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HomeHuman ResourcesManaging PeopleThe Difference Between Redundancy and Termination and Why It Matters

The Difference Between Redundancy and Termination and Why It Matters

Redundancy and termination are similar in that in each case, you will find yourself without a job. The core difference between the two is the reason you are without a job and what happens to your position when you leave. Both redundancy and termination often happen with little to no warning. Read on for an overview of both redundancy and termination.


The Difference Between Redundancy and Termination and Why It Matters

Redundancy is when an employer no longer needs a particular position or job to be completed. Redundancy can result from a variety of situations (i.e. the job was completed, the needs of the company have changed, or the company is going bankrupt.)

Redundancy can occur when new technology reduces the need for people, sales, or production slows down dramatically, reducing the need for people, jobs are relocated overseas, or there is a merger or reorganization that results in duplication of positions.

When you lose your job due to redundancy, you are not replaced. Instead, your position is eliminated. If you lose your job as a result of redundancy, your employer does not need to defend their decision making. A lay-off and redundancy are similar since when you’re laid off, it’s usually due to the fact that the company doesn’t have sufficient enough work for you to do.


Termination is when your employer decides to eliminate you from the company. You leave, and someone else is hired into your position to complete the tasks you were doing. When you are terminated, your employer will need to provide a reason for your termination, which explains why you are being asked to leave while your position is still required.

If you were terminated unfairly, you could seek legal help for compensation. If your employer presents your loss of employment as redundancy, but then you learn that was not the case, you were terminated unfairly.

Consequences of each

Both redundancy and termination tend to happen with little to no warning. You may be aware that your job is at risk, but you will likely not be offered a period to stay and keep working. For example, when you voluntarily leave a job, you typically provide your employer with two weeks’ notice to give them time to replace you.

Employers don’t usually offer two weeks’ notice when letting you go. If you are let go as a result of either redundancy or termination following an accident, injury, or illness, you should consult an employment law attorney on your rights to ensure you were not eliminated unfairly.

Regardless of how secure you believe your job is, anyone can be at risk of losing their job through either redundancy or termination. When you lose your job unexpectedly, you may be put in serious financial risk as many people live paycheck-to-paycheck.

Most people cannot afford to pay their bills if they find themselves suddenly unemployed. Without a paycheck, you can accumulate a significant amount of debt in a relatively short period while trying to tend to the day-to-day needs of your family. Luckily, there is a solution to this unfortunate dilemma.

The Solution

Being faced with suddenly not being able to pay bills can be devastating to you and your family. The best solution (aside from immediately looking into unemployment — although this tends to only cover the very basics, and typically doesn’t come close to what you were earning) to this problem is to be proactive before it ever happens with income protection insurance.

Income protection insurance replaces up to 75% of your monthly income if you are unable to work due to an accident, injury, or illness. There is a waiting period, so you can’t wait to buy insurance if you think there is a chance you may need it soon.

Like any other insurance, you buy it with the hopes of never needing to use it, and like any other insurance, you can use an online comparison tool to get the best price. Compare best income protection insurance with iSelect to make sure you are getting the coverage you need to protect your family with a premium you can afford.

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