Case Studies

How Do Job Cuts Impact Employees on Workers Compensation?

TGB's Tina Bouras writes about the importance of negotiating your redundancy entitlements when on workers compensation.

TGB’s Tina Bouras writes about the importance of negotiating your redundancy entitlements when on workers compensation.

Once again, employees of big business in South Australia are facing job cuts.

GM Holden Limited, commonly known has Holden, was founded in 1856 as a saddlery manufacturer.  In 1908 it moved into the automotive field before becoming a subsidiary of the United States based General Motors (GM) in 1931.

Sadly, after over 100 years of manufacturing and production of vehicles, Holden’s Elizabeth plant will close its doors in 2017.

It is hard to quantify the overall and long term impact, but it is estimated that nearly 3,000 jobs at the Holden Elizabeth plant will go, and as many as 65,000 other jobs may be impacted across the country.

Similarly, it appears that our “Flying Kangaroo”, Qantas, is also going down a difficult financial path in its recent announcement that over a thousand jobs will be cut.

This is even more unfortunate for the many hard working Australians who have suffered injuries during the course of their employment.  Workers are entitled to a number of payments under the Workers Rehabilitation and Compensation Act. Once a worker is faced with a redundancy their entitlements can be severely impacted if independent legal advice is not sought. For example, there is likely to be a lump sum amount payable that has not been considered in the redundancy package.

Some self-insured companies considering reducing staff numbers may look to offer redemptions to employees who are still on workers compensation. In recent times, the WorkCover Corporation has stated that redemptions were contrary to the Corporations policy, and there has been a significant reduction in the number of redemptions offered to injured workers. 

In the recent decision of the Full Court of the Supreme Court of South Australia in the Halliday v Gallagher Bassett Services P/L & Anor [2013] SASCFC 90 an application was made by an injured worker for a redemption. This was rejected by the Corporation as it was contrary to its Policy. This was appealed and the worker sought an order against the Corporation to compel them to consider to agree to a redemption of ongoing entitlements to compensation pursuant to s42 of the Act. Although the application was dismissed, it was held that:

“…Section 42 of the Act explicitly makes provision for conciliation between the Corporation and a worker in the event of a failure to agree a redemption of the worker’s entitlements. On referral to conciliation, the Corporation has a duty to make a genuine attempt to conciliate and to consider whether or not to make an exception to its policy in the case of the particular worker who has sought a redemption (Kourakis CJ [16], [25] and [27], David and Peek JJ agreeing [32] and [33]…”

For those who are on workers compensation and facing redundancy, it is critical to seek independent legal advice before any agreement is signed, so that you know what your complete entitlements are. When the redundancy is signed, it is too late.

TGB is South Australia’s largest injury law firm. For a free initial interview about your workers compensation issue, contact your nearest TGB office