Abbott proposal strips redundancy packages

ANNUAL leave loading for workers "terminated" by their employers would be stripped from their redundancy packages, under changes before Federal Parliament.

The changes form part of the Abbott Government's Fair Work Amendment Bill, and would return loading payments at termination to arrangements in place before the Fair Work Act was passed in 2010.

It would also enact recommendations of the Fair Work Review Panel, a review completed in 2012 under the previous government.

A full "regulatory impact statement" by the government's Office of Best Practice Regulation found the change would save employers' money and "provide certainty" for workers and employers.

It would also remove inconsistencies between the current Fair Work Act and employment contracts which currently prevent workers getting the extra loading paid out on top of their annual leave owed when "terminated".

"Specifically, (it) would represent a reduction in costs for employers who have had to pay leave loading on unused leave to employees on termination because of the operation of section 90(2) of the Fair Work Act despite express provisions in the applicable modern award or enterprise agreement to the contrary," the statement reads.

While it would not affect employees terminated without any annual leave loading, it would remove workers' entitlements to the 17.5% loading "on top of any holiday pay owed to them".

"However, affected employees would not have had this entitlement prior to the commencement of the Fair Work Act and will continue to be entitled to their base rate of pay for any period of untaken annual leave," the statement reads.

While the changes to the Fair Work Act will likely pass the House, the government's bill is set for lengthy debate in the Senate, where Labor and The Greens have both voiced concerns about the changes.

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