Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decisions [2014] FWC 2432 and [2014] FWC 2431 in matter numbers C2014/3631 and C2014/362 of Commissioner Roe at Melbourne on 10 April 2014.

Introduction and background

[1] Ms Marcelia Powell and Ms Maria Togia were formerly employed by Australian Commercial Catering Pty Ltd (ACC), and performed work in connection with ACC’s catering contract with Robert Bosch (Australia) Pty Ltd at a site in Clayton in Melbourne. ACC lost its contract with Robert Bosch effective from 25 October 2013. At that time Ms Powell had been performing work in relation to the Robert Bosch contract in the employ of ACC for nine years, and Ms Togia had been doing so for nine years and eight months. Both women were, shortly before the termination of the Robert Bosch contract, offered the options of taking a position with Alliance Catering, the new catering contractor engaged by Robert Bosch at the Clayton site, or taking up an alternative ACC position at its Coles Atrium site at Tooronga in Melbourne. The precise circumstances of these offers are explained in greater detail later. Both Ms Powell and Ms Togia rejected the positions offered at the Coles Atrium site, and their employment with ACC terminated effective from 25 October 2013. Ms Togia subsequently commenced casual employment with Alliance Catering at the Robert Bosch site at Clayton.

[2] On 25 March 2014 ACC lodged applications pursuant to s.120 of the Fair Work Act 2009 (FW Act) for the redundancy entitlements otherwise payable to Ms Powell and Ms Togia (in each case, 16 weeks’ pay) be reduced to zero on the basis that ACC had obtained other acceptable work for them. These applications were subsequently heard and determined by Commissioner Roe. In decision issued on 10 April 2014 1 (Powell decision), the Commissioner determined that the redundancy payment to Ms Powell should be reduced to 33% of her entitlement, and made an order to that effect2 (Powell order). In a further decision issued on the same day3 (Togia decision), the Commissioner dismissed ACC’s application in relation to Ms Togia. The published decisions incorporated by reference reasons given by the Commissioner on transcript at the end of the hearing on 8 April 2014.

[3] On 22 April 2014 ACC lodged a notice of appeal against both the Powell decision and the Togia decision pursuant to s.604 of the FW Act. Permission to appeal was required in each case. In a decision issued on 6 March 2015 4 (Appeal decision), the Full Bench by majority (Gooley DP and Blair C) determined that, in the case of the Togia decision, permission to appeal should be refused and, in relation to the Powell decision, that permission to appeal should be granted, the appeal upheld, and an order made dismissing ACC’s application in relation to Ms Powell. The dissenting member (O’Callaghan SDP) determined that, in relation to the Togia decision, permission to appeal should be granted, the appeal upheld, and an order made reducing the redundancy entitlement payment by two-thirds. The Senior Deputy President also identified a technical error with the form of the Powell order, and determined that it was necessary to grant permission to appeal, uphold the appeal and issue a revised order to correct the error. An order5 (Appeal order) was made giving effect to the decision of the majority.

[4] ACC then applied for judicial review of the Appeal decision. In a decision delivered on 22 December 2015 6 the Federal Court Full Court (Tracey, Barker and Katzmann JJ) ordered that a writ of certiorari be issued quashing the Appeal decision, the Appeal order and the Powell order, and that a writ of mandamus be issued “to compel the first respondent [the Commission] to exercise its jurisdiction to hear and determine according to law the applicant’s applications for permission to appeal and, if permission is granted, the appeals in proceeding C2014/662.”

[5] On 19 February 2016 Ms Powell lodged a notice of appeal against the Powell decision. Because rule 56(2)(a) of the Fair Work Commission Rules 2013 requires that a notice of appeal be lodged within 21 calendar days of the decision the subject of the appeal, Ms Powell requires the grant of an extension of time until 19 February 2016 pursuant to rule 56(2)(c) in order for her appeal to be competent. She also requires permission to appeal.

[6] The task of re-hearing ACC’s appeal from the Powell decision and the Togia decision in accordance with the writ of mandamus issued by the Federal Court Full Court and dealing with Ms Powell’s appeal were allocated to this Full Bench. This decision deals with those matters.

Facts

[7] Ms Powell and Ms Togia were both full-time employees of ACC. In relevantly identical letters sent to each of them on 16 August 2013, they were advised by ACC that it had lost the Robert Bosch contract and that their employment would cease on 25 October 2013 unless one of four identified options materialised:

“a) You may seek to continue your employment with the new provider (Alliance Catering a division of Spotless) - If you are successful your full entitlements including final weeks pay, annual leave and loading, and any Long Service Leave entitlement will be paid to you directly.

b) You find alternative employment and resign prior to the finishing date with a new employer - Your wages and entitlements will be paid out as described in paragraph (a).

c) You take up another position with ACC - Your wages will continue to be paid as normal depending on the new position that you accept and your entitlements will continue to accrue with ACC.

d) There is no other position available with ACC and you are not successful in continuing with the new contractor. All entitlements will be paid to you including any redundancy payments as per the award.”

[8] The letter went on to request them to “confirm your intentions by 30 September (depending on Alliance interviews) to us so as we can make appropriate arrangements”. Prior to 30 September 2013, Ms Powell and Ms Togia unsuccessfully sought alternative employment with ACC, and had not to that point been offered any position with the new contractor, Alliance Catering. On 11 October 2013 ACC wrote to Ms Powell and Ms Togia in letters entitled “Re Redundancy Package” that a redundancy entitlement (of an amount equal to 16 weeks’ pay) “may be payable” to each of them. The letters both went on to say:

“Please be advised that under section 63(2)(a) of the National Employment Standards, Redundancy does not apply if:

The Employee rejects an offer of employment with the new employer on terms and conditions substantially similar to, and, considered on an over basis, no less favourable that, the employee’s terms and conditions of employment with the old employer immediately before the termination of that employment.”

[9] The reference to section 63(2)(a) is incorrect. Sections 119-123 of the FW Act establish the National Employment Standards (NES) in respect of redundancy pay. The basis for the proposition in italics in the portion of the letters set out above is not readily apparent.

[10] On 18 October 2013, ACC provided forms to Ms Powell and Ms Togia to apply for redundancy payments. They completed and returned them.

[11] On 23 October 2013, ACC sent letters to Ms Powell and Ms Togia which each stated as follows:

“The Managing Director of ACC has personally intervene due to your length of service, experience and loyalty to the company to offer you a position with us should you decline your offer with Alliance Catering. 

The position is located at our Coles - Atrium site 800 Toorak Road, Tooronga approximately 15 minutes from your current site. 

Your current work hours, rate of pay and conditions will be mirrored and your job description maintained at the new site. 

The position would commence Monday 28/10/2013 at your current start time. I apologise for the late notice but as you can appreciate we had to make structure changes to Coles in order to accommodate this offer for you. 

Please note that if you do not take up the Alliance or ACC offer you will not be entitled to the redundancy offer. 

Please confirm your intension to me at your earliest convenience so that I can accommodate Coles induction sessions for you.” 

[12] Both Ms Powell and Ms Togia declined to accept the offer of positions at the Coles Atrium site. They gave their reasons for refusing the Coles - Atrium positions in statements from the bar table in the first instance proceedings before the Commissioner (there having been no sworn evidence adduced by any party). In relation to Ms Powell, the transcript of the proceedings sets out the following exchanges between her and Commissioner Roe 7:

“THE COMMISSIONER: All right, thank you. So, essentially, if I understand what you're saying is that you were offered the option of essentially terminating your employment and therefore receiving a redundancy payment or taking the casual job with lesser hours at Alliance and you accepted the redundancy at that point on 18 October.

MS POWELL: Yes.

THE COMMISSIONER: The letter of 23 October came after that. Right?

MS POWELL: Yes, that's right.

THE COMMISSIONER: Okay. That having happened, why didn't you accept the offer of 23 October? So what's wrong with the offer of employment at Coles from your perspective - at the Coles store?

MS POWELL: My husband and I only have one car between us.

THE COMMISSIONER: Yes.

MS POWELL: He starts work at 6.30 in the morning. From there I have to get to Taronga. Now, when you go onto the Monash on Springvale Road at that hour of the morning, you have the lights on, so only two cars can go through consistently and there is always a traffic jam. So it would take me at least 35 minutes to get there.

THE COMMISSIONER: Okay. But how were you getting to the Clayton site?

MS POWELL: My husband works, as I said, five minutes up the road from Bosch.”

[13] Ms Togia gave her reasons as follows 8:

“THE COMMISSIONER: Then just tell me why you didn't - what's wrong as far as you're concerned with the proposal to work at Coles?

MS TOGIA: The travel. My husband is working Monash Medical Centre. It's just five minutes down where I work at Bosch.

THE COMMISSIONER: Yes.

MS TOGIA: I'm only the driver because only two of us. I drive him down to work. By the time I get there it's 35 minutes. It's not worth - so I rang Nicole and told her about that. I can't take that position because the travel and the way - - - 

THE COMMISSIONER: Yes.

MS TOGIA: Yes.

THE COMMISSIONER: So when you told Nicole that that was what you were doing, what did she say?

MS TOGIA: On the 23rd and then I say, "I'll take the redundancy," and she say, "No, it's the law and you don't have to - if you don't take the offer, you don't have the redundancy." That's what she told me.”

[14] Mr Darmos, who represented ACC in the hearing before the Commissioner, gave a different estimate of the additional time it would take to drive to the Coles Atrium site at Tooronga. He told the Commissioner 9

“…we say that the new location is located in Taronga [sic], Hawthorn, which is say 10 minutes from the Bosch site, maybe 15 minutes at best if there's a bit of traffic, by car; not that I've driven it myself, but certainly the distance is driven - and timed it by myself, but a distance certainly that should not be considered to be anything unreasonable.”

[15] In the hearing before us, additional material was provided, by consent, concerning the additional distance and time that would have been involved for Ms Powell and Ms Togia to commute to the Coles Atrium site at Tooronga. ACC tendered documents generated by Google Maps which, it contended, demonstrated that:

● the distance between the Robert Bosch site and the Coles Atrium site was 16.4 kms, and would take between 18 and 26 minutes to drive depending on traffic conditions;

● the distance direct from Ms Powell’s residence to the Coles Atrium site was 20.1 kms, and would take between 24 and 35 minutes to drive depending on traffic conditions;

● the distance from Ms Powell’s residence to the Robert Bosch site was 21.7 kms, and would take between 24 and 28 minutes to drive depending on traffic conditions;

● the distance direct from Ms Togia’s resident to the Coles Atrium site was 17.9 kms, and would take between 20 and 35 minutes to drive depending on traffic conditions; and

● the distance from Ms Togia’s residence to the Robert Bosch site was 4.8 kms, and would take between 9 and 12 minutes to drive depending on traffic conditions.

[16] The employment of Ms Powell and Ms Togia with ACC terminated on 23 October 2013. On 25 October 2013 Ms Togia accepted an offer of casual employment with Alliance Catering at the Robert Bosch site, pursuant to which she was to work 22½ hours per week. 10 She explained her reasons for doing this to the Commissioner as follows11:

“MS TOGIA: I rang them on Friday, 25 of 10. I got no choice because I got mortgage to pay and a bill, only me and my husband.”

[17] Ms Powell declined to accept employment with Alliance catering because of its casual nature and the reduced number of hours of work.

The Commissioner’s decisions

[18] In the Powell decision, the Commissioner determined that, Ms Powell was entitled to a redundancy payment under s.119 of the FW Act, and that ACC’s offer to Ms Powell of employment at the Coles Atrium site constituted “other acceptable employment” because it was on substantially similar terms and conditions as applied at the Robert Bosch site. 12 He did not consider that the additional travel distance to Tooronga affected this assessment. In the exercise of his discretion under s.120, the Commissioner determined to reduce the amount of Ms Powell’s redundancy payment to 33% of the entitlement under s.119.13 The reasons given by the Commissioner in transcript for this were as follows:

“It's common in a situation where work is moved from one location to another to look at the question of some form of compensation for a period of time for the inconvenience of that relocation and if one looks at what that might have meant in this particular case, and I'm not suggesting that that is any form of statutory entitlement but I'm just saying it is a very common situation in dealing with relocations for that to be dealt with, I would estimate that the sort of compensation that the employee might have received in that situation would have been no more than compensation for one hour per working day for six months.

In the case of Ms Powell that amounts to approximately $2600. So the reason I'm raising that as an example is that if Ms Powell had been required by her employer to move from one location to another and had received reasonable compensation for the inconvenience associated with that move then the level of that compensation would have been of that sort of order. Ms Powell would have been entitled to a redundancy payment of 16 weeks, which is approximately $9800, according to exhibit ACC 6.

I don't underestimate at all the personal inconvenience and hardship associated with Ms Powell travelling to a new work location at Taronga, so I can understand her personal decision that that is too inconvenient for her, so I'm not critical of Ms Powell making that decision, but I think that if you look at all of the criteria, that is if you look at the fact that the position that was being offered is at current work hours, current rate of pay and conditions, no loss of skills and ongoing employment, it seems to me that the inconvenience concerning travel doesn't render the employment unsuitable as alternative employment.

So balancing all of the factors, I believe that the amount of redundancy pay should be reduced by two-thirds so that Ms Powell would receive one third of the redundancy payment to which she would have otherwise been entitled…”

[19] In the Togia decision, the Commissioner likewise accepted that Mr Togia was entitled to a redundancy payment on termination under s.119. However in his reasons given on transcript the Commissioner stated that he considered that Ms Togia’s action in taking up of employment with Alliance Catering was consistent with the options available under ACC’s letter of 23 October 2013. 14 The Commissioner found that the employment with Alliance Catering was not suitable alternative employment because it involved significantly fewer hours of work per week and therefore less income, and because it was less secure employment being casual in nature.15

Appeal decision

[20] The majority in the Appeal decision determined that the Commissioner had erred in the Powell decision and the Togia decision by failing to have regard to a relevant consideration which it described in the following terms:

“[28] In both cases the employees’ employment with ACC was to come to an end on 25 October 2014. On 11 October 2014 both employees had been advised of their redundancy entitlement and both employees accepted that offer on or around 18 October 2014 and accepted that their employment would end on 25 October 2015.

[29] An employer may make a job redundant however the decision to terminate an employee’s employment occurs after the employer has determined that there are no suitable alternative positions available for the employee. At that time the employee is given notice of termination. An employer after that date, may, due to a change in circumstances, offer the employee another position and the employee may accept the position. Having given notice of termination, the employer may not unilaterally revoke the notice.”

[21] Notwithstanding the identification of error in this respect, the majority determined to refuse permission to appeal in the case of the Togia decision because they agreed with the Commissioner’s conclusion that “the position offered by ACC to Mrs Togia was not acceptable alternative employment” [sic; presumably the majority intended to refer to the employment offered by Alliance Catering] and “as such we would make the same decision as Commissioner Roe”. 16 In relation to the Powell decision, the majority determined to grant permission to appeal because it considered that “a substantial injustice would result if permission to appeal were not granted in respect of the decision in respect of Mrs Powell as her circumstances were not sufficiently different to that of Mrs Togia to justify a different outcome”.17 The majority then proceeded to determine afresh the question of whether the offer of employment at the Coles Atrium site was acceptable other employment. The majority concluded:

“[34] On 23 October 2014, Mrs Powell had been given notice of termination of their employment. Mrs Powell did not agree to the revocation of the termination.

[35] We have had regard to change of location for Mrs Powell and the difficulties associated with the change of location. We have also had regard to the lateness of the offer to transfer Mrs Powell.

[36] We find that the late offer by ACC, combined with the difficulties faced by Mrs Powell in travelling to the proposed site, mean that objectively, the new position was not acceptable alternative employment.”

[22] The majority proceeded in the Appeal to order the dismissal of ACC’s application with respect to Ms Powell.

[23] The dissenting member considered that the Commissioner’s conclusion in the Powell decision that ACC’s offer of employment at the Coles Atrium site constituted acceptable employment was not in error merely because of the lateness of the communication of the offer - a matter which the Commissioner had in any event taken into account. 18 The Senior Deputy President considered however that the order made by the Commission to give effect to the Powell decision, which went beyond simply reducing the redundancy entitlement otherwise payable and ordered ACC to pay Ms Togia a specified amount, was beyond power and should be quashed and a revised order issued which specified the reduction in the amount payable under s.119.19 In relation to Ms Togia, the Senior Deputy President’s view was that the Togia decision was in error and should be quashed because there was a failure to take into account whether the offered employment at the Coles Atrium site constituted suitable alternative employment.20 On a re-determination of ACC’s application in relation to Ms Togia, the Senior Deputy President would have reduced the redundancy payment to Ms Togia by two-thirds to achieve a consistent result with that applying to Ms Powell, taking into account the similarity in transport difficulties to the Coles Atrium site.21

Full Court decision

[24] In the Full Court decision, jurisdictional error was identified in the majority’s judgment in the Appeal decision in respect of its consideration of both the Powell decision and the Togia decision. In relation to Ms Powell, the Full Court found that the majority erred by taking into account the lateness of the offer of employment in determining whether the employment was acceptable under s.120(b)(i). The Full Court said:

“[60] … It may be unreasonable for an employer to make an offer at the eleventh hour, so to speak, particularly where the employee has already made alternative arrangements to her or his prejudice. But s 120(1)(b)(i) is not concerned with the reasonableness of the employer’s conduct. It is concerned with the acceptability of the employment. While we do not discount the possibility that in a particular case the timing of the offer may bear upon the question of whether the employment is acceptable for the employee, as we would read the words of the provision it will generally be irrelevant. The conduct of the employer will be relevant to the exercise of the discretion, however, if and when the pre-conditions for its exercise have been made out. In other words, if the employment was acceptable it was open to the Full Bench if it considered the employer had acted unreasonably in making the employment available at such a late point in time not to reduce the redundancy payments at all or only to some extent. In the present case, however, we are unable to see that the lateness of the offer was relevant to the question of whether the position at the Coles – Atrium site was acceptable employment.”

[25] In relation to the Togia decision, the Full Court held that the majority had erred in refusing permission to appeal because they adopted the Commissioner’s decision, which did not determine whether the position offered by ACC was acceptable alternative employment. The Full Court said:

“[63] …We accept that it is not a jurisdictional error merely to misconstrue a commissioner’s reasons (see Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees’ Union (2015) 230 FCR 565 at [158] per Katzmann J), but here (unlike in Teys) the effect of the misconstruction is that it is highly likely that the majority failed to ask itself the right question, which was whether the employment at Coles - Atrium store was acceptable employment for Ms Togia, that being the employment which ACC had obtained for her.

[64] The letter ACC sent to Ms Togia (and Ms Powell for that matter) presented her with an alternative: take up its offer or the offer from Alliance Catering. Only if she did neither would she lose her redundancy payment. The letter was ambiguous at best, misleading at worst. It is entirely possible that Ms Togia was misled into accepting the Alliance Catering offer, thinking that she would not thereby jeopardise her full entitlement to redundancy pay. This circumstance would be relevant to the question of whether the discretion to reduce the redundancy amount should be exercised at all and, if so, the extent of the reduction. But in the absence of any evidence or material to indicate that ACC had obtained the Alliance Catering employment for Ms Togia it was irrelevant to the antecedent or threshold question of whether the power to determine that the amount be reduced had been enlivened.”

[26] The Full Court rejected a contended error advanced by ACC that the Full Bench fell into jurisdictional error in the Appeal decision by taking into account Ms Powell’s “personal preference” in driving her husband to work. In doing so the Full Court said:

“[56] Whether or not Ms Powell driving her husband to work was an election based on personal preferences or an economic or other necessity is a vexed question. Ms Powell did not give evidence in the Commission so the proposition that she rejected ACC’s offer because of a personal preference was not put to her. The majority said that they had had regard to the change of location and the difficulties associated with it. ACC accepted (and rightly so) that increases in travel times may be taken into account in determining whether the employment obtained by the employer is “acceptable employment for the employee” within s 120(1)(b)(i). Plainly, these factors are relevant, whether or not an objective test applies. An increase in travel times will often result in a reduction in net wages in that it will usually involve higher fuel costs or increased fares. It may also have higher personal costs in that it will reduce the amount of leisure and family time available to an employee. Cryptic though the majority’s reasons are, in all the circumstances we are not satisfied that the majority erred as alleged. It is well accepted that the reasons of administrative decision makers are “not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed”: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.”

Submissions

[27] In relation to its appeal, ACC submitted that:

● the effect of the Full Court decision was to require the Commission to re-determine ACC’s appeals against the Powell decision and the Togia decision;

● in the Powell decision, the Commissioner erred by not taking into account that the additional travel involved to the Coles Atrium site was only 30 minutes per day, which did not warrant anything other than a reduction of the entitlement to redundancy pay to nil;

● Ms Powell’s (and Ms Togia’s) rejection of ACC’s offer of employment at the Coles Atrium site in order to be able to continue to drive their husbands to work before commencing work themselves was a personal preference which should not be rewarded by the payment of any redundancy pay;

● alternative employment may be acceptable notwithstanding inconvenience to employees;

● in respect of the Togia decision, the Commissioner failed to consider at all the offer of employment at the Coles Atrium site and instead considered the employment obtained by Ms Togia with Alliance Catering, and accordingly that decision should be quashed and ACC’s application concerning Ms Togia re-determined; and

● Ms Togia’s application should be re-determined in the same way as Ms Powell’s, for the same reasons.

[28] In response, Ms Powell and Ms Togia (who were jointly represented by counsel) submitted:

● permission to appeal against the Powell decision should be refused, because the Commissioner took into account the additional travel time which would have been involved in working at the Coles Atrium site and made a discretionary assessment about that which was not attended by appealable error;

● permission to appeal against the Togia decision should be granted on the basis that the Commissioner erred by failing to consider whether ACC’s offer to employ her at the Coles Atrium site constituted acceptable alternative employment;

● the appeal against the Togia decision should be re-determined by this Full Bench on the basis that the employment offered at the Coles Atrium site at Tooronga site was not acceptable alternative employment because, on the material before the Commissioner, an additional 35 minutes travel was required having regard to Ms Togia’s need to drop her husband off at the Monash Medical Centre on the way to work;

● alternatively, if the offered position at the Coles Atrium site was determined to be acceptable alternative employment, the Commission should not exercise its discretion in ACC’s favour, having regard to the additional travel time and its effect on Ms Togia and her husband, the unreasonableness of ACC’s conduct in giving mixed messages as to Ms Togia’s entitlement to redundancy pay, and the lateness of the offer and the consequent denial of time for Ms Togia to make alternative arrangements to travel to work.

[29] In relation to her own appeal, Ms Powell submitted that an extension of time should be granted in accordance with the principles stated in Jobs Australia v Eland. 22 Ms Powell did not have legal representation at the time the Powell decision was issued, and was self-represented in the appeal proceedings. Ms Powell was successful in those proceedings in the sense that ACC’s appeal was dismissed. Ms Powell only obtained legal representation at the stage of the Federal Court proceedings, and the possibility of her filing an appeal of her own only arose after the Full Court decision was issued. In those circumstances, it was submitted, Ms Powell has a reasonable explanation for the lengthy delay in lodging the appeal. The appeal would allow a full reconsideration of the Powell decision to occur in light of the Full Court decision, and had significant prospects of success. No prejudice would be visited upon ACC if an extension was granted, it was submitted, because the appeal would essentially raise the same issues as ACC’s appeal against the Togia decision.

[30] In relation to the merits of the appeal, it was submitted that the Powell decision was attended by appealable error in that the Commissioner failed to take into account, both at the threshold of considering whether ACC had obtained acceptable alternative employment and at the subsequent stage of determining the reduction in redundancy pay, to the additional travel time that would be required to travel to Tooronga and the consequent effect on Ms Powell’s personal circumstances. In the latter stage, there was also said to be a failure to consider the unreasonableness of ACC’s conduct and the lateness of the Coles Atrium offer. This, Ms Powell submitted, should lead to the Full Bench granting permission to appeal, upholding the appeal and quashing the Powell decision, and re-determining the matter by dismissing ACC’s application in relation to her.

[31] ACC opposed Ms Powell being granted an extension of time to lodge an appeal on the basis that there was no satisfactory explanation for the inordinate delay, the appeal lacked merit, and the issues raised by the appeal would in any event arise in ACC’s appeal from the Powell decision.

Consideration

The statutory framework

[32] Division 11 of Pt.2-2 of the FW Act establishes the National Employment Standards concerning notice of termination of employment and redundancy pay. Section 119(1) provides that an employee has an entitlement to redundancy pay:

(1) ... if the employee’s employment is terminated:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or


(b) because of the insolvency or bankruptcy of the employer.

[33] Section 119(2) provides for the quantum of redundancy pay entitlements. They are expressed as amounts of weeks’ pay “at the employee's base rate of pay for his or her ordinary hours of work” payable by reference to the employee’s period of continuous service with the employer.

[34] Section 120 then provides:

(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.


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

[35] In considering an application made by an employer under s.120, the Commission must first consider whether either of the circumstances set out in paragraphs (a) or (b) of s.120(1) applies.Consideration under s.120 is enlivened upon an application being made by the employer for a reduction in the amount of redundancy pay otherwise payable under s.119. In dealing with such an application, the Commission must first determine whether the pre-conditions for the application of the section set out in s.120(1) are satisfied - that is, that the employee the subject of the application has an entitlement under s.119 to redundancy pay, and that the employer has either obtained other acceptable employment for the employee or cannot pay the redundancy entitlement.

[36] As was pointed out in the Full Court decision, “The origin of s 120 lies in the decision of the Full Bench of the Conciliation and Arbitration Commission in Termination, Change and Redundancy Case (1984) 8 IR 34 to introduce an entitlement to severance pay for all employees under federal awards whose employment had been terminated because of redundancy”. 23 Cases decided in relation to award provisions established pursuant to those test case provisions are therefore relevant in the consideration of s.120.

[37] In relation to s.120(1)(b)(i), whether alternative employment obtained by the employer is “acceptable” is to be determined objectively, not by reference to whether the employment is subjectively acceptable to the employee. 24 The determination of whether alternative employment is acceptable requires an assessment and value judgment on the part of the decision-maker.25 The employer “obtains” other acceptable employment when it acquires or gets the employment by its conscious, intended acts.26

[38] Once it is concluded that the preconditions in s.120(1) are satisfied so that s.120 is applicable, it will be necessary for the Commission to determine under s.120(2) whether the employee’s entitlement to redundancy pay under s.119 should be reduced and, if so, by how much. This requires the exercise of a broad discretionary power. 27 Any determination by the Commission for a reduced amount of redundancy pay then becomes the employee’s entitlement under s.119: s.120(3).

ACC’s appeal against the Powell decision

[39] We do not consider that ACC has demonstrated any appealable error in the Powell decision. As earlier stated, ACC’s case as advanced before us was that the Commissioner, in deciding the extent to which Ms Powell’s redundancy entitlement should be reduced having regard to the ACC’s offer of employment at the Coles Atrium site, had failed to take into account that the additional travel time was only 30 minutes per day, and that this was an insufficient basis to permit the redundancy entitlement to be reduced to anything other than nil.

[40] It is certainly not the case that the Commissioner failed to take into account the travel time issue; indeed in relation to Ms Powell it was the major matter which he considered in determining what the extent of the reduction in the redundancy entitlement should be. We do not accept that the Commissioner was obliged, in that consideration, to proceed on the basis that the additional travel involved only an additional 30 minutes per day. The estimate of 30 minutes was one given by Mr Darmos, on behalf of ACC, from the bar table as being the time it would take to drive from the Robert Bosch site at Clayton to the Coles Atrium site at Tooronga. Mr Darmos admitted that he had not actually driven and timed the trip. His estimate was contradicted by Ms Powell (and Ms Togia), who said it would take them 35 minutes one way (although it is unclear whether they meant from home to Tooronga in total, or 35 minutes after they undertaken their commitments to drop their husbands at their workplace). The additional material from Google Maps which was relied upon in the appeal, and was of course not before the Commissioner, does not suggest that Mr Darmos’s estimate was so obviously correct that it should necessarily have been accepted by the Commission. That material suggests that if Ms Powell had accepted the position at Tooronga and had continued to drop her husband off at his workplace before proceeding to work, she would have faced, approximately, an additional 36-52 minutes per day depending on traffic conditions (noting that the Google Maps material did not measure the distance and time from the husband’s workplace to the Tooronga site).

[41] In considering the extent of the reduction to a redundancy entitlement as a result of an offer of acceptable alternative employment, it is well established that additional travel time to the work location of the offered employment is a relevant consideration. 28 This is relevant, not just as a matter of inconvenience to the employee, but also because, as observed in the Full Court decision, the cost of additional travel may cause a reduction in net pay and affect leisure and family commitments.29 In the exercise of his discretion under s.120(2), the weight to be given to the clearly relevant issue of travel time was a matter for the Commissioner to assess. It is not sufficient to demonstrate appealable error to contend that a particular consideration should have been given more or less weight in order that a different outcome should have pertained.30

[42] The discretionary nature of the decision-making process engaged in by the Commissioner allowed him considerable latitude as to the outcome that was to apply. We consider that the Commissioner’s decision to reduce Ms Powell’s redundancy entitlement by two-thirds represented a reasonable exercise of the discretion. No appealable error has been demonstrated by ACC, and we do not consider that the appeal insofar as it concerns the Powell decision raises any issue of general application or importance that would otherwise merit the grant of permission.

[43] Ordinarily that would cause us to conclude that ACC should be refused permission to appeal against the Powell decision. However, as earlier noted, the Full Court quashed the Powell order, meaning that there is no extant order to give effect to the Powell decision. Accordingly we consider it appropriate to grant permission to appeal for the purpose of rectifying this deficiency, to confirm the Powell decision pursuant to s.607(3)(a) of the FW Act, and to give effect to the Powell decision by making a new order pursuant to s.607(3)(b). That order will be consistent with the approach taken in the dissenting judgment in the Appeal decision at paragraphs [47]-[48].

ACC appeal from the Togia decision

[44] It is clear that there was a failure by the Commissioner to consider, for the purposes of s.120(1)(b)(i) of the FW Act, whether ACC had obtained alternative acceptable employment for Ms Togia when it offered her the position at the Coles Atrium site. In accordance with the Full Court decision, this offer of employment was not excluded from consideration under s.120(1)(b)(i) merely because of its lateness. This failure constituted appealable error in that the Commissioner failed to take into account a relevant consideration, deal with the case advanced by ACC in support of its application, and ask himself the right question. Accordingly we grant ACC permission to appeal against the Togia decision, uphold the appeal and quash the Togia decision.

[45] We consider that the appropriate course to be taken consequent upon this outcome is to re-determine ACC’s application in relation to Ms Togia pursuant to 607(3)(b) of the FW Act on the basis of the material that was before the Commissioner and the additional Google Maps material that was placed before us during the appeal hearing.

[46] It is first necessary to consider the pre-requisites for the application of s.120 specified in s.120(1). In relation to s.120(1)(a), there was no dispute and we are satisfied that Ms Togia became entitled to a redundancy payment under s.119 of the FW Act upon the termination of her employment by ACC. In relation to s.120(1)(b), we are satisfied that ACC obtained other employment for Ms Togia when it offered her a position in its employ at the Coles Atrium site at Tooronga, in that it was entirely due to ACC’s intentional action that the offer of employment was made. We further consider that the employment was acceptable, for essentially the same reasons as identified by the Commissioner in the Powell decision. The type of employment (full-time), duties, hours of work, pay rates and other conditions of employment were in all significant respects the same as had applied to Ms Togia at the Robert Bosch site. Additional travel time was involved, bringing with it the likelihood of inconvenience, increased travel costs and some interference to non-working life, but not to a sufficient degree such as to make working at the Coles Atrium site an impracticable, unviable or intolerable proposition.

[47] Section 120 therefore applies, and it becomes necessary to consider whether the amount of Ms Togia’s redundancy entitlement should be reduced, and if so by how much, pursuant to s.120(2). Again, for essentially the same reasons as articulated by the Commissioner in transcript in relation to Ms Powell, we consider that Ms Togia’s redundancy entitlement should be reduced by two-thirds. That is an amount which appropriately recognises that, notwithstanding the similarity between the terms and conditions of the Coles-Atrium position which was offered and those of Ms Togia’s position at the Robert Bosch site, the additional travel time would have been likely to cause detriments of the nature we have previously recognised. It will also ensure comity in the respective positions of Ms Powell and Ms Togia, the relevant circumstances of whom appear to us to be substantially the same.

[48] We have given consideration to the matter raised at paragraph [56] of the Full Court decision, namely whether ACC’s correspondence of 23 October 2013 may have misled Ms Togia into thinking that if she accepted either the Coles-Atrium position or a position offered by Alliance Catering, she would still be paid her full redundancy entitlement. If Ms Togia had been misled by ACC into accepting employment with Alliance Catering (and refusing the Coles-Atrium position) on this understanding, then we consider that would justify a lesser reduction to her redundancy pay entitlement.

[49] We accept that ACC’s 23 October 2013 letter, insofar as it stated “Please note that if you do not take up the Alliance or ACC offer you will not be entitled to the redundancy offer”, was likely to lead the reader to believe that acceptance of either of the identified offers would mean that the redundancy entitlement would still be paid. However Ms Togia’s description of subsequent events at the hearing before the Commissioner, which we have earlier set out, demonstrates that she was not in fact misled. When, on 23 October 2013, she told “Nicole” (presumably Nicole Mighell, ACC’s Human Resources Manager and the signatory to the 23 October 2013 letter) that she would prefer to take the redundancy payment rather than the Coles Atrium position, she was told that “if you don't take the offer, you don't have the redundancy”. While this statement was itself misleading in the sense that it suggested that Ms Togia could accept the Coles Atrium position and still receive her redundancy pay entitlement, it at least made clear to Mr Togia that ACC’s position was that any refusal of the Coles Atrium offer would mean she would lose the redundancy entitlement. This statement did not, apparently, cause Ms Togia to re-assess her position. Her explanation for accepting the Alliance Catering position two days later was financial necessity. She did not suggest that she believed that acceptance of this position would allow her to retain her redundancy entitlement.

[50] Accordingly we will issue an order reducing Ms Togia’s redundancy entitlement to 33% of the amount otherwise payable under s.119.

Ms Powell’s appeal

[51] The usual principles applying to consideration of an application to extend time to lodge an appeal were summarised in the Full Bench decision in Jobs Australia v Eland 31 as follows (footnotes omitted):

“[5] Time limits of the kind in Rule 56 should not simply be extended as a matter of course. There are sound administrative and industrial reasons for setting a limit to the time for bringing an appeal and it should only be extended where there are good reasons for doing so. The authorities indicate that the following matters are relevant to the exercise of the Tribunal’s discretion under Rule 56(2)(c):

● whether there is a satisfactory reason for the delay;

● the length of the delay;

● the nature of the grounds of appeal and the likelihood that one or more of those grounds being upheld if time was extended; and

● any prejudice to the respondent if time were extended.”

[52] The delay here was very lengthy, and it is not clear to us that Ms Powell has an adequate explanation for significant portions of the period of delay. We accept that ACC would not be prejudiced by the grant of the extension sought. However the primary matter which we consider weighs against the grant of an extension is that the appeal lacks merit. For the reasons explained in relation to ACC’s appeal against the Powell decision, we do not think that there is any substance to the proposition that the Commissioner did not properly take into account Ms Powell’s personal circumstances concerning travel time. It appears to us, reading the Powell decision and the reasons given by the Commissioner on transcript, that he treated the travel time issue as the primary consideration and that he approached this issue on the assumption that Ms Powell would, if she accepted the Coles Atrium position, have to continue to drop her husband at his workplace before proceeding to Tooronga.

[53] In relation to the contention that the Commissioner failed to take into account ACC’s alleged unreasonable behaviour and the lateness of its offer, we do not consider that these were relevant considerations which the Commissioner was obliged to take into account. Although, as earlier discussed, ACC’s letter of 23 October 2013 may have given a misleading impression about its position with respect to the payment of redundancy entitlements, there was no evidence that this caused any prejudice to Ms Powell. Unlike Ms Togia, she rejected employment with both ACC at the Coles Atrium site and Alliance Catering at the Robert Bosch site. On any view of the 23 October 2013 letter, it was clear that that meant ACC did not intend to pay Ms Powell her redundancy entitlement. Ms Powell did not therefore make any decision on the basis of misleading advice from ACC which caused her to disentitle herself to redundancy pay. As to the lateness of the offer, the reason for this was explained to some degree in the 23 October 2013 letter. More importantly, there is no evidence that Ms Powell had taken any step prior to 23 October 2013 which put her in a position where she could not have accepted the Coles Atrium position. If, for example, Ms Powell had before 23 October 2013 entered into an employment contract for another position on the assumption that ACC was not going to provide alternative employment and therefore she would receive her redundancy pay, then the lateness of the offer would have significance. But nothing of that nature was identified at the hearing before the Commissioner (or indeed before us).

[54] In short, having heard Ms Powell’s entire argument, we are not satisfied that her appeal is of sufficient merit to justify the grant of permission to appeal. For that reason, we refuse to grant the required extension of time. The appeal is therefore incompetent and must be dismissed.

Conclusion and orders

[55] In relation to ACC’s appeal against the Powell decision, we grant permission to appeal and confirm the Powell decision, and we will separately issue an order reducing Ms Powell’s redundancy entitlement to an amount equal to 33% of her entitlement under s.119 of the FW Act.

[56] In relation to ACC’s appeal against the Togia decision, we grant permission to appeal, uphold the appeal, and quash the Togia decision. We will separately issue an order reducing Ms Togia’s redundancy entitlement to an amount equal to 33% of her entitlement under s.119 of the FW Act.

[57] In relation to Ms Powell’s appeal, the required extension of time is refused and the appeal is dismissed.

[58] Finally, we wish to record our appreciation for the assistance provided to us by Mr Avallone of counsel, who appeared for Ms Powell and Ms Togia on a pro bono basis.

VICE PRESIDENT

Appearances:

J. D’Abaco of counsel with P. Darmos solicitor for the Australian Commercial Catering Pty Ltd.

B. Avallone of counsel for Ms Powell and Ms Togia.

Hearing details:

2016.

Melbourne:

6 June.

 1   [2014] FWC 2432

 2   PR54981

 3   [2014] FWC 2431

 4   [2015] FWCFB 87

 5   PR55939

 6   [2015] FCAFC 189

 7   Transcript 8 April 2014 at PNs 169-178

 8   PNs 244-251

 9   PN55

 10   PN235

 11   PN237

 12   Powell decision at [6]

 13   Powell decision at [7]

 14   PNs 384-388 and 395

 15   Togia decision at [6]; PN395

 16   Appeal decision at [32]

 17   Appeal decision at [32]

 18   Appeal decision at [41]

 19   Appeal decision at [47]-[49]

 20   Appeal decision at [43]-[44]

 21   Appeal decision at [46]

 22   [2014] FWCFB 4822

 23   Full Court decision at [12]

 24   Clothing & Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226; Clothing Trades Award 1982(1) [1990] AIRC 980; (1990) 140 IR 123 

 25   Full Court decision at [45]

 26   FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90 at [20]

 27   Ibid at [21]; Full Court decision at [42], [60]

 28   See e.g. National Union of Workers v Tontine Fibres [2007] AIRCFB 1016, (2007) 168 IR 143 at [24]-[31]

 29   Full Court decision at [56]

 30   Restaurant and Catering Association of Victoria [2014] FWCFB 1996, (2014) 243 IR 132 at [57]-[58] at [57]-[58] and the authorities there cited.

 31   [2014] FWCFB 4822

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