Employers will not have to extend redundancy payments to casuals but will have to double severance payments to permanent workers as part of a groundbreaking state industrial relations commission decision.
From December 1, staff will be entitled to double the amount of severance pay for redundancies with the maximum payout increased to 16 weeks and the definition of small business has been changed.
The Queensland Industrial Relations Commission (QIRC) decision is significant as it is the first time it has made a decision before the national commission, which is currently hearing a similar case.
The definition of small business has been rejigged to exempt those with staff working a total of fewer than 550 hours on average per week, excluding overtime, Monday to Sunday.
The other key elements of the decision are:
- severance pay will be calculated using the ordinary rate of pay, excluding overtime, penalty rates, allowances and bonuses
- applications for superannuation benefits will now be heard by the Commission and determined on a case-by-case basis
- payments will not be extended to casuals
- workers over 45 years old will not be able to claim a 25% loading on all rates.
Commerce Queensland president Graham Heilbronn welcomed the decision as it continues to protect small business.
"In rejecting the claim to remove the exemption for those employers who employ less than 15 employees, the Commission recognised that many small businesses operate in marginal circumstances, and an obligation to make severance payments could send some businesses to the wall," Heilbronn says.
The QIRC has also allowed further submissions by the Queensland Council of Unions, including the extension to casuals, to be lodged later, general secretary Grace Grace says.
"It will also ensure than sham employer arrangements designed to avoid TCR obligations will be countered by redefining the operation of companies where those companies have common directors or shareholders," Grace says.
"The decision has also ensured the offsetting of severance payments against superannuation entitlements that will be substantially limited whereby employers will now have to make individual applications for exemption from these new arrangements."
A Blake Dawson and Waldron client alert warns the federal decision may affect state arrangements and employers should be aware of variations in state awards as the amendments are not automatic.