Govt puts limit on redundancy pay

Press, Volume CXVI, Issue 34127, 13 April 1976, Page 1

Govt puts limit on redundancy pay

(Neto Zealand Press Association) WELLINGTON, April 12. The Government acted tonight to limit the amount that employers may pay out in compensation for redundancy.

Announcing that an amendement had to be made to the Wage Adjustment Regulations to limit redundancy compensation, the Minister of Labour (Mr Gordon) said that in the last few weeks a danger had developed in negotiations on redundancy.

The Government had been disturbed by the size of redundancy payments, so temporary regulations had been introduced that would be effective until laws were enacted, he said.

The new regulations, operative until December 31, next year, would limit compensation for redundancy to amounts that were to be paid under “existing instruments” or amounts paid under provisions approved in exceptional circumstances for inclusion in instruments by the Industrial Commission, the State Services Tribunal, the Waterfront, In-

dustry Tribunal, or the Air Crew Tribunal. Otherwise, compensation payment for redundancy would be limited to two per cent of the total of an employee’s ordinary pay during the 12 months immediately preceding the date on which he was given notice of his redundancy, multiplied by the number of years (not exceeding 20) during which the employee had been in the continuous service of the employer. To qualify for a payment, an employee had to have had at least 12 months continuous service with the employer immediately before the date on which notice was given of redundancy — unless in extraordinary circumstances the appropriate authority ruled otherwise. Mr Gordon said the Industrial Commission and relevant tribunals might approve compensation payments outside the limits set down. They could do this when they were satisfied that exceptional circum-

stances existed. But the regulations said that they were not bound to have regard for current agreements as precedents. The regulations did not compel anyone to make redundancy payments — “They simply set a maximum."

They did not affect existing agreements where those agreements already exceeded the maximum.

Own accords

Parties could make their own bargains without the approval of the Industrial Commission or tribunals so long as they did not exceed the limits set down.

The regulations did not prevent parties considering redundancy provisions from continuing their discussions, and that included the State services.

In the State services a number of unions had made claims for redundancy agreements. The Government had authorised the State employing authorities to begin negotiations.