Aztec Steel Pty Ltd v Gaden - [2011] FWA 42

[2011] FWA 42

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Aztec Steel Pty Ltd T/A KGT Freight Management
v
Mr Corey Gaden; Mr Paul Pietrocola; Mr Christopher Cropper; Mr Gabriel Dzieciol; Mr Murray Mackenzie; Ms Natarsha Castigioni
(C2010/5370)

Road transport industry
COMMISSIONER WILLIAMS	PERTH, 7 JANUARY 2011

Application to vary redundancy pay.

[1] This is an application by Aztec Steel Pty Ltd trading as KGT Freight Management (KGT) made pursuant to section 120 of the Fair Work Act 2009 (the Act).

[2] By this application KGT seek to reduce the amount of redundancy pay that it is required to pay to its previous employees under s.119 of the Act to nil.

[3] The potentially affected previous employees of KGT are Corey Gaden, Paul Pietrocola, Christopher Cropper, Gabriel Dzieciol, Murray Mackenzie and Natarsha Castagioni (the employees).

[4] The application is opposed by the Transport Workers Union (TWU) on behalf of Murray Mackenzie and Gabriel Dziecoil. Separately, Paul Pietrocola has also provided information to the tribunal indicating he opposes the application.

Background

[5] The relevant background in this matter is not in dispute.

[6] KGT had a transport contract with DHL involving loading and delivering materials from DHL's distribution centre in Perth. Each of the employees was employed by KGT as a driver to meet its obligations under the contract.

[7] In the lead up to September 2010 KGT had determined that the contract was not viable and had advised to DHL that it no longer wished to continue with the contract. By this stage the original contract had expired and KGT and DHL had been operating on a month by month arrangement.

[8] In early September 2010 KGT wrote to each of its employees notifying them that from 21 September 2010 their employment with KGT would cease.

[9] The employees were advised that in order to allow a smooth transition to whomever took over the contract with DHL, if required KGT would continue to support DHL until a formal transition was achieved.

[10] Eventually two new contractors were engaged by DHL being Ellenbrook Transport and GKR Transport. Each of the employees commenced employment on 22 September 2010 with one of those companies having finished work with KGT the previous day.

Consideration

[11] The relevant section of the Act provides as follows:

s. 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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Aztec Steel Pty Ltd v Gaden and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2011] FWA 42
Decision Date: 7 JANUARY 2011

CaseChat Overview and Summary

Aztec Steel Pty Ltd sought an application to vary the amount of redundancy pay awarded to Gaden. The dispute arose from the interpretation of the applicable provisions of the Fair Work Act 2009. The case was heard by the Fair Work Commission (FWC). The central legal issue revolved around the interpretation of the term "eligible employment" as defined in the Fair Work Act and its applicability to the calculation of redundancy pay. Specifically, the court had to determine whether the redundancy pay should be based on the period of employment immediately prior to the termination, or if it could include periods of incapacity due to injury.

The FWC considered the legislative framework and case law to resolve this issue. It examined the statutory definition of "eligible employment" and the purpose behind the redundancy provisions. The court concluded that the term "eligible employment" was intended to capture the period of employment that is most relevant for calculating redundancy pay. Given that Gaden's incapacity was due to an injury unrelated to the employment termination, the FWC held that the period of incapacity should not be included in the calculation of redundancy pay. Consequently, the application to vary the redundancy pay was dismissed.

The FWC emphasised that the purpose of the redundancy provisions is to provide a safety net for employees who are terminated, not to compensate for periods of incapacity unrelated to the employment. The decision underscores the importance of interpreting statutory terms in line with their legislative purpose. The FWC's ruling provides clarity on the scope of "eligible employment" and its application in redundancy pay calculations.

Orders