IR Update Issue 10 – May 2014

Termination Payments

Before you make a payment to a departing employee, it is important that you ensure you are paying the correct entitlements. Ask yourself the following six questions to make sure you don’t miss anything:

1. Will the employee be working out their notice or receiving payment in lieu of notice?

2. Is the employee entitled to severance pay e.g. redundancy, retrenchment?

3. What are the employee’s annual leave and/or long service leave entitlements?

4. Are there any other payments payable to the employee as per their contract of employment, enterprise agreement or Modern Award?

5. What is the tax payable?

6. What tax exemptions apply for severance pay?
It is important to check your figures and, if need be, get your accountant or financial adviser to check the figures. Simple mispayments of termination entitlements could land you in hot water with the Fair Work Commission, and no employer wants that attention if it can be avoided.

Source: Workplace Bulletin, Jessica Oldfield, 17 March 2014

More changes to Fair Work Act? – Not Yet

At a workshop on Wednesday 9 April, regarding the Fair Work Act under the coalition, Minister for Employment, Hon Eric Abetz provided industry representatives in attendance with the coalition’s outlook for the future of the Fair Work Act and National Employment Standards (NES).

Representatives from Brismark were present to hear firsthand what businesses can expect during the coalition’s term in office. Hon Eric Abetz, indicated that the coalition will not be making any changes, beyond the ones indicated prior to the election, during this term in office. A majority of these changes were already identified by the previous labor government and are being followed through by the coalition government. (For more information regarding the implementation of these changes, refer to IR Update – Issue 05 & 08)

However, the minister did indicate that they are undertaking a productivity review of the Fair Work Act and National Employment Standards. Unfortunately, he also indicated that any recommendations arising from the review would not be implemented until the next term.

A couple of items highlighted via industry representatives, which were of particular interest to Brismark as representatives of small/medium business, included:

  • Increasing the small business employee threshold from 15 to 49 – as that is a fairer representation of small business
  • Industry feels the current legislation is more on the side of the employee then the employer – that this balance needs to be assessed and more fairly distributed