DECISION

Fair Work Act 2009
s.120—Redundancy pay

White Cloud Trading Pty Ltd T/A Tree of Life
v
Monique Mihaljevich
(C2015/2681)

Variation of redundancy pay.

[1] This decision concerns an application by White Cloud Trading Pty Ltd T/A Tree of Life (the applicant) under section 120 of the Fair Work Act 2009 (the Act) for a variation in the redundancy pay owing to Ms Monique Mihaljevich (Ms Mihaljevich).

Factual background

[2] The witness statements provided by the applicant state that the full-time Assistant Manager role in the company’s retail stores was made redundant companywide and replaced with a permanent part-time Assistant Manager role. The working hours for the new position were 32 hours per week rather than the 38 hours per week that had been applicable to the redundant full-time role.

[3] The witness statement of Ms Mihaljevich explains that she had been employed from 2009 until 14 May 2015. She had been the full-time Assistant Manager in the applicant’s store in Westfield Whitford City working 38 hours per week.

[4] Ms Mihaljevich was advised by her employer of the restructure within the business and advised that they would no longer require the full-time Assistant Manager position. The applicant did offer her the alternative position as the part-time Assistant Manager with the reduction in hours to 32 per week. Ms Mihaljevich had advised the applicant that she could not accept this alternative position because of the reduction in wages compared to the full-time Assistant Manager role she had been working in.

[5] Consequently by letter dated 30 April 2015 the applicant terminated the employment of Ms Mihaljevich with effect on 14 May 2015.

[6] By making this application the applicant seeks that the Commission vary the redundancy payment to Ms Mihaljevich because in their view they have obtained for her other acceptable employment being the part-time Assistant Manager role.

Consideration

[7] The relevant provision of the legislation is set out below.

“120  Variation of redundancy pay for other employment or incapacity to pay

(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(b) the employer:

(i) obtains other acceptable employment for the employee; or

(ii) cannot pay the amount.

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(2) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”

[8] An application such as this can only be made where an employee is entitled to be paid an amount of redundancy pay because of section 119 of the Act. This only occurs if the employee’s employment has been terminated because the employer no longer requires the job that had been done by the employee to be done by anyone.

[9] The facts above demonstrate that these legislative preconditions have been satisfied. Ms Mihaljevich’s employment has been terminated because the applicant no longer requires the full-time Assistant Manager job which she had been doing to be done by anyone.

[10] The facts also demonstrate that the applicant did obtain other employment for Ms Mihaljevich being the part time Assistant Manager position.

[11] The question to be determined by the Commission is whether the part-time Assistant Manager position is other acceptable employment. Only if this is the case can the Commission consider any reduction in the amount of redundancy pay to which Ms Mihaljevich is entitled under section 119 of the Act.

[12] In this case the other employment obtained for the employee is identical in all aspects except for the fact there is a reduction in the hours of work and a consequential reduction in the wages to be earned for the position. That reduction in hours and in wages is 16%. Assessed objectively, a permanent reduction in income for an employee of 16% means that the other employment is not other acceptable employment within the meaning of section 120 of the Act.

[13] Consequently there is no legislative basis for any change to the amount of redundancy pay to which Ms Mihaljevich is entitled.

[14] Accordingly this application is hereby dismissed.

COMMISSIONER

Final written submissions:

Applicant, 25 May 2015.

Respondent, 11 June 2015.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR569428>