GEERS reformed to boost employee entitlements

Employee entitlement scheme will be reformed, with the Gillard Government announcing plan to remove redundancy payment cap

November 16, 2010

Long-time workers made redundant will receive higher payouts under reforms announced today by the Gillard Government.

The Government will overhaul the General Employee Entitlements and Redundancy Scheme (GEERS) by removing the cap on payouts from January 1 next year.

Rather than employees receiving a set figure, payouts will now be based on how long they have worked for the business.

Workplace Relations Parliamentary Secretary Jacinta Collins says redundancy pay is currently capped at 16 weeks if a company becomes insolvent and cannot fund entitlements.

From next year, workers will receive a payout up to a maximum of 4 weeks for every year of service.

"This is about fairness and ensuring Australian workers are paid what they deserve, based on how long they have served," Collins says.

"If one worker has been at a company for five years, and another worker for 35 years, why should they get the same redundancy payout? That’s not fair and that was the unfair system under WorkChoices, where thousands of workers suffered huge financial losses."

GEERS is designed to help workers recover entitlements if their employer goes bust, but does not cover unpaid superannuation.

Collins says the global financial crisis increased the need for redundancy payments. She says the Government will consult those affected before legislating the changes.

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