DECISION

Fair Work Act 2009
s.120—Redundancy pay

Electricity Wizard Pty Ltd
v
Pasilika Tauiliili
(C2018/1503)

Variation of redundancy pay

[1] Electricity Wizard Pty Ltd (Electricity Wizard) has made an application pursuant to s.120(2) of the Fair Work Act 2009 (Act) to have the Commission reduce the redundancy entitlement of Mr Pasilika Tauiliili, a former employee of the company whose employment ended for reason of redundancy.

[2] Mr Tauiliili was employed as a team leader overseeing sales staff at Electricity Wizard from 28 September 2015 until March 2018. The date of termination is a matter I will return to below. At the time Mr Tauiliili’s employment ended, he had just over two and a half years’ continuous service with the company. The National Employment Standards (NES) in the Act prescribe minimum entitlements for employees in respect of redundancy pay. Section 119(2) provides that an employee who at the time of redundancy has a period of continuous service with the employer of at least two years but less than three years is entitled to receive six weeks’ redundancy pay.

[3] The company contends that Mr Tauiliili’s redundancy entitlement should be reduced because it offered him a revised team leader role in the company, which constituted ‘other acceptable employment’ for the purpose of s.120(1)(b)(i) of the Act.

[4] Following a telephone mention, I issued directions to the parties to file and serve submissions and any witness statements or other documents on which they sought to rely. The application was then heard before me on Tuesday, 24 July 2018. Mr Sakellariou, the company’s human resources officer, gave evidence for Electricity Wizard. Mr Tauiliili gave evidence on his own behalf.

Statutory framework

[5] Section 120 confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise have been entitled under s.119 of the Act.

[6] Section 120(1) states that the section applies if an employee is entitled to be paid an amount of redundancy pay under s.119, and the employer ‘obtains other acceptable employment’ for the employee. These are the jurisdictional facts that must be established before the Commission may exercise its discretion. Section 120(2) then states that the Commission ‘may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate’. If the Commission makes an order under s.120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination (see s.120(3)).

[7] The key questions for consideration in the present matter are whether Electricity Wizard obtained ‘other acceptable employment’ for Mr Tauiliili, and if so whether I should exercise my discretion to reduce the amount of Mr Tauiliili’s redundancy pay. As will be apparent from the discussion below, it is also important for me to make a finding of fact as to when Mr Tauiliili’s employment ended.

Factual background

[8] The circumstances surrounding the termination of Mr Tauiliili’s employment and the discussion of the alternative role are largely agreed, although the parties differ on certain points.

[9] On 2 March 2018, Mr Tauiliili was advised by Mr Cobb, the company’s managing director, that the business could not support the current team leader roles and that Mr Tauiliili and another team leader would need to undertake sales work or accept redundancy. Mr Tauiliili was about to commence a period of leave in connection with the birth of his child, and he asked for time to think about the matter.

[10] On 9 March 2018, Mr Cobb and Mr Sakellariou met with Mr Tauiliili. Mr Cobb explained that Mr Tauiliili’s current role of team leader was redundant. He said that Electricity Wizard needed to change the team leader role because certain functions were no longer required, and the sales force had reduced in size. Mr Sakellariou told Mr Tauiliili that there was another role he could perform, to be called ‘team leader’, but which would involve interacting with customers, assisting them to choose the right energy plan, and contributing to sales. He told Mr Tauiliili that the new role would entail the same hours of work and the same salary, together with necessary upskilling and retraining where necessary. During the hearing, Mr Sakellariou explained that, as of 9 March 2018, there was no position description for the role, and that certain details of the role remained to be finalised.

[11] Mr Tauiliili said to Mr Cobb and Mr Sakellariou that he was not interested in the alternative role, and that he wished to be paid his redundancy entitlement. He was given a document that showed the redundancy payment he would receive. At the end of the meeting, Mr Tauiliili shook hands with Mr Cobb and Mr Sakellariou. He addressed the sales staff to tell them that he was leaving the company. A payroll officer asked Mr Tauiliili to hand back his access card, his laptop computer and his headphones, which he did. Mr Tauiliili then filled out an exit form, which is standard practice when a person’s employment with company ends.

[12] There was some confusion about precisely when Mr Tauiliili’s employment ended. Mr Tauiliili gave evidence that he left the meeting on 9 March 2018 with the understanding that his position had been made redundant, that his employment had ended, and that all that remained to be done was for him to sign some paperwork. Mr Sakellariou gave evidence that, given what Mr Tauiliili had said at the meeting of 9 March 2018, he did not expect him to remain with the company, but that he understood that the paperwork in relation to the redundancy had yet to be finalised. I understand Mr Sakellariou’s evidence to be that he did not consider Mr Tauiliili’s employment to have ended on that day.

[13] Mr Tauiliili gave evidence that on 16 March 2018 the company paid out to him his untaken accrued annual leave. The company did not directly contradict this evidence however Mr Tauiliili’s final pay slip was filed as part of the company’s documents in the proceeding. This records a payment date of 22 March 2018. I note also that Mr Tauiliili stated that he received the payment out of annual leave on a Thursday, whereas in fact 16 March 2018 was a Friday. In my view Mr Tauiliili gave evidence on this matter to the best of his recollection, but his recollection was imperfect. I find that the pay slip is a business record and that it correctly reflects the payment out of annual leave having occurred on 22 March 2018. However, the document is described in the company’s index of materials as Mr Tauiliili’s last pay slip, and it notes a ‘pay period’ of 5 March to 11 March 2018.

[14] Mr Tauiliili said that between 12 and 16 March 2018 he made enquiries of Mr Sakellariou as to when he would receive his redundancy payment. On 16 March 2018, he received an email from Mr Sakellariou, asking him to come into the office on 19 March to speak about a revised team leader position. Mr Tauiliili queried the purpose of the meeting, as he understood that his employment with the company had ended. He told Mr Sakellariou that he could not attend on 19 March, as he was starting a new job that day. He agreed instead to meet with Mr Sakellariou on 20 March 2018.

[15] At the meeting of 20 March 2018, Mr Tauiliili was handed a number of documents relating to the alternative role that had been referred to at the meeting on 9 March 2018, including a position description, key performance indicators, and details of remuneration. There was a discussion about the new alternative role, however Mr Tauiliili said that he was not interested, and had commenced a new job. He was then handed a termination letter, which stated that his employment would end on 3 April 2018 for reason of redundancy, and that he would receive a redundancy payment of $8,312.31, representing 6 weeks’ pay. Mr Sakellariou told Mr Tauiliili that the company would be checking the redundancy calculation with the Fair Work Commission. It appears that he was foreshadowing that the company intended to make an application to the Commission under s.120 of the Act, although Mr Tauiliili does not recall any mention of such an application.

[16] In my opinion, Mr Tauiliili’s employment with the company ended on 9 March 2018. Mr Sakellariou acknowledged in the hearing that this was Mr Tauiliili’s last day of work. Mr Tauiliili was asked to return company property, including his access pass, and did so. He said goodbye to his co-workers. Further, his final pay slip indicates the last pay period ended on 11 March 2018. There was no further pay period, which is consistent with his employment having ended by this date.

[17] Although the termination letter given to Mr Tauiliili at the meeting on 20 March 2018 recorded a termination date of 3 April 2018, I find that this did not reflect the actual legal termination date, which was 9 March 2018. I note that the employment relationship between Mr Tauiliili and Electricity Wizard had clearly ended by 19 March 2018, when he commenced a new job with another employer.

Submissions of the parties

[18] The company says that it offered Mr Tauiliili a modified but acceptable team leader role which Mr Tauiliili chose to decline, preferring instead to take up employment elsewhere. It says that the revised role remained a team leader position, albeit with a new emphasis on sales and interaction with clients. It says that the offer of alternative employment was objectively ‘acceptable’ employment because it entailed no change to the remuneration, hours, location, or nature of the work or its status.

[19] The company contends in its submissions that Mr Tauiliili put himself in a position where he could not take up other acceptable employment offered by the company, because he accepted a different job with a new employer. Further, or alternatively, the company argues that it did not have an opportunity to have Mr Tauiliili remain employed with Electricity Wizard. It says that it was Mr Tauiliili’s preference to take redundancy rather than accept any other employment at Electricity Wizard, because he had found another job elsewhere.

[20] Mr Tauiliili submitted that he considered his employment with the company to have ended on 9 March 2018. He immediately began looking for a new job, and found one, which he commenced on 19 March 2018. He said that he did not expect any further meeting with the company after 9 March 2018 because as far as he was concerned, he was no longer employed at Electricity Wizard. He said that it was only after the company learnt that he had found another job that it attempted to reduce his redundancy payment under s.120.

[21] Mr Tauiliili contended that the alternative role that was discussed on 9 March and 20 March 2018 was not acceptable. He says it was of a different character, being fundamentally sales-based, rather than supervisory. He also submitted that although the salary and title were the same, the alternative role would have been a demotion. He also said that he would have had a reduced capacity to earn commissions; the commission structure meant he would need to cover his base salary by making a certain number of sales before receiving any commission, whereas in his previous role he simply made a $10 commission for every sale. I accept this evidence.

[22] Mr Tauiliili said that a number of sales consultants at Electricity Wizard have informed him that the other team leader, who was offered the same revised role as Mr Tauiliili, eventually accepted a further revised role and is now performing the same sales role as all the other sales consultants. He says this demonstrates that the revised role was in effect a demotion. However, I do not place reliance on this evidence. It is hearsay and has not been tested.

Did the company ‘obtain’ other employment for Mr Tauiliili?

[23] Many of the cases that come before the Commission under s.120 of the Act concern efforts that have been made by the applicant-employer to obtain ‘other acceptable employment’ for the employee with another employer. However, it is also possible for the employer to ‘obtain’ other employment within its own organisation. It is clear that in the present case, Electricity Wizard ‘obtained’ other employment for the respondent. But when did it obtain this employment for him?

[24] During the meeting on 9 March 2018 the company gave Mr Tauiliili a good indication of the alternative role that would be available. It told him that the role would be customer-facing with a leadership element, and that the position title and remuneration would be the same. However, the alternative role discussed at this meeting lacked important details. The position description and the information about the bonus and commission structure were not provided to Mr Tauiliili until the meeting on 20 March 2018, after his employment with the company had ceased. 1 In my view, for an employer to avail itself of s.120, the other acceptable employment must be ‘obtained’ and offered to the employee while she or he is still employed by that employer. The section speaks of an employer obtaining other acceptable employment for the employee. This cannot occur once the relevant employment relationship has come to an end. In the present case, the other employment was not obtained until after Mr Tauiliili’s employment with Electricity Wizard ended.

[25] This conclusion is sufficient to dispose of the application. However, I will briefly address the question of whether the employment was ‘acceptable’. It is clear that Mr Tauiliili did not accept the other employment. However, whilst relevant, this is not determinative of whether the employment was ‘acceptable’ for the purposes of s.120. ‘Acceptable’ means ‘able to be agreed to’, but it also means ‘suitable’. A person might not accept objectively ‘acceptable’ employment.

[26] It is well-settled that the question of whether other employment is ‘acceptable’ is to be approached objectively, and with regard to all the circumstances, including the terms and conditions of employment and duties.² In the present case, the alternative role offered the same salary and hours of work. The role had the same title, and involved leadership. It required assistance to be provided to agents, as well as coaching. However, Mr Tauiliili would have been required to go onto the phones, deal directly with clients and work on sales. The alternative role was essentially sales-based, with a leadership element; it was not primarily supervisory. It was therefore of a different nature. Further, the possibility of earning commissions was diminished. These two considerations together, on balance, lead me to conclude that the alternative employment was not ‘other acceptable employment’ for the purposes of s.120(1)(b)(i).

Conclusion

[27] I am not satisfied that Electricity Wizard obtained other acceptable employment for Mr Tauiliili for the purpose of s.120 of the Act. Accordingly, the application for a determination under s.120 is dismissed.

DEPUTY PRESIDENT

Appearances:

Mr N. Sakellariou for Electricity Wizard Pty Ltd

Mr P. Tauiliili for himself

Hearing details:

2018

Melbourne

24 July

Printed by authority of the Commonwealth Government Printer

<PR609665>

 1   I note that in the company’s materials, these documents are dated 14 March 2018, that is, after the termination date

2 Clothing and Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226 at 230-231; Re Target Retail Agreement 2001 PR916204 at [6]