Skills Fund would stop ‘wasteful’ redundancies: report


Skills Fund would stop ‘wasteful’ redundancies: report

A new report recommends the establishment of a Skills Development Fund to stop companies from throwing away their investment in workers by making them redundant.


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A new report recommends the establishment of a Skills Development Fund to stop companies throwing away their investment in workers by making them redundant.
The report, Keeping Skills During Hard Times, recommends establishing such a Fund, which would enable employers to retain their employees during the economic slowdown while they undertake training.
Released by the Dusseldorp Skills Forum and Job Futures, the report says it is vital that governments and industry work cooperatively to come up with alternatives to layoffs.
Don’t throw away workers
Report author, international labour market analyst Toni Wren, said Australian firms need to be careful not to throw away their investment in workers.
‘They will need a skilled workforce to remain strong and productive, both to sustain themselves over the downturn and take advantage of growth and new opportunities as the economy recovers,’ Wren said.
The report says government policy needs to focus on building skills in the workforce, and implementing structures that will cushion the impact of the slowdown on workers, including alternatives to forced redundancies.
Keep them on the books
It suggests that the establishment of the Skills Development Fund would allow employers to keep workers on the books during the downturn, but release them to undertake training, either on the job or in approved training establishments.
The Fund would be jointly financed by government and industry. Part of it would be earmarked to re-skill workers in green jobs needed for the transition to a new low-carbon economy.
The Fund would draw on international best practice including that of Swedish firms working with Job Security Councils, which have developed strategies to improve productivity and alternatives to redundancy.
Employers would contribute to the Fund on a sliding scale, with small business contributing a smaller proportion but able to receive proportionally greater support.
Alternatives to redundancy
The report notes that there are already possible alternatives to redundancy that should be canvassed, including reduced overtime, shorter working hours, job sharing, reduced reliance on casuals, requiring employees to take outstanding annual leave and taking unpaid leave, as well as firms themselves addressing performance issues.
‘Government and industry should promote and “talk up” alternatives to firing employees,’ the report says.
Return to work quickly
The report also notes that for those who lose their jobs in the current economic climate, between one-half and two-thirds are likely to return to work relatively quickly based on labour market analysis. However, the remaining half to a third will either leave the labour force or stay unemployed for a ‘significant duration’.
For those made redundant it recommends:
  • early access to case management and training support for retrenched workers who are at risk of becoming long-term unemployed
  • abolishing waiting periods and liquid assets tests for the unemployed to prevent families sliding into poverty and homelessness
  • reviewing the National Employment Standard (NES), which offers a minimum protection for all workers but excludes up to two million private sector employees
  • reviewing the scheme that provides income support to workers whose employer becomes insolvent, yet excludes some small business and casual employees
  • providing relief to those on unemployment benefits in the private rental market.
The report calls for the Productivity Commission to undertake an extensive inquiry into Australia’s redundancy arrangements, and recommends the Department of Education, Employment and Workplace Relations (DEEWR) set up an Office of Labour Market Adjustment to pool knowledge and best practice.
The report is not yet available on the Dusseldorp Skills forum site
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