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New severance pay entitlement for redundant workers in WA

A recent decision by the Western Australian Industrial Relations Commission means that all WA employees will now be entitled under a General Order to certain redundancy entitlements, including severance pay, irrespective of whether they are employed under or subject to awards or industrial agreements. In the WAIRC decision, the scale of severance payments determined by the Australian Industrial Relations Commission in its latest redundancy case will apply generally to employees throughout WA. An employee with one year’s service is entitled to four weeks’ pay and an employee with nine years’ service is entitled to 16 weeks’ pay. As with the AIRC scale, under the General Order employees with 10 years’ service and over will be entitled to 12 weeks’ pay. This reduction in the number of weeks’ pay after 10 years’ service takes into account the entitlement to pro rata long service leave. Other requirements of the General Order include: •Employees must be provided with a statement of employment on termination for redundancy when introducing change that is likely to have a significant effect, employers must consult with employees including probationary and fixed term employees, regardless of their length of service. •Employers will be obliged to notify Centrelink as soon as possible where it has decided to make 15 or more employees redundant. •Employers will only be obliged to notify a union of redundancies when that union is nominated by the employee •When calculating continuous service, service with a former employer will be included where there has been a transmission of business. However, the WAIRC has not as yet set the salary cap for exclusion and proposes to hear further submissions on the issue for senior executives. Employers should review policies and procedures to ensure they will comply with the General Order. If a Federal award covers employees then this will continue to apply. This includes the requirement of small businesses to pay severance pay of up to eight weeks to employees who have at least four years’ service with the employer. For all other employees in WA, other than senior executives, the provisions of the General Order will apply. Those employers with fewer than 15 employees will be exempt from the severance pay component of the General Order. The General Order is to operate as a minimum entitlement. Those employees who have contractual entitlements more favourable than those contained in the General Order will still be entitled to them. For more information contact Andrew Burnett, partner Minter Ellison Ph: 9429 7414

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