A Member's Bill introduced into Parliament by Labour MP Sue Moroney last week seeks to provide minimum statutory redundancy entitlements for all employees. In particular, the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill provides for:
- Notice of termination of no less than four weeks;
- Compensation of redundancy in the amount of four weeks' remuneration for the first full year of continuous service with the employer; and
- Further compensation of two weeks' remuneration for each subsequent full or partial year of the employee's continuous employment to a maximum entitlement of 26 weeks' remuneration.
A similar Bill was defeated at its first reading in May 2010.
If the Bill is passed into law, the financial implications would obviously be significant for some employers, many of whom have struggled through the Global Financial Crisis in recent years. There is no doubt that the impact of a redundancy on employees can be very significant, but equally this needs to be balanced against the costs of restructurings, particularly for many SMEs, where a significant downturn in work has led to the need for reducing costs and rationalising workforces.