[2018] FWC 7864
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.120—Redundancy pay

Australian Footwear T/A Diana Ferrari
(C2018/5999)

DEPUTY PRESIDENT CLANCY

MELBOURNE, 24 DECEMBER 2018

Variation of redundancy pay.

[1] On 25 October 2018, Australian Footwear T/A Diana Ferrari (Diana Ferrari) made an application to the Fair Work Commission (the Commission) under s.120 of the Fair Work Act 2009 (the Act) seeking to vary the amount of redundancy pay payable to Ms Dinna Tzortzis, who had her employment terminated by reason of redundancy, to zero.

Background

[2] Ms Tzortzis had worked for Diana Ferrari for almost 12 years as a retail sales assistant on a permanent part-time basis at its outlet store in Birkenhead Point. There is no dispute as to the following sequence of events:

  On 4 August 2017, Mr Jay Munro, Chief Executive Officer of Munro Footwear Group, notified all staff that Diana Ferrari would exit the apparel business and that all Diana Ferrari Concept stores would be closed over the next 6-18 months;

  A letter dated 10 September 2018 addressed to Ms Tzortzis notified her that the lease for the Diana Ferrari Birkenhead Point store was not being renewed and that 21 October 2018 would be its last day of trading. An attachment to the letter contained a list of vacancies within the Munro Footwear Group;

  On 17 October 2018, Ms Tzortzis was sent a letter for variation to the terms and conditions of her employment, which indicated that she would be employed by Australian Footwear Pty Ltd at the Williams store in Macquarie from 21 October 2018, with all other terms of employment remaining unchanged;

  In an email from Munro Footwear Group dated 22 October 2018, Ms Emily Miller, HR Advisor, indicated that if Ms Tzortzis declined the redeployment option it would make her role redundant but would also make an application to the Commission to have the redundancy payment reduced, given that it submits it had obtained other acceptable employment;

  On 25 October 2018, Ms Tzortzis wrote to Munro Footwear Group to decline the proposed variations to the terms and conditions of her employment;

  Later the same day, Diana Ferrari lodged its application with the Commission seeking to vary Ms Tzortzis’ redundancy pay to nil.

[3] This matter was the subject of a conference before me on 12 November 2018.

[4] On 14 November 2018, I issued directions requiring Diana Ferrari to file any submissions, witness statements or other material addressing how it says it has obtained other acceptable employment for Ms Tzortzis, by no later than 4:00pm on 21 November 2018; Ms Tzortzis to file any submissions, witness statements or other material in reply to Diana Ferrari’s material by no later than 4:00pm on 28 November 2018; and Diana Ferrari to file any material in reply by no later than 4:00pm on 3 December 2018. The parties were also directed to ensure that the material addressed the commute between:

  Ms Tzortzis’ residence and current place of work in the Diana Ferrari Birkenhead Point store; and

  Ms Tzortzis’ residence and proposed place of work in the Williams Macquarie store.

Submissions of Australian Footwear T/A Diana Ferrari

[5] Diana Ferrari submits that during her employment, Ms Tzortzis reported to Ms Nikki Magill, Assistant State Manager – NSW. In Ms Magill’s witness statement, 1 she contends that on 11 October 2018, she offered Ms Tzortzis two roles: Part Time Sales Assistant at Burwood and Part Time Sales Assistant at Macquarie. Ms Magill contends in her witness statement that whilst she presented both stores as possible redeployment options, she understood that the Macquarie store would be better suited to Ms Tzortzis as it was closer in proximity to her. On this basis, the letter of variation to the terms and conditions of employment was offered to Ms Tzortzis to vary her base location to the Williams store in Macquarie.2 This offer was subsequently declined by Ms Tzortzis on 25 October 2018.

[6] Ms Magill further submits in her witness statement that the nature of employment at both the Williams Macquarie and Diana Ferrari Birkenhead Point stores is the same as they are “B grade stores” with similar reported turnovers. 3 Further, Ms Magill concedes that whilst Diana Ferrari Birkenhead Point did stock apparel, the Diana Ferrari business had exited its apparel category in August 2017.

[7] In relation to the commute, Diana Ferrari submits the following as to the difference in distance between Ms Tzortzis’ residence, former place of work in Diana Ferrari Birkenhead Point, and the proposed location of redeployment at Williams Macquarie:

  Home to former place of work (Diana Ferrari Birkenhead Point) is 7.1km and around 10-20 minutes in travel time via a motor vehicle;

  Home to the proposed place of work (Williams Macquarie) is 6.7km and around 12-28 minutes in travel time via a motor vehicle.

[8] Diana Ferrari further submits that the position offered to Ms Tzortzis is of the same level of responsibility, involves the same duties and would require her to maintain the same degree of expertise as that occupied by her at Diana Ferrari Birkenhead Point.

[9] Moreover, Diana Ferrari referred to Clause 1.3 of Ms Tzortzis’ employment contract, which stated:

You will undertake your work at the location outlined in Schedule 1. The Employer may from time to time, at its discretion, require you to permanently or temporarily change or transfer your place of work to another location within the same State or Territory. You will also be required to work at such other places as reasonably necessary to perform your duties.

Submissions of Ms Dinna Tzortzis

[10] Ms Tzortzis submits that she had been employed by Diana Ferrari Birkenhead Point as a sales assistant, but was often given managerial duties without additional compensation. However, Ms Tzortzis contends that she chose to continue working at Diana Ferrari Birkenhead Point as its location was convenient and she enjoyed working within a fast-paced outlet environment. She further submits that prior to working with Diana Ferrari Birkenhead Point, she worked for another fashion label at the same Birkenhead Point location.

[11] In relation to the commute, Ms Tzortzis does not dispute that travel time by motor vehicle to Birkenhead Point is approximately 15 minutes. She further contends that the commute to Birkenhead Point is against traffic and that street parking was easily accessible. Moreover, Ms Tzortzis submits that parking on the street did not incur parking fees.

[12] On the other hand, Ms Tzortzis submits there is no street parking at Macquarie and she would therefore be required to commute via public transport, which could take 45-60 minutes plus a ten minute walk from the bus stop to the store. Ms Tzortzis further contends that as she would be required to commute during peak hour, she would need to travel over an hour each morning to work and approximately 45 minutes to travel home.

[13] In relation to the work, Ms Tzortzis contends that the Diana Ferrari Birkenhead Point store was an outlet store that stocked ladies’ footwear as well as apparel, despite the Diana Ferrari business exiting the apparel market. She asserts that the store was a larger store and was extremely busy, likening it to a “market atmosphere”.

[14] In contrast, Ms Tzortzis submits that Williams Macquarie is smaller and very quiet, where she would be working at a slower pace to what she was accustomed. She further asserts that the store sells current stock at full prices as opposed to all stock lines at a reduced price.

[15] Ms Tzortzis contends that up until 11 October 2018, she believed she was receiving a redundancy. She reportedly notified Ms Magill that none of the vacancies provided to her in the attachment to the letter dated 10 September 2018 were suitable and requested a redundancy. Ms Tzortzis submits that following her request, Ms Valentina Dimeska, store manager at Diana Ferrari Birkenhead Point, telephoned Ms Miller and was advised that Ms Tzortzis’ redundancy would be approved. A witness statement of Ms Dimeska dated 24 November 2018 was attached to Ms Tzortzis’ submissions, outlining that during her conversation with Ms Miller on 11 September 2018, she was informed that Ms Tzortzis would be paid her redundancy and any leave owing after the store closure on 21 October 2018.

[16] Finally, Ms Tzortzis submits that she believed the position at the Williams Macquarie store had been created to avoid paying her redundancy.

Reply Submissions of Diana Ferrari

[17] Diana Ferrari submits that the Macquarie Centre where the Williams Macquarie store is located has 5000 paid parking spaces available, and that staff parking was available at a discounted rate of $10.00 per day. It further contends that untimed street parking is available in the vicinity. In contrast, Birkenhead Point has 1500 paid parking spaces available and there is no provision regarding discounted staff parking.

[18] Diana Ferrari disputes Ms Tzortzis’ contention that the Williams Macquarie store was smaller and very quiet, submitting that the store revenue was similar to that of the Birkenhead Point store and furthermore, that the position description for both stores is identical.

[19] Diana Ferrari further disputes Ms Dimeska’s evidence, contending that it is not in line with its policies to conduct a redundancy consultation with a third party and further submitting that such consultations were conducted by Ms Magill confidentially with Ms Tzortzis herself.

Legislation

[20] Section 120 of the Act provides:

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.

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

[21] Section 119(1) of the Act provides:

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.”

Consideration

[22] There is no dispute that Ms Tzortzis’ position with Diana Ferrari is redundant and therefore, she would ordinarily be entitled to redundancy pay pursuant to s.119(1) of the Act. However, the application before me seeks an order reducing the amount of redundancy pay to zero on the basis that the employer has obtained other acceptable employment for the employee. I am therefore required to first determine whether the offer of employment at the Williams Macquarie location is “other acceptable employment”.

[23] The Full Bench of the Commission provided the following guidance in relation to s.120(1)(b)(i) of the Act in Australian Commercial Catering Pty Ltd v Powell and Togia; Powell v Australian Commercial Catering Pty Ltd4

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. The determination of whether alternative employment is acceptable requires an assessment and value judgment on the part of the decision-maker.   The employer “obtains” other acceptable employment when it acquires or gets the employment by its conscious, intended acts.” 5 (references omitted)

[24] In Clothing & Allied Trades Union of Australia v Hot Tuna Pty Ltd, the Full Bench of the Australian Conciliation and Arbitration Commission stated:

“…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.” 6

[25] Ms Tzortzis was offered a permanent part-time role at Williams Macquarie with all her other terms of employment remaining unchanged. On the basis of this, I accept that she had been offered the same part-time hours at the rate of pay she was previously receiving at Diana Ferrari Birkenhead Point. I also accept that her level of seniority has not changed. These factors weigh in favour of a finding that Diana Ferrari obtained other acceptable employment for Ms Tzortzis.

[26] There is some debate as to the product offering at Williams Macquarie compared with Birkenhead Point and Ms Tzortzis has claimed the Birkenhead store was a faster paced sales environment, which she enjoyed. Diana Ferrari submits the turnover at the two stores is comparable, both locations are classified as B Grade stores and only stock footwear. I am not persuaded these issues, some of which touch upon considerations of a more subjective nature, weigh against a finding that Diana Ferrari obtained other acceptable employment for Ms Tzortzis.

[27] On the issue of commuting time, if driving her own vehicle, I am satisfied that the commuting time for Ms Tzortzis to and from Williams Macquarie has not increased to such an extent that weighs against a finding that Diana Ferrari obtained other acceptable employment. I am persuaded however that if the alternative was that she catch public transport, the extra travel time would weigh against a finding that Diana Ferrari obtained other acceptable employment for Ms Tzortzis.

[28] Therefore, the question becomes one of considering the impact of the cost of parking at Williams Macquarie which would be at least $50 per week. On the hours of work I have been advised Ms Tzortzis performs, I have calculated her weekly wages to be approximately $615 based on her being a Retail Employee Level 1 under the General Retail Industry Award 2010 (the Award). The added expense of parking at Williams Macquarie as a proportion of these wages is not insignificant for a retail worker on Award rates of pay.

[29] In all the circumstances therefore, where Ms Tzortzis is earning the Award rate of pay, the additional expense for parking persuades me that she has not been offered ‘other acceptable employment’ by Diana Ferrari. Given this, I decline to reduce the redundancy pay to which Ms Tzortzis is entitled to because of s.119 of the Act and dismiss the application made by Diana Ferrari.

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

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR703527>

 1   Appendix 1 to the Applicant’s submissions.

 2   Appendix 3 to the Applicant’s submissions.

 3   Diana Ferrari Birkenhead Point’s reported turnover is $1,268,300.00 and Williams Macquarie’s reported turnover is $1,242,500.00.

 4   [2016] FWCFB 5467.

 5   Ibid at [37].

 6   (1988) 27 IR 226 (Munro and Peterson JJ, Leary C) at 230-231.