| [2021] FWC 6038 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Chamber of Commerce and Industry of Western Australia Limited T/A CCIWA
v
Mr Peter Boom
(C2021/4208)
DEPUTY PRESIDENT BINET |
PERTH, 21 OCTOBER 2021 |
Variation of redundancy pay
[1] The Chamber of Commerce and Industry of Western Australia Limited trading as CCIWA (CCIWA) has applied to the Fair Work Commission (FWC) for an order pursuant to section 120 of the Fair Work Act 2009 (Cth) (FW Act) to vary the amount of redundancy pay to be paid to Mr Peter Boom (Mr Boom).
[2] CCIWA have sought an Order that the amount of redundancy pay be reduced from 4 weeks of Mr Boom’s base rate of pay for his ordinary hours of work to zero (Order) on the grounds that CCIWA have found other acceptable employment for Mr Boom (Application).
[3] On 13 August 2021 Directions were issued for the filing of materials to enable the Application to be determined (Directions).
[4] In accordance with the Directions the parties filed a jointly prepared Agreed Statement of Facts, which the parties were advised would be admitted into evidence and considered not in dispute.
[5] The Directions contained an invitation for either party to make a request to be heard orally in relation to the Application by 4pm Thursday 3 September 2021. The parties were advised that, should neither party wish to make oral submissions, and subject to my review of the materials filed in accordance with the Directions, a conclusion about the Application may be made on the written materials filed.
[6] No request to be heard orally was received from either party on or before 4pm Thursday 3 September 2021 therefore the Application has been determined ‘on the papers’.
[7] Mr Boom commenced his employment with CCIWA on 23 July 2020 as a Graduate Engineer, pursuant to a maximum term contract, expiring on 26 July 2023. 1
[8] Mr Boom was one of several graduates employed to fill graduate positions arising from a Graduate Host Agreement whereby CCIWA provided graduates to Horizon Power and Western Power to perform rotations of six month duration. 2
[9] Mr Boom’s employment was covered by the Electrical Power Industry Award 2020 (Award).
[10] His ordinary hours of work were 37.5 hours per week Monday to Friday. 3
[11] Mr Boom's salary, prior to termination, was $62,600 plus 10% superannuation. 4
[12] At the time he ceased employment with CCIWA Mr Boom was performing a rotation at Horizon Power Bentley. 5
[13] In May 2021 the Board of the CCIWA decided to terminate the Graduate Host Agreement. The Board instructed the management of CCIWA to liaise with the host companies to ensure the ongoing employment of the affected graduates. 6
[14] On 3 June 2021 CCIWA's Chief Financial Officer (CFO) Mr Mathew Golds (Mr Golds) notified Horizon Power of the termination of the Graduate Host Agreement. In an email sent later the same day confirming the content of those discussions Mr Golds offered to assist in the transition process. 7
[15] On 4 June 2021 Mr Golds met with Horizon Power to discuss the logistics of the consultation process with Graduates. He confirmed the content of those discussions later the same day by email relevantly noting that: 8
“Consultations will close with the Graduates once a placement or final decision has been made regarding their employment beyond 30 July 2021. We look forward to working with you over the coming days to identify suitable opportunities for our Graduates with your company to commence on, or before, 30 July 2021.”
[16] Horizon Power responded to the email later the same day confirming the Graduates’ Supervisors had been notified. 9
[17] On 8 June 2021 Mr Golds met with all the Horizon Power graduates to inform them that CCIWA were considering ceasing the graduate host program on 30 July 2021 and that as a consequence their role with CCIWA was likely to become redundant. Mr Golds informed the Graduates that CCIWA were working closely with Horizon Power to identify suitable alternative employment for the Graduates. 10
[18] Later the same day he and CCIWA's Manager, People & Assets, Ms Paisha Cook (Ms Cook) met with Mr Boom individually. Mr Golds says that he informed Mr Boom that CCIWA are working closely with the Host Companies to identify suitable opportunities but that this may take some time due to the different levels of approval processes within each company. He says that he encouraged him to contact Ms Cook if he wanted further information and that in the event that CCIWA were not successful in securing a role for him with Horizon Power he would be provided with a list of alternative roles at CCIWA. 11
[19] Ms Cook confirmed the content of the discussions with Mr Boom later the same day in writing. The letter provided to Mr Boom states that: 12
“We are working closely with the Host Companies to identify suitable opportunities and will try our best to resolve as quickly as possible.”
[20] On 8 June 2021 Ms Cook informed Horizon Power by email that consultation with the graduates (including Mr Boom) had commenced. In the email she notes that the graduates were hopeful in securing roles with Horizon Power and makes arrangements with Horizon Power to further discuss this. 13
[21] On 9 June 2021 Ms Cook met with Horizon Power and explained that all the Graduates had expressed an interest in securing employment with Horizon Power given that Western Power seemed unlikely to make any offers immediately. She says that she endeavoured to address Horizon Power’s concerns about the logistics of how their alternate graduate program might operate and instead encouraged them to focus on making offers of employment. She also says that she encouraged Horizon Power to hold contract discussions directly with the Graduates to expedite the process. As promised during the meeting later the same day she sent Horizon Power of all the graduates looking for alternative employment. 14
[22] On 11 June 2021 Ms Cook wrote to each of the graduates including Mr Boom informing them that she was liaising with Horizon Power in relation their potential employment with Horizon Power and that she had invited Horizon Power to speak directly to the Graduates if that provided a quicker pathway to direct employment for the graduates. 15
[23] On 16 June 2021 Horizon Power informed Ms Cook that the CEO of Horizon Power had approved offers of employment being made to all eight graduates then on rotation with Horizon Power. 16 On the same day Ms Cook asked Horizon Power to also consider offering employment to graduates then on rotation to Western Power.17
[24] On 1 July 2021 Ms Cook met with Mr Boom to inform him that his position was redundant effective 30 July 2021. In a letter sent the same day confirming those discussions Ms Cook notes that discussions have commenced with Horizon Power to offer him a role. Notwithstanding this a list of vacancies at the CCIWA was also attached to the letter. The letter states that in the event that Horizon Power do make an offer of employment to Mr Boom that CCIWA will apply to the FWC to vary his redundancy payment. 18
[25] On 13 July 2021 Horizon Power informed CCIWA that offers of employment had been made to eight graduates (including Mr Boom) and requested information about whether the graduates had completed and passed pre-employment medicals with CCIWA. 19
[26] On 14 July 2021 CCIWA provided details of the date upon which graduates passed their pre-employment medicals. 20
[27] On 21 July 2021 Horizon Power informed CCIWA that offers of employment had been made to, and accepted by, seven graduates (including Mr Boom). Horizon Power provided CCIWA with details of the terms and conditions of that employment. Horizon Power indicated that two graduates had declined an offer of employment. In response later the same day CCIWA offered to provide Horizon Power with the details of two other graduates, then on rotation to Western Power, to replace those graduates who declined offers of employment. 21
[28] Mr Boom's employment with CCIWA ended on 31 July 2021. 22
[29] Mr Boom accepted an offer of employment from Horizon Power and commenced employment with Horizon Power as a Graduate Engineer on 2 August 2021 on a maximum term contract due to expiry on 2 August 2023. 23
[30] His role and day to day duties have not changed from when he was employed by CCIWA and performing a rotation at Horizon Power. 24
[31] His contract with Horizon Power provides for a salary of $72,973 plus 11% superannuation. His working hours are 37.5 hours per week Monday to Friday. 25
[32] Section 120 of the FW Act states that:
“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.
(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”
[33] Section 119 of the FW Act states that:
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 |
[34] Clause 32 of the Award notes that redundancy pay for employees covered by the Award arises from section 119 of the FW Act. I am therefore satisfied that Mr Boom is entitled to redundancy because of section 119 of the FW Act.
[35] I am also satisfied that CCIWA have standing to bring the Application as his employer.
[36] CCIWA submits that it obtained other acceptable employment for Mr Boom within the contemplation of section 120(1)(b)(i) of the FW Act.
[37] In order to satisfy the requirement to ‘obtain’ other acceptable employment the employer must have caused the alternative employment to become available to the redundant employee. 26 This requires the employer to have procured an offer of employment whether or not it is accepted by the employee.27 This does not require the employer to be a strong “moving force” in obtaining the offer of employment rather the offer of employment need only be the result of the “conscious intended acts” of the employer.
[38] Mr Boom does not dispute that his employment with Horizon Power is ‘acceptable’ employment. Given the increase in term of employment and improved conditions of employment it is clear the new employment is objectively better.
[39] However, Mr Boom disputes that CCIWA ‘obtained’ his employment with Horizon Power. In support of this assertion, he says that Horizon Power engaged in conversation with him on 15 June 2021 and explained that it intended to offer her employment pending approval from the CEO of Horizon Power. Furthermore he says that CCIWA did not ‘obtain’ his employment with Horizon Power because it was Horizon Power who informed him of the offer of employment with Horizon Power and not CCIWA.
[40] The evidence filed reveals that CCIWA approached Horizon Power to endeavour to secure employment for Mr Boom and the other graduates. This occurred well before his discussions with Horizon Power on 15 June 2021.
[41] I am satisfied that the evidence reveals that CCIWA ‘obtained’ his offer of employment for the purposes of section 120(1)(b)(i). See for example the evidence that:
a. On 4 June 2021 Mr Golds met with Horizon Power to discuss the logistics of the consultation process with Graduates and his email of the same date in which he stated: 28
“Consultations will close with the Graduates once a placement or final decision has been made regarding their employment beyond 30 July 2021. We look forward to working with you over the coming days to identify suitable opportunities for our Graduates with your company to commence on, or before, 30 July 2021.”
b. On 8 June 2021 Ms Cook informed Horizon Power by email that the graduates were hopeful in securing roles with Horizon Power and made arrangements with Horizon Power to further discuss this.
c. On 9 June 2021 Ms Cook met with Horizon Power and endeavoured to address Horizon Power’s concerns about the logistics of how their alternate graduate program might operate and instead encouraged them to focus on making offers of employment. Later the same day she sent Horizon Power a list of all the graduates looking for alternative employment including those then working at Western Power.
d. On 14 July 2021 CCIWA provided Horizon Power with details of the date upon which the graduates passed their pre-employment medicals and the outcome of those medicals as evidence of their fitness for work with Horizon Power.
[42] CCIWA regularly updated Mr Boom and the other graduates that it was endeavouring to secure employment for them during the redundancy process. However, the graduates had no visibility over the meetings and numerous correspondence which CCIWA engaged in directly with Horizon Power to ensure that the Graduates were offered employment until CCIWA filed its materials in these proceedings.
[43] The decision to encourage Horizon Power to have discussions directly with the Graduates in an effort to improve the efficiency of the process unfortunately resulted in some graduates, like Mr Boom, not unreasonably presuming that CCIWA had no involvement in the process.
[44] I am satisfied that the position that Mr Boom was offered a role as a Graduate with Horizon Power was ‘acceptable employment’ which was ‘obtained’ by Western Power for the purposes of section 120(1)(b)(i) of the FW Act.
[45] I am satisfied that in the circumstances it is appropriate to grant the Order sought and reduce Mr Boom’s redundancy pay to nil.
[46] An order to this effect will issue with this decision. 29
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR734484>
1 Agreed Statement of Facts filed on 7 September 2021, [1]-[2].
2 Submissions filed by CCIWA on 19 August 2021.
3 Agreed Statement of Facts filed on 7 September 2021, [3].
4 Agreed Statement of Facts filed on 7 September 2021, [4].
5 Agreed Statement of Facts filed on 7 September 2021, [7].
6 Submissions filed by CCIWA on 19 August 2021.
7 Submissions filed by CCIWA on 19 August 2021, Attachment 7.
8 Submissions filed by CCIWA on 19 August 2021, Attachment 9.
9 Submissions filed by CCIWA on 19 August 2021, Attachment 9.
10 Submissions filed by CCIWA on 19 August 2021, Attachment 18.
11 Submissions filed by CCIWA on 19 August 2021, Attachment 18.
12 Submissions filed by CCIWA on 19 August 2021, Attachment 3.
13 Submissions filed by CCIWA on 19 August 2021, Attachment 17.
14 Submissions filed by CCIWA on 19 August 2021, Attachment 18.
15 Submissions filed by CCIWA on 19 August 2021, Attachment 13.
16 Submissions filed by CCIWA on 19 August 2021, Attachment 17.
17 Submissions filed by CCIWA on 19 August 2021, Attachment 17.
18 Submissions filed by CCIWA on 19 August 2021, Attachment 4.
19 Submissions filed by CCIWA on 19 August 2021, Attachment 16.
20 Submissions filed by CCIWA on 19 August 2021, Attachment 16
21 Submissions filed by CCIWA on 19 August 2021, Attachment 12.
22 Agreed Statement of Facts filed on 7 September 2021, [9].
23 Agreed Statement of Facts filed on 7 September 2021, [7].
24 Submissions filed by CCIWA on 19 August 2021
25 Form F45A – Application to vary redundancy order filed on 21 July 2021.
26 P&R Electrical Wholesalers Pty Ltd [2016] FWC 1730 at [26]-[27].
27 FBIS International Protective Services (Aust) Pty Ltd v MUA and Fair Work Commission [2015] FCAFC 90 at [18].
28 Submissions filed by CCIWA on 19 August 2021, Attachment 18.