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Feds to challenge redundancy ruling

THE Federal Government will introduce legislation to overturn the Australian Industrial Relations Commission’s decision to force small businesses to pay up to eight weeks of redundancy.

Federal Workplace Relations Minister Kevin Andrews said the Government would legislate to return the redundancy exemption to small business.

The bill is due to go before Federal Parliament after it deals with the Federal Budget on May 11.

However, there are doubts that such legislation would pass through the Senate.

Businesses employing fewer than 15 employees have been exempt from paying redundancy for the past 20 years. The decision applies to all small businesses that operate on Federal industrial arrangements including awards and Australian Workplace Agreements.

Mr Andrews said the commission’s decision imposed the same pay out obligations for small and big business employers when workers had up to five years’ service with their employer.

“This Government will remove the small business redundancy obligations from the Federal award safety net,” he said.

Democrats Workplace Relations spokesman Andrew Murray said he would wait to see the legislation before making a final decision.

“However, the Prime Minister should be aware that the Democrats recognise the independent commission has deliberated for many months on this matter and we would be hard to convince that a decision arrived at through that process should be overturned,” he said.

“In addition, we believe all employees should have access to a redundancy safety net.”

Chamber of Commerce and Industry employee relations director Bruce Williams said the AIRC’s decision had been devastating for small business.

“The commission’s decision was a surprise given the broad support to retaining the exemption, including the support of the Western Australian Government,” he said.

“After all, it was the commission that exempted small business from redundancy 20 years ago.”

However, the full AIRC decision regarding redundancy payments for all businesses could have much wider impact than just that on the small business sector.

Mr Williams said he thought the decision’s impact on businesses employing more than 15 employees had been lost in the furore over small business.

“If you look at an employer that has 16 or 17 employees, the maximum redundancy provisions have been doubled from eight weeks to 16 weeks,” he said.

“Four months pay for a redundant employee could not be termed as a safety net.”

Combined Small Business Association CEO Oliver Moon said the Federal Government’s move would be welcomed by small business.

“I think small business would expect the Federal Government to do something to overturn the decision,” he said.

 

 

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