The human faces of the redundancy test case


The human faces of the redundancy test case

The Australian Chamber of Commerce and Industry will also be lodging a claim at a later date which would seek to 'better balance employer and employee interests' in cases of redundancy or termination.


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Today's announcement by the Hilton Hotel in Sydney that it was making 467 workers redundant with no more than eight weeks' severance pay to permanent staff was a perfect example of why redundancy standards need changing, according to Australian Council of Trade Unions president Sharan Burrow.

Launching the ACTU's redundancy test case, due for hearing within the next couple of months, Burrow was flanked at a Sydney press conference by three of the Hilton's workers, who between them have more than 43 years experience with the hotel.

The Sydney Hilton told workers this morning it is closing its doors on 29 November for a $200 million refurbishment which could take between 18 months and two years to complete. The workers will receive the award minimum as severance – in this case, eight weeks.

The workers say none of them were consulted before the announcement. They claim the company did not offer to redeploy them to other hotels in the chain, did not offer employment support services and did not offer their jobs back at the end of the refurbishment.

he Hilton told WorkplaceInfo it would make no public comment on the issue until tomorrow.

More than a quarter of the Hilton workers are casual and will therefore receive redundancy pay. Burrow blasted as 'pretty cynical' management's offer to pay them an extra week if they stayed on 'until the death-knell'.

The ACTU claim

The ACTU claim seeks to boost the Federal award cap from eight weeks to 16 weeks redundancy pay, in line with NSW (see story). The union body sees the claim as a minimum standard, and is encouraging workers to negotiate more generous deals with their employers.

The breakdown is as follows:

  • 1-2 years' service =  4 weeks' pay (no change) or 5 weeks if aged over 45.
  • 2-3 years' service = 7 weeks' pay (up from 6) or 8.75 weeks if over 45.
  • 3-4 years' service = 10 weeks' pay (up from 7) or 12.5 weeks if over 45.
  • 4-5 years' service = 12 weeks' pay (up from 8) or 15 weeks if over 45.
  • 5-6 years' service = 14 weeks' pay (up from 8) or 17.5 weeks if over 45.
  • 6 years or more = 16 weeks' pay (up from 8) or 20 weeks if over 45.  

The ACTU is also seeking severance pay for casuals, who currently get nothing, and an extra four weeks for workers over 45 years of age, who usually face at least twice the average 22-week wait for re-employment and up to 98 weeks without a job.

It also wants the current exemption for small businesses lifted and would require employers to consult workers before redundancy and provide allowance for job search and financial counselling after redundancy.

The test case, which will be run via four awards applying to Victorian clerks, ACT retail and wholesale workers, rubber, plastic and cable makers and graphic artists – seeks to replicate the NSW standard which has been in place since 1994. 

The Queensland Council of Unions last week began a similar claim in that state's Industrial Relations Commission (see story).

The Federal standard has been unchanged since 1984, but the climate has totally changed, Burrow said.

'In 1984 redundancies were few and far between, but what we have now is the reality of corporate collapse,' she said.

Burrow said in many instances, if workers were shown the respect due in return for their loyalty, they could help management avoid redundancy or crisis situations.

She told WorkplaceInfo after the conference that while the unions would object to a blanket small business exemption, they would be 'absolutely prepared to talk to small business where they can genuinely prove their case'.


The Federal Workplace Relations Minister, Tony Abbott said in a statement today if the case was successful, small businesses would go under trying to provide for 'contingent liabilities' that may never be needed/used.

The Australian Industry Group also opposes the application, saying for small businesses especially a change would be a 'double whammy'. 

AiG's national IR director, Steve Smith told WorkplaceInfo businesses with 15 or fewer workers which currently did not have to pay any redundancy, would not only have to start providing it, but double.

He said if successful the case would discourage the use of full-time staff, and predicted that ACTU's application in relation to casuals would fail, as loadings had been increased only last year partly to take into account redundancies.

The AiG is filing a counter-application, seeking to have transmission of business dealt with to avoid the scenario that occurred in the recent Amcor case, where workers were transferred to a new parent company doing the same jobs on basically the same terms and conditions (see story).

In that case, the Federal Court found it had no option but to find that employees who were entitled to receive redundancy payments under the strict wording of a particular agreement should receive those payments despite the fact that they suffered no actual break in employment or loss of benefits.

The Australian Chamber of Commerce and Industry will also be lodging a claim at a later date which would seek to 'better balance employer and employee interests' in cases of redundancy or termination.


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