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RedundancyFebruary 26, 2016
Dick Smith will cease trading and close their doors in 8 weeks. The Australian brand has been in operation for forty-eight years, its last few, however, have not been as admirable. Amongst its financial downfalls were possible contributing factors involving employment relations. Financial woes for any company are difficult to overcome, however when you have a possible mix of underpayments and fines associated, it can at times be the icing on the cake.
At the beginning of the year, Dick Smith went into receivership, which was a result of slower than usual Christmas earnings. In the month that followed, the Fair Work Ombudsman led investigations into underpayments of staff. Dick Smith was put on the market in the hope of a sale which has not been successful.
In cases such as this, redundancies often result from company slow down and economic loss. The shutting down of Dick Smith electronics will lead to almost 2,500 people losing their employment. Late last year it was announced that 300 people were to be made redundant after ABC retail stores would close.
Another Australian brand who has had significant impacts on the Australian unemployment rate was Ansett. When the airline collapsed in 2001, more than 15,000 employees were made redundant. It took over a decade for these employees to receive their last pay pack of remuneration. Some employees who worked at Ansett for decades were owed hundreds of thousands of dollars in entitlements when the airline collapsed.
For a small business, although the impacts are not to this scale, it is just as important to have all of your employee entitlements accounted for. If you were to find yourself in financial trouble how do you manage your staff in terms of communicating job loss, paying your staff their employment entitlements and reasonably justifying redundancy?
Your employees accrue annual leave, which must be paid out to them if they are made redundant. If you have any questions relating the employee entitlements and redundancy, contact Employsure today on 1300 651 415.