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Decisive action needed by govt to protect small business - AIG

16 September, 2008

“The Federal Government needs to take decisive action to preserve the small business redundancy pay exemption following a statement by the Australian Industrial Relations Commission (AIRC),” Australian Industry Group Chief Executive Heather Ridout has said.

“The AIRC in its Award Modernisation Statement has indicated that small businesses will be required to pay redundancy pay under modern awards.

“Redundancy obligations will hit small businesses hard.  Small business is the largest employer of labour in Australia. There are approximately one million businesses with less than 15 employees. These businesses employ around 3 million Australians - over 40% of private sector employment.

“It is counterproductive to increase the cost of employment in this sector and it is essential that the Government includes provisions within its substantive workplace relations legislation preserving the current small business redundancy pay exemption.  This is consistent with the policy announced prior to the Federal Election.

“In the Government’s Forward with Fairness – Policy Implementation Plan, August 2007, a commitment was given to not impose redundancy pay obligations upon small businesses in the following terms:

“Small businesses are excluded from Labor’s National Employment Standard for redundancy payments”.

“In its earlier Forward with Fairness policy document the issue was also addressed, as set out in the following extract:

“Employees who are made redundant and who are employed in workplaces with 15 or more employees will also be entitled to redundancy pay as determined by the Australian Industrial Relations Commission in the 2004 Redundancy Test Case.”

“Courts and tribunals operate within the framework of laws created by Parliament. The Government needs to ensure that the appropriate legislative framework is put in place,” Ridout said.

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