Quirks in mod­ern awards #3: No ​“small busi­ness” exemp­tion for redun­dan­cy pay under cer­tain awards

The major­i­ty of employ­ees in Aus­tralia are cov­ered by an indus­try / occu­pa­tion spe­cif­ic mod­ern award. Whilst many of the awards con­tain sim­i­lar pro­vi­sions, in this series of occa­sion­al arti­cles we exam­ine unusu­al award claus­es which are some­times missed by employers.

Most mod­ern awards con­tain word­ing in rela­tion to redun­dan­cy pay along the fol­low­ing lines: ​“Redun­dan­cy pay is pro­vid­ed for in the Nation­al Employ­ment Stan­dards.” This is a ref­er­ence to sec­tions 119 to 123 of the Fair Work Act 2009 (Cth).

Sec­tion 119 of the Act con­tains a slid­ing scale of redun­dan­cy pay­ments for eli­gi­ble employ­ees. Sec­tion 121(1)(b) of the Act, how­ev­er, pro­vides that an employ­ee is not enti­tled to redun­dan­cy pay under sec­tion 119 if they are employed by a ​“small busi­ness employ­er”.

“Small busi­ness employ­er” is defined by sec­tion 23 of the Act to mean an employ­er with few­er than 15 employ­ees (includ­ing ​“asso­ci­at­ed enti­ties” of the employ­er, and exclud­ing cer­tain types of casu­al employees).

How­ev­er, some awards pro­vide that redun­dan­cy pay is payable by cer­tain small busi­ness employ­ers (albeit on a reduced scale). Exam­ples include:

• The Join­ery and Build­ing Trades Award 2010 (see clause 17.2 – dif­fer­ent rates of redun­dan­cy pay apply to ​“small employ­ers”);

• The Man­u­fac­tur­ing and Asso­ci­at­ed Indus­tries and Occu­pa­tions Award 2010 (see clause 23.2 — dif­fer­ent rates of redun­dan­cy pay apply to ​“small fur­nish­ing employ­ers”);

• The Tex­tile, Cloth­ing, Footwear and Asso­ci­at­ed Indus­tries 2010 (see clause 19.3 – dif­fer­ent rates of redun­dan­cy pay apply to a ​“small employ­er in the cloth­ing indus­try”);

• The Tim­ber Indus­try Award 2010 (see clause 15.7 dif­fer­ent rates of redun­dan­cy apply to employ­ers pre­vi­ous­ly cov­ered by the Tim­ber and Allied Indus­tries Award 1999 and the Fur­nish­ing Indus­try Nation­al Award 2003).

Some mod­ern awards also pro­vide for ​“indus­try-spe­cif­ic redun­dan­cy schemes” which oper­ate in place of the pro­vi­sions in the Nation­al Employ­ment Stan­dards and do not con­tain exemp­tions for small busi­ness employ­ers. Exam­ples include:

• The Black Coal Min­ing Indus­try Award 2010 (see clause 14);

• The Build­ing and Con­struc­tion Gen­er­al On-Site Award 2010 (see clause 17);

• The Mobile Crane Hir­ing Award 2010 (see clause 12);

• The Plumb­ing and Fire Sprin­klers Award 2010 (see clause 18).