Australian Footwear Pty Ltd T/A Munro Footwear Group
[2023] FWC 1231
•25 MAY 2023
| [2023] FWC 1231 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
Australian Footwear Pty Ltd T/A Munro Footwear Group
(C2023/2741)
| COMMISSIONER MIRABELLA | MELBOURNE, 25 MAY 2023 |
Variation of redundancy pay
On 10 May 2023, Australian Footwear Pty Ltd (company) applied for an order under s.120 of the Fair Work Act 2009 (the Act) to reduce the redundancy entitlement of Ms Deanne Vella. Ms Vella was employed full-time in the position of Store Manager at the company’s ‘Cinori’ store in Brighton. Ms Vella’s employment began 26 February 2019 and will end on 6 June 2023.
Ms Vella will have worked for the company for four years and three months and will be entitled to 8 weeks redundancy pay pursuant to s.119 of the Act.
The company has applied to reduce Ms Vella’s redundancy entitlement amount to $4,861.44 because it offered her an alternative role as ‘2IC’ (Deputy Manager) in its Midas store in Armadale. It contends that this is “other acceptable employment’ for the purposes of s 120(1) (b)(i). Ms Vella accepted the offer and does not oppose the application.
Section 120 of the Act gives the Commission the discretion to vary a redundancy entitlement to which an employee would otherwise be entitled to under s.119 of the Act. Section 120 applies if the employee is entitled to an amount of redundancy under 119 (s.120(1)) and the employer either obtains ‘other acceptable employment’ or cannot pay the amount of the redundancy (s.120 (1)(b)). The Commission’s discretion in s.120(2) to vary the redundancy pay to a specified amount (including a nil amount) that it considers appropriate, can only be exercised if the conditions of s.120(1) are met. Where an order under s.120(2) is made, the reduced redundancy to which the employee is entitled, will be the amount specified in the determination (s.120(3)).
In this matter, I need to consider whether the company obtained ‘other acceptable employment’ for Ms Vella, and if so, whether I should exercise my discretion to reduce the amount of her redundancy pay.
Background
Ms Vella is currently employed by the company at the ‘Cinori’ store in Brighton. As a consequence of the company’s lease on this property expiring on 3 April 2023, discussions were held on 22 February 2023 with Ms Vella and Linda Dario, an Area Manager for the company. These discussions involved offers by the company for redeployment to either one of two of its other stores. One offer to Ms Vella was to be redeployed as the Store Manager for the company’s Mountfords store in Balwyn and the other was as Deputy Manager at their Midas store in Armadale. The following day, Ms Vella informed Ms Dario that she would accept the offer to work at the Midas store in Armadale.
On 7 March 2023, the company was advised of an extension to the lease to the Brighton store to 6 June 2023. On 8 March 2023, the company advised Ms Vella that the date for closing the Brighton store had changed to 6 June 2023 and that the full-time position of Deputy Manager at the Midas Armadale store would remain open for her. Ms Vella agreed to continue working at the Brighton store and after the lease expiry on 6 June 2023, to begin working at the Armadale store on 12 June 2023.
Submissions
The company submitted that it obtained acceptable employment for Ms Vella within the meaning of s.120 of the Act. It said it offered Ms Vella a suitable role as Deputy Manager in its store in Armadale. They submit that the eight weeks redundancy amount to which Ms Vella is entitled should be reduced by an amount that reflects the difference in the annual salary she receives in her current position as Store Manager and the salary she will receive in her new position at the Armadale store. That is, they submit that the redundancy amount of $8,846.15, to which Ms Vella is entitled, should be reduced to $4,861.44. Ms Vella does not object to this submission.
Consideration
It is not in dispute that the company obtained other employment for Ms Vella. It offered her employment at its Midas store in Armadale. The offer has been made in good time before the employment at the Brighton store is to end. This is relevant because s.120 applies only where the employer obtains ‘other acceptable employment for the employee’; that is, Ms Vella must have been an employee when the offer was made.
Ms Vella agreed to the company’s offer of redeployment. The question of whether the other employment is ‘acceptable’ is an objective assessment. The ‘other employment’ will necessarily be different in some regard to the existing employment. In assessing whether other employment is acceptable, it is relevant to consider the differences between the existing employment and the role that has been offered and accepted by Ms Vella.
The location of the current employment is in Brighton and the new role is in Armadale. The distance between the two locations is approximately 8 kilometres from the east to the southeast of the Melbourne CBD. The roles differ in that in her current employment, Ms Vella is the Store Manager and she is moving to a position where she is effectively the deputy Store Manager with a reduced remuneration of $4,861.44 per annum.
The ‘other employment’ offered does not need to be the same as Ms Vella’s current job. The question I need to answer is whether the other employment offered by the company to Ms Vella was objectively acceptable; that is, capable of being agreed to or suitable. The work offered is somewhat less challenging and remuneration is about 8% lower than her current salary, but it is in the same industry, the same field of work and in a location reasonably close to the current place of employment. On balance, I find that the company did obtain ‘acceptable other employment’ for Ms Vella for the purposes of s.120(1)(b)(i) of the Act.
Having satisfied the requirements of s.120(1), I must now consider whether to exercise my discretion to reduce Ms Vella’s redundancy pay. In my view, and taking all the relevant matters into consideration, it is appropriate to reduce Ms Vella’s redundancy pay.
Conclusion
I am satisfied that the company obtained other acceptable employment for Ms Vella, and that in the circumstances I should exercise my discretion to reduce the redundancy pay to which she is entitled to 5 weeks pay. An order will be issued separately reflecting this decision.
COMMISSIONER
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