Libs table redundancy exemption Bill for small business

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Libs table redundancy exemption Bill for small business

Legislation to exempt businesses with fewer than 15 employees from redundancy pay obligations was introduced in Federal Parliament today by Kevin Andrews, the Minister for Employment and Workplace Relations.

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Legislation to exempt businesses with fewer than 15 employees from redundancy pay obligations was introduced in Federal Parliament today by Kevin Andrews, the Minister for Employment and Workplace Relations. 

The Workplace Relations Amendment (Small Business Employment Protection) Bill 2004 seeks to overturn the decision of the Australian Industrial Relations Commission (AIRC) introduced in Marchof this year which removed the previous exemption.   

The AIRC ruled that a redundancy pay scale  of entitlements could apply to  employees of small businesses under federal awards (and consequently federal agreements as relevant awards were changed). 

Impact of AIRC decision

Andrews said the AIRC decision would have a devastating effect on small businesses.  

‘It would mean a typical retail small business with seven employees, each with six years continuous employment, would now face a contingent liability for redundancy pay of almost $30,000,’ he told Parliament. 

Impact of legislation

He said the Bill would not affect any redundancy pay provisions that were in awards prior to the AIRC’s decision. 

Nor will it affect any actual entitlement that arises before the legislation commences. 

‘The Government’s objective is not to take away something that employees already have,’ he said. 

Andrews said that while many small businesses were profitable, they tended to be chronically undercapitalised and don’t have the financial resources to cope with ‘large, unpredicted commitments such as redundancy payments’. 

‘Clearly, employees of small businesses will not gain anything from the AIRC decisions if they no longer have a job to go to,’ he said. 

However small businesses were free to reach agreement with their employees to make redundancy payments ‘where they can afford it and where it is a priority for employees’.  

Outside the House he challenged the Labor Opposition to show its ‘business friendly’ credentials and support the Bill.

ACTU comment 

An ACTU spokeswoman said it was absurd to think that something as arbitrary as the number of employees in a workplace dictates whether or not that employee gets a redundancy package.

Research done by the ACTU has proven that the extent of losses suffered by small business employees is exactly the same as those from medium and large businesses.

The research also shows that 70 per cent of small businesses when reducing staff are making a profit.

Source documents

  • Access to Text of the Bill and Explanatory memoranda of Workplace Relations Amendment (Small Business Employment Protection) Bill 2004 can be found here.
  • Second speech reading

Related 

Federal redundancy test case - 2004

How federal IR reform agenda will affect business

 

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