Adelaide Shelving Supplies Pty Ltd T/A Dexion Adelaide v Jason Craig
[2021] FWC 6327
•1 DECEMBER 2021
| [2021] FWC 6327 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120—Redundancy pay
Adelaide Shelving Supplies Pty Ltd T/A Dexion Adelaide
v
Jason Craig
(C2021/6497)
COMMISSIONER HAMPTON | ADELAIDE, 1 DECEMBER 2021 |
Application for variation of redundancy pay – employee offered employment with applicant employer in different role – whether acceptable alternative employment obtained – same location and general terms but different status – increased pay offer declined and then taken off the table and employee invited to resign as part of confirming rejection of the alternative position – alternative employment offer objectively acceptable – matters concerning process and reduced nature of proposed role still relevant to discretion – discretion exercised to reduce but not eliminate NES redundancy payment – order made.
1. Background and case outline
[1] Adelaide Shelving Supplies Pty Ltd T/A Dexion Adelaide (Dexion) has made an application pursuant to s.120 of the Fair Work Act 2009 (the FW Act) seeking a reduction to zero in the redundancy pay otherwise due to a former employee, Mr Jason Craig (the respondent employee or Mr Craig).
[2] Mr Craig’s position of “Factory Hand” was made redundant and the offer of an alternative position of “Stores Assistant” was made. Following discussions, Mr Craig rejected the alternative position due to the perceived status of the position and sought the full payment of the redundancy entitlements due to him under the FW Act. An element of these discussions was that at one stage Dexion sought Mr Craig’s resignation and later advised that it considered that the provision of the alternative position entitled it to seek a reduction in the redundancy payment.
[3] At all relevant times the employment of Mr Craig was covered by the Manufacturing and Associated Industries and Occupations Award 2020 (the Award) and the Award applied to his employment. The Award provides that the redundancy entitlements are established by the National Employment Standards (NES) of the FW Act.
[4] The redundancy payments provided by s.119 of the FW Act as part of the NES are established in the following terms:
“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 |
[5] The application has been made under s.120 of the FW Act which provides as follows:
“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.”
[6] The FW Act also provides some exclusions from the obligation to make redundancy payments in the following terms:
“121 Exclusions from obligation to pay redundancy pay
(1) Section 119 does not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1) (whichever happened first):
(a) the employee’s period of continuous service with the employer (other than periods of employment as a casual employee of the employer) is less than 12 months; or
(b) the employer is a small business employer.
(2) A modern award may include a term specifying other situations in which section 119 does not apply to the termination of an employee’s employment.
(3) If a modern award that is in operation includes such a term (the award term), an enterprise agreement may:
(a) incorporate the award term by reference (and as in force from time to time) into the enterprise agreement; and
(b) provide that the incorporated term covers some or all of the employees who are also covered by the award term.”
[7] Mr Craig was employed at Dexion Adelaide for 17 completed years. There is no dispute that Mr Craig’s position has been made redundant and he is otherwise entitled to the redundancy pay provided by s.119 of the FW Act.
[8] That is, Dexion is not a small business within the meaning of s.23 of the FW Act. 1 Given Mr Craig’s service and the size of the Dexion business,2 and the absence of any other relevant exclusion in s.121, the redundancy pay otherwise due to Mr Craig is 12 weeks pay.
[9] I am satisfied that Dexion is eligible to bring this application and has done so in accordance with the FW Act.
[10] I have now conducted a hearing to determine this application. In advance of the hearing, I issued directions confirming the agreed context for the application, outlining the disputed issues to be determined by the Commission, and providing an opportunity for both parties to provide outlines and documentary evidence in advance of the hearing. I also organised links to other decisions of the Commission concerning s.120 applications to be provided to the parties. This was done to illustrate the principles generally applied by the Commission to such matters.
[11] As the parties were both self-represented, I directly facilitated the conduct of the hearing and the provision of oral evidence in a manner consistent with the Commission’s statutory charter.
[12] For reasons outlined below, I have ultimately determined, on balance, that the new position obtained by Dexion was acceptable alternative employment and that in light of all of the circumstances of the matter, some reduction in the amount of redundancy payments due to Mr Craig should be ordered.
2. The position advanced by the Dexion Adelaide
[13] Dexion was represented, by Mr Mark Cameron, Director of the Applicant Employer.
[14] Dexion contends that Mr Craig’s role within the business at the time of the discussion leading to the redundancy was that of Factory Hand. Further, it contends that the role of Stores Assistant was an alternative position provided by it to Mr Craig and that this was acceptable employment within the contemplation of s.120(1)(b)(i) of the FW Act. In particular, it submits that:
• Mr Craig was not employed as a Senior Factory Hand and although he had at some stages during his service had a more senior role, at the time of the redundancy he was working (generally alone) in part of the business and was a Factory Hand;
• Mr Craig has been aware for some years that the part of the business in which he was employed was going to be sold and that he would be offered alternative employment;
• The duties of the alternative position are substantially similar requiring Mr Craig to select shelving and racking components and package for dispatch from the warehouse;
• Mr Craig’s role as Factory Hand was part of the same warehouse in which the role of Stores Assistant was to be performed and he should have been familiar with that work and what was required. In any event, Mr Craig was given details of the position including through the provision of a Job Description;
• Details of the proposed position were discussed in a series of meetings during which Mr Craig was advised that Dexion would approach the Commission to seek a reduction in the redundancy pay if he was to reject the alternative position offered. This occurred after Dexion had sought and received advice;
• An offer to increase the hourly rate of pay was made and rejected by Mr Craig; and
• The hours and location of work, reporting arrangements, and continuity of employment would have remained unchanged.
[15] Mr Cameron provided sworn oral evidence to the Commission and Dexion relied upon the following evidentiary documents:
• Written outline of position; 3
• Notes of Meeting with Mr Jason Craig on 23 September 2021; 4
• Job Description for the position of Factory Hand; 5
• Job Description for the position of Stores Assistant; 6
• Organisational Chart – 2006; 7
• Organisational Chart – 2013; 8
• Organisational Chart – September 2021; 9
• Organisational Chart – October 2021; 10 and
• The Letter of termination. 11
[16] Dexion submits that the redundancy payment should be reduced to nil given the offer, and rejection, of other acceptable employment.
3. The position advanced by Mr Craig
[17] Mr Craig provided a written statement 12 in support of his position and provided further oral submissions and sworn evidence during the course of the hearing.
[18] Mr Craig contends that the Stores Assistant position was not acceptable alternate employment for the following reasons:
• The Stores Assistant role is a step down from his precious position of “Senior” Factory Hand;
• The Factory Hand role was mainly manufacturing (cutting) and assembly of runners, with only a small part of the job picking and packaging for dispatch;
• The higher wage rate was not offered in writing and was only made verbally after being advised that the offer of alternative employment was not accepted and had been withdrawn by the time of the final meeting; and
• The position of Stores Assistant was a substantially different and junior job than his actual role with the applicant employer.
[19] The basis of Mr Craig’s position was stated in the following terms: 13
• I was employed on 31st May 2004 as a Factory Hand but I was actually employed as Senior Factory Hand reporting to Steve Lindsay the Manufacturing Supervisor. I was employed in this capacity as they were aware that (an existing senior employee) would be having surgery for a knee replacement and would require substantial time off. Steve was off for over a year after his first surgery and shortly after returning had to have a second surgery for which he was off for a period of months after which he returned in a part time capacity. The organisational chart provided by Mr Cameron as at 2013 shows my position as Senior Factory Hand.
• I was aware for some time that Driven Technologies was potentially going to be sold and that I would be offered alternate suitable employment but no specific alternate position titles or descriptions were discussed until September 2021.
• The Stores Assistant role was offered in writing at $21.30 per hour which I did not want to accept due to the role being a step down from the position that I was currently doing as Senior Factory Hand. My role at the time of leaving consisted mainly (approx. 90%) manufacturing (cutting) and assembly of runners with the remaining 10% made up of picking and packaging accessory parts for dispatch. The Stores Assistant role was mainly general up-keep of warehouse as per the Job Description provided and I was advised that I would be reporting to the Senior Storeman.
• The additional offer of $22.50 was not put in writing and was put to me verbally by Brian (Mr Parker) in the lunch room when I advised again that I did not want to accept the Stores Assistant role.
• At the subsequent meeting with Mark (Mr Cameron) and Lyndon (Logistics Manager) on the morning of 23 September 2021, Mr Cameron advised that they had decided to bring this to a head and that I either accept the Stores Assistant role at $21.30 as they were taking the offer of $22.50 off the table or I had to resign and provide a letter of resignation. I feel that this was an attempt to get me to resign so that I no redundancy entitlements had to be paid. I advised that I would not be resigning and Mark advised that they would be taking the matter to the Fair Work Commission.
• A further meeting was then held in the afternoon of 23 September 2021 where I was advised that my employment would cease effective immediately by way of redundancy and that they would be applying to Fair Work Commission to have my redundancy severance payments reduced to zero.
[20] Mr Craig seeks the full payment of the statutory redundancy entitlements and, in effect, that this application be dismissed.
4. General findings based upon the evidence
[21] I find that both Mr Cameron and Mr Craig were seeking to assist the Commission by giving honest evidence about the events as they unfolded. There are some factual disputes between them and I have resolved these having regard to the nature and consistency of the evidence, including the extent to which the evidence represented a first-hand account. In that regard, Mr Cameron was unable to provide direct evidence about the circumstances at the time of Mr Craig’s original employment or some directly relevant discussions that involved Mr Craig and Dexion’s Company Director, Mr Parker – who did not give evidence.
[22] I have not drawn a negative inference from the absence of evidence from Mr Parker; 14 however, I have determined the facts and ultimately this application based upon the relevant and most persuasive evidence that is before the Commission.
[23] I found Mr Craig’s evidence about those matters to be convincing and I accept it.
[24] Where the “evidence” of the parties went to whether the alternative position was (subjectively) acceptable, this is matter for the Commission to determine objectively, and I have regarded these elements as submissions and taken them into account in that manner.
[25] Mr Craig was employed by Dexion in May 2004 as a ‘Factory Hand’. This role formally reported to the Logistics Manager/Store/Warehouse Manager; however, Mr Craig regularly liaised with and had direct access to Mr Parker who, as Managing Director and Chairman of the Board, undertook a hand-on role with the part of the business in which he was employed. Although engaged as a Factory Hand, the context of his employment was that Mr Craig was expected to stand in for another more senior factory employee who was expected to and did take some extended personal leave. During those absences and at other times, Mr Craig supervised the other employees in the area.
[26] Although the company was organised rather informally at the time and position titles were apparently given and varied without any formality or notice, the title of Mr Craig’s role was sometimes referred to as a Senior Factory Hand. This included on the 2013 Organisational Chart provided by Dexion and that title used more recently on some time and wages records. 15 Despite the absence of the notion of “Senior” in more recent times on some documentation, in practical terms Mr Craig was a senior hand in the sense of experience and responsibility.
[27] Whilst Dexion was Mr Craig’s employer, his role was to prepare manufactured goods for an associate Company, Driven Technologies, which contracted Dexion to produce finished goods.
[28] Mr Craig's original role was in the manufacturing area of the business and involved the use of Brake Presses and saws for cutting, punching and drilling of aluminium material, followed by final assembly and packaging of finished goods. The finished goods were then packed onto pallets ready for dispatch. The manufacturing area originally had 3 staff members including Mr Craig, a Senior Manufacturing Officer, and Junior Factory Hand.
[29] In 2010, the product range was re-designed, which eliminated all use of the Brake Presses and other tooling which greatly reduced manufacturing time and increased throughput. This re-design, which was staged over two years, eventually enabled Mr Craig to meet production schedules generally without the assistance of other staff.
[30] Since April 2013, Mr Craig has primarily worked on his own. During downtimes for other staff in the business, some employees were redirected to assist him in the assembly area. During those times, Mr Craig, in effect, supervised the employees. This area of the business has not since 2013 had other employees permanently engaged on that work, other than Mr Craig who was and remained a full-time employee.
[31] Mr Craig and other employees at Dexion were aware for some years that Driven Technologies was going to be sold. I find that somewhere in the order of 2 years before the events leading to this application, Mr Craig was also told that should the company be sold, he was employed by Dexion and would be offered alternate employment. No details were provided or discussed at that time.
[32] Driven Technologies was eventually sold on 10 September 2021.
[33] On 7 September 2021, a meeting was held with Mr Craig and Mr Parker where the respondent employee was offered a new position of 'Stores Assistant'. This included an offer to increase his remuneration from $20.90 p/h to $21.30 p/h. Mr Craig sought more details of the alternative position but indicated that the ‘pay’ was inadequate and expressed reservations about the nature of the role itself.
[34] At some stage following this meeting, a Job Description for the Stores Assistant position was provided to Mr Craig. I will return to the details of the position shortly.
[35] On 17 September 2021, another meeting was held with Mr Craig and Mr Parker and an offer of $22.50 p/h was given in view of the respondent employee’s length of service and experience. During the meeting, Mr Craig was advised, in effect, that the alternative to accepting the proposed alternative position was for him to resign Mr Craig declined to do so.
[36] In declining this offer, Mr Craig stated that the position was below his current position and described it as nothing more than a 'stores lackey' and stated that he was seeking to be paid his redundancy entitlements. It was mutually understood at that point that Mr Craig would be working until 1 October 2021.
[37] In the absence of an agreed approach Dexion was uncertain how the redundancy process should be handled. It then sought advice including from the Fair Work Ombudsman and an independent employment specialist Lawyer.
[38] Following from this advice, on 23 September 2021, 2 meetings were held between Mr Craig, Mr Cameron and Mr Lyndon Cranwell (Company Logistics Manager). Mr Craig was advised in advance that Dexion wanted a meeting, and was offered the opportunity to have a support person present; which was declined.
[39] At the first meeting on 23 September 2021, Mr Cameron advised that Dexion had decided to bring this to a head and the following, in effect, occurred:
• Dexion confirmed that on 7 September 2021 it had offered the new position of Stores Assistant with a rate of $21.30 per hour up from $20.90 per hour and that Mr Craig had declined that offer on grounds that included the inadequate rate of pay. This was accepted as accurate by Mr Craig.
• Dexion then confirmed that on 17 September 2021 it had offered a rate of pay of $22.50 per hour and that Mr Craig had rejected that offer based upon the nature of the position (a “stores lacky”). This was accepted as accurate by Mr Craig.
• There was then a discussion about the nature of the then current and proposed role and whilst it was agreed by Mr Craig that the positions were similar, there remained a dispute about the details of the 2 roles and their relative status.
• In effect, Dexion then advised that it had sought legal advice and was offering the Stores Assistant role at $21.30 per hour and Mr Craig would need to decide whether to accept that offer or walk away and claim redundancy. I find that the earlier offer of $22.50 per hour was by then withdrawn and now off the table and was not re-offered by Dexion. Dexion also advised that they would be applying to the Commission to determine Mr Craig’s “claim” for redundancy. Mr Craig, in effect, confirmed that he was seeking his redundancy entitlements.
[40] As a result of this discussion and the earlier meeting with Mr Parker, Mr Craig reasonably understood that his options were to accept the new role at $21.30 per hour or otherwise resign his employment and then claim a redundancy. He also understood that Dexion would ultimately be taking the matter to the Commission.
[41] A further meeting was then held in the afternoon of 23 September 2021 where Mr Craig was advised that he would be terminated and that his employment would cease effective immediately. He was also provided with a letter of termination due to redundancy 16 and advised that Dexion would be applying to Commission to have the “redundancy severance payments” reduced to zero.
[42] On termination, Mr Craig was paid 5 weeks in lieu of notice, his wages up until the originally agree date of 1 October 2021, and all his outstanding leave entitlements.
[43] In terms of the actual roles at issue in this matter, I find that the Factory Hand role at the time of the redundancy involved the following main duties:
• Coordinate and carry out all manufacturing orders of “Freetrack” (the product name of the storage system being handled through the Driven Technologies part of the Dexion business) and related componentry;
• Maintain a clean and safe workspace, and abide by workplace health and safety policies and Procedures;
• Other tasks related to the manufacture of the Freetrack suite of products; and
• Responsibility for all processes carried out in the manufacturing area.
[44] In practice this work involved the manufacturing (cutting of runners and assembly of components for the storage units) and picking and packing of parts for dispatch. Whilst the proportions of each of these elements were in dispute, I find that this involved in the order of 20 per cent of Mr Craig’s time cutting and fettling runners, 60 per cent on assembly, and 20 per cent on picking and packing.
[45] At the time of the redundancy, Mr Craig generally worked alone in the Factory Hand role and was responsible for the proper completion of the relevant tasks. I also find that Mr Craig, in effect, supervised other employees in the Freetrack manufacturing. assembly and packing functions from time to time.
[46] The Job Description 17 and Organisational Chart18 record Mr Craig reporting to the Warehouse Manager; however the evidence19 is that he worked closely with the Managing Director given the Director’s hand-on role with the Driven Technologies part of the business.
[47] The Job Description for the Factory hand role required no formal tool making or machinist qualifications, however this, and previous experience in manufacturing and assembly, was preferred.
[48] I also find that the proposed Stores Assistant role as set out in the Job Description 20 given to Mr Craig as part of the consultation contemplated the following main duties:
• Safe and efficient operation of warehouse plant and machinery including checking and reporting of any damage, observance of any general maintenance required, ensuring only licensed operation of forklifts and vehicles, correction of any instance of unsafe use by any other parties, and weekly checking of fire extinguishers, hoses and reels, ensuring they are at all times and clear of obstructions and are always accessible;
• General up-keep of the warehouse area including inwards stock must be stored away as soon as possible, no stock is left for extended periods in access aisles, all rubbish is removed and disposed of during the day, and all tools are returned to their holding locations after use;
• Receipt of goods inwards, including checking for and reporting of damage, accurate inventory counting and reporting, including identification of stock, and labelling for ‘put away’, and safe and quick placement of stock in its correct area once inventory is complete;
• Despatch of goods including accurate identification and picking of stock, assembly of racking frames and Longspan frames, assembly of cabinets, stock must be picked, assembled & packed to meet despatch times, all stock for despatch must be packaged and protected from damage, any site contacts required are made and confirmed prior to despatch;
• Clean-up of the warehouse area should be progressively carried out during the day with a final clean-up at the end of each day.
[49] As explained to Mr Craig, this would involve him working as part of the warehouse team performing warehouse duties including the general up-keep of the store and picking and packing goods.
[50] The Organisation Chart, 21 which represented how Dexion contemplated the formal reporting arrangements, reveals that Mr Craig would have formally reported to Warehouse Manager, along with a team comprising a Warehouse Coordinator, a “Prep Work” Supervisor and 2 other Warehouse (or Stores) Assistants. There is no evidence that this Chart was shown to Mr Craig during the consultations. I find that Mr Craig was verbally advised to the effect that he would be reporting through one of the other experienced warehouse employees, who he considered to the “Senior Storeman”.22
[51] Based upon the information known to Mr Craig at the time and now confirmed in the evidence, in the new position Mr Craig would no longer be dealing with Mr Parker directly and there was no recognition within the position of the extent of experience that he would have brought to the Stores Assistant role. I do accept that in a relatively small and informal business, Mr Craig would have continued to have some informal access to the management team but not in the same sense that had previously applied.
[52] At the time of his dismissal, Mr Craig was classified by Dexion as a C14 under the Award. 23 I observe that there would be significant doubt about whether this was correct given the nature of his work and the classification criteria in Schedule A of the Award.24 I also observe that Mr Craig was paid at $20.90 per hour; being just below the (higher) C13 award rate.25 However, the correctness of the award classification and any potential underpayment of wages is beyond the scope of this matter and I leave that aspect for the parties.
[53] Both positions involved full-time employment and the proposed Store Assistant role contemplated continuous service and the retention of all other benefits. At the time of the termination, the rate of pay on offer to Mr Craig was $21.30 per hour. As found above, Mr Craig had earlier declined the alternative position at a rate of $22.50 per hour as part of the discussion where he informed that he would have to resign if he did not take that role. The $22.50 proposal was “off the table” by the time of the events on 23 September 2021 and the final decision and termination of employment.
[54] I observe that Dexion does not appear to have internal human resources management expertise and its knowledge of award and redundancy processes appeared to be rudimentary. This led to certain aspects of handling this matter, including at one point indicating that if Mr Craig did not accept the Store Assistant role, he would need to resign. Whilst I do not find that this was done in an attempt to put the redundancy entitlement itself into doubt, this may have been the impact and Mr Craig was correct in his assessment that some damage to the trust he had in the employment relationship resulted from that action. It was not until Dexion took advice, and after Mr Craig had rejected the Stores Assistant role, that the proper process including the prospect that Dexion would approach the Commission to seek a reduction in the redundancy payment otherwise due, was the full and proper context put to the respondent employee.
[55] This finding does not necessarily go to whether the alternative position was objectively acceptable but may be relevant to the exercise of any discretion that arises.
5. Did the Dexion obtain acceptable alternative employment for the employee by offering the position?
[56] In order to determine this question, it is necessary to consider both the appropriate approach to be taken by the Commission to s.120 of the FW Act and the nature of the alternative position in the context of these parties.
[57] The historical context for the nature of the provisions that are now found in s.120 of the FW Act is summarised by the Full Bench of the Australian Industrial Relations Commission in Australian Chamber of Manufacturers and Derole Nominees Pty Ltd - Clothing Trades Award 198226 (Derole) in the following terms:
“
“Obtains”
This term originates from the first decision in the Termination, Change and Redundancy Case where the Full Bench said:
“Two particular instances, which the employers argued might warrant an application for relief from the obligation to pay the general prescription, which were brought to our attention in the proceedings were when an employer obtains acceptable alternative employment for the employee, and where employees receive the benefit of superannuation schemes on retrenchment.
We do not wish to prevent an employer making an application to be exempted from the general prescription pursuant to this decision in cases where an employer obtains acceptable alternative employment for an employee but we would point out that, in our decision, severance payments are not made for the purpose of assisting employees to find alternative employment. Where such an application was made it would be important to consider whether previous service with the previous employer was recognized as service with the new employer.”
The word “obtains” does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate.
It follows that “obtain” must be given some lesser meaning. The Shorter Oxford Dictionary (third edition, revised) provides as its relevant meaning, the definition of “obtain” as “to procure or gain, as the result of purpose and effort”. It seems to us that meaning is of assistance here; that is, the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind.
This approach is supported if the passages quoted above from the Termination, Change and Redundancy Case are read in conjunction with what was said under the heading “assistance in seeking alternative employment”. There the Commission records the ACTU objective of achieving award provisions “designed to ensure that the employer assists the employee to find alternative employment”.
Reliance was placed by the ACTU on a decision of the South Australian Industrial Commission in the Milk Processing and Cheese Etc Manufacturing Case:
“where it was decided that there should be included in any detailed prescription on redundancy an obligation on the employer actively to offer, or to make reasonable endeavours to procure, suitable alternative employment for redundant employees.”
Dealing with the circumstances in which the general prescription the Full Bench was awarding might be departed from, the decision in the Termination, Change and Redundancy Case indicates that particular regard was paid to, inter alia, the S.A. Milk Processing and Cheese Etc. Manufacturing decision. Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer’s ability to “obtain” alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.” 27
[58] I note that one element of the approach taken in Derole must however now be considered subject to the later decision of the Full Federal Court in FBIS International Protective Services (Aust) Pty Ltd v The Maritime Union of Australia.28 In particular, the Court has qualified that the appropriate reference point to assess the efforts of the applicant employer in obtaining alternative employment does not involve consideration of whether the employer was the strong, moving force towards the creation of the available opportunity.29
[59] In any event, there is no doubt in this case that Dexion obtained the alternative employment for Mr Craig. It organised the position within its own business and made a definite and informed offer which subsequently was not accepted by the respondent employee.
[60] The critical issue here is whether the alternative position was acceptable.
[61] It is well established in this jurisdiction that the concept of acceptable alternative employment is to be determined objectively and that the mere rejection of the alternative does not make it objectively unacceptable. As noted by the Full Bench in Derole:
“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.” 30
[62] The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer31 and it is a serious step for the Commission to make an order to limit or remove an employee’s statutory entitlement to redundancy payments.32 In order to establish whether the alternative employment obtained by the employer is acceptable, it is necessary to have regard to all relevant matters including factors such 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.33
[63] It is also clear that acceptable employment does not mean identical employment; however, it has been held by the Commission that:
“…the objective test of acceptability appears to be that the alternative work bears a sufficient comparability to the original work and is not unreasonably removed from the employee’s original duties, skills set, qualifications, experience and other terms and conditions of employment. The test is not whether or not the employee is capable of carrying out the new employment as such, it is whether there is sufficient correlation between the relevant indicia of the current work and the alternative employment as proposed.”34
[64] As observed by Bissett C,35 this approach is consistent with other authorities.36
[65] Further, employees should not unreasonably refuse offers of alternative employment merely because they wish to access the benefits of redundancy pay. 37
[66] If the Commission is satisfied that acceptable alternative employment has been obtained, a discretion arises to reduce all or some of the redundancy pay having regard to all of the relevant circumstances.38
[67] I also observe that as part of the present context in which the redundancy provisions of the NES operate, the provisions of the Award, and most other modern awards, contain an obligation upon an employer, in circumstances of major change such as selling a part of the business leading to redundancies, to:
“… … discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 41.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.” 39
[68] The proposal of the Stores Assistant role would reasonably be understood as a measure to mitigate the adverse effects of the redundancy.
[69] Was the Stores Assistant position as obtained for Mr Craig by Dexion objectively acceptable?
[70] There are many features of the Store Assistant role that support Dexion’s proposition that it was acceptable for present purposes. This included that the role has some common duties with the existing role, including in particular, the assembly, picking and packing functions and the general environment of the warehouse and associated duties. Further, the continuation of the general working conditions, a full-time role with the same working hours and location, and the same or slightly increased wage are consistent with this notion. In addition, the maintenance of all other entitlements and continuous service, are consistent with an objectively acceptable alternative position.
[71] There are some differences in the positions. The duties do not involve any cutting of the components or similar functions and there is no prospect of any informal supervision or leadership elements contemplated in the role. The proposed practical reporting arrangement are also supportive of the view that the position was less senior within the workplace. This is despite the fact that the classification and pay arrangements did not reflect those elements at the time. Although it is an objective assessment that is required, it is appropriate to take into account the fact that this was proposed to an employee who had previously been recognised, in practice and generally in terms of the name of the position, as a Senior Factory Hand who worked closely with the Managing Director in his role from time to time for over 17 years. This is relevant because the objective assessment must consider the actual circumstances of the parties involved, albeit judged independently with most weight being given to quantifiable matters.
[72] On balance, I find that the alternative position proposed bears a sufficient comparability to the original work and is not unreasonably removed from the respondent employee’s original duties, skills set, qualifications, experience and other terms and conditions of employment. Having regard to this, and the circumstances more generally, I find on balance that Dexion obtained acceptable alternative employment within the meaning of s.120(1)(b)(i) of the FW Act.
[73] There are however certain elements of the proposed position that may also be relevant to the exercise of discretion resulting from this finding.
6. Is it appropriate for the Commission to make an order to reduce the amount of redundancy pay?
[74] Given that the employer has obtained acceptable alternative employment for the respondent employee, the final issue is whether there should be a reduction (including potentially to zero as sought by Dexion) in the amount of the redundancy payments. As outlined earlier, this is a matter of discretion to be exercised having regard to all the relevant circumstances of a particular matter.
[75] If accepted by Mr Craig there would also have been no break in, or loss of, the continuity of service. The nature of the redundancy payments provided in the NES recognises, amongst other factors, that employees who are terminated by virtue of redundancy lose their non-transferable credits (including potential access to long service leave) and their continuity of service and seniority, and suffer other inconvenience and hardships. 40
[76] There are, however, considerations arising from the process undertaken by Dexion to permit Mr Craig to make an informed decision. Further, I consider that in the particular circumstances of this matter, some of the contrary features of the alternative position should be taken into account. In making this assessment, the Commission must exercise any discretion having regard to all of the relevant circumstances including the apparent purpose of the provision, the objects41 of the FW Act and what is fair and just.42 In that regard, the refusal by Mr Craig to accept an offer of acceptable employment, and not adopt the measures that would mitigate the consequences of the redundancy, would be a significant, but not necessarily determinative, consideration in favour of doing so.43
[77] As to the first aspect, I have found that at the point that the higher wage was offered, and Mr Craig rejected the proposal, this took place as part of the same discussion where he was being advised that if he rejected the proposal he would need to resign. This was not a proper explanation of the alternatives and was reasonably understood by Mr Craig as being associated with his existing entitlements to redundancy payments. The higher wage was off the table by the time of the subsequent discussions and although Mr Craig might have raised the notion himself, this was not at all clear. I cannot be satisfied that this clumsy initial handling of the process by Dexion did not impact upon the trust and confidence in the relationship and ultimately impact upon the choices then being made by Mr Craig.
[78] Further, for reasons previously outlined, the difference in practical seniority between the roles is in my view relevant to the discretion I am required to exercise.
[79] Having regard to all of my findings, I consider that the NES redundancy payments should be significantly reduced but not to nil as sought by Dexion. Rather, I consider that a reduction of 40 per cent is fair and reasonable in all the circumstances of this matter.
7. Conclusions and orders
[80] I have on balance found that the Stores Assistant position is acceptable alternative employment within the meaning of s.120(1)(b)(i) of the FW Act. I have also found that it is appropriate to exercise my discretion to reduce the NES redundancy payment otherwise due to Mr Craig.
[81] In all of the circumstances, I have determined that the redundancy payments should be reduced to 60 per cent of the NES entitlement. Orders44 to that end are being issued in conjunction with this decision.
COMMISSIONER
Appearances:
M Cameron, on behalf of the Applicant, Adelaide Shelving Supplies Pty Ltd T/A Dexion Adelaide.
J Craig, the Respondent Employee on his own behalf.
Hearing details:
2021
November 18
By Video.
Printed by authority of the Commonwealth Government Printer
<PR735727>
1 Dexion confirmed that it employed in the order of some 24 employees at the time of Mr Craig’s redundancy – transcript PN86 – PN89.
2 Noting s.121(1) of the FW Act.
3 Exhibit 1.
4 Exhibits 2 and 3.
5 Exhibit 4.
6 Exhibit 5.
7 Exhibit 6
8 Exhibit 7.
9 Exhibit 8.
10 Exhibit 9.
11 Exhibit 10.
12 Exhibit 11.
13 Drawn from Mr Craig’s written statement provided to the Commission – exhibit 11.
14 It is open for the Commission, but not necessary, to draw a negative inference where there is an unexplained failure to call evidence - Jones v Dunkel (1959) 101 CLR 298. See also The Herran Building Group Pty Ltd v Edward Anneveldt[2013] FWCFB 4744.
15 The evidence of Mr Cameron – transcript PN127.
16 Exhibit 10.
17 Exhibit 4.
18 Exhibit 8.
19 Including the evidence of Mr Cameron.
20 Exhibit 5.
21 Exhibit 9.
22 Mr Craig’s evidence – exhibit 11 at 3.
23 The oral evidence of Mr Cameron.
24 The C14 classification is, in effect, an introductory rate involving induction training and contemplates working under direct supervision and exercising minimal judgement whilst undertaking that training.
25 The C13 award rate at the time was $20.92 per hour. The C13 classification contemplates working under direct supervision or in a team environment and the employee understanding and undertaking basis quality control and other similar procedures.
26 Australian Chamber of Manufacturers and Derole Nominees Pty Ltd - Clothing Trades Award 1982 (1), (1990) 140 IR 123 per Peterson J, Marsh DP and Oldmeadow C.
27 Ibid at 127 and 128.
28 [2015] FCAFC 90.
29 Ibid at [19] and [20].
30 Derole at 128.
31 Re Target Retail Agreement 2001, PR916204, 4 April 2002, at para 6.
32 Clothing and Allied Trades Union v Hot Tuna (1988) 27 IR 226.
33 Re Clerks Salaried Staffs (Agriculture Award) 1999, Print S1216, 24 November 1999, drawing upon Derole..
34 Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 (16 May 2007) at [26].
35 In Vicstaff Pty Ltd T/A Stratco v May and McFerran[2010] FWA 3141 at [28].
36 Clothing and Allied Trades Union v Hot Tuna (1988) 27 IR 226.
37 See also NUW v Tontine Fibres [2007] AIRCFB 1016 and the summary of principles in Spotless Services Australia Limited [2013] FWC 4484 per Sams DP at [14].
38 Re Clerks Salaried Staffs (Agriculture Award) 1999, Print S1216, 24 November 1999, drawing upon Derole..
39 Clause 41.1(b) of the Award.
40 See Termination, Change and Redundancy Case (1984) 8 IR 34 at 73 and Redundancy Case (2004) 29 IR 155 at [5], [133] to [152].
41 Section 3 of the FW Act.
42 Section 577 of the FW Act.
43 See the discussion of the exercise of discretion in Coal and Allied v AIRC (2000) 99 IR 309 per Gleeson CJ, Gaudron and Hayne JJ at [19]; CEPU and AG Coombs Fire Protection Pty Ltd [AIRC Print Q1727] (Giudice J, Polites SDP, Hingley C, 17 June 1998) (at p 2); and Warrell v Walton [2013] FCA 291 at [24].
44 .PR736326.
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