Redundancy capped for workers of bankrupt TCF contractors

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Redundancy capped for workers of bankrupt TCF contractors

As part of the federal government’s moves to reduce the maximum amount of redundancy payments to employees of bankrupt companies, it has introduced a new regulation providing the same cap for redundant TCF contract outworkers.

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As part of the federal government’s moves to reduce the maximum amount of redundancy payments to employees of bankrupt companies, it has introduced a new regulation providing the same cap for redundant textile, clothing and footware (TCF) contract outworkers.

These workers are given the same protection as other employees via the Fair Entitlements Guarantee Regulation 2012. If passed, the Fair Entitlements Guarantee Amendment Regulation 2014 (No. 1) will amend the 2012 regulation to cap the maximum amount of redundancy pay entitlement at 16 weeks, and will also make technical amendments to clarify the operation of the scheme.

The Explanatory Memorandum also provides the following details of the technical amendments, which:
  • “clarify that where a TCF contract outworker is eligible for an advance under the regulation the claimant’s initial entitlement will be calculated without reference to any amounts required to be withheld by law, such as pay as you go tax withholding;
  • clarify that the death of a TCF contract outworker does not prevent that person from being eligible for an advance, to enable the next of kin or estate to pursue a claim;
  • clarify that when a debt owed by a TCF contract outworker to the specified person is greater than the entitlement to which it relates, it can be offset proportionally against any of the claimant’s other entitlements that form their advance; and
  • remove the eligibility requirement for a TCF contract outworker who was owed debts prior to the insolvency event to have taken reasonable steps to be paid those debts and instead allow the Secretary of the Department to reduce a TCF contract outworkers’ entitlement by the amount of any debts that he or she did not take reasonable steps to be paid.”
The Regulation and Explanatory Statement can be viewed here.

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