NSW Clarification of Redundancy Statement - Four Weeks Pay and Car Allowance?

[ChrisAnderson]

Hi Law Answers,
I am being made redundant today, and I am not sure my employer is paying me my full redundancy monies.
Below is a statement from my company redundancy policy. Can you please tell me if the sentence in brackets at point #3 means I should receive 4 weeks base pay and car allowance?


If employment commencement date is prior to the 1 April 2013

• Ordinary time earnings for the period to date including motor vehicle value or car allowance.
• Annual Leave and Long Service Leave entitlements (as per State Laws)
• A compensation payment of 4 weeks of ordinary time earnings for each year of employment or part thereof. (Inclusive of motor vehicle value or car allowance)
• Pro-rata bonus payment for the period (bases on objectives paid in line with GV Global Policy and timing).
• 1 additional week ordinary time earnings if over 45 years of age (if over 2 years of service)

Regards

 

[AnnaLJ]

Hi Chris

Did your redundancy payment also include payment in lieu of notice? You should have a notice period in your contract for termination and this would need to be added on top of the redundancy payout amount of 4 weeks.

Your redundancy policy is not worded the best, but from a strict reading of the policy I would deduce that you should be paid 4 weeks car allowance as well as 4 weeks pay.

Did they provide you a breakdown of how your final redundancy payment was calculated? The Fair Work website has a calculator you can use to help work out if you have been paid correctly. This may provide some further comfort to you: P.A.C.T Notice & redundancy calculator - Calculate entitlements

On another point, are you confident that this is a genuine redundancy? Is your position no longer needed at the company?

All the best

 

[ChrisAnderson]

Hi Anna,

Thank you very much for taking the time to reply to my questions and for providing extra information and assistance.

Yes, my redundancy payment also included a ’payment in lieu of notice’ component of 5 weeks (I am over 45).

I have also been advised a ‘Restraint Area and Period’ will apply to me; but I have not yet been advised where or how long this would apply and I am currently awaiting this information from my employer. If I may ask, if such a restriction is placed on my future employment (within an industry I have served for over 17 years), is it reasonable to request remuneration for this period? So, if I am advised I can not work with a competitor supplier or customer for 12 months from termination I could reasonable request a supplement of say 50% of lost earnings?

As far as this being a genuine redundancy - I would hazard to guess, not really. With 14 years exposure to our many and varied software and hardware solutions, there is one product which is no longer under support, and this is the reason given for my redundancy since I am the sole/primary engineer for this retired product. However I am also a primary/senior engineer for other products which remain and which I do currently support so if I was to remain within the company I am able and willing to continue my engineering tasks. However I am happy to take the redundancy package and move on, unless you think there are any reasons to challenge this decision from my employer.

Once again, thank you for your time and assistance with my questions. What I had hoped would be a mutually amicable redundancy process is now starting to become complicated and stressful and I appreciate the advise and assistance you are able to lend.

Cheers

 

[AnnaLJ]

Hi Chris

Did your contract of employment have a 'restraint of trade' clause in it? Generally, for a restraint of trade to apply it would need to have been agreed in writing between you and your employer. Even then, there are requirements that a restraint of trade clause be reasonable. If it is not reasonable, it could be held invalid if challenged in a court.

Some of the factors that might be taken into consideration when assessing whether a restraint clause is reasonable (and therefore, enforceable) include:

• the nature of the work, and the employee’s seniority in the employer’s business, including whether the position involved exposure to confidential information
• the benefit to the employer and the employee of agreeing to the restraint
• the scope and duration of the restraint, including the time and area included in the restraint
• whether the restraint of trade provides no more than is adequate to protect the employer’s legitimate business interest

The main area the courts seem to focus on is the 'scope' of the restraint - ie, how long it is for, whether the restraint is just for certain named competitors, certain roles or the whole industry and also whether it's just in your immediate locality or wider (state wide etc). This will really come down to a question of fact, and wont be able to be assessed until your employer advises you what the scope of the restraint is. I would recommend some legal advice when it comes to assessing this. But again, you should check your contract to see if you have agreed to a restraint. It's difficult for me to see how this restraint could apply to your employment if it had not previously been agreed to in writing between you and the employer.

It's difficult to know from the information you have provided whether this would be a genuine redundancy or not. You can get free advice on this point though from the Fair Work Ombudsman (13 13 94). I'm not 100% across what remedies could be provided if it were found not to be genuine, though I imagine one might be reinstatement of the role which may or may not be something that appeals to you.

All the best

 

[ChrisAnderson]

Hi Anna,

Once again, thank you so much for your time in answering my questions and with such detailed answers.

The legal information, direction and advise you have supplied has empowered me to negotiate an agreement on the inclusion of my car allowance into my redundancy package and the removal of my restraint clause. I have signed my redundancy agreement on Friday and now have many new opportunities in front of me.

All the best and thank you again for all of the assistance and information.

Many thanks, and best regards

 

[AnnaLJ]

Hi Chris

I am so happy to hear that everything has worked out well for you! Employment law/redundancies etc are definitely a very complicated area and the employee is often in the weaker bargaining position when it comes to these situations. So it's best to be armed with as much knowledge as you can!

What did you end up deciding with the restraint of trade clause? is your employer still trying to enforce this?

All the best for the future!