Fair Work Act 2009

A guarantee of termination entitlements is an undertaking given by an employer covered by an enterprise agreement that:

is an undertaking that the employer will comply with subsection (3) if the agreement is terminated under section 226 and the employer terminates the employment of a protected employee for the termination of the agreement:

at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

because of the insolvency or bankruptcy of the employer; and

is in writing; and

meets any requirements relating to the signing of undertakings that are prescribed by the regulations.

A protected employee for a termination of an enterprise agreement under section 226 is an employee who would, but for the termination of the agreement, be covered by the agreement.

For the purposes of paragraph (1)(a), the employer complies with this subsection, in relation to the termination of the protected employee’s employment, if the employer complies with the terms of the enterprise agreement that, if the agreement were still in operation, would have provided the employee with entitlements that:

relate to a termination of the employee’s employment:

at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

because of the insolvency or bankruptcy of the employer; and

except if the employee was an award/agreement free employee immediately before the termination of the employee’s employment—are more beneficial than the entitlements under a modern award that covered the employee in relation to the employment at that time.

A guarantee of termination entitlements given in relation to the termination of an enterprise agreement:

comes into force on the day on which the termination of the agreement comes into operation under section 227; and

ceases to be in force at the earliest of the following times:

if the guarantee specifies a period during which the guarantee is to remain in force and the FWC approves that period under subsection (5)—the end of that period;

immediately before another enterprise agreement that covers the same, or substantially the same, group of employees as the terminated agreement comes into force;

the end of the period of 4 years beginning on the day the guarantee is given to the FWC.

The FWC may, in its decision terminating an enterprise agreement, approve a period for the purposes of subparagraph (4)(b)(i) if it considers the period to be appropriate.

An employer must comply with a guarantee of termination entitlements given by the employer to the FWC in relation to the termination of an enterprise agreement if:

the agreement is terminated under section 226; and

the employer terminates the employment of a protected employee for the termination of the agreement while the guarantee is in force:

at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

because of the insolvency or bankruptcy of the employer.

This subsection is a civil remedy provision (see Part 4‑1).

To avoid doubt, a guarantee of termination entitlements is a governing instrument for employment for the purposes of the Fair Entitlements Guarantee Act 2012.