Payment issues: underpayment; redundancy pay

Q&A

Payment issues: underpayment; redundancy pay

Employers are still unclear about some payment issues in the context of WorkChoices. Underpayment claims going back five years and redundancy payments from a small business are considered here.

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Employers are still unclear about some payment issues in the context of WorkChoices. Underpayment claims going back five years and redundancy payments from a small business are considered here.

Two recent questions received by WorkplaceInfo are noted below.

Underpayment claims

Q. Our company employs fewer than 15 employees and, unfortunately, needs to make one employee redundant. The employee is covered by a NAPSA that does not provide an exemption for an employer with fewer than 15 employees. When WorkChoices was introduced, the Federal Government indicated that redundancy pay would no longer apply to small business. Is this the case?

A. Under the Workplace Relations Act an employee can sue, before an eligible court, for underpayment of amounts (including amounts into a superannuation fund) for a period of up to six years after the payment should have been made. This would also apply to any underpayment based on a payment for a period of annual leave or personal/carer's leave, as well as the relevant payments applicable to a termination of employment.

Redundancy pay and small business

Q. Our company employs fewer than 15 employees and, unfortunately, needs to make one employee redundant. The employee is covered by a NAPSA that does not provide an exemption for an employer with fewer than 15 employees. When WorkChoices was introduced, the Federal Government indicated that redundancy pay would no longer apply to small business. Is this the case?

A. A term in a pre-reform Federal award that refers to redundancy does not apply to an employer with fewer than 15 employees. However, the redundancy clause in a NAPSA is 'preserved' and will continue to apply until replaced by a new workplace agreement. Therefore, a NAPSA that provides redundancy pay where the employer has fewer than 15 employees is still enforceable.

Related

Payment of wages - some problems for employers

Recovery of monies and WorkChoices

Redundancy - a WorkChoices perspective

  

 

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