Affinity Risk Partners (Brokers) Pty Ltd
[2011] FWA 295
•17 JANUARY 2011
[2011] FWA 295 |
|
DECISION |
Fair Work Act 2009
s.120—Application to vary redundancy pay for other employment or incapacity to pay
Affinity Risk Partners (Brokers) Pty Ltd
(C2011/2519)
COMMISSIONER SMITH | MELBOURNE, 17 JANUARY 2011 |
Application to reduce the redundancy pay of Michael Russell to nil.
[1] This is an application made pursuant to s.120 of the Fair Work Act 2009 (Cth) (the Act) by Affinity Risk Partners (Brokers) Pty Ltd (Affinity) for the reduction to nil of a redundancy payment that would otherwise be payable to Mr Michael Russell. Mr Russell’s entitlement arises as a result of the application of s.119 of the Act. Mr Russell had, at the time of the redundancy, one year and eight days service.
[2] Section 120 provides:
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, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA 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.
[3] In the proceedings, Affinity was represented by Mr P. Grant, a Director and Chief Executive Officer of the Company and Mr Russell represented himself.
[4] Briefly, the redundancy of Mr Russell arose as a consequence of a client of Affinity taking back the work performed by Affinity by deciding to undertake that work in-house. Mr Russell was performing that work at Affinity and Mr Grant arranged for him to follow that work to the new employer.
[5] Affinity argued that it was relevant for me to take into account:
- The length of service of Mr Russell,
- The fact that Mr Grant secured employment for Mr Russell with the client lost to Affinity where he performed the same work as he did at Affinity,
- There was no period of unemployment between the time Mr Russell finished with Affinity and commenced employment with the new employer,
- Mr Russell had been paid all other statutory entitlements and it was submitted that he had not suffered any loss of employment security,
- Mr Russell had not suffered any loss normally associated with inferior conditions, loss of seniority or diminished job or social status as the position was the same as the one he had occupied with Affinity,
- Mr Russell had not suffered any loss of income, and
- Mr Russell did not have to apply for another job.
[6] In addition, Affinity argued that the loss of the client had impacted seriously upon the business and as a result of this and other changes Affinity had made seven employees redundant. In short Affinity argued that a redundancy payment would be a windfall for Mr Russell, be unfair on Affinity and would be against the spirit of the legislation.
[7] Mr Russell accepted the majority of the submissions put by Affinity but submitted that the position offered was only for six months and there was no certainty that it would continue beyond that time. In those circumstances Mr Russell submitted that he had to actively seek other employment—which he obtained.
[8] During the proceedings I asked Mr Grant why the application for relief had only been lodged on 6 January 2011 when Mr Russell had been made redundant on 25 June 2010. Mr Grant submitted that he had only recently become aware of the process that he could follow.
[9] Mr Russell assisted with a further explanation. Mr Russell submitted that he had been pursuing his entitlement under the Act and it had been the subject of an investigation and finding by the Fair Work Ombudsman. The advice was given by the Ombudsman on 27 September 2010 that Mr Russell had an entitlement. However, no payment was made and Mr Russell found it necessary to initiate proceedings in the Magistrates’ Court to recover his entitlement.
[10] It is well known in equity that for a person to seek relief they should come with clean hands. In this matter Affinity appears to have refused to pay an entitlement contained in the Act and has done so in the knowledge that it had that duty. This forced Mr Russell, in the end, to seek to pursue his entitlement through the courts. This is unfortunate.
[11] Affinity has a very persuasive case. There is nearly always some form of trauma associated with losing employment but in the case of Mr Russell he has been fortunate to have suitable alternative employment arranged for him and other than another change in employer, remains employed today without having any period of unemployment or employment with inferior terms and conditions with one exception. That exception was, of course, the fact that the employment offer was, on its face, only for six months.
[12] Given the circumstances, Affinity has made out a case for the amount of redundancy pay to be reduced. Section 120(2) permits Fair Work Australia (FWA) to reduce the amount of redundancy pay by a specified amount that it considers appropriate. Section 578 provides that in performing functions or exercising powers in relation to a matter under a part of the Act, FWA must take into consideration, among other matters, equity, good conscience and the merits of the matter.
[13] In all the circumstances of this case I find that the appropriate reduction in the amount of redundancy pay is three weeks, leaving one week payable to Mr Russell. An order will issue accordingly.
[14] I add that because of the history of this matter, if the payment is not made within 14 days of today’s date the order will be set aside. Mr Russell would then be in a position to pursue the full amount in the Magistrates Court.
COMMISSIONER
Appearances:
Mr P. Grant, the applicant
Mr M. Russell. on behalf of Affinity Risk Partners (Brokers) Pty Ltd.
Hearing details:
2011.
Melbourne:
January, 11.
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