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Transcript of interview with Fran Kelly: Radio National: 16 November 2010: GEERS; employee redundancy entitlements

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Senator the Hon Jacinta Collins

Parliamentary Secretary for School Education and Workplace Relations 16 November, 2010


Transcript, Radio National interview, Issues: GEERS - employee redundancy entitlements



FRAN KELLY: Australian workers will soon receive a bigger slice of their entitlements if the company goes broke. The Gillard Government will amend the General Employee and Entitlements and Redundancy Scheme, otherwise known as GEERS, to ensure that redundancy payouts better reflect the number of years served as an employee.

The GEERS safety net was first introduced by the Howard Government almost ten years ago now, following the high profile collapse of National Textile. But many have always regarded the scheme as second rate because it goes nowhere near guaranteeing 100 per cent of entitlements for 100 percent of employees.

For example, under GEERS, you can only get up to sixteen weeks worth of redundancy entitlements paid out even though you may be owed much more after lifetime effort in some work places.

Senator Jacinta Collins is the Parliamentary Secretary for Workplace Relations; she’s speaking with our political editor, Alison Carabine.

JACINTA COLLINS: Well we think this is about fairness and ensuring that Australian workers are paid what they deserve, based on how long they’ve served. So, if one worker of a company had been there for only four years, at the moment they receive exactly the same pay-out as another employee who may have done 35 years of service, and that’s just not fair.

It’s an unfairness that existed under the Workchoices System and is one of the other changes that the Gillard Government is introducing so that we have fairer outcomes for families.

ALISON CARABINE: So the worker who worked for example for 35 years what would his or her new entitlement be?

JACINTA COLLINS: Well that will depend on their industrial entitlements, whether it’s under an enterprise agreement or some other arrangement, but what they will receive is their full maximum entitlement. So in some cases that may be four weeks per year of service. I can give you for instance, one example of a Tasmanian employee, who had 47 years of

service, and he would have been owed about $110,000 dollars but because of the limits of the previous scheme he only got $28,000, so that’s a worker whose family missed out on over $80,000 dollars.

ALISON CARABINE: Do you have any sense on how many workers will be eligible for the new generous entitlements?

JACINTA COLLINS: It again varies on particular industrial arrangements but certainly there are a number of schemes that provides benefits higher than the previous cap.

ALISON CARABINE: And how much is this going to cost the taxpayer?

JACINTA COLLINS: Well the cost of the scheme for this financial year is expected to be in the order of $188 million dollars. The total amount paid last financial year was $154 million so that gives you a sense of the comparison. And indeed last year the Government recouped, because this is also about reclaiming from companies that have gone into liquidation eventually, $19 million dollars.

ALISON CARABINE: So of the $154 million the government paid out, it recouped only $19 million?

JACINTA COLLINS: Well you can’t compare year to year because it usually takes several years before the various organisations that have a claim eventually receive those funds, and it will depend on which period eventually the liquidation processes comes to culmination.

ALISON CARABINE: The Government does try to recoup the money once the companies have been wound up but by offering a more generous entitlement won’t you be exposing the taxpayer to a bigger bill under these changes?

JACINTA COLLINS: There is going to be an additional amount that the Government will fund, we think that’s in the order of about $11 million dollars each year, but to achieve fairness and ensure that workers and their families get their full entitlements we think that that’s a cost worth paying.

ALISON CARABINE: Labour went to the election promising all annual leave or long service leave and up to three months of unpaid wages for workers under the GEERS scheme, when will we see that legislated?

JACINTA COLLINS: Well those elements already exist in the GEERS scheme, the new elements are the improvements to the redundancy payouts and the additional protections that we’ve said we’ll legislate in terms of making sure that workers receive their superannuation payments and that they receive access to redundancy, within a reasonable period of time. In some cases, it can take a very long time before a company is actually formerly liquidated, and we will be looking at that issue next year as we bring forward legislation in this area.

ALISON CARABINE: Labour and the unions have long regarded the GEERS scheme as second rate at best, why has it taken so long to fix this particular anomaly with the scheme?

JACINTA COLLINS: Well we went to the last election with the commitment of a Fair Entitlements Guarantee and we will be introducing these changes from the 1 January. We don’t think that’s a long time.

FRAN KELLY: Senator Jacinta Collins is the Parliamentary Secretary for Workplace Relations and she was speaking there with our Political Editor Alison Carabine.