Entitlements scheme means employers will rethink provisions: Abbott

News

Entitlements scheme means employers will rethink provisions: Abbott

Employers would be less likely to negotiate generous redundancy packages with their employees under the Federal Government's new scheme to guarantee workers' entitlements in the case of corporate collapse, according to the federal Workplace Relations Minister Tony Abbott.

WantToReadMore

Get unlimited access to all of our content.

 

Employers would be less likely to negotiate generous redundancy packages with their employees under the Federal Government's new scheme to guarantee workers' entitlements in the case of corporate collapse, according to the federal Workplace Relations Minister Tony Abbott.

Speaking after a meeting with State IR Ministers on the Gold Coast on Friday, Abbott said that as the situation stood now, 'some people are better off losing their jobs than keeping their jobs'.

When questioned about whether that flew in the face of the Government's emphasis on enterprise bargaining, and the right to negotiate higher packages, Abbott said while that philosophy still stood the Government should not have to pay for more than what he called the 'community standard' of eight weeks' redundancy.

The new scheme will cost the Government $66m, and it says it will guarantee the entitlements of workers in 90% of company collapses. It will pay out all unpaid wages, annual leave, long-service leave, and pay in lieu of notice, up to a salary limit of $75,200. Workers earning more than that will be treated as if they earned that limit, and redundancy pay for all workers will be capped at eight weeks. The scheme will be backdated to September 12, to pick up workers whose companies have collapsed due to association with Ansett, however Ansett workers' entitlements will be funded by a $10 levy on air tickets.

Abbott said the new scheme was not an admission of failure on the part of the Government's former Employee Entitlements Support Scheme (1), which capped payouts to $10,000 in Labor states and $20,000 in SA and the NT.

The EESS was put in place after the collapse of National Textiles in January 2000. That company, the chairman of which was the Prime Minister's brother Stan Howard, collapsed owing $11m in entitlements (see 175/2001), and the Government paid 100% of entitlements owing to those workers.

Abbott said the EESS was only ever intended to be provisional. 'We didn't say it was the last word - we said it was provisional and we'd consider it again,' he said. Small business employees would also be covered under the new scheme, Abbott said.

The Labor IR Ministers continued to push for a levy of 0.1% of payroll to be paid by all companies with more than 20 employees (see 178/2001), which would pay for 100% of all entitlements lost, saying taxpayers should not be expected to foot the bill.

They issued a statement after the meeting saying they were concerned by the lack of detail in Abbott's new proposal, including the ad hoc nature of its funding, and were also worried that Abbott had not ruled out further 'one-off' tax levies to fund the scheme. They said they would continue with a working party to examine alternative arrangements they felt would be fairer to workers and taxpayers. Abbott said after the meeting the 0.1% levy proposal amounted to 'a tax on jobs', and if the State Labor Ministers were truly that concerned, they could set up their own schemes to fund the shortfall.

Federal Opposition IR spokesperson Arch Bevis said this new scheme would still not pay out the total amounts owing to long-serving employees, many of whom would lose up to 80% of their entitlements.

 

 

 

Post details