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News Bulletin : ADA News Bulletin May 2011
29 MAY 2011 WHAT IS REDUNDANCY? The following definition applies for the purposes of redundancy pay under the National Employment Standards (NES) and under S.119 of the Fair Work Act 2009: Redundancy occurs if the employee's employment is terminated by the employer because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour, or because of the insolvency or bankruptcy of the business. Under the NES the minimum entitlement to redundancy or severance pay now applies to a broader category of employees. Previously, redundancy pay had only been a legal entitlement for award/agreement-covered employees. The NES now provides a statutory entitlement to redundancy pay for all full-time and part- time employees employed by a company that is not defined as a small business, including award free employees. EMPLOYEES EXCLUDED FROM REDUNDANCY PAY The NES provides exclusions for when redundancy is not paid: • the employer employs less than 15 employees • an employee has less than 12 months continuous service with the employer • the person is a casual employee • the employee is terminated because of serious misconduct • the employee is employed for a specified task, or a specified period of time, or a specified season • a training arrangement applies to the employee and his/her employment is for a specified period of time, or limited to the period of the training arrangement • the employee is an apprentice • an industry-specific redundancy scheme in a modern award applies to the employee or is incorporated into an enterprise agreement which applies to the employee. MODERN AWARD PROVISIONS ON REDUNDANCY Modern awards may contain a 'transitional provisions' clause that preserves the redundancy pay provisions that applied under a previously applicable Notional Agreement Preserving a State Award (NAPSA) for incorporated businesses and the relevant state award for Division 2B unincorporated businesses, where the redundancy pay provisions are more beneficial than the NES's redundancy provisions. The NES provides a scale of redundancy payments based on the employee's years of service. Where the redundancy pay is more beneficial under the NAPSA or Division 2B State Awards the provisions will prevail over the NES until 31 December 2014. Redundancy provisions under the Health Professionals and Support Services Award 2010 include the following; • Clause 8 -- consultation with employees must be provided in regards to major changes affecting employees in the workplace (redundancy is one of these changes). Failure to consult with employees in relation to redundancy may result in a claim of unfair dismissal. • Clause 12.2 -- the transfer to lower paid duties would be given the same period of notice if their position was terminated. • Clause 12.3 -- an employee leaving during the notice period will be entitled to receive the benefits and payments under the award had they worked until the expiry of the notice period. • Clause 12.4 -- a job search entitlement is provided to an employee who is given notice of termination in a case of redundancy with up to one day's time off with pay during each week of notice for the purpose of seeking other employment. WHAT IS A GENUINE REDUNDANCY? For a redundancy to be considered 'genuine' the person's position is no longer required to be performed by anyone because of the changes in genuine operational requirements of the employer's business. The employer has complied with any obligations under the modern award, such as consulting with the employee about the redundancy and the employer if possible has attempted to redeploy the employee within the business. If you are considering making staff redundant it is recommended that you call and discuss the individual circumstances with an advisor at the ADA HR Advisory Service. For more information or assistance, please contact the friendly team at the ADA HR Advisory Service on: Phone: 1300 ADA INC (1300 232 462) Fax: 02 8448 3299 Email: email@example.com The ADA HR Advisory Service is available from 8.30 am--5.30 pm (AEST) Monday to Friday. 'The answer could be just a phone call away' REDUNDANCY UNDER THE national employment system
ADA News Bulletin April 2011
ADA News Bulletin June 2011