Process a Redundancy

Humanforce Payroll allows you to process resignations, redundancies and termination enquiries in compliance with ATO requirements. In this article, you'll find the steps for processing a redundancy.

Before you begin, authorise and process any timesheets for the terminated employee in the current pay period within Humanforce WFM, and sync them to Humanforce Payroll. You can create an out-of-cycle payrun for only the terminated employee/s in Humanforce WFM for this purpose, if needed.

Step One: Identify the Termination Date

If the termination date is today or in the future (but within the Period End Date) proceed straight to Step Two below.

To process a termination with a termination date in the past, complete the following steps:

1. Go to Employee > Employee Maintenance and find the employee by selecting the relevant payroll name.
2. Click the employee's row to open the edit screen.
3. Click the Employment tab and enter
   1. Termination Date
   2. STP 2 Termination Type and
   3. Termination Reason.
4. Click Update.

You can now see Date Terminated in the Employee List for the terminated employee. The employee will stay visible in this list until the payroll has been Authorised. Once it has been authorised the terminated employee will be hidden. To view any terminated employees in the Employee List, click Show All. 

Note: You will not be able to process a termination that occurred in the past if you 
have not entered the Termination Date.

Step Two: Create the Termination

1. Go to Payroll > Payroll Processing > Termination and click the icon.
2. Select the employee from the list.
3. In the Termination Nature field, select Genuine Redundancy 
4. Enter the Termination Date
5. If applicable, select the relevant policy in the Redundancy Policy drop-down list
6. Check the Normal Gross Earnings. If it shows as 0.00, manually enter the figure (see note below for more details) 
7. Click Create.

When you put in the Termination Date the Years Of Service are calculated from the Service Date on the Employee Maintenance record. It then calculates the Number of Weeks based on the Modern Award requirements or the Redundancy Policy, if applicable.

Note that the Normal Gross Earnings is used by Humanforce Payroll to calculate the Marginal Tax Rate. Entering the Normal Gross Earnings gives you the ability to override the figure should you think the Marginal Tax Calculated is incorrect. For example, where an employee is terminated at the beginning of the financial year and does not have any YTD figures, you can enter the Normal Gross Earnings figure by calculating the YTD Taxable Income / YTD No of Pay Periods to ensure the correct calculation of the tax. 

Step Three: Review and add details

Once you've created the termination, you'll be presented with further details and options.

1. Select include in EFT (if you want it to be processed as part of the EFT File) or Adhoc EFT 
2. Check that you agree with the figures calculated in the breakdown of what the employee will be paid for outstanding leave balances.
3. If there are any ETP Payments that need to be processed as part of the Redundancy, such as in lieu of notice, click Add and select Payment Type from the drop-down list. For In Lieu payments, enter in the number of weeks and the amount will auto-populate.
4. Additional Pay Elements can also be added as part of the termination if required. Click Add button. This is like a Pay Adjustment and linked Pay Elements will not automatically load. 
5. In Normal Pay
   1. Add leave dates and types, noting that leave dates cannot be greater than the Termination Date. Manually adjust the leave entitlement to be paid out in the Termination.
   2. Select the appropriate option in the  Rate Sets dropdown.
6. Click Calculate and Save to review the Termination Breakdown which contains the Gross, Tax and Net figures.

Step Four: Review the Termination Breakdown and Finalise

1. Check that you are happy with the figures the system has calculated, based on the Termination Date. 
2. If you need to include any ETP payments in the Normal Termination, in the ETP/Lump Sum D section, click Add.
3. To add other Pay Elements needed, under Normal Pay - Adjustment Section, click Add. For Auto Paid normal hours will be created on the timesheet.
4. Click Calculate and Save and Humanforce Payroll will calculate the tax that needs to be paid on Termination. If required, you can override the tax amounts by entering values into the Override field for the relevant tax type, on the right-hand side.
5. If any items on the Termination are not correct click Edit Details to amend.
6. To view a PDF version of the Termination, click Term Advice. It will include Draft Only in the heading until you finalise the Termination.
7. Double check you are happy with your selection for include in EFT or Ad Hoc and all figures contained in the Termination.
8. Once the termination has been reviewed and is ready to be paid and processed, click Finalise.
9. In the List of Terminations, click on the entry to see any leave without pay hours an employee has taken and if required, reduce that from their Years of Service when you process a Redundancy payment. If the employee has any leave without pay absences in their final pay, you can process it through a Pay Adjustment and then create the Termination payment.

Once a Termination has been finalised it cannot be deleted.