More than 1 in 10 of private sector employees under a collective employment agreement do not have any redundancy pay. This number of private sector employees on collective employment agreements (CEAs) walking away with nothing has doubled since 2009 when this was only 5%. According to Victoria University’s Centre for Labour Employment and Work, many people aren’t even covered by CEAs. For those employees under an individual employment agreement, entitlements to redundancy money are rarely present.
Involuntary redundancy insurance after the 2008 recession
Almost a decade on from the global financial crisis, it’s still incredibly common that contracts include clauses that say no redundancy cover is payable. Alongside this, the trends of shrinking redundancy maximums continue to persist.
As numbers of employees entitled to redundancy pay are reduced, the maximum amount they are entitled to have shrunk also. In 2003, most workers on Collective Employment Agreements (CEAs) were entitled to 40 or more weeks in redundancy pay. Now, CEAs are commonly set between 1 and 13 weeks.
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The return of economic growth hasn’t changed employers’ position on redundancy either; they’d rather not face such high costs to restructure ever again.
All of these factors come together and paint a clear picture for workers: that the responsibility to prepare for being made redundant is firmly on them. But with most New Zealanders unable to cover more than a month of expenses with their savings, budgetary planning, and the prudence to take out involuntary redundancy cover is more important than ever.
The good news is that redundancy insurance is easy to get and very affordable – you don’t need to face financial disaster if you find yourself being made redundant. Live without the worry of relocating, or taking up the first job you can find. The best part is, with Ease Insurance Brokers helps you get the right involuntary redundancy insurance policy, with coverage that works best for your unique circumstances.