AP789529CRV - Metal, Engineering and Associated Industries Award 1998
[Pt I:Pt 4:4.4 Severance Pay title changed by PR947664 from 08Jun04]
Summary
This clause describes certain rights and obligations of employers and employees in circumstances where an employer no longer requires a job to be done by anyone.
[Pt I:Pt 4:4.4.1 substituted by PR947664 from 08Jun04]
4.4.1(a) Business includes trade, process, business or occupation and includes part of any such business.
4.4.1(b) Redundancy occurs where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and that decision leads to the termination of employment of the employee, except where this is due to the ordinary and customary turnover of labour.
4.4.1(c) Small employer means an employer which employs fewer than 15 employees.
4.4.1(d) Transmission includes transfer, conveyance, assignment or succession whether by agreement or by operation of law and transmitted has a corresponding meaning.
4.4.1(e) Week’s pay means the ordinary time rate of pay for the employee concerned. Provided that such rate shall exclude:
[Pt I:Pt 4:4.4.2 substituted by PR947664 from 08Jun04]
4.4.2(a) Severance pay - other than employees of a small employer
An employee, other than an employee of a small employer, whose employment is terminated by reason of redundancy is entitled to the following amount of severance pay in respect of a period of continuous service:
Period of continuous service |
Severance pay |
Less than 1 year |
Nil |
1 year and less than 2 years |
4 weeks’ pay* |
2 years and less than 3 years |
6 weeks’ pay |
3 years and less than 4 years |
7 weeks’ pay |
4 years and less than 5 yeas |
8 weeks’ pay |
5 years and less than 6 years |
10 weeks’ pay |
6 years and less than 7 years |
11 weeks’ pay |
7 years and less than 8 years |
13 weeks’ pay |
8 years and less than 9 years |
14 weeks’ pay |
9 years and less than 10 years |
16 weeks’ pay |
10 years and over |
12 weeks’ pay |
* Week’s pay is defined in 4.4.1.
4.4.2(b) Severance pay - employees of a small employer
An employee of a small employer as defined in 4.4.1 whose employment is terminated by reason of redundancy is entitled to the following amount of severance pay in respect of a period of continuous service:
Period of continuous service |
Severance pay |
Less than 1 year |
Nil |
1 year and less than 2 years |
4 weeks’ pay* |
2 years and less than 3 years |
6 weeks’ pay |
3 years and less than 4 years |
7 weeks’ pay |
4 years and over |
8 weeks’ pay |
* Week’s pay is defined in 4.4.1.
4.4.2(c) Provided that the severance payments shall not exceed the amount which the employee would have earned if employment with the employer had proceeded to the employee’s normal retirement date.
4.4.2(d) Continuity of service shall be calculated in the manner prescribed by 7.1.5. Provided that service prior to 8 June 2004 shall not be taken into account in calculating an entitlement to severance pay for an employee of a small employer pursuant to 4.4.2(b).
4.4.2(e) Application may be made for variation of the severance pay provided for in this clause in a particular redundancy situation in accordance with the Redundancy Case Decision [PR032004, 26 March 2004] and the Redundancy Case Supplementary Decision [PR062004, 8 June 2004].
4.4.3 Transmission of business
[Pt I:Pt 4:4.4.3 substituted by PR947664 from 08Jun04]
4.4.3(a) The provisions of this clause are not applicable where a business is before or after the date of this award, transmitted from an employer (in this subclause called the transmittor) to another employer (in this subclause called the transmittee), in any of the following circumstances:
4.4.3(a)(i) Where the employee accepts employment with the transmittee which recognises the period of continuous service which the employee had with the transmittor and any prior transmittor to be continuous service of the employee with the transmittee; or
4.4.3(a)(ii) Where the employee rejects an offer of employment with the transmittee:
4.4.3(b) The Commission may vary 4.4.3(a)(ii) if it is satisfied that this provision would operate unfairly in a particular case.
[Pt I:Pt 4:4.4.4 substituted by PR947664 from 08Jun04]
This clause does not apply to:
[Pt I:Pt 4:4.4.5 substituted by PR947664 from 08Jun04]
The Commission may vary the severance pay prescription on the basis of an employer’s incapacity to pay. An application for variation may be made by an employer or a group of employers.
[Pt I:Pt 4:4.4.6 substituted by PR947664 from 08Jun04]
4.4.6(a) An employer, in a particular redundancy case, may make application to the Commission to have the general severance pay prescription varied if the employer obtains acceptable alternative employment for an employee.
4.4.6(b) This provision does not apply in circumstances involving transmission of business as set in 4.4.3.
4.4.7 Employee leaving during notice period
[Pt I:Pt 4:4.4.7 substituted by PR947664 from 08Jun04]
An employee given notice of termination in circumstances of redundancy may terminate his/her employment during the period of notice set out in 4.3.1(a). In this circumstance the employee will be entitled to receive the benefits and payments they would have received under this clause had they remained with the employer until the expiry of the notice, but will not be entitled to payment in lieu of notice.
[Pt I:Pt 4:4.4.8 Time off during notice period title changed by PR947664 from 08Jun04]
[Pt I:Pt 4:4.4.8(a) substituted by PR947664 from 08Jun04]
4.4.8(a) During the period of notice of termination given by the employer in accordance with 4.3.1(a), an employee shall be allowed up to one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment.
4.4.8(b) If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee shall, at the request of the employer, be required to produce proof of attendance at an interview or they will not receive payment for the time absent. For this purpose a statutory declaration will be sufficient.
[Pt I:Pt 4:4.4.8(c) inserted by PR947664 from 08Jun04]
4.4.8(c) The job search entitlements under this subclause apply in lieu of the provisions of 4.3.4.
4.4.9 Transfer to Lower Paid Duties
[Pt I:Pt 4:4.4.9 inserted by Q2704 from 01Jul98]
Where an employee is transferred to lower paid duties by reason of redundancy the same period of notice must be given as the employee would have been entitled to if the employment had been terminated and the employer may at the employer’s option, make payment in lieu thereof of an amount equal to the difference between the former ordinary time rate of pay and the new ordinary time rate for the number of weeks of notice still owing.
