Recent changes affecting labour costs

There have been three important recent decisions potentially affecting the labour costs facing businesses in Western Australia. On 9 March 2005 the High Court of Australia issued two separate decisions affecting the rights and obligations of business owners when they sell or restructure their business. In the "Gribbles case" the High Court ruled that a new employer is not a successor to a former employer for the purpose of Federal award coverage where there was no sale or transfer of assets between the two employers, even if they conduct the same or similar business activities and employ the same employees. The importance of this decision is that where the former employer was covered by a federal award, the new employer will not automatically be bound by the federal award. The second case is the "Amcor case" in which the High Court ruled that employees who remained in their same jobs on the same conditions following a de-merger, but who had different employers as a result of corporate re-structuring, were not entitled to redundancy pay because their positions had not been made redundant. In an important decision affecting larger businesses the WA Industrial Relations Commission ruled on 27 April 2005 that it will make a general order extending redundancy pay to employees in private industry in Western Australia (i.e. except those covered by federal industrial awards or agreement). The commission convenes again on 10 May 2005 to finalise the terms of the general order. The general order will provide for up to 16 weeks pay for employees whose jobs are made redundant depending on the employee’s years of service, and follows the standard applicable under Federal awards and agreements. Businesses with more than 15 employees should therefore consider making appropriate provision in their business planning and accounting and record systems for this potential additional labour cost. For more information contact Mark Hemery or Greg Hocking at Talbot Oliver. Both can be contacted on 08 9325 8977.

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