AMP has slashed 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 [Australian finance industry 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 wrote in a message notifying staff of the changes. “I can sure you that ExCo (executive committee) made these decisions after careful consideration and have created a policy that we believe is fair for all.”
Internal messages seen by Investor Strategy News show staff are up in arms about the move, with some saying that “long term employees are no longer valued” and questioning their decision to stick with the business through the dark days of the royal commission and its aftermath. Others noted that the new policy compared unfavourably with those of other financial institutions.
“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 employee.
“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’s tough for older non-executive employees to find roles and to give them only one week of additional pay was a “poor offering”, while another said that the executive committee had made the decision to “better their bottom line”.
“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.
Former AMP NZ chief, Blair Vernon, was appointed as chief financial officer and head of ‘transformation’ for the overall business last year with a brief to slash expenses.
At the time, George said a “key focus” for Vernon would be “delivering the capital management and cost base review”.
In a statement, AMP said “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.”
Lachlan Maddock is editor Investor Strategy News (Australia)
