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A Full Bench of the Australian Industrial Relations Commission on March 26 2004 handed down a test case decision, which will substantially increase employer obligations in regard to dismissed employees because of redundancy. The Printing Industries Association of Australia (PIAA) took part in the hearings and made submissions, along with other employer groups, preventing the union claim being granted in full. The changes came into force from April 24.One of the outcomes has seen the exemption from severance payments which employers of fewer than 15 employees had previously enjoyed has been removed, meaning that employers will have a maximum severance payment obligation of eight weeks’ pay.
The Commission took the view that as employees with 10 years or more service were also entitled to prorata long service leave, their severance entitlement should be reduced somewhat to reflect that.
The limitation of severance payments for potential retirees was retained. Employees approaching retirement age who are retrenched are not entitled to severance pay exceeding what they would have earned if employed until retirement age. The union claim for severance pay for casuals was rejected.
However, the Commission determined that individual businesses may still apply for exemption from making severance payments on the grounds of incapacity to pay. The incapacity must be demonstrated in detail to the Commission.
Employers of 15 or more will be required to consult with affected employees (and their requested union) in the event of a dispute arising from redundancy.
Under this provision, employers will have to provide relevant information regarding the reasons for proposed redundancies; the number and categories of workers likely to be affected; and the period over which the redundancies are to be carried out.
Employers will also be required to consult on measures taken to avert or minimise redundancies and any adverse affects.
This decision applies to a number of federal awards, including the Graphic Arts - General - Award 2000. It does not apply to the Country Publishing and Printing Award 2000 or to state awards which cover clerks, commercial travellers, truck drivers, etc.
Severance payments - Employers with fewer than 15 employees:
Period of continuos Service Severance Pay
Less than 1 year Nil
More than 1 year but less than 2 years 4 weeks’ pay
More than 2 years but less than 3 years 6 weeks’ pay
More than 3 years but less than 4 years 7 weeks’ pay
More than 4 years 8 weeks’ pay
Severance payments - Employers with 15 or more employees:
Period of continuos Service Severance Pay
Less than 1 year Nil
1 year and less than 2 years 4 weeks pay
2 years and less than 3 years 6 weeks pay
3 years and less than 4 years 7 weeks pay
4 years and less than 5 years 8 weeks pay
5 years and less than 6 years 10 weeks pay
6 years and less than 7 years 11 weeks pay
7 years and less than 8 years 13 weeks pay
8 years and less than 9 years 14 weeks pay
9 years and less than 10 years 16 weeks pay
10 years and over 12 weeks pay
