If pre-Fair Work redundancy pay is more beneficial

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If pre-Fair Work redundancy pay is more beneficial

What scale of redundancy pay applies: the NES entitlement or that provided by a previous NAPSA which happens to be more generous?

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What scale of redundancy pay applies: the NES entitlement or that provided by a previous NAPSA which happens to be more generous?

This question was recently sent to our Ask an Expert service.
 
Q  Our company employs a number of employees in New South Wales who are covered under the Clerks — Private Sector Award 2010. Unfortunately, due to a downturn in business, we will have to make two clerical positions redundant at the end of this month. Both employees have been employed by the company for approximately six years. We have selected the two employees who will be redundant and have provided them with an estimate of their entitlements on termination of their employment. Because the company employs 15 or more employees, they are entitled to receive redundancy pay under the National Employment Standards (NES).
 
One employee has received advice claiming that because the previous NSW NAPSA (Clerical & Administrative Employees (State) Award) provided a more beneficial redundancy pay scale than the NES, this provision prevails over the NES minimum entitlement. We are of the view that the NAPSA no longer exists and was superseded by the Clerks’ modern award. Which redundancy pay scale applies in this circumstance?

A  It is common for a modern award to contain a transitional provision that continues to impose an obligation on the employer to pay the redundancy scale prescribed by that NAPSA where it provides a more beneficial entitlement to redundancy pay for the employee than the NES. The Clerks — Private Sector Award 2010 contains such a transitional provision (cl 14.5). The redundancy scale under the NSW NAPSA for six years or more of continuous service with the employer provides for 16 weeks of redundancy pay at the employee’s actual rate of pay (20 weeks if the employee is 45 years or more).

This is a more beneficial entitlement to redundancy pay than that prescribed by the NES, which provides 11 weeks of redundancy pay for at least six years but less than seven years of continuous service. This means the redundancy provisions of the NSW NAPSA will prevail over the NES.

Transitional provisions expire

The transitional provisions for redundancy pay will continue to apply until 31 December 2014, after which the minimum redundancy scale under the NES will apply to all eligible employees.
 
Other acceptable employment
 
It should also be noted the amount of redundancy pay can be varied (to nil) by the Fair Work Commission where the employer arranges other acceptable employment for an employee.
 


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