All Construction Contractors in the general building and construction industry need to be aware of the federal “Building and Construction General On-site Award 2020” which covers employees working on-site. This includes any construction, alteration, extension, repair, maintenance, demolition, or dismantling of buildings that form part of land.
Visit the Fair Work website for full details on the Award.
The “redundancy” clause 17 under the Federal Award is unique to the building and construction industry and for the unaware may potentially expose any construction contractors to be in breach of the federal Award and the Fair Work Act 2009.
With significant fines for a corporation for such a breach, employers need to look at relevant risk strategies to ensure their legal obligations are being met.
What does this mean?
“Redundancy” means a situation where an employee ceases to be employed by an employer to whom this award applies, other than for reasons of misconduct or refusal of duty”.
In effect, the Award triggers a redundancy payment:
- Where a construction employee is made redundant by their employer; or
- Where an employee resigns after having been employed for 12 months or more.
A further down side for small employers is the Award does not provide an exemption for a small employer, as defined, from having to pay redundancy as per the National Employment Standards.
Apprentices aren’t entitled to redundancy while they’re under a training contract.
An employee who has finished their apprenticeship is entitled to redundancy. Their years as an apprentice will be counted when calculating redundancy pay and notice amounts if:
- their employer kept them on for a further 12 months after the apprenticeship was completed.
What can employers do?
Assess your risk strategy on the question of redundancy obligations.
One way to do this is to consider the benefits of joining ReddiFund (formerly WACIRF) which is a WA based redundancy fund operating in the building and construction industry.
The benefits of an employer joining ReddiFund are:
- Contributions are tax deductible in the year you make them.
- Employer contributions to ReddiFund can be as low as $40 per week per employee and offset the Award redundancy obligations.
- ReddiFund handles all the paper work involving redundancy payouts.
- Employers can manage their cash flow by making regular monthly redundancy contributions rather than make lump sum payouts at a time when they can least afford to.
- No administration fees are charged to you or your employees.
- ReddiFund surpluses are returned to the industry as the major sponsor of MATES in Construction which provides invaluable support to all workers and families in the building and construction industry
Employers can contact ReddiFund to assist with meeting their award obligations and discuss the benefits of being a member of the Fund.