Too piecemeal as a standalone bill
Critics argued the bill should not be split from the broader workplace package because passing only this measure would leave other promised protections, such as wage theft and labour hire reforms, unresolved.
Fair Work Legislation Amendment (Small Business Redundancy Exemption)
Current status
This bill did not become law and is no longer proceeding.
Policy area
Work & employment
What does this bill do?
Workers at an insolvent business would keep redundancy pay when a larger employer shrinks below 15 staff before the last jobs are cut, so timing would not wipe out that entitlement.
Why was it introduced?
An insolvency loophole left some workers without redundancy pay when an insolvent larger employer cut staff below 15 before the last jobs were terminated. This bill removes that small business exemption in those insolvency cases so redundancy pay is not lost because of the timing of layoffs.
Broader context
Since 2009, federal workplace law has exempted businesses with fewer than 15 employees from paying redundancy pay, but that rule created a loophole when an insolvent larger employer cut staff below the threshold before the final jobs were terminated. In November 2023, Senators Jacqui Lambie and David Pocock introduced this bill to preserve redundancy entitlements in those insolvency-driven downsizings, the SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. passed it on 9 November, and it was then sent to the House of RepresentativesThe lower house where the bill was sent after passing the Senate..
Key criticism
The main criticism was not about the redundancy fix itself but about carving it out of the wider Closing Loopholes packageA broader workplace reform package that speakers say this bill was split away from., which critics said would cherry-pick one easy measure while leaving other worker protections behind. That case was raised mainly by Labor ministers and senators, while other speakers broadly backed the bill and any reservations were mostly that it was too narrow rather than harmful on its own.
Who supported it?
Senator Jacqui Lambie introduced this bill. Speeches supporting it came from Liberal Party, Jacqui Lambie Network, Greens.
Introduced in Senate 06 Nov 2023
Passed Senate 09 Nov 2023
Failed in House 13 Nov 2023
Did not become law —
Did it become law?
No
The bill did not complete passage through Parliament.
Final passage
No final passage
The bill has not completed passage and is no longer proceeding.
Time before failure
7 days
From introduction to the final recorded step before the bill stopped proceeding
Meaning
What does this bill do?
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Workers at an insolvent business would keep redundancy pay when a larger employer shrinks below 15 staff before the last jobs are cut, so timing would not wipe out that entitlement.
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The change would apply only to employers that are bankrupt or being wound up because they are insolvent, and would not affect ordinary small businesses that remain solvent.
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Employees could still qualify for redundancy pay if the staff cuts that pushed the business under the small business threshold happened within the previous 6 months of bankruptcyThe legal process used when a person or partnership cannot pay their debts, and the page uses it for insolvency cases that trigger the exception., liquidationThe formal process of closing a company and selling assets to pay debts., or an insolvency appointment.
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The new rule would start after Royal AssentThe final step that gives a bill legal force after Parliament passes it. and would apply only when both the job loss and the insolvent downsizing below 15 staff happen after the law starts.
Show source excerpts
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The amendments would provide an exception to the operation of the small business redundancy exemption in such downsizing contexts, thus preserving an employee’s redundancy pay entitlement in a range of scenarios in which the employer may have become a small business employer due to insolvency. This ensures an employee’s legal entitlement to redundancy pay is not taken away based on when they were made redundant.
Fair Work Legislation Amendment (Small Business Redundancy Exemption) explanatory memorandum -
The Bill only applies to employees of employers that are bankrupt or in liquidation due to insolvency. It does not affect ongoing, solvent businesses. It is intended the Bill will cover the situation when a larger employer incrementally downsizes due to insolvency, either in the period leading up to liquidation or bankruptcy, or afterwards, and the number of employees falls below the 15 employee threshold for the small business definition, causing some employees to lose their previous entitlement to redundancy pay. This may occur, for example, where an insolvency practitioner makes most of the employees of a company redundant upon their appointment, but retains the bookkeeping and payroll staff – fewer than 15 employees in total – to assist with the orderly wind up of the business.
Fair Work Legislation Amendment (Small Business Redundancy Exemption) explanatory memorandum -
New subparagraphs (4)(d)(i)–(iii) would provide a six month ‘look back’ period to apply to determine the application of the exception, from six months before the bankruptcy or liquidation, or the appointment of the insolvency practitioner, or, if the appointment of the insolvency practitioner was immediately preceded by the appointment of other insolvency practitioners, from the earliest appointment date.
Fair Work Legislation Amendment (Small Business Redundancy Exemption) explanatory memorandum -
New clause 125 would ensure that despite the operation of new paragraph 121(4)(d), the amendments to section 121 will only apply to employees whose employment has been terminated post-commencement and where the insolvent employer downsizing to become a small business employer occurred post-commencement.
Fair Work Legislation Amendment (Small Business Redundancy Exemption) explanatory memorandum
Context
Broader context for this bill
Since 2009, federal workplace law has exempted businesses with fewer than 15 employees from paying redundancy pay, but that rule created a loophole when an insolvent larger employer cut staff below the threshold before the final jobs were terminated. In November 2023, Senators Jacqui Lambie and David Pocock introduced this bill to preserve redundancy entitlements in those insolvency-driven downsizings, the SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. passed it on 9 November, and it was then sent to the House of RepresentativesThe lower house where the bill was sent after passing the Senate..
- 2009
Fair Work Act sets a small business redundancy exemptionThe rule that lets employers with fewer than 15 staff avoid paying redundancy pay.
Hansard for the bill states that since 2009 employers with fewer than 15 staff have generally been exempt from paying redundancy pay under federal workplace law.
Hansard ↗ - 2023
Insolvent large employers are found to be using the threshold to avoid final redundancy payments
The explanatory memorandumThe official note that explains what the bill does and why it was drafted. says the bill responds to anomalous outcomes where a larger business becomes a small business employer due to insolvency and workers can lose redundancy entitlements.
Australian Parliament House ↗ - 06 Nov 2023
Crossbench senators introduce a bill to close the insolvency loophole
The bill was introduced in the SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. to remove the exemption in insolvency cases so the timing of downsizing below 15 employees would not wipe out redundancy pay.
Parliamentary timeline ↗ - 09 Nov 2023
SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. passes the bill
SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. debate described the measure as closing a loophole affecting workers at businesses going under, and the chamber agreed to the third reading that day.
Hansard ↗ - 13 Nov 2023
Bill moves to the House of RepresentativesThe lower house where the bill was sent after passing the Senate.
After clearing the SenateThe chamber that debated and passed the bill before sending it to the House of Representatives., the bill was introduced and read a first time in the House, extending the push to change redundancy rules for insolvency-driven staff cuts.
Parliamentary timeline ↗
Legislative route
How did it move through Parliament?
House Senate
Introduced 06 Nov 2023
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
Second reading opened 06 Nov 2023
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Second reading debate 09 Nov 2023
The bill reached this recorded parliamentary step.
SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. second reading agreed 09 Nov 2023
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. third reading agreed 09 Nov 2023
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Introduced 13 Nov 2023
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
Key criticism
The main case against this bill
The main criticism was not about the redundancy fix itself but about carving it out of the wider Closing Loopholes packageA broader workplace reform package that speakers say this bill was split away from., which critics said would cherry-pick one easy measure while leaving other worker protections behind. That case was raised mainly by Labor ministers and senators, while other speakers broadly backed the bill and any reservations were mostly that it was too narrow rather than harmful on its own.
No broad substantive case against the redundancy change itself was recorded.
Fixes only a small part of the problem
Some supporters said the bill closed only one loophole and would not solve the broader problem of workers losing redundancy and other entitlements when businesses exploit gaps in workplace law.
Further sources
Votes
Recorded votes
No recorded votes were found before this bill stopped proceeding.
Parliamentary debate
Who spoke, and what they said
Start here — lead voices
Sponsor speech Supports
Jacqui Lambie
Jacqui Lambie supports the bill and says it closes a loophole that lets large businesses avoid redundancy payments when they shrink into insolvency.
Read in Hansard ↗ Lead opposing voice Opposes
Murray Watt
Watt says the government will not support splitting off this bill from the broader workplace package, because it wants the whole set of worker protections dealt with together rather than leaving key measures to next year.
Read in Hansard ↗ Lead supporting voice Supports
Barbara Pocock
Barbara Pocock says the Greens support the bill because it helps workers in small businesses who can miss out on redundancy support when a business becomes insolvent.
Read in Hansard ↗ Lead voice Supports
Michaelia Cash
Michaelia Cash supports the bill and says it should be passed separately because it fixes a loophole so employees of a business that has shrunk through insolvency do not lose their redundancy payment.
Read in Hansard ↗All speeches by bloc
Labor
2 speakers · 1 support · 1 oppose
Labor
2 speakers · 1 support · 1 oppose
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Murray Watt ★ Watt says the government will not support splitting off this bill from the broader workplace package, because it wants the whole set of worker protections dealt with together rather than leaving key measures to next year.
“We do not understand why Senators Lambie and David Pocock, with the support of the opposition, are cherrypicking aspects of the government's broader legislation and saying: 'These things are important but those other things—you know what?—they're not that important. They can wait till next year.'”
Read the full speech in Hansard ↗ -
Louise Pratt Pratt says Labor will let the bill pass and regards it as a good, simple fix, but argues it only closes one small loophole and does not solve the wider problem of workers losing redundancy and entitlements.
“So here we are today in this place. Sure, this will pass. It's probably a good thing, but I really just want to remind the crossbench that we need to continue to work through these issues in good faith and not leave people behind on all the other mounting and important issues.”
Read the full speech in Hansard ↗
Coalition
3 speakers · 3 support
Coalition
3 speakers · 3 support
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Michaelia Cash ★ Michaelia Cash supports the bill and says it should be passed separately because it fixes a loophole so employees of a business that has shrunk through insolvency do not lose their redundancy payment.
“On that basis, along with the coalition, along with the crossbench, we are prepared to be constructive in relation to the government's omnibus bill and pass today those elements of the bill that do deliver for Australian workers, that do deliver for those suffering from or who have been victims of family and domestic violence, that do deliver for those who were employed by a larger business but through no fault of their own are now employed by a smaller business and may not therefore be able to get a redundancy payment, that will deliver for those in relation to the asbestos authority, now taking on the remit for silica related diseases.”
Read the full speech in Hansard ↗ -
Matt O'Sullivan Matt O'Sullivan says the SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. should support the bill because it strips out a non-contentious redundancy measure that should have been dealt with separately and allowed to start immediately.
“The thing that we really have heard consistently in every hearing that we've held—there have been five hearings so far—is that these elements that are in the broader omnibus bill are supported. They're not controversial. There is support from everyone. There's really no reason why they should be delayed because of the examination that is required for the more controversial elements of the closing loopholes bill. So this really does need to be supported.”
Read the full speech in Hansard ↗ -
Slade Brockman Brockman says the SenateThe chamber that debated and passed the bill before sending it to the House of Representatives. should pass the bill and the related workplace bills quickly, describing them as low-hanging fruit that the whole chamber supports.
“Senator Lambie and Senator Pocock, I congratulate you for bringing forward this set of bills, the Fair Work Legislation Amendment (Small Business Redundancy Exemption) Bill 2023, the Fair Work Legislation Amendment (Strengthening Protections Against Discrimination) Bill 2023, the Fair Work Legislation Amendment (Asbestos Safety and Eradication Agency) Bill 2023 and the Fair Work Legislation Amendment (First Responders) Bill 2023. You really did bell the cat, and we just heard from Senator Pratt the belling of the cat. The fact is that these bills are low-hanging fruit because I suspect it is very clear that the entire Senate supports them. We shouldn't take anyone's vote for granted, but it seems as though the entire Senate will support these bills through this chamber in a very quick fashion.”
Read the full speech in Hansard ↗
Greens
1 speaker · 1 support
Greens
1 speaker · 1 support
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Barbara Pocock ★ Barbara Pocock says the Greens support the bill because it helps workers in small businesses who can miss out on redundancy support when a business becomes insolvent.
“Finally, the Fair Work Legislation Amendment (Small Business Redundancy Exemption) Bill 2023 addresses an important implication arising from the small business redundancy exemption. It will give support to those employees who are often right at the end of the chain of a series of redundancies and find themselves, under existing provisions, missing out on the support that they need when a business becomes insolvent.”
Read the full speech in Hansard ↗
Minor parties and independents
1 speaker · 2 contributions · 1 support
Minor parties and independents
1 speaker · 2 contributions · 1 support
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Jacqui Lambie ★ 2 contributions Jacqui Lambie supports the bill and says it closes a loophole that lets large businesses avoid redundancy payments when they shrink into insolvency.
Hansard records 2 separate contributions by Jacqui Lambie on this bill. They are grouped here so the speaker is listed once.
Second reading speech
Jacqui Lambie supports the bill and says it closes a loophole that lets large businesses avoid redundancy payments when they shrink into insolvency. She argues workers who stay on to wind up the business should keep their entitlements, and calls the change common sense.
“This Bill fixes that because it provides for an exception to the exemption.”
Read this contribution in Hansard ↗Second reading speech
Lambie supports the bill because it closes a loophole that lets insolvent businesses avoid paying redundancy to workers who stay on to wind up the business. She says the change is common sense and should not wait until next July.
“This amendment is just common sense, and it's an amendment that shouldn't have to wait until next July. It is not controversial and it is not complicated. It simply protects the redundancy entitlements of those workers who are the last ones out the door.”
Read this contribution in Hansard ↗
Record
Full record
- Status
- Not Proceeding -- Collected from the APH bill page.
- Originating house
- Senate
- 06 Nov 2023
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
- 06 Nov 2023
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
- 09 Nov 2023
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
- 09 Nov 2023
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
- 09 Nov 2023
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
- 13 Nov 2023
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.