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‘They’re going ballistic’: AMP slashes redundancy benefits across business

AMP has cut redundancy pay maximums and notice periods in a move that has left long-term employees dismayed after they stuck with the company through the royal commission and its aftermath.

AMP will reduce redundancy pay maximums and notice periods across its business with a new policy that has put management on the defence and left staff deeply dissatisfied.

Under the new policy, the minimum notice period has changed from eight weeks to six; the age supplement for staff over the age of 45 has been cut from a maximum 10 weeks of pay to a maximum of one week; maximum redundancy pay has been changed from 104 weeks to 52 weeks, “significantly higher than the BFI Award maximum of 16 weeks”; and for those at “job levels 11” and above, a 26-week maximum redundancy pay will continue to apply for AMP executives.

The new policy will maintain the same severance pay of five weeks of pay for the first year of service and three weeks for each remaining year.

  • “I understand that some people will have differing views on these changes and that some may be disappointed,” CEO Alexis George (pictured) wrote in a message notifying staff of the changes. “I can assure you that ExCo (executive committee) made these decisions after careful consideration and have created a policy that we believe is fair for all.”

    But sources said that staff are “going ballistic” in response to the change, and messages on AMP’s internal channel seen by ISN show some questioning their decision to stick with the business through the dark days of the royal commission and its aftermath. One staff member said that “long term employees are no longer valued”, while others noted that the new policy compared unfavourably with those of other financial institutions and suggested it was largely a cost-saving exercise.

    “This is a very sad day for AMP… (as a) loyal employee who has stuck by AMP through the hard times over the last 30 years to have this happen is disappointing,” wrote one staff member.

    “Clearly the bottom line for shareholders is far more important than the loyalty of long-serving employees, particularly those who serve on the front line and who have had to contend with the royal commissions, enforceable undertakings, and poor decisions from former management,” wrote another.

    Staff also noted that it would be hard for older non-executive employees to find roles and to give them only one week of additional pay was a “poor offering”, and suggested that the executive committee had made the decision to “better their bottom line”. Several staff also requested that AMP consider grandfathering the current policy, and said that the changes had been made without consulting the workforce.

    “I am sorry you feel like this and that you are so unhappy with the workplace,” George wrote in reply to one employee. “It actually saddens me that this is how you feel about AMP and the future.”

    AMP’s previous redundancy policy was in place for 24 years and was established during its 2000 takeover of GIO. The new policy was “researched and benchmarked” against similar companies across the industry before changes were made, and will take effect from 1 January 2025.

    “At AMP we have a compelling Employee Value Proposition that includes a package of benefits to help us attract, reward and retain the best people for our company,” an AMP spokesperson told ISN. “AMP’s redundancy policy was due to be reviewed, having been in place since 2000.

    “The new policy, which will come into effect on 1 January next year, aligns our approach to redundancy with the contemporary policies of our financial industry peers. Taken as a whole these new redundancy entitlements remain significantly more generous than those set out in the applicable industry award, which covers the majority of AMP’s workforce.”

    But staff clearly remain unconvinced.

    “How can customers trust AMP if the employees no longer trust their employer?” a staff member wrote.

    Lachlan Maddock

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

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