Government’s redundancy payments scheme enhanced from 1 January

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Government’s redundancy payments scheme enhanced from 1 January

Long-time employees of bankrupt businesses who are made redundant will receive higher payouts under reforms announced yesterday by the Federal Government.

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Long-time employees of bankrupt businesses who are made redundant will receive higher payouts under reforms announced yesterday by the Federal Government.
 
The Federal Government will amend the General Employee Entitlements and Redundancy Scheme (GEERS), by removing the cap on payouts from 1 January 2011.
 
Yesterday’s announcement means that rather than employees receiving a set figure, payouts will now be based on how long they have worked for a business.
 
Redundancy pay is currently capped at 16 weeks. From next year, workers will receive a payout up to a maximum of 4 weeks for every year of service.
 
Unions welcome improvements
 
Unions welcomed the announcement stating that the removal of a cap on redundancy payments will mean that almost every worker will receive their redundancy entitlements in full in cases where their employer went out of business without having made provisions.
 
ACTU president Ged Kearney said this would be a vast improvement on the GEERS scheme established by the Howard Government, which had capped redundancy payments at 16 weeks.
 
The changes will guarantee redundancy pay of up to four weeks wages for every year of service. It will also guarantee all annual leave, all long service leave and up to three months of unpaid wages.
 
AMWU comments …
 
The Australian Manufacturing Workers’ Union has welcomed the Federal Government’s decision.
 
Dave Oliver, AMWU national secretary, said that under the previous GEERS regime thousands of workers and their families had seen decades of work amount to very little because directors wound up companies without assets to cover what they owed their workforce.
 
Oliver said that the surety for workers was a key win, but that the union would keep campaigning to ensure employers who engage in illegal conduct are prosecuted, and the new scheme does not become a way for employers to transfer their costs onto the taxpayer,
 
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