A redundancy guide for small Australian businesses
Employment

A redundancy guide for Australian small businesses

A redundancy guide for Australian small businesses

Updated 3 January 2021

You may have heard that Australian small businesses don’t need to pay redundancy. 

Well, that’s not always the case.

Here’s what you need to know about redundancy pay if you are a small business.

In a hurry? Jump ahead. 

Small business definition

First, when we are talking about a small business, we’re talking about employers with fewer than 15 employees.

And, this calculation includes:

  • all employees employed at that time
  • the employee who is being dismissed
  • any other employee who is also being dismissed or whose employment is also being terminated, and
  • a casual employee is NOT to be counted unless, at that time, they have been employed on a regular and systematic basis.
  • associated entities (eg grouped companies) are taken to be one entity

People usually get the idea that small businesses don’t need to pay redundancy because of section 121 of the Fair Work Act 2009 (Cth) which is below.


Section 121 Fair Work Act

Here's section 121:

Section 119 (redundancy pay) does not apply to the termination of an employee's employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1) (whichever happened first):

(a)  the employee's period of continuous service with the employer is less than 12 months; or

(b)  the employer is a small business employer.

(2)  A modern award may include a term specifying other situations in which section 119 does not apply to the termination of an employee's employment.

(3)  If a modern award that is in operation includes such a term (the award term ), an enterprise agreement may:

(a)  incorporate the award term by reference (and as in force from time to time) into the enterprise agreement; and

(b)  provide that the incorporated term covers some or all of the employees who are also covered by the award term.

Awards that require small businesses to pay redundancy

Despite section 121 above, there are small businesses in certain industries that are not exempt from paying redundancy entitlements to their employees because of their industry awards. 

Below are some Awards that provide for small businesses to pay redundancy to employees (this list may not be exhaustive, so please check your Award regardless of whether it's listed below).

  • Joinery and Building Trades Award 2010
  • Mannequins and Models Award 2010
  • Manufacturing and Associated Industries and Occupations Award 2010   
  • Textile, Clothing, Footwear and Associated Industries Award 2010
  • Timber Industry Award 2010.

Redundancy payment clause - examples

Joinery and Building Trades Award example

Below is the small business redundancy pay clause from the Joinery and Building Trades Award 2010. 

17.4 Redundancy pay for employee of small business employer

(a) Clause 17.4 applies to an employee of a small business employer except for an employee who is excluded from redundancy pay under the NES by sections 121(1)(a),123(1),123(4)(a) or 123(4)(d) of the Act.

(b) In paragraph (a) an employee is an employee of a small business employer if, immediately before the time the employee’s employment is terminated, or at the time when the employee is given notice of termination as described in section 117(1) of the Act (whichever happens first),the employer is a small business employer as defined by section 23 of the Act.

(c) Subject to paragraphs (f) and (g),an employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(i) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(ii) because of the insolvency or bankruptcy of the employer.

(d) The amount of the redundancy pay in paragraph (c) equals the total amount payable to the employee for the redundancy pay period specified in column 2 of Table 2—Redundancy pay period according to the period of continuous service of the employee specified in column 1, worked out at the employee’s base rate of pay for his or her ordinary hours of work.

Table 2—Redundancy pay period

Below is how many week's pay for employees that are eligible for redundancy pay.

Employee’s period of continuous service with the employer on termination

Redundancy pay period

Less than 1 year

Nil

At least 1 year but less than 2 years

4 weeks

At least 2 years but less than 3 years

6 weeks

At least 3 years but less than 4 years

7 weeks

At least 4 years and over

8 weeks

(e) In paragraph (d) continuous service has the same meaning as in section 119 of the Act.(f) The terms of section 120 of the Act apply as if section 120 referred to ‘paragraph 17.4(c) above rather than ‘section 119’.

NOTE:Under section 120 of the Act the Fair Work Commission can determine that the amount of redundancy pay under the NES is to be reduced if the employer obtains other acceptable employment for the employee or cannot pay that amount.

Paragraph (f) applies these arrangements also to redundancy pay under clause 17.4.(g) The terms of section 122 of the Act apply as if section 122 referred to ‘clause 17.4’rather than ‘this Subdivision’ and to ‘paragraph 17.4(c) above’rather than ‘section 119’.

NOTE:Under section 122 of the Act transfer of employment situations can affect the obligation to pay redundancy pay under the NES and the Fair Work Commission can make orders affecting redundancy pay. Paragraph (g) applies these arrangements also to redundancy pay under clause 17.4.

Mannequins and Models Award 2010 example

The clause below is another example of a redundancy clause for small businesses for the mannequins and models industry.

And it is based on a decision issued on 24 December 2019. Any party opposing the provisional view must file a submission to the Fair Work Commission setting out their position by 4pm on Thursday 23 January 2020.

12. Redundancy

NOTE: Redundancy pay is provided for in the NES. See sections 119–123 of the Act. Clause 12 supplements the NES by providing redundancy pay for employees of a small employer.

12.1 Transfer to lower paid duties on redundancy

(a) Clause 12.1 applies if, because of redundancy, an employee is transferred to new duties to which a lower ordinary rate of pay applies.

(b) The employer may:

(i) give the employee notice of the transfer of at least the same length as the employee would be entitled to under section 117 of the Act as if it were a notice of termination given by the employer; or

(ii) transfer the employee to the new duties without giving notice of transfer or before the expiry of a notice of transfer, provided that the employer pays the employee as set out in clause 12.1(c).

(c) If the employer acts as mentioned in clause 12.1(b)(ii), the employee is entitled to a payment of an amount equal to the difference between the ordinary rate of pay of the employee (inclusive of all-purpose allowances and penalty rates applicable to ordinary hours) for the hours of work the employee would have worked in the first role, and the ordinary rate of pay (also inclusive of all-purpose allowances and penalty rates applicable to ordinary hours) of the employee in the second role for the period for which notice was not given.

12.2 Employee leaving during redundancy notice period

(a) An employee given notice of termination in circumstances of redundancy may terminate their employment during the minimum period of notice prescribed by section 117(3) of the Act.

(b) The employee is entitled to receive the benefits and payments they would have received under clause 12 or under sections 119–123 of the Act had they remained in employment until the expiry of the notice.

(c) However, the employee is not entitled to be paid for any part of the period of notice remaining after the employee ceased to be employed.

12.3 Job search entitlement

(a) Where an employer has given notice of termination to an employee in circumstances of redundancy, the employee must be allowed time off without loss of pay of up to one day each week of the minimum period of notice prescribed by section 117(3) of the Act for the purpose of seeking other employment.

(b) If an employee is allowed time off without loss of pay of more than one day under clause 12.3(a), the employee must, at the request of the employer, produce proof of attendance at an interview.

(c) A statutory declaration is sufficient for the purpose of clause 12.3(b).

(d) An employee who fails to produce proof when required under clause 12.3(b) is not entitled to be paid for the time off.

(e) This entitlement applies instead of clauses 11.2 and 11.3.

12.4 Severance pay—employees of a small business employer

(a) Clause 12.4 applies to an employee of a small business employer, except for an employee who is excluded from redundancy pay under the NES by sections 121(1)(a), 123(1), 123(4)(a) or 123(4)(d) of the Act.

(b) In paragraph (a) an employee is an employee of a small business employer if, immediately before the time the employee’s employment is terminated, or at the time when the employee is given notice of termination as described in section 117(1) of the Act (whichever happens first), the employer is a small business employer as defined by section 23 of the Act.

(c) Subject to paragraphs (f) and (g), an employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(i) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(ii) because of the insolvency or bankruptcy of the employer.

(d) An employee of a small business employer whose employment is terminated by reason of redundancy is entitled to the following amount of redundancy pay in respect of a period of continuous service:

Table 2—Redundancy pay period

Employee’s period of continuous service with the employer on termination

Redundancy pay period

Less than 1 year

Nil

At least 1 year but less than 2 years

4 weeks

At least 2 years but less than 3 years

6 weeks

At least 3 years but less than 4 years

7 weeks

At least 4 years and over

8 weeks

(e) In paragraph (d) continuous service has the same meaning as in section 119 of the Act.

(f) The terms of section 120 of the Act apply as if section 120 referred to ‘paragraph  (c) above’ rather than ‘section 119’.

NOTE: Under section 120 of the Act, the Fair Work Commission can determine that the amount of redundancy pay under the NES is to be reduced if the employer obtains other acceptable employment for the employee or cannot pay that amount. Paragraph (f) applies these arrangements also to redundancy pay under clause 17.4.

(g) The terms of section 122 of the Act apply as if section 122 referred to ‘clause 12.4’ rather than ‘this Subdivision’ and to ‘paragraph (c) above’ rather than ‘section 119’.

NOTE: Under section 122 of the Act transfer of employment situations can affect the obligation to pay redundancy pay under the NES and the Fair Work Commission can make orders affecting redundancy pay. Paragraph (g) applies these arrangements also to redundancy pay under clause 17.4.

Key message

Always check your applicable award to see if your small business needs to pay redundancy. 

And, as always, be sure to get advice if you are in doubt.

Do you have questions or comments about redundancy pay? Be sure to leave them below. 





Read More
How to avoid an unfair dismissal claim for a fake redundancy
Employment

How to avoid an unfair dismissal claim for a fake redundancy

How to avoid an unfair dismissal claim for a fake redundancy

29 December 2019 

Employers can avoid unfair dismissal claims for a fake redundancy by understanding the meaning of genuine redundancy and following best practice guidelines in a redundancy situation.

In a hurry? Jump ahead. 

Section 389 meaning of genuine redundancy

The legal definition of a genuine redundancy is found in section 389 of the Fair Work Act 2009 (Cth). 

Below we'll go through that definition.

 A person's dismissal was a case of genuine redundancy if:

  • the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and
  • the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

And, an employee’s dismissal will not be a case of genuine redundancy if it would have been reasonable in all the circumstances for them be redeployed within:

  • the employer's enterprise; or
  • the enterprise of an associated entity of the employer.

Next, we'll go through that definition and make use of all the guidance we have from modern awards, enterprise agreements and fair work definitions.

Consultation (even if no award or enterprise agreement applies)       

You can follow model consultation practices below even if there's no applicable award or enterprise agreement. We'll go through the model modern award term for consultation first.

Model award term - consultation

  • employers must notify employees and their representatives who may be affected by the proposed changes
  • employers must discuss the changes with the affected employees and their representatives, and provide information in writing to them, as soon as practicable after a definite decision has been made about:
    • the nature of the changes
    • effects the changes are likely to have on employees
    • measures to prevent or reduce the adverse effects of such changes on employees
  • employers must then give prompt consideration to matters raised by the employees and their representatives in relation to the changes.

What about the enterprise agreement model? You can also use the enterprise agreement model for consultation in your business. We'll go through that next.

Model enterprise agreement term - consultation

This model term is found in the Fair Work Regulations (regulation 2.09) and outlined below. 

This term applies if the employer:

[1) (a) has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(b) proposes to introduce a change to the regular roster or ordinary hours of work of employees.

[2] Major change

For a major change referred to above:

[a) the employer must notify the relevant employees of the decision to introduce the major change; and

(b)  subclauses (3) to (9) apply.

(3)  The relevant employees may appoint a representative for the purposes of the procedures in this term.

(4)  If:

(a)  a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b)  the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(5)  As soon as practicable after making its decision, the employer must:

(a)  discuss with the relevant employees:

       (i)  the introduction of the change; and

       (ii)  the effect the change is likely to have on the employees; and

       (iii)  measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and

(b)  for the purposes of the discussion—provide, in writing, to the relevant employees:

       (i)  all relevant information about the change including the nature of the change proposed; and

       (ii)  information about the expected effects of the change on the employees; and

       (iii)  any other matters likely to affect the employees.

(6)  However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(7)  The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

(8)  If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph (2)(a) and subclauses (3) and (5) are taken not to apply.

(9)  In this term, a major change is likely to have a significant effect on employees if it results in:

(a)  the termination of the employment of employees; or

(b)  major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or

(c)  the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d)  the alteration of hours of work; or

(e)  the need to retrain employees; or

(f)  the need to relocate employees to another workplace; or

(g)  the restructuring of jobs.

Now that we’ve covered the steps to follow for consultation, let’s look at redeployment, the other element in the section 389 Fair Work Act 2009 (Cth) genuine redundancy definition. 

Redeployment

A person's dismissal will not be a case of genuine redundancy if it would have been reasonable in the circumstances to redeploy the person within: 

  • the employer's enterprise, or
  • the enterprise of an associated entity of the employer.

So what exactly does reasonable in the circumstances mean?

Reasonable in the circumstances

Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal.

The factors below are relevant:

  • whether there exists a job or a position or other work to which the employee can be redeployed[2]
  • nature of any available position
  • qualifications required to perform the job
  • the employee's skills, qualifications and experience, and
  • the location of the job in relation to the employee's residence and the remuneration.

Associated entity

An employer must consider whether it is reasonable to redeploy an employee to an associated entity.

The degree of managerial integration between the different entities is likely to be a relevant consideration.

Alternative job, position or work must be identified

The Fair Work Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer's enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. 

Evidence would usually include canvassing the steps taken by the employer to identify other work which could be performed by the dismissed employee.

The job must be suitable

The job must be suitable, that is, the employee should have the skills and competence to perform it either immediately or within a reasonable period of retraining.

Other considerations may be relevant such as:

  • location of the job, and
  • level of remuneration.

Roles with lower income & less responsibility to be considered

If an employer has other positions available, even at a lower level, that the redundant employee has the skills to perform, the employer should not assume the employee will reject the position.

Otherwise, the Commission may find it would have been reasonable in all the circumstances for an employee to have been redeployed.

Open selection processes

Open selection process may impact on whether redundancy is genuine

For example, if the employer fills a vacancy by requiring the employee to compete with other employees, it might be found that the resulting dismissal is not a case of genuine redundancy.

The next part is understanding what an associated entity is. 

Associated entity

Associated entities are businesses or other bodies that are connected to each other in some way. For example, when a business owns or controls the other business for the purpose of a transfer of business. Section 50AAA of the Corporations Act provides a full definition.

If it would have been possible for the redundant employee to be redeployed into an associated entity, then the dismissal will not be a case of genuine redundancy.

Do you have questions or comments about redundancy? Be sure to leave them below. 


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Will an award always apply?
Employment

Will an award always apply?

Will an award always apply?

27 December 2019 

A modern award will not always apply to a stated industry or occupation for example, for high income earners.

What is an award?

An award sets out the minimum employment terms and conditions that apply on top of the national employment standards. 

Awards typically cover: 

  • pay 
  • allowances
  • penalty rates 
  • overtime 
  • hours of work 
  • rosters
  • breaks

Award coverage 

Awards cover employees. They are industry or occupation based and apply to employees and employers who perform work covered by them. 

In many cases, an award will not apply to high income earning employee, even if the award applies to their industry.

Registered enterprise agreement 

An award won’t apply if there is a registered enterprise agreement that applies. 

However, if the pay rate in the enterprise agreement is less than an award, the pay rate in the applicable award will apply. 

Award and registered agreement free employees 

If an employee is not covered by either an award or enterprise agreement, they are covered by the national minimum wage and the national employment standards will form the minimum terms and conditions of employment. 

Do you have questions or comments about an award? Be sure to leave them below. 


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Read More
What is a flexibility term?
Employment

What is a flexibility term?

What is a flexibility term?

26 December 2019 

A flexibility term allows an employee and their employer to vary the effect of an applicable award. 

Flexibility terms are covered in section 144 of the Fair Work Act 2009 (Cth).

Effect of individual flexibility arrangements

Once agreed, a flexibility arrangement is taken to be a term of the modern award.

Requirements for flexibility terms

The flexibility term must:

  • identify the terms in the award that may be varied; and
  • require that the employee and the employer genuinely agree to any individual flexibility arrangement; and
  • result in the employee being better off overall; and
  • outline how any flexibility arrangement may be terminated; and
  • be in writing and signed:
    • by the employee and the employer; and
    • if the employee is under 18 - by their parent or guardian; and
  • require the employer to give a copy of any individual flexibility arrangement to the employee; and 
  • the flexibility term must not require the term to be approved, or consented to, by another person (except for an employee under 18).

Do you have questions or comments about a flexibility term? Be sure to leave them below. 


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Factors Fair Work takes into account for unfair dismissal compensation
Employment

Factors Fair Work takes into account for unfair dismissal compensation

Factors Fair Work takes into account for unfair dismissal compensation

24 December 2019 

An employee is able to make a claim for a dismissal they deem their dismissal to be harsh, unfair or unreasonable per section 387 of the Fair Work Act 2009 (Cth).

Criteria

So what factors does the Fair Work Commission take into account for compensation? Below are the factors from section 392 of the Fair Work Act 2009 (Cth).

  • effect of the order on the viability of the employer’s enterprise; 
  • length of the person’s service with the employer
  • the remuneration the person would have received if they had not been dismissed 
  • efforts the person has made to mitigate their loss because of the dismissal
  • amount of any income reasonably likely to be earned by the person between the time of making the order for compensation and the actual compensation 
  • ​any other matter Fair Work considers relevant 

Factors that reduce compensation 

Misconduct

Importantly, misconduct will reduce the compensation amount. That is, if Fair Work is satisfied that the person’s misconduct contributed to the employer’s decision to dismiss the person. 

Shock, distress etc disregarded 

Fair Work will not consider shock, distress or humiliation or other hurt caused to the person by the dismissal. 

Compensation cap

The amount ordered by Fair  Work must not exceed the lesser of: 

  • the higher income threshold immediately before dismissal 
  • the amount that is received by the person or to which the person was entitled (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal. 

Instalments permitted 

Fair Work may permit the employer concerned to pay the amount required in instalments specified in the order. 

Do you have questions or comments about compensation for an unfair dismissal? Be sure to leave them below. 


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Consequences when Fair Work orders are not complied with
Employment

Consequences when Fair Work orders are not complied with

Consequences when a Fair Work order is not complied with

Updated: 15 February 2021

Did you know that it's a criminal offence not to comply with an order by the Fair Work Commission?

Below are the actions an employee can take if an order has not been complied with. 

Fair work order

First, when we are talking about an order, we are referring to a compulsory direction given by the Fair Work Commission in accordance with a decision. 

Also, a Fair Work order is legally binding. 

And you should pay attention for timeframes for when an order needs to be complied with. 

Employee options for non compliance

If an employer does not follow an order of the Commission, the employee (or an industrial association acting on the employee’s behalf or a Fair Work Inspector) may seek enforcement of the Commission’s order through the commencement of civil proceedings in:

  • the Fair Work Division of the Federal Circuit Court of Australia, or
  • the Fair Work Division of the Federal Court of Australia

And, a failure to comply with a Commission order may result in the Court awarding a pecuniary penalty.

Small claim process

An application before the Fair Work Division of the Federal Circuit Court of Australia may be dealt with as a small claim  if the amount is $20,000 or less and no application is made for a pecuniary penalty.

What is a small claim procedure?

A small claim procedure in the Federal Circuit Court of Australia is a way by which a person can seek to recover unpaid monies. The proceedings are generally faster and more informal than other court proceedings and each party can only be represented by a lawyer if permission is given by the court. 

If a general protections dismissal dispute order for compensation is more than $20,000, other processes for enforcement can be used.

A pecuniary penalty order cannot be sought through a small claim procedure.

And there is a lodgment time limit of 6 years.

Penalties

If an employer has not complied with an order made by the Commission, it is possible for the Court (except in a small claim proceeding) to order the payment of an additional penalty.

This kind of penalty is known as a pecuniary penalty and is in addition to any order made by the Commission.

Do you have questions or comments about a Fair Work order? Be sure to leave them below. 





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The difference between a general protections and unfair dismissal claim
Employment

The difference between a general protections and unfair dismissal claim

The difference between a general protections and unfair dismissal claim

23 December 2019 

Employee’s may make a number of claims when they end their employment. In this article, we're comparing 2 of those claims; the general protections and unfair dismissal claim. 

Here’s what you need to know. 

In a hurry? Jump ahead. 

First, let’s start with general protections.

General protections

General protections claims have to do with: 

  • Workplace rights 
  • Freedom of association 
  • Protection from workplace discrimination 
  • Relief for discrimination, victimisation or other unfair treatment. 

What employer’s can’t do 

Employers cannot take ‘adverse action’ against someone, like an employee, because they have a workplace right, have exercised a workplace right or propose to exercise one. 

What is adverse action?

Below are ways that an employer can take adverse action against an employee or potential employee: 

  • ​dismissing them 
  • not giving them their legal entitlements
  • ​changing their job to their disadvantage 
  • treating them differently than others
  • not hiring them 
  • offering them different (and unfair) conditions, compared to other employees. 

Minimum employment period 

General protections may be lodged by both employees and prospective employees, so there is no minimum employment period that must have been worked before a claim can be made. 

Remedies 

Remedies for a general protections claim include: 

  • an order for reinstatement of the person
  • an order for the payment of compensation to the person
  • an order for payment of an amount to the person for remuneration lost
  • an order to maintain the continuity of the person’s employment, or
  • an order to maintain the period of the person’s continuous service with the employer.

Unfair dismissal 

A person has been unfairly dismissed if the Fair Work Commission is satisfied that an employee (who is protected from unfair dismissal) has been dismissed and the dismissal: 

  • was harsh, unjust or unreasonable; and 
  • was not consistent with the Small Business Fair Dismissal Code (in the case of employee’s of a small business), and 
  • was not a case of genuine redundancy 

Fair Work’s criteria for unfair dismissal 

In considering if a dismissal was harsh, unjust or unreasonable, Fair Work must take into account the factors below (s. 387 Fair Work Act 2009 (Cth)):

Reason  

If there was a valid reason for the dismissal. 

Notice

If the person was notified of that reason. 

Response 

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and 

Support Person 

Any unreasonable refusal by the employer to allow that person to have a support person present to assist in any dismissal discussion.

Unsatisfactory performance warning 

If the dismissal related to unsatisfactory performance, whether they had been warned about that unsatisfactory performance before dismissal 

Employer size 

degree to which the size of the employer’s business would impact the procedures for dismissal.

Human resources 

The degree to which the absence of HR would be likely to impact on the procedures followed in effecting the dismissal. 

Other 

Fair work will consider any other relevant matters.

Minimum employment period

Employees have to be employed for at least 6 months before they can apply for unfair dismissal.

Employees working for a small business have to be employed for at least 12 months before they can apply.

If there was a change of business ownership, service with the first employer may count as service with the second employer when calculating the minimum employment period.

Remedies 

Remedies for an unfair dismissal are determined by the Fair Work Act 2009 (Cth) and include: 

  • reinstatement (getting the job back)
  • ​compensation (no more than 26 weeks’ pay) 
  • non financial remedies like a written statement of service 

Table - key differences

Feature

General Protections

Unfair Dismissal

Claim basis

  • Workplace rights 
  • Freedom of association 
  • Protection from workplace discrimination 
  • Relief for discrimination, victimisation or other unfair treatment. 
  • Dismissal was was harsh, unjust or unreasonable

    Minimum employment period

    None, prospective employees may also apply

    6 months or 12 months for a small business with < 15 workers

    Remedies

  • an order for reinstatement of the person
  • an order for the payment of compensation to the person
  • an order for payment of an amount to the person for remuneration lost
  • an order to maintain the continuity of the person’s employment, or
  • an order to maintain the period of the person’s continuous service with the employer.
  • reinstatement (getting the job back)
  • ​compensation (no more than 26 weeks’ pay) 
  • non financial remedies like a written statement of service 

  • Do you have questions or comments about a general protections or unfair dismissal claim? Be sure to leave them below. 


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    What is a forced resignation ?
    Employment

    What is a forced resignation?

    What is a forced resignation ?

    18 December 2019 

    First, a forced resignation occurs when an employee has no real choice but to resign. 

    Proof of a forced resignation 

    The employee must prove they did not resign voluntarily and that the employer forced their resignation.  

    Also, it has to be the case that the employer took action with the intent to bring the relationship to an end.

    An employer is generally able to treat a clear and unambiguous resignation by en employee as a resignation. 

    What about if that resignation is given by the employee in the heat of the moment?

    Employer responsibility - heat of the moment resignation

    In the case of a heat of the moment resignation, an employer may be required to allow a reasonable period of time to pass.

    That is, to make sure that the employee truly meant to resign.

    Also, the employer may have a duty to confirm the intention to resign, if, during that time, they are put on notice that the resignation was not intended.

    Forced resignation

    Fair Work found the cases below to be forced resignation 

    Employee letter

    An employee sends a letter to their employer indicating their intention to resign in the future. The employee was distressed and unwell and it was not held to be effective notice of resignation. The employer’s acceptance of the resignation was held to be a termination at the employer’s initiative: Marks v Melbourne Health [2011].

    Employer alleged employee resigned

    After an angry discussion, an employee thought they were dismissed and the employer thought they resigned. The employer continued to attend work (to work out the notice period). Her attendance at work showed that she did not demonstrate an intention not to be bound by her contract of employment: Bender v Raplow Pty Ltd [2011].

    Failure to pay wages

    An employee gave notice of resignation after having been paid under half of his owed wages. This was held to be forced resignation by the employee and the employer’s conduct constituted a dismissal by the employer: Bender v Raplow Pty Ltd [2011].

    Key take aways

    If an employee resigns in the heat of the moment, for example, after a heated discussion, the employer should let some time pass then confirm the employee's intentions. 

    Also, if an employer treats an employee unfairly and gives them no choice but to resign, this could be deemed a forced resignation.

    In the case of a forced resignation, the termination is considered at the initiative of the employer and may allow the employee to claim they were unfairly dismissed.

    Got questions or comments about a forced resignation ? Be sure to leave them below. 


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    Do the National Employee standards override employee agreements ?
    Employment

    Do the National Employment Standards override employee agreement terms ?

    Do the national employment standards override employee agreement terms ?

    14 December 2019 

    National Employment Standards (NES) are minimum terms for all Australian employees. 

    So, if an employment agreement has less favourable terms than the NES, then yes, the NES will override the terms in an employee agreement.

    In a hurry? Jump ahead below.

    In addition to the NES, employees are also protected by various legislation which sets out their minimum employee entitlements. 

    So what exactly am I referring to when I say 'legislation'?

    I am talking about any applicable enterprise agreement, Award and also employment legislation and regulations like the Fair Work Act and the Fair Work regulations and of course, the NES.

    What you need to know is that employer’s may include more generous terms than what the law stipulates but not less favourable terms in an employee agreement.

    Employee Agreements - what applies

    When it comes to the NES, the word minimum is key.

    The NES are the minimum terms. And, there’s nothing stopping an employer from providing more generous terms than those in the NES to an employee in an employee agreement.

    So, an employee agreement may have more favourable terms than the NES but not less favourable. 

    What do they NES cover?

    We’ve gone into detail about the NES in this article. Briefly they cover: 

    Interaction of NES, Awards, Employee Agreements and Legislation

    When thinking about employment law and how the elements fit together, its important to know that employees have rights because of: 

    • Awards 
    • Enterprise Agreements 
    • National Employment Standards
    • Legislation 
    • Employment Agreements.

    Also, an employer cannot pick and choose which of the above will apply. Each has a role in protecting employee rights.

    Employment agreement with more favourable terms

    An employee can hold an employer to an employment agreement that has more favourable terms e.g. higher pay, more annual leave etc.

    And, an employer cannot claw back more generous terms written into an employment agreement and seek to rely on an Award, Enterprise Agreement or NES. 

    Case study #1 Employer asks employee to work 45 + hours per week

    An employer writes that the employee is required to work 45+ hours per week in an employment agreement despite the existence of an applicable Award (Joinery and Building Trades Award 2010) that says the employee will work an average of 38 hours and the NES which state a maximum of 38 hours per week

    In this case, the employer is in breach of both the Award provisions and the NES. The employer cannot enforce term that says 45+ hours per week on an ongoing basis.

    Case study #2 Employee agreement with higher pay than Award

    In this case, the employee worked as a paralegal, covered by the Legal Services Award 2010. 

    Payroll noticed the employee was being paid more than the Award and reduced the employee's pay to the Award amount without getting legal advice.

    The employer cannot do this. 

    Also, the employer won't be able to claw back the additional amount stated in the employee agreement. The employee can hold the employer to the payment terms in the employee agreement.

    Got questions or comments about employment agreements? Be sure to leave them below. 


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    The time frame for termination pay now clarified in 92 Australian Awards
    Employment

    The time frame for termination pay now clarified in 92 Australian Awards

    Time frame for termination pay now clarified in 92 Australian Awards

    12 December 2019 

    On 11 December 2019, the Fair Work Commission published a decision that means 3 more industries will now give employee's transparency about the timing of their final termination pay in their Awards. 

    Below I will cover the the Award changes, the original November 2018 change for 89 other industry Awards and the model clause.

    In a hurry? you can jump ahead below.

    Retail Industry Award 2010

    The Rail Industry Award 2010 will now include the same clause for termination pay within 7 days after initially opposing its addition.

    Alpine Resorts Award 2010 

    There’s a slight variation for the Alpine Resorts Award, employee’s now have certainty they will be paid their  termination entitlements within 14 days of their termination date. But for employees paid weekly, they will be paid by the end of their next complete 7-day period. 

    Pharmacy Industry Award 2010 

    Employees covered by the Pharmacy Industry Award will be paid no later than 14 days after the employee’s termination date. The reasoning for this decision is that a large percentage of businesses  in the Pharmacy Industry are small businesses without dedicated bookkeeping staff and the cost of paying within 7 days will be much higher.

    Previous change - 89 Awards that include model clause

    Back in November 2018, many employees across Australia became entitled to be paid their termination pay within 7 days of a termination because of a new clause that was added to 89 Australian Awards.  

    You can get the full list of Awards with the clause here.

    Below is an excerpt of 12 from that list that cover many Australian employees: 

    • Banking, Finance and Insurance Award 2010 
    • Clerks - Private Sector Award 2010 
    • Educational Services (Teachers) Award 2010 
    • Fitness Industry Award 2010 
    • General Retail Industry Award 2010
    • Hair and Beauty Industry Award 2010 
    • Legal Services Award 2010 
    • Miscellaneous Award 2010 
    • Pharmaceutical Industry Award 2010 
    • Real Estate Industry Award 2010 
    • Security Services Industry Award 2010 
    • Social, Community, Home Care and Disability Services Industry Award 2010

    The model clause

     Here's what the clause for payment within 7 days looks like: 

    X. Payment on termination of employment

    (a) The employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:

    (i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

    (ii) all other amounts that are due to the employee under this award and the NES.

    (b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.

    Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

    Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

    Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after. 

    Got questions or comments about this Fair Work change to Awards? Be sure to leave them below. 


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