Redundancy Provisions in the Building and Construction Sector
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Understanding redundancy under the Plumbing and Fire Sprinklers Award 2020 and the Building and Construction General On-Site Award 2020 is crucial, as it deviates from the commonly known definition.
Definition of Redundancy
Within these Awards, redundancy is defined as:
- A situation where an employee ceases to be employed by an employer other than for reasons of misconduct or refusal of duty.
Implications of this Definition
This unique definition means that if an employee’s employment ends for reasons other than misconduct or refusal of duty, the employer is obligated to pay the amounts outlined below.
Payments as per the table are required in the following scenarios:
- Termination for underperformance or poor conduct: If an employee is terminated due to underperformance or poor conduct, that does not amount to misconduct.
- Employee resignation: If an employee resigns after completing at least 12 months of continuous employment.
- Position redundancy: If the position itself is made redundant.
Payment Structure
The specific payment amounts required in these situations are detailed in the table below:
|
Period of continuous service |
Redundancy Pay |
|
Less than a year |
1.75 hours pay for each completed week of service (doesn't apply if the employee resigns) |
|
1 year but less than 2 years |
2.4 weeks’ pay plus 1.75 hours pay for each completed week of service in the second year (capped at 4.8 weeks) |
|
2 years but less than 3 years |
4.8 weeks’ pay plus 1.6 hours pay for each completed week of service in the third year (capped at 7 weeks) |
|
3 years but less than 4 years |
7 weeks’ pay plus 0.73 hours pay for each completed week of service in the fourth year (capped at 8 weeks) |
|
4 years or more |
8 weeks’ pay |
A week’s pay means the all-purpose rate of pay (in accordance with Schedule B of the Award) at the time of termination.
Who receives this payment?
Full-time or part-time (weekly hire or daily hire)
A full-time or part-time employee (either engaged as weekly hire or daily hire) is entitled to this payment at the end of their employment
Casual
Any period of service as a casual will not entitle an employee to accrue service in accordance with clause 34.3 for that period.
Apprentice
Service as an apprentice will entitle an employee to accumulate credits towards the payment of a redundancy benefit in accordance with this clause, if:
- the employee completes an apprenticeship; and
- remains in employment with that employer for a further 12 months.
Exclusion from National Employment Standards (NES)
As these Awards have a specific redundancy scheme, the provisions of the National Employment Standards (NES) within the Fair Work Act 2009 do not apply to employees who are employed under these Awards. This means there is no small business exemption from payment.
It is essential that Employers understand these specific provisions to ensure compliance with the relevant Award. For further assistance, please contact our HR Advisory team on 07 3273 0800 or email advice@mpaq.com.au
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