VIC Am I Entitled to a Redundancy?

[Madmicky83]

Hi,

I have been made redundant by a small company with 13 people on the pay roll. With the research I have done, we have 17 staff members but 4 of those members are, to what I believe, paid through a trust.

Is a trust a entity?

I understand a small business does not allow for a redundant payment, but with this information, does that make them not a small business? Therefore, would I be entitled to a redundancy?

 

[Matthew Lynch]

Hi

You will be entitled to a redundancy if:

1.the trust is an associated entity of the principal entity, and
2. together they employ 15 or more employees, not including casuals (regular and systematic casuals are included).

Associated entity has the meaning of s 50AAA of the corporations act.

Basically, if the trust is wholly controlled by the principal entity then it will be an associated entity.

If you need further help feel free to get in touch.

 

[Rod]

Quite likely. But main consideration is whether the 4 being paid into the trust are considered contractors. Method of payment is not the main factor.

 

[Madmicky83]

The four others are owners in the company that work there alongside me full time.

 

[Rod]

Hmm, assuming all four owners are also directors, they may be taking 'wages' as dividends or directors fees.

I'd expect they may only be considered employees if they are executive directors (ie work in the business) but I'm not sure if this counts from a redundancy perspective. If no-one here answers, call the Fair Work Commission for an answer.

 

[Matthew Lynch]

Directors are employees. If they work beside you they will most likely be counted as employees.