Oddities in our workplace relations system – #1 redundancy

Did you know that an employee of a business with 15 or more employees and with 10 or more years’ service gets:

  • 4 weeks less redundancy pay than an employee with 9 years’ service
  • 2 weeks less than an employee with 8 years’ service and
  • 1 week less than an employee with 7 years’ service?

How can that be?

When the redundancy standard was increased in the Termination Change and Redundancy Case, the Australian Industrial Relations Commission accepted employer submissions that it should be reduced because employees got long service leave after 10 years.  So the 16 week entitlement after 9 years’ service reduced to 12 weeks’ after 10 years’ service.

Is that still the case?

One thing did change and that was that shortly after that decision was made, the Victorian Government reduced the qualifying period for payment in lieu of long service leave to 7 years.

Was the redundancy standard adjusted for that change?

No – noone has done anything about that.

Should they have?

Absolutely but it requires amendment to the Fair Work Act 2009 so the Commonwealth Government has to do it.

How do we deal with it?

We tell our clients that that is not fair and to just give everyone who has 9 or more years’ service the 16 week entitlement.

Here is the Fair Work Ombudsman’s Fact Sheet on Termination and Redundancy: Notice-of-termination-and-redundancy-pay