Application by Srideen Pty Ltd
[2016] FWC 1573
•11 March 2016
[2016] FWC 1573
DECISION
| Fair Work Act 2009 | |
| s.120—Redundancy pay | |
| Srideen Pty Ltd T/A Ray White | |
| (C2015/6039) | |
| DEPUTY PRESIDENT KOVACIC | CANBERRA, 11 MARCH 2016 |
Variation of redundancy pay – position offered found to be an acceptable position for the
purposes of s.120(1)(b)(i) of the Act – redundancy entitlements reduced to nil in accordance
with s.120(2) of the Act.
[1] This matter relates an application made by Srideen Pty Ltd T/A Ray White (Srideen -
the Applicant) pursuant to s.120 of the Fair Work Act 2009 (the Act). The application seeks to
have the redundancy entitlement payable to Ms Karen Coe, the former Principal of the
Applicant’s Weston Creek office, reduced to nil on the basis that Srideen had obtained other
acceptable employment for her.
[2] The application was heard by the Fair Work Commission (the Commission) on
29 September 2015. With the agreement of the parties the hearing was conducted as a
determinative conference. At the hearing, Mr Doug O’Mara, the Applicant’s Principal and
Chief Executive Officer, appeared for the Applicant, while Ms Coe appeared on her own
behalf.
[3] For the reasons set out below, I am satisfied that the position in the Woden office
offered to Ms Coe by the Applicant was an acceptable position for the purposes of
s.120(1)(b)(i) of the Act and that as she declined to take up that position her redundancy
entitlement should be reduced to zero in accordance with s.120(2) of the Act.
Background
[4] Ms Coe was employed by the Applicant for just over seven years in a number of roles.
From January 2015 Ms Coe was employed as the Principal of the Applicant’s Weston Creek
office. Ms Coe ceased her employment with Srideen on 14 August 2015.
[5] The background to this matter is set out in two letters which were attached to the
application. The first is a letter from Ms Coe’s legal representative which states among other
things that:
“1. Ms Coe has worked for Civium and more recently for Sriedeen [sic Srideen] for some years. Civium and Sriedeen are related entities. [2016] FWC 1573
2. Civium and Ms Coe entered into an employment contract for the position of Principal at the Western Creek agency for Ray White commencing on
5 January 2015.
3. The position was a permanent position with provision for a bonus based on
performance.
4. On 20 July 2015, Mr O’Hara [sic O’Mara], the managing director for Sriedeen,
advised Ms Coe that he was closing the office in Weston Creek and that her
position was no longer available.
5. Our client met with Mr O’Mara who indicated that he had a position for her
reporting to the Principal of the Woden agency, another entity within the
Group.
6. Ms Coe has indicated that she does not wish to take up the other position as it
is not commensurate with her role as Principal at Weston Creek.
Issues It is our view that this invokes the redundancy provisions of the Fair Work Act 2009
…”
[6] On 24 August 2015 Srideen’s legal representative responded to the above matter
stating, inter alia, that:
“1. Ms Coe was employed at the Ray White Woden office up until 5 January 2015, at which time she took up a position at the Weston Creek office. As part of that, her employment transferred from Civium to Srideen and all of her accrued entitlements were recognised by the related Ray White entity. 2. As part of her employment at the Weston Creek office, she was responsible for
(amongst other things) the sales and marketing duties for the Weston Creek
area. She had only one other senior sales agent with her in the office, with the
effect that the level of responsibility was (when viewed fairly) not high.
3. The titles given to employees of the Ray White family differ from office to
office. Respectfully, little turns on this as it is the duties that are relevant for
the purposes of section 122(3) of the Act.
4. Whilst Ms Coe was at the Weston Creek office, her title was that of
‘Principal’. Whilst that term carries with it some connotations of responsibility
(and for clarity, we are not suggesting Ms Coe was without responsibility), the
reality of the Weston Creek office was that it had only limited staff and Ms
Coe always reported back to Mr O’Mara and, in his absence, the principal of
the Woden office.
5. When the decision to close the Weston Creek office was made, Ms Coe was
offered a comparable (by which we mean to say, effectively the same) position
to that which she was already performing albeit based at the Woden office and
[2016] FWC 1573under the title of ‘Residential Director’. We are instructed it is an
understatement in your letter to suggest Ms Coe was to become only a ‘sales
agent’.
6. The change of title was necessary only due to a principal already being in place
at the Woden office, who Ms Coe was always below in the Ray White
hierarchy whilst working at the much smaller Weston Creek office.
7. The duties of the position (whether described as ‘Principal’, ‘Residential
Director’ or otherwise) nevertheless were proposed to remain the same, as
would her level of responsibility and remuneration.
8. To further illustrate the point that the change in title is a superfluous
consideration, only one member of the Ray White board operates under the
title of ‘Principal’. That is not to say that that board member carries any greater
responsibility and the other board members, or that principals not on the board
have a greater career standing than the directors at the board level. It is also
unclear to us how being a principal at a comparably minor office, carries with
it any greater prestige than being a director within a larger (and more
successful) framework.
9. We are instructed that all of the above was explained to Ms Coe during the
negotiations for her to transfer back to the Woden office, which she initially
was agreeable to. Had she accepted the position at the Woden office, her
employment would have transferred to the related DS Residential entity, with
all of her accrued entitlements being recognised.
10. That it proved infeasible for the Ray White enterprise to have Ms Coe perform
her duties from an office based in Weston Creek, despite the attempts of Ray
White to do so, does not entitle Ms Coe to a redundancy in the circumstances
where she elected not to take up the comparable position in Woden.”
The Applicant’s case
[7] Key aspects of Srideen’s submissions were that:
it had purchased the Weston Creek business over the period November 2014 to
February 2015, with Ms Coe relocating to the Weston Creek office in mid-January
2015;
the entire property management team at the Weston Creek office resigned on the day
that the purchase was settled, with the function absorbed into the Woden office;
as a result, there were three staff left at the Weston Creek office which had a
capacity for 13 to 14 staff;
it was faced with a number of financial challenges as a result of having received an
unexpectedly large payroll tax bill in late January 2015;
those financial challenges resulted in it implementing a cost-cutting regime across all
departments and making a business decision to relocate people from the Weston
Creek office to the Woden office;
all staff in the Weston Creek office were offered roles in the Woden office, with
Ms Coe the only person who decided not to relocate;
[2016] FWC 1573
the position offered to Ms Coe was that of a Director as opposed to a Principal, with
the only change from her existing position being that of its title;
the position offered to Ms Coe involved the same role and responsibilities as her
position at the Weston Creek office;
while at the Weston Creek office Ms Coe reported directly to Mr O’Mara on all
matters regarding sales, general office maintenance and contracting;
Ms Coe’s terms and conditions of employment would not have changed as a result of
her moving to the Woden office;
Ms Coe would have continued to occupy a senior position with the Applicant,
though she would no longer have sat on its board;
the Applicant’s board had ceased meeting in 2015 as the Applicant considered that
the meetings were non-productive;
Ms Coe would, upon relocating to the Woden office, have continued to have had a
focus on the Weston Creek area, with her bonuses driven by the success of the
Weston Creek team;
Mr O’Mara saw no distinction between a Director and Principal, adding that he was
technically the Principal of the business as he held the real estate license;
the Applicant had established a management services company which serviced the
entire group in respect of human resource, administration, budgeting and financial
management issues;
that company liaised with individual leaders in the business to obtain relevant
corporate information, e.g. revenue projections for budgeting purposes;
the Applicant also employed a marketing person responsible for marketing the
Group, though Ms Coe had a mandate to develop business in the Weston Creek area
both as Principal of the Weston Creek office and had she relocated to the Woden
office; and
the Applicant saw scope down the track for Ms Coe to become a shareholder in the
business, contending that working out of the larger Woden office would have been
advantageous in this regard.
Coe’s case
[8] Key aspects of Ms Coe’s submissions were that:
when the Principal of the Weston Creek office was discussed with her it was put to
her as a promotion and as an opportunity to grow in the business;
the role involved marketing, budgeting, forecasting and the preparation of marketing
plans, the challenge of growing the business and general office management;
when considering the offer she asked what would occur if it did not work out, adding
that the Applicant indicated that it would give the Weston Creek office a period of
twelve months to see what happened, review the situation at that time and that if it
did not work out that Ms Coe would come back into this business in a similar role to
what she had;
the offer on 20 July 2015 to return to the Woden office came as a shock to her;
she was somewhat aware of the financial issues confronting the broader group;
she considered the role offered to her at the Woden office to be a demotion as she
would have to work through another Principal;
she indicated that she would not be relocating to the Woden office based on the offer
on the table, adding that she never resigned;
[2016] FWC 1573
she assumed that the Principal position at the Weston Creek office had been made
redundant as it was no longer required;
she did not dispute that her remuneration would not change, though she was
concerned that her position and wage would not be maintained in future;
had she been offered the position of a sales agent in October 2014 when the Weston
Creek opportunity was first raised with her, she would have rejected it;
she considered that the status and potential opportunities attaching to the position in
the Woden office were not the same as those attached to her role as Principal of the
Weston Creek office;
the Weston Creek role also involved the management of staff, input into marketing
plan and budgeting, growing other staff and recruitment and general office
management such as dealing with complaints; and
she did not dispute that any lead regarding the Weston Creek area would
automatically be referred to the Weston Creek team in the Woden office.
[9] At the hearing, Ms Coe accepted the Commission’s characterisation of her
submissions that the key difference between the position offered to her and her former role as
being that she saw the status and potential opportunities attached to the position offered as
being lesser than those attached to her former position.
The Statutory framework
[10] The application has been made pursuant to s.120 of the Act which provides 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.”
Consideration of the issues
[11] No submissions were made contending that Ms Coe was not entitled to a redundancy
payment as per s.119 of the Act. It was therefore not disputed that s.120(1)(a) was satisfied.
[12] In this case the Applicant contended that the position it offered Ms Coe in its Woden
office was an acceptable position for the purposes of s.120(1)(b)(i) of the Act and that as such
Ms Coe’s entitlement should be reduced to nil in accordance with s.120(2) of the Act.
[2016] FWC 1573
[13] The issue of acceptable employment was dealt with by the Full Bench in Australian
Chamber of Manufacturers v Derole Nominees Pty Ltd (Derole), where the Full Bench 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 a
like nature, the location being not unreasonably distant; the pay arrangements
1
complying with award requirements. There will probably be others.”
[14] The Full Bench in Derole identified a number of considerations in determining
whether or not alternative employment was “acceptable”. Those considerations included
whether the work was of a like nature, the location of the position not being unreasonably
distant; the pay arrangements of the position complying with award requirements and any
other considerations. In this case, other considerations would be the seniority of the position,
where it sat in the overall hierarchy of the Applicant’s business and the potential opportunities
for advancement it presented.
[15] An analysis of the material before the Commission in this case indicates that:
Ms Coe would have retained her role and responsibilities in the position offered to
her;
at the Weston Creek office Ms Coe reported directly to Mr O’Mara on all matters
regarding sales, general office maintenance and contracting;
a management services company serviced the entire group in respect of human
resource, administration, budgeting and financial management issues;
Ms Coe’s terms and conditions of employment would not have changed;
Ms Coe would have continued to have occupy a senior position with the Applicant,
though she would no longer have sat on its board (which no longer met);
Ms Coe would have continued to have a focus on Weston Creek, with her bonuses
driven by the success of the Weston Creek team;
Ms Coe was concerned that her position and wage would not be maintained in future
despite the Applicant’s assurances;
she considered that the status and potential opportunities attaching to the position in
the Woden office were not the same as those attached to her role as Principal of the
Weston Creek office;
other differences between the roles concerned the management of staff, input into
marketing plan and budgeting, growing other staff and recruitment and general
office management such as dealing with complaints;
Ms Coe had worked at the Woden office prior to taking up her role at the Weston
Creek Office in January 2015; and
[2016] FWC 1573
the distance between the two offices is not great.
[16] The above analysis supports a finding that while there were some differences between
Ms Coe’s former position and the position offered her, both roles were for all intents and
purposes the same. Further, Ms Coe’s remuneration would have remained unchanged,
including her access to bonuses. While her title would have changed, Ms Coe would have
remained a senior manager within the Applicant’s organisation. While some management
aspects were missing from the position offered to Ms Coe, I do not consider that the absence
of those aspects results in the position offered to Ms Coe being a lesser role. That view is
reinforced by Mr O’Mara’s evidence regarding the role of the management services company
and that, while at the Weston Creek office, Ms Coe reported directly to him on all matters
regarding sales, general office maintenance and contracting. I note also that Ms Coe had
worked at the Woden office in a corporate support role prior to moving to the Weston Creek
office.
[17] Beyond that, and based on the material before the Commission, I am not satisfied that
the change in title would have been perceived more broadly as a demotion, particularly in the
circumstances, or that the potential opportunities for Ms Coe to advance within the business
would have been diminished in any way had she taken up the position offered.
[18] In other words, the above analysis indicates that the position offered to Ms Coe would
have entailed her by and large continuing to perform the same role as her former position in
the Weston Creek office, albeit minus some of her former managerial responsibilities. This
supports a finding that the position was an acceptable position for the purposes of
s.120(1)(b)(i) of the Act.
[19] As mentioned above, Ms Coe stated at the hearing that she advised the Applicant that
she would not be relocating to the Woden office based on the offer on the table. Given the
above finding that the position offered to her was an acceptable position, I see no basis for
Ms Coe to be paid her redundancy entitlement as there appears to be no objectively justifiable
basis for her declining to take up the position offered her by the Applicant. I note also
Ms Coe’s evidence that prior to moving to the Weston Creek office she was advised that were
the Weston Creek move not to work out that she would come back into this business in a
similar role to what she had.
Conclusion
[20] For all the above reasons, I am satisfied that the position in the Woden office offered
to Ms Coe by the Applicant was an acceptable position for the purposes of s.120(1)(b)(i) of
the Act and that as she declined to take up that position her redundancy entitlement should be
reduced to zero in accordance with s.120(2) of the Act.
[2016] FWC 1573
Appearances:
D. O’Mara for the Applicant.
K. Coe on her own behalf.
Hearing details:
2015.
Canberra:
September 29.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR577923>
1
(1990) 140 IR 123 at pp128.
[21] An order to that effect will be issued in conjunction with this decision.
0