Submission: Small Business Redundancy


ARITA has made a submission to the Senate Education and Employment Committees’ inquiry and report into the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Bill) to the extent that it relates to the small business redundancy exemption.

ARITA was key in advocating for amendments to correct the anomalous position created by the loophole.

In 2019 ARITA members raised concerns with us regarding the practical operation of the small business redundancy exemption in s 121 of the Fair Work Act 2009 (Cth) and the potential inequities that can arise for some employees during the redundancy process. ARITA raised these concerns with the Fair Entitlements Guarantee team and Treasury at the time and has continued to raise them periodically since.

ARITA's submission supports the proposed reforms which address the unintended and inequitable outcomes for employees whose employment is terminated after their employer, which was previously a larger business, becomes a small business employer as a result of headcount reductions arising from a formal insolvency process. The current process sees employees who are not made redundant until after the business falls in size to become a small business employer, by employing less than 15 employees as prescribed in s 23 of the FWA, lose their previously held entitlement to a redundancy payment once they are terminated.

The Senate Education and Employment Committee is not due to issue its report in relation to the Bill until 1 February 2024.

Read ARITA's Submission - Fair Work Legislation Amendment (Closing Loopholes) Bill 2023