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‘Not good enough’: AMP should think twice on new redundancy policy

AMP’s best deserve more than its worst, but the unilateral reduction of their redundancy benefits means that’s what they’ve gotten. There’s still time for its executive committee to make good.

One hundred and four weeks is a lot of redundancy pay. It’s two whole years of it. It’s also the maximum amount to which AMP’s longest-serving employees are entitled to – or were, until AMP unilaterally halved it, and slashed a number of other redundancy benefits.

Without a doubt, the existing arrangements were generous – maybe too generous, for a business still trying to reanimate its share price. And as AMP pointed out, the new arrangements are still more generous than the Banking, Finance and Insurance award maximum of 16 weeks. But for many employees who took to AMP’s internal comms channel to voice their displeasure, “it’s not good enough”.

Here’s some maths: with redundancy pay accruing at a rate of five weeks for the first year served and three weeks for every year after that, somebody would have to work at AMP for about 34 years – nearly their entire working life – to be entitled to the maximum 104 weeks of it.

  • That means working for AMP through its ill-fated merger with GIO, the Hayne royal commission and fees for no service, the resignation of Craig Meller, the arrival and departure of Francesco de Ferrari, the arrival and departure of Alex Wade, the appointment of Boe Pahari and the conflagration that followed, the sale of AMP Life and GEFI and Capital, plus the BOLR debacle. It means working for AMP before it listed on the ASX, which, in combination with all of the above, has probably been the most value destructive event in its entire history.

    Whoever has made it that long should be studied. Has anybody even done it? Could they?

    But that’s beside the point. The point is that working at AMP for any length of time in the last few decades has demanded plenty from the people who did it, and they still did it, and they very likely did it because they knew they could expect some reward for their loyalty. And doubtless there’s a long tail of employees who, though not getting the maximum payout, were previously entitled to more than the 52 weeks now on offer. That these sorts of changes are often made as a prelude to redundancies likely has not filled AMP’s longest serving employees with confidence.

    Decisions like these are hard, and that’s precisely because of the reaction that’s unfolded over AMP’s internal communications channel, where staff have accused the executive committee of prioritising shareholders or “their bottom line”. After years of bleeding, hard decisions are required of the company’s management. Shareholders probably will be pleased. But in the context of their service to AMP, the demands from some employees that the company at least consult with them – or grandfather some of the arrangements – don’t seem that steep.

    Back at a Women in Super event in 2021, AMP chief executive Alexis George pondered what her legacy at AMP might be, telling the audience that watching the company from the outside had been “sad” and that she wanted to “simply leave the place better than where (she) found it”.

    “I really want the place to be somewhere people want to work, want to be our customers, and want to be our shareholders,” George said. “And if I can just make it a little bit better, that is good for me. That’s what will be important to me.”

    Here’s hoping that George can still deliver on her good intentions.

    Lachlan Maddock

    Lachlan is editor of Investor Strategy News and has extensive experience covering institutional investment.

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