29 November 2017 Quirks in modern awards #3: No "small business" exemption for redundancy pay under certain awards

By Simon Obee, Associate

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).

Simon Obee, Senior Associate  |  Phone: +61 2 9233 5544  |  Email:

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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