But do I HAVE to (make redundancy payments)?

Sing it with me, Bob Dylan: the times they are a changin’.

For one reason or another, your business is undergoing significant operational changes and you need to make some of your workforce redundant.

So, who do you make redundant, how do you do it properly and, most importantly, what do you have to pay them?

1. Who you make redundant will depend on the reasons for the redundancy, as well as the size of your business and the nature of the restructure.
2. The proper process and procedure to be followed will depend on the terms of the employment contract and/or applicable modern award or enterprise bargaining agreement. 
3. Generally, you will not have to pay an employee redundancy pay in the following situations:

1. The employee was employed on a casual or fixed-term contract;
2. The employee has only been employed for less than 12 months; or
3. The employee was an independent contractor.

There are some exceptions to this rule and then some exceptions to those exceptions.

Also, those exceptions are not the only exceptions.

Put simply, redundancy can be incredibly complicated.

Get it right and get the experts to talk you through it.

Penalties of up to $54,000 for corporations and $10,800 apply to directors for breaching their redundancy obligations under the Fair Work Act 2009 (Cth) so it pays to pay up! (Though only when you have to, of course.)

Call the Workplace Relations team at Nevett Ford on (03) 9614 7111 and we’ll make it look easy. 

 

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Overworked and Underpaid: The reality behind George Calombaris’ Greek tragedy

 

In a brilliant piece of spin worthy of an election campaign, George Calombaris openly admitted to underpaying past and present employees over $2.9 million – and has maintained his positive public image.

 

From the papers to The Project, the popular Masterchef appeared everywhere, apologised for profiting from his workers and continued to accept bookings at his numerous Greek restaurants across Melbourne.

 

You would be forgiven for thinking that it’s all that easy – underpay, apologise, back to business as usual – but be warned, this is the exception, not the rule. 

 

Businesses that are found to breach the Fair Work Act 2009 are liable to penalties of up to $54,000 for corporations, per breach. This means that if you underpay 100 employees, you are liable to 100 lots of penalties. Directors also face penalties of upon $10,800 per breach.  

 

Last year, the Fair Work Ombudsman recovered more than $2.2 million dollars in penalties alone for underpaid employees.

 

For George Calombaris’ Made Establishment empire, the repayments will be made quickly and easily, as the investors in the business have continued to pledge their financial support for the company.

 

Other businesses are not so lucky and have had to enter into voluntary administration after being ordered to back-pay their workers.

 

If you are unsure of how much to pay your employees in order to fulfil your obligations under the relevant employment contract, modern award or enterprise bargaining agreement, talk to someone who knows the answer! Contact the workplace relations team at Nevett Ford for all your employment law questions on (03) 9614 7111.

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