APPLICATION BY MAX SOLUTIONS PTY LTD T/A MAX SOLUTIONS

[2021] FWC 4063

[2021] FWC 4063

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

APPLICATION BY MAX SOLUTIONS PTY LTD T/A MAX SOLUTIONS
(C2021/2395)

DEPUTY PRESIDENT LAKE BRISBANE, 12 JULY 2021

Variation of redundancy pay

Background

[1] MAX Solutions Pty Ltd T/A MAX Solution(the Applicant) has applied pursuant to s.120(2) of the Fair Work Act 2009 (the Act) to have the Commission reduce to nil the redundancy entitlement of Ms Alice King (the Respondent). The Respondent was employed by the Applicant at the Borallan Training and Correctional Centre (BTCC), a service operated by the Applicant pursuant to a government contract. The Applicant was informed that its services would not be used following early March 2021. Consequently, it sought to redeploy its staff within the organisation.

[2] The terms and conditions of employment of the Employees were, at all material times, provided by the MAX Solutions Enterprise Agreement 2020 (the Agreement).

[3] Ms King commenced employment with the Applicant on 10 July 2017 as job centre manager at BTCC. Her employment ended on 14 May 2021. It was accepted by the Applicant that under the Agreement, the Respondent would be entitled 7 weeks of redundancy pay if her redundancy was to be paid in full.

The Application

[4] The application to vary the Respondent’s redundancy pay to nil was on the basis that the Applicant provided her with acceptable alternative employment. The Respondent says none of the alternatives were acceptable.

[5] I held a conference to see if a resolution could be reached between the parties. As the matter did not resolve, each party was given an opportunity to make submissions both in writing and at the hearing.

[6] The matters for determination is whether the Applicant provided other acceptable work and if so, whether the commission exercise discretion to vary the redundancy. If a variation is appropriate, I must determine to what extent the redundancy should be varied.

Relevant legislation

[7] Section 119(1)(a) of the Act relevantly provides that an employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated 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. The section goes on to provide for the amount payable to an employee who is made redundant, which is dependent on their length of continuous service.

[8] Section 120 confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise have been entitled under s.119 of the Act.

[9] Section 120(1) states that the section applies if an employee is entitled to be paid an amount of redundancy pay under s.119, and the employer “obtains other acceptable employment” for the employee. These are the jurisdictional facts that must be established before the Commission may exercise its discretion. Section 120(2) then states that the Commission “may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate”. If the Commission makes an order under s.120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination (see s.120(3)).

The meaning of “other acceptable employment”

[10] In Spotless Services Australia Limited t/as Alliance Catering   [2016] FWC 4505 (‘Spotless’), Deputy President Sams usefully identified the authorities relevant to “other acceptable employment” and the task to be performed by the Commission:

“[60] The question of what constitutes ‘other acceptable employment’ in the context of a redundancy situation, has been considered by the Commission and its predecessors in many and varied circumstances and industries over a number of years. In Derole Nominees, a Full Bench of the Australian Industrial Relations Commission (AIRC) said at pp 128-129:

‘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.

This approach to the test demonstrates that any alternative employment available to the eighteen former employees of the company cannot be regarded as “acceptable” merely because a number of other former employees took up employment at the new location. The relevant aspects of the job must be examined objectively to determine whether the employment is “acceptable”.

…

The exemption provision imports the notion that an effort of a sufficient kind by an outgoing employer may cause his obligation for redundancy pay to be reduced; a decision by an employee not to co-operate with the employer may well disentitle the employee to all or some of the payment.’ (my emphasis)

[61] In Oscar Oscar Group Services Pty Ltd v Lees [2012] FWC 3901 (‘Oscar Oscar’), Commissioner Asbury (as Her Honour then was), said at paras [18]-[19]:

‘[18] The question of whether alternative employment is acceptable, must be assessed on an objective basis. It is relevant to the assessment that redundancy payments are not made solely for the purpose of assisting employees to find alternative employment. Redundancy payments are intended to tide an employee over during the search for alternative employment, and to compensate the employee for loss of credits for sick leave, long service leave and other entitlements based on length of service. The question of whether previous service with the previous employer is recognised as service with the new employer, will also be relevant.

[19] Other considerations will be whether the alternative employment is of a like nature; a reasonable distance from the previous employment; whether pay and conditions are comparable; hours of work and job security in relation to the new position. The fact that an alternative position does not meet the personal preferences of an employee, may place the right to receive full redundancy pay at risk, where the employee refuses a position that is found to be acceptable on an objective basis.’

[62] Senior Deputy President Watson in Feltex said at a para [33] and [89]:

‘[33] The parties accept, as do I, that matters to be considered in assessing whether alternative acceptable employment has been obtained include matters such as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security, the location of work, continuity of service and accruals and the application of probationary periods. The relevant authorities also demonstrate that this listing of matters is not exhaustive and the question of whether an employment is acceptable alternative employment will be decided on the peculiar facts of a matter. Further, the authorities suggest that acceptable employment is not synonymous with identical employment, although the basis of the 2004 variation of the TCR test case provision suggests that, whilst not identical, terms and conditions should be substantially similar and no less favourable, overall, than the terms and conditions applicable to the employee at the time of the redundancy.

…

[89] I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.’

[63] In Vicstaff Pty Ltd (t/as Stratco) v May (2010) 204 IR 233 (‘Vicstaff’), Bissett C said at paras [29]-[30]:

‘[29] The determination of whether or not alternative employment is acceptable must be determined objectively and not subjectively from the perspective of the employer or employees. That the alternative employment may be rejected does not objectively make it unacceptable nor does the fact that the employment was offered make it, by virtue of the offer, acceptable. Further, that one of the persons out of a group may have accepted the employment does not make the employment acceptable for the others in the group. The reasons for the acceptance of alternative employment are many and varied and general conclusions should not be drawn from a particular circumstance.

[30] It is therefore incumbent upon the employer (Vicstaff) in this matter to demonstrate that the alternative employment is acceptable taking into account all matters relevant in such a consideration. Had the alternative work been considered acceptable to the individuals one imagines they would have accepted the work offered.’

[64] In DRW Investments t/as Wettenhalls v Timothy Richards & Others [2016] FWC 461, I said at para [183]:

‘[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:

● rate of pay;

● hours of work;

● work location;

● seniority;

● fringe benefits;

● workload;

● job security;

● continuity of service;

● accrual of benefits;

● probationary periods;

● carer’s responsibilities; and

● family circumstances.

This list is not exhaustive. There may be other relevant factors.’

[65] The above decisions have some common features, including:

● The test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.

● ‘Acceptable employment’ is not identical employment, as no two jobs could be exactly the same.

● An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.

● An employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.

● The acceptance of alternative employment by one or more persons in a group of redundant employees, does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.

● There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment.” 1

Meaning of “acceptable employment”

[11] The question remains whether the offer by the Applicant was on terms and conditions no less favourable than the terms and conditions that the Applicant experienced prior to the restructure.

[12] The proposed roles do not have to be identical and in considering this the Commission must determine the matter objectively weighing up aspects of the role that include duties, conditions, pay level and location to mention some of them.

[13] Relevant to this pointin Derole Nominees, the Full Bench of the Australian Industrial Relations Commission (AIRC) found:

“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.”  2

[14] A further explanation on this point was put forward by in Von Bibra Robina Autovillage Pty Ltd by Richards SDP, who adopted the principles in Derole Nominees and said:

“In contrast, 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.” 3

SUBMISSIONS

[15] The Applicant submits that it offered the Respondent three suitable alternative roles which she declined. Given the Respondent’s refusal of the redeployment, the Applicant seeks to have her redundancy varied to nil.

[16] It is worth considering the characteristics of each of the roles in some detail. The first role offered was that of Placement Consultant – Fortitude Valley. The Respondent stated that office location was further from her home and the route would involve more traffic and therefore increased travel time, which would affect her family responsibilities. The second role offered was that of Placement Consultant – Ipswich. The Respondent did not provide an answer for two weeks, by which time that role had been filled. The third role offered was Placement Consultant – Browns Plains. That role was declined by the Respondent.

[17] Ms Renee Parry appeared at the hearing and gave evidence behalf of the Applicant. She stated that the Applicant viewed all three roles as suitable alternatives given that there was no impact on the Respondent’s salary, hours of work or seniority and the Applicant would not be required to serve out any probation period. The roles offered fit within the same level in the Agreement as her previous position and utilised the Respondent’s skills. Ms Parry’s evidence was that the work itself was similar in nature in terms of assessing their customers and getting them job ready upon their release from custody. She was not able to comment specifically on the workload of each of the locations. Ms Parry further indicated that job security was similar across the business sites in the sense that contracted work comes up for renewal from time to time and the Applicant has to put in bids to retain work. However, she said that it would unlikely that the Applicant would, for example, lose all its bids for ongoing work.

[18] Ms Parry indicated there would be no impact to the benefits currently enjoyed by the Respondent were she to take up any of these new roles, save for any benefit attributable to the location of the BTCC. Though Ms Parry was unaware of any such benefit.

[19] As to the location change, this was an inevitable consequence of the BTCC contract ending. Ms Parry understood that the Respondent had stated that the Fortitude Valley role would have increased the Respondent’s travel time and may have impacted her family responsibilities. In respect of the other locations, Ms Parry stated that Google Maps showed that both the Ipswich and Browns Plains locations were about 20 minutes from the place of residence on file for the Respondent. The Respondent said that the Browns Plains location would require her to use tolls and that this should be taken into account when considering whether it was an acceptable alternative.

[20] The Respondent gave evidence and made submissions on her own behalf. She stated that while she had initially been employed in the job centre manager role, she had been moved to a “reintegration specialist” some time ago. In her eyes, those roles were completely different given that her current role involved assisting individuals who were coming up for release from custody, assessing their individual needs and arranging for referrals to professionals to assist them, including for example, to doctors for mental health plans. The job was in once sense highly administrative and key performance indicators, while used, involved the number of assessments arranged. By contrast, the Respondent said, the new proposed roles where heavily driven by key performance indicators involving how many places of employment she could secure for those reintegrating into society. Consequently, she says, the roles had a heavy marketing component. She was particularly concerned about the key performance indicators. She said they were likely to negatively impact her mental health.

[21] Ms Parry stated that while the roles had different titles and were not identical, they were both within the same classification according to the Agreement and involved similar skills, which the Applicant believed that the Respondent possessed. Ms Parry accepted that the roles proposed might involve cold-calling prospective employers or visiting their stores to inform them of the service provided by the Applicant and that the key performance indicators were in part based on getting people into jobs. That said, Ms Parry said these key performance indicators were based on the caseloads and the relevant area and that people new to the role were not expected to perform at the same level as seasoned employees until they had been there for some time.

[22] Ms Parry stated that the Applicant was unaware of the Respondent’s concerns about the key performance indicators as this has not been communicated to them. The Respondent felt she had communicated her concerns.

CONSIDERATION

[23] Having regard to the authorities set out above and the submissions made by both parties, I consider that the Fortitude Valley may not have been an acceptable alternative to the Respondent’s employment because of the impact that it may have had on the Respondent’s family responsibilities, which were discussed at a relatively early stage.

[24] In respect of the Ipswich and Browns Plains roles, I am satisfied that the altered location did not impact the acceptability of those offers of employment. Given there would be no change to the Respondent’s salary, Agreement classification, hours of work, seniority or probation period in either of these roles, whether or not they constituted acceptable alternative employment falls on whether the change to the key performance indicators substantially alters the role. The different key performance indicators reflected that the work the Respondent would be expected to conduct, while within the same Agreement classification band, would have more marketing and promotion tasks/focus than her existing role required.

[25] A consequence for the Applicant would be that her performance would be managed according to her ability to promote and generate customers for her clients. This was a more active focus for the Applicant and she feared that she may not be able to perform under such a results focused role.

[26] I can appreciate the Respondent’s apprehension about this change. It is regrettable that this was not communicated to Ms Parry prior to the middle of the hearing. If it had been, perhaps the parties may have been able to discuss the matter further and come to some sort of amicable resolution between them.

[27] I also accept that the Applicant had offered what it perceived to be at least two options for acceptable alternative employment. The Ipswich role could not transpire due to the Respondent’s delayed response. The Respondent may not have accepted it anyway. I am satisfied that the Browns Plains role was on its face “acceptable other employment” for the purpose of s.120(1)(b)(i) of the Act. However, from the Respondent’s perspective, in the light of the role’s emphasis on marketing and promotion rather than administration, the Browns Plains role was not “acceptable other employment”.

Conclusion

[28] Accordingly, I consider that I should exercise my discretion to reduce the Respondent’s redundancy pay. I order that the Respondent receive 4 weeks by way of redundancy entitlement within 14 days of this decision being issued.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1   Spotless Services Australia Limited t/as Alliance Catering[2016] FWC 4505.

 2 (1990) 140 IR 123

 3   Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397.