[2018] FWC 1553
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Australian Insurance Repairs Pty Ltd
v
Ms Kristina Fleming
(C2018/1010)

COMMISSIONER SPENCER

BRISBANE, 11 APRIL 2018

Variation of redundancy pay.

INTRODUCTION

[1] An application pursuant to s.120(1)(b)(i) of the Fair Work Act 2009 (the Act) was made by Australian Insurance Repairs Pty Ltd (the Applicant) seeking to vary the amount of redundancy pay to be made to Ms Kristina Fleming (the Respondent).

[2] The Respondent commenced employment with the Applicant on 6 May 2015 on a casual basis, and on a fulltime basis from 8 December 2015, in the position of Team Leader - Insurance. Accordingly, the Applicant had been employed for over two years and was entitled to six weeks’ redundancy pay pursuant to s.119(2) of the Act. On 1 February 2018, the Applicant provided a Notice of Redundancy to the Respondent, stating that the Applicant would cease to conduct business in February 2018. It was not in dispute that the Respondent’s position was being made redundant.

[3] The Applicant submitted that they had obtained other alternative employment in accordance with s.120(1)(b)(i) of the Act, for the Respondent, and the Respondent had accepted the position. The Applicant made an application to vary the amount of redundancy pay to nil, pursuant to s.120(2) of the Act. The Respondent was seeking six weeks redundancy pay based on her length of service.

[4] Directions were set for the filing of material, and the matter was listed for Hearing, by telephone, on 28 March 2018. At the Hearing, the Applicant was represented by Mr Barry Nelmes, Director of the Applicant, and the Respondent represented herself.

[5] Whilst not all evidence and submissions are referred to in this decision, all of such have been considered.

RELEVANT PROVISIONS OF THE ACT

[6] Pursuant to s.119 of the Act:

119 Redundancy pay


Entitlement to redundancy pay


(1) An employee is entitled to be paid redundancy pay by the employer 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.


Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

Amount of redundancy pay


(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

Redundancy pay period

Employee’s period of continuous service with the employer on termination

Redundancy pay period

1

At least 1 year but less than 2 years

4 weeks

2

At least 2 years but less than 3 years

6 weeks

3

At least 3 years but less than 4 years

7 weeks

4

At least 4 years but less than 5 years

8 weeks

5

At least 5 years but less than 6 years

10 weeks

6

At least 6 years but less than 7 years

11 weeks

7

At least 7 years but less than 8 years

13 weeks

8

At least 8 years but less than 9 years

14 weeks

9

At least 9 years but less than 10 years

16 weeks

10

At least 10 years

12 weeks


[7] The application has been made pursuant to s.120 of the Act, which states:

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…

(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.”

[8] The Commission is required to take into account whether the Respondent was entitled to be paid redundancy pay, in accordance with s.119 of the Act; the remuneration and conditions of the alternative employment, including its:

● Status;

● Rate of pay;

● Location;

● Hours of employment;

● Duties;

● Whether the alternative employment was obtained by the Applicant; and

● Whether the alternative employment was or was not acceptable and why.

SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE

[9] The Applicant submitted that the Respondent had been employed with the Applicant on a casual basis since 6 May 2015 and then on a fulltime basis from 8 December 2015, and was paid a rate of $25.60 per hour. The Applicant submitted that the Respondent’s continuous service of between two and three years entitled her to the equivalent of 6 weeks’ redundancy pay.

[10] In relation to the offer of alternative employment, the Applicant stated as follows:

The same type of company, same position, full time, same entitlements, same wage and offices in same area.

Caylen Building Services, Arundel – Kristina accepted their offer and will commence on 05/03/2018, as she wanted to go on a two-week holiday first before commencing her new position with Caylen Building services. We received confirmation from the Director at Caylen Building Services of all of this.” 1

[11] The Applicant provided an email dated 20 February 2018, from Mr Darren Ferne of the alternative employer, Caylen Building Services, addressed to Mr Guy Roberts, General Manager of the Applicant. The email stated that the position offered was also full time; that the Respondent was content with the same conditions of employment (however sought confirmation as to whether a fuel card was included); the address of the alternative employment; and that the Respondent’s position would be Repair Coordinator.

[12] The Applicant also submitted that the Respondent did not complete her two weeks’ notice period and left early on her final day without the permission of Mr Nelmes, which constituted grounds to not pay redundancy.

SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE

[13] The Respondent submitted that she was made redundant by the Applicant on 15 February 2018. She stated that she worked for a period of 2 years, 9 months and 9 days, with her commencement date being 6 May 2015. She stated that she was advised in December 2017 that the Applicant would be closing the insurance department of the company.

[14] The Respondent stated that she was advised she would be transferred into another department with the company. On 22 January 2018, Mr Nelmes advised the Respondent that the Applicant would be ceasing operations, and advised her that it would be acceptable for her to commence to seek alternative employment. On 1 February 2018, the Respondent submitted she was given two weeks’ notice by Mr Roberts, and she elected to work out the notice period.

[15] She submitted that during the notice period, she spoke to Mr Roberts, who said a friend of his may be looking for an employee. She stated that Mr Roberts made a call for her, which she regarded as a courtesy. She submitted that she had not received a response for nearly two weeks, and therefore she contacted the new employer herself. She stated that she had obtained some interviews. She stated that the alternative employer advised her that they was interested, however were unsure of their current business requirements or a commencement date.

[16] The Respondent submitted that she was never advised that if the Applicant found alternative employment for her, she would not be entitled to receive redundancy pay, even though she had questioned many times to have the redundancy amount calculation available to her on her final day.

CONSIDERATION

[17] In determining an application made pursuant to s.120 of the Act, the Commission must first be satisfied that there is an entitlement to redundancy pay. 2 Where there is no entitlement to redundancy pay under s.119 of the Act, there can be no order to reduce the entitlement.3

[18] It was not in dispute that the Respondent was entitled to be paid redundancy pay. Further, the amount required to be paid was not in dispute and there was no suggestion that the dismissal was not a case of genuine redundancy in accordance with the Act.

[19] I am satisfied that the Respondent has an entitlement to redundancy pay, pursuant to s.119 of the Act. The matter turns on whether the Applicant had obtained other acceptable employment for the Respondent.

[20] The Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd characterised “other acceptable employment” as follows:

What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 4

[21] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd the Full Bench held:

...We do not propose to repeat here the thoroughly detailed argument presented by counsel for the union. A considerable part of that case was devoted to questions of onus and to supporting the proposition that the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters. It was argued that the failure of the employer to adduce evidence of such matters caused the company to fail to make out a case for an exemption. We have no doubt that there is an onus on the employer invoking cl 51(c) and that matters of the kind referred to by the union may be relevant in assessing the position in a particular case. We do not believe it to be necessary to make that examination in every case. Where an employee has accepted alternative employment in circumstances as those here, then in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl 51(c) of the award...” 5

[22] Finally, the Commission in Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai stated as follows:

[8] In NUW v Tontine Fibres [2007] AIRCFB 1016 (Tontine) a Full Bench of the AIRC considered the meaning of the expression “acceptable alternative employment” in a redundancy provision in an enterprise agreement. It was common for enterprise agreements to reflect award provisions and contain redundancy entitlements that could be reduced if the employer obtained acceptable alternative employment (or some variant of that expression). The Full Bench observed:

“[23] It is well established... that the concept of acceptable alternative employment is to be determined objectively. As noted by a Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd:

“What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.”

[24] The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer. In order to establish whether the alternative employment obtained by the employer is acceptable it is necessary to have regard to such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters (including the location of the employment and travelling time)…”

[9] Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.” 6 [Footnotes omitted]

[23] The Applicant submitted that the alternative position was acceptable given that it was on a fulltime basis, it was at a similar level, the rate of pay and entitlements were the same, and the office was located in the same area.

[24] The terms of the offer of redeployment are sufficiently comparable, particularly given the alternative offer provided similar employment conditions. These matters were not in serious dispute between the parties. The alternative employment was on commensurate terms to the Respondent’s position. Accordingly, I am satisfied that the alternative employment was “acceptable.”

[25] The Respondent submitted that Mr Roberts made the initial call to the alternative employer, however that she herself followed up after she had not received any news for almost two weeks. The Respondent stated that she received an email from Mr Nelmes on the day that she was due to receive her final pay, advising that he had found her alternative employment and was no longer required to pay redundancy.

[26] In FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia the Full Court of the Federal Court considered what is required by the term “obtains”, 7 within the meaning of s.120(b)(i). It was held:

20. With respect to the Full Bench’s reliance on the Shorter Oxford, the present might be one of those rare occasions on which it is useful to refer to the corresponding full entry in the Oxford English Dictionary itself. Relevantly, that reads:

To come into the possession or enjoyment of (something) by one’s own effort, or by request; to procure or gain, as the result of purpose and effort; hence, generally, to acquire, get.

We would not regard the references to “effort”, and to “purpose and effort” in this meaning as implying the existence of some kind, much less a strong kind, of “moving force” in bringing about the new state of possession referred to. They imply, rather, that the possession must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance. Moreover, we cannot perceive any reason why what is described as the “general” connotation of the word – “to acquire, get” – should not be regarded as a perfect fit for the purposes sought to be achieved by the relevant provision in the standard award clause before this provision became the subject of legislation.” 8

[27] In Australian Commercial Catering Pty Ltd v Marcelia Powell and Maria Togia the Full Bench of the Commission, 9 in relying on FBIS, stated, “…[t]he employer “obtains” other acceptable employment when it acquires or gets the employment by its conscious, intended acts.”10

[28] The Applicant had contacted the alternative employer to discuss employment for the Respondent. The Respondent, after having not received any further information on the redeployment for a period of two weeks, proceeded to contact the alternative employer directly. The Respondent submitted that she obtained alternative employment on her own initiative.

[29] At the Hearing, the Respondent conceded that she would not have been aware of the alternative employment but for the Applicant making the inquiry. Further, she stated that had she been aware that in accepting the alternative employment, the Applicant would be a liberty to seek a variation of her redundancy pay, she may not have accepted the alternative employment. It is not the case that the Respondent need have accepted the offer of alternative employment for the Applicant to have standing to bring the present application. It is sufficient that the Applicant “obtained” the alternative employment for the Respondent and that it was “acceptable”. In the present circumstances, had the Respondent obtained other, alternative employment on her own initiative, the outcome would remain largely unchanged.

[30] It is evident that the Respondent was offered the alternative employment as a result of the Applicant’s “conscious” and “intended” actions in contacting the alternative employer for the purposes of obtaining a role for the Respondent and that the position was only available to the Respondent as a result of the Applicant’s conduct. Accordingly, I am satisfied that the alternative employment was “obtained” for the Respondent.

[31] Having determined that the Applicant obtained other acceptable employment of the Respondent, any reduction in redundancy pay must now be determined.

[32] The Respondent submitted that she received the offer of alternative employment on her final day of employment, 25 February 2018. The parties, following the Hearing, sought to provide further correspondence and subsequently correspondence was forwarded to the Commission from the Applicant. The correspondence included a copy of an email from the alternative employer dated 2 February 2018, that stated:

Just to keep yourself and Kristina in the loop.

We are looking at commencing the new area/insurer in the next couple of weeks, when this is signed I would like to meet up and look at offering Kristina a position with us.

Obviously it depends on the agreements time and worth but I think we should be fine to bring her on board.

[33] A further email was provided by the Applicant, from the Respondent to Mr Roberts dated 15 February 2018, which stated inter alia:

Thank you for all you have done for me by giving me the opportunity to work with you and giving me a job. Over the years I have defiantly learnt some great attributions from you that I will take with me for the rest of my life.

And I could not show my appreciation enough for helping me to get the job with [the alternative employer]. I cannot wait to start my new chapter there.” [sic]

[34] It is apparent that the Respondent knew of the alternative employment, and the Applicant’s role in obtaining such, at least from 15 February 2018.

CONCLUSION

[35] On the evidence, the Applicant obtained the alternative employment. The Respondent was aware of the Applicant’s efforts to obtain such. In addition, she was aware of the alternative employment and had accepted such, prior to completing her employment with the Applicant.

[36] Accordingly for the aforementioned reasons, given that the conditions of the alternative employment are commensurate and acceptable when compared to the Respondent’s position, it is therefore appropriate to vary the amount of redundancy pay to which the Respondent is entitled, to nil.

[37] An Order [PR601509] to that effect will issue together with this decision.

al of the Fair Work Commission with member’s signature.

COMMISSIONER

Appearances:

Mr B Nelmes for the Applicant.

Ms K Fleming on her own behalf.

Hearing details:

2018.

Brisbane:

28 March.

Printed by authority of the Commonwealth Government Printer

<PR601200>

 1   Applicant’s Form F45A – Application to vary redundancy pay dated 19 February 2018 at 2.1.

 2   Application by CAE Australia Pty Ltd [2012] FWA 7992 at [13].

 3   Ibid.

 4   (1990) 140 IR 123 at 128.

 5   (1988) 27 IR 226 at 230 - 231.

 6   [2013] FWC 1327 at [8] – [9].

 7   [2015] FCAFC 90.

 8   Ibid at [20].

 9   [2016] FWCFB 5467.

 10   Ibid at [37].