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More redundancy pay for Australian workers

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Senator the Hon Jacinta Collins Parliamentary Secretary for School Education and Workplace Relations

16 November, 2010

Media release

More redundancy pay for Australian workers

Australian workers will receive redundancy pay for every year of service if their company goes broke, Senator Collins announced today.

Under changes to come into effect on January 1, 2011, the Gillard Government will remove the cap on redundancy payments so that workers’ payouts will be based on how long they have served.

Currently, if an employer becomes insolvent and cannot fund redundancy entitlements, redundancy pay is capped at 16 weeks. From next year, workers will receive a payout up to a maximum of 4 weeks for every year of service.

“This is about fairness and ensuring Australian workers are paid what they deserve, based on how long they have served,” Senator Collins said.

“If one worker has been at a company for five years, and another worker for 35 years, why should they get the same redundancy payout? That’s not fair and that was the unfair system under WorkChoices, where thousands of workers suffered huge financial losses.

“What a double blow to workers, to not only lose their jobs after so many years but then to miss out on tens of thousands of dollars they and their families need. Finally, Australian workers will be treated fairly and get the redundancy payouts they deserve when their employer goes into liquidation.”

The global financial crisis has sparked an increased need for redundancy payments and the Government is committed to funding entitlements. The changes will be made by amending GEERS (General Employee Entitlements and Redundancy Scheme) Operational Arrangements. But the Government will consult key stakeholders and legislate next year.

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