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Workplace Relations Amendment (Small Business Employment Protection) Bill 2005

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2004-2005

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

WORKPLACE RELATIONS AMENDMENT

(SMALL BUSINESS EMPLOYMENT PROTECTION) BILL 2004

 

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

Amendments to be moved on behalf of the Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment and Workplace Relations,

the Honourable Kevin Andrews MP)



 

 

 

WORKPLACE RELATIONS AMENDMENT
(SMALL BUSINESS EMPLOYMENT PROTECTION) BILL 2004

 

(Amendments to be moved on behalf of the Government)

 

OUTLINE

 

The Bill as introduced will ensure that small business redundancy pay will no longer be an allowable award matter.  The removal of small business redundancy pay as an allowable award matter means that an ‘eligible instrument’ (i.e., a State law, a State award, a State authority order or a Territory law) made before 26 March 2004 which contains a small business redundancy pay obligation which was previously suppressed by a federal award will ‘spring up’ to fill the gap when a federal award no longer provides for small business redundancy pay. 

 

An amendment is proposed that will omit item 9 and substitute it with a new item that will prevent an ‘eligible instrument’:

·                 that was made on or after 26 March 2004 having the effect of requiring relevant small business employers to pay redundancy pay (subitem 9(2));

·                 that was made before 26 March 2004 but which was amended or varied between 26 March 2004 and the commencement of the Schedule having the effect of requiring relevant small business employers to pay redundancy pay (subitem 9(2)). 

 

The amendment will also prevent an eligible instrument containing a small business redundancy pay obligation:

 

·                 before 26 March 2004 and that was suppressed by a federal award ‘springing up’ requiring a particular affected employer bound by a federal award to pay redundancy pay (subitem 9(3));

·                 before 26 March 2004 requiring a relevant small business employer to pay redundancy pay in the case where the employer is bound by a federal award but is also a party to a certified agreement (CA) or an Australian Workplace Agreement (AWA) where the CA or AWA ceases to have effect (subitem 9(4)); and

·                 before 26 March 2004 continuing to impose that obligation where the small business becomes bound by a federal award (subitem 9(5)).

 

FINANCIAL IMPACT STATEMENT

 

The proposed amendments are budget neutral.



NOTES ON AMENDMENTS

 

SCHEDULE 1 - REDUNDANCY PAY BY SMALL BUSINESS EMPLOYERS

 

Amendment No. 1 - Schedule 1, item 9, page 7 (lines 9 to 20)

 

Item 9 ─ Transitional ─ eligible instruments

 

Item applies to eligible instruments with small business redundancy pay requirements just before commencement

 

9.1       Subitem 9(1) provides that item 9 will apply if, just before the commencement of Schedule 1, an ‘eligible instrument’ contained provisions requiring some or all relevant employers that employ fewer than 15 employees to pay redundancy pay.  The terms ‘eligible instrument’ and ‘relevant employer’ are defined in subitem 9(6).  An ‘eligible instrument’ is a State law, a State award, a State authority order or a Territory law.  A ‘relevant employer’ is, in the case of a State law, award or authority order, a constitutional corporation.  In the case of a Territory law, it is all employers. 

 

Eligible instruments that began to provide for small business redundancy pay between 26 March 2004 and commencement

 

9.2       Paragraph 9(2)(a) deals with a situation where an eligible instrument was made before 26 March 2004 and before that date did not contain provisions requiring the affected employers to pay redundancy pay but was varied on or after 26 March 2004 to include a provision requiring the affected employers to pay redundancy pay.  Paragraph 9(2)(a) will prevent that eligible instrument from having the effect of imposing redundancy pay obligations on the affected small business employers from the commencement of this Schedule.

 

9.3       Paragraph 9(2)(b) will prevent an eligible instrument made on or after 26 March 2004 having the effect of imposing redundancy pay obligations on relevant small business employers from the commencement of this Schedule.

 

Eligible instruments where Federal award suppressed a small business redundancy pay requirement that was present just before 26 March 2004

 

9.4       Subitem 9(3) deals with a situation where an eligible instrument was made before 26 March 2004 and has a provision requiring relevant small business employers to pay redundancy pay but was suppressed by a federal award because of inconsistency.  Subitem 9(3) will ensure that the eligible instrument would be prevented from ‘springing up’ to impose redundancy pay obligations on relevant small business employers once the inconsistency is removed and the federal award no longer contains a provision dealing with small business redundancy pay. 

 

Eligible instruments where certified agreement or AWA suppressed a small business redundancy pay requirement that was present just before 26 March 2004, and a Federal award would also have had that effect

 

9.5       Subitem 9(4) deals with a situation where a certified agreement or AWA to which a relevant small business employer is party ceases to have effect after the commencement of the Schedule, but the small business employer remains bound by a federal award.  Subitem 9(4) will ensure that when the agreement ceases to have effect, an eligible instrument that would otherwise have imposed a redundancy pay obligation will not impose that obligation. 

 

Eligible instruments where small business redundancy pay requirement was present just before 26 March 2004 and a future Federal award starts to apply

 

9.6         Subitem 9(5) deals with a situation where, before 26 March 2004, a relevant small business employer was covered by an eligible instrument (e.g. a State common rule award) containing provisions requiring the employer to pay redundancy pay, and, after commencement of the Schedule, the employer becomes bound by a federal award which applies in relation to some or all of the employees to whom the requirement to pay redundancy pay relates.  From the time at which the employer becomes bound by the federal award, the small business redundancy pay obligation in the eligible instrument will cease to have effect in relation to the relevant employees. 

 

Definitions

 

9.7         Subitem 9(6) defines the terms, ‘eligible instrument’, ‘Federal award’ and ‘relevant employer’.