26 September 2023

Redundancy brings super benefit

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The Department of Premier and Cabinet has referred staff to a Circular to clarify employee superannuation benefits on the occasion of a retrenchment.

According to the Department, Circular NSWTC 15-14 Superannuation Retrenchment Benefits says employees who accept an offer of voluntary redundancy may be entitled to be paid a superannuation benefit as a result of the termination of their employment.

“Some superannuation schemes provide specific redundancy (retrenchment) benefits to eligible members,” the Department says.

“Employees will only be entitled to be paid a superannuation retrenchment benefit if the reason stated by their employer for their termination of employment comes within the meaning of retrenchment in the schemes’ rules,” it says.

It says a Judgment handed down in the NSW Supreme Court found that employees would not be entitled to a superannuation benefit if the reason for their termination was not consistent with the grounds defined in the Superannuation Act 1916.

“Employers are advised, however, to state the grounds for retrenchment in the redundancy offer made to an employee,” it says.

“This will protect an employee’s interests and ensure proper processes are implemented.”

The Department says employees would be entitled to a superannuation benefit if they took voluntary or compulsory redundancy on the grounds that the employer no longer required the contributor’s (or employee’s) services and did not propose to fill the position; work that the contributor was engaged to perform had been completed; or the amount of work that the employer required to be performed had diminished and, because of that fact, it was necessary to reduce the number of employees.

The Circular can be accessed at this PS News link.

According to the Department, 19 Industrial Relations became the responsibility of the DPC in July 2019 with the current Circular replacing TC15-14. It says the content is unchanged.

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