Government Move To Deny Severance Pay Is Heartless And Wrong

ACTU President Sharan Burrow said:

“The simple fact is that the overwhelming majority of businesses (70%) who lay off workers are profitable when they do so and can afford to give laid off workers severance pay.

This is a classic case of sour grapes. Having failed to win the argument on the basis of facts, the Howard Government now plans to ignore the independent umpire and reduce entitlements for people who are laid off.

The Howard Government’s proposed new law to deny small business employees redundancy pay is a heartless attack on some of the most vulnerable people in our community.

Up to 100,000 people working in small businesses are retrenched every year and they need redundancy pay to help tide them over.

Redundant workers face an average of five months unemployment (22 weeks). Large numbers of especially older workers drop out of the work force entirely after they are retrenched.

People are working in small business for up to twenty years and yet if they are unlucky enough to be laid off they walk away with nothing unless there is redundancy pay.

But independent data from the Australian Bureau of Statistics shows that the overwhelming majority of businesses are profitable when they make people redundant and downsize.

The Howard Government made a lengthy submission to the Australian Industrial Relations Commission but, in the end, lost the argument.

The Commission considered all the facts and all the arguments and made a decision that balances the needs of business against the need for a safety net that protects all employees.

It caps the severance pay entitlement for small business employees at half the level for larger businesses – 8 weeks redundancy pay as opposed to 16 weeks – and it allows small businesses to seek an exemption if they are have difficulty paying redundancy.

The ACTU calls on the Senate to respect the decision of the independent umpire and reject the Government’s legislation.”