Bower and Secretary, Attorney-General's Department
[2020] AATA 4353
•30 October 2020
Bower and Secretary, Attorney-General's Department [2020] AATA 4353 (30 October 2020)
Division:GENERAL DIVISION
File Number: 2020/3184
Re:Glenys Bower
APPLICANT
AndSecretary, Attorney-General's Department
RESPONDENT
DECISION
Tribunal:Deputy President R I Hanger AM QC
Date:30 October 2020
Place:Brisbane
The Tribunal affirms the decision under review.
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Deputy President R I Hanger AM QC
CATCHWORDS
FAIR ENTITELEMENTS GUARANTEE – redundancy pay – whether Applicant entitled to an advance under the Fair Entitlements Guarantee Act 2012 for redundancy pay – where governing instrument for Applicant’s redundancy pay entitlement is the Fair Work Act 2009 – where Applicant’s employer was a small business employer at the time written notice of termination was given – decision under review affirmed.
LEGISLATION
Clerks – Private Sector Award 2010
Fair Entitlements Guarantee Act 2012 (Cth)
Fair Work Act 2009 (Cth)REASONS FOR DECISION
Deputy President R I Hanger AM QC
30 October 2020
This is an application to review a decision of the Respondent made on 17 April 2020[1] in relation to a claim for an advance in respect of redundancy pay pursuant to the provisions of the Fair Entitlements Guarantee Act 2012 (Cth) (FEG Act).
[1] Exhibit 1, T Documents, T20 p211.
BACKGROUND
Ontime Management Services Pty Ltd (Ontime Management) was one of four companies in a group (Ontime Group[2]) that employed more than 15 people prior to 16 July 2019. The applicant began employment with Delux Freight Pty Ltd on 31 July 2013. The applicant’s employment was transferred to Deluxe Freight Operations Pty Ltd on 1 April 2016[3] and later to Ontime Management on 12 June 2017[4] where she was employed until 19 July 2019.[5] A liquidator was appointed to each of the companies in the Ontime Group on 24 July 2019.[6]
[2] The Group consisted of four entities including Ontime Management, 3PL Expert Pty Ltd, Ontime Freight Services Pty Ltd and Ontime Warehousing Pty ltd; Exhibit 1, T Documents, T4.
[3] Exhibit 1, T Documents, T5 p50.
[4] Exhibit 1, T Documents, T5 p55.
[5] Exhibit 1, T Documents, T13 p134.
[6] Exhibit 1, T Documents, T4; Exhibit 3, Respondent’s Statement of Facts, Issues and Contentions, p11 para37.
On 5 July 2019 the applicant was asked to attend an all staff meeting held by Mr Fred Auret, former sole director of all four companies of Ontime Group. He advised at the meeting that the majority shareholder of the Ontime Group had withdrawn support for the group and that the businesses would cease work on 12 July 2019.[7] Mr Auret said that all staff were entitled to claim their outstanding entitlements through the FEG Act. Several employees, including the applicant, were asked if they would stay for an extra week to close outstanding invoices and prepare for the liquidators. The applicant, believing that it would not affect her entitlements, acceded to the request.[8]
[7] Exhibit 5, Letter from Fred Auret; Exhibit 7, Statutory Declaration of the Applicant; Exhibit 8, Statement of the Applicant.
[8] Exhibit 6, Statutory Declaration of R.B. Deane; Exhibit 7, Statutory Declaration of the Applicant.
The employment of many employees ceased on 5 July 2019. Many others were terminated on 12 July 2019. After that date only a handful employees were left.[9]
[9] Exhibit 8, Statement of the Applicant.
On 16 July 2019 the applicant was given a formal notice that her employment was to cease on 19 July 2019.[10]
[10] Exhibit 1, T Documents, T13 p133.
The actual notice was headed “Termination of your employment”. The letter stated:
“The purpose of this letter is to confirm the outcome of a recent review completed by the Trustee for the Ontime Management Services Trust (the employer) of its operational requirements, and what this means for you.
As a result of this review, the position of Shared Service Manager is no longer needed. Regrettably this means your employment will terminate. This decision is not a reflection on your performance.
We have investigated redeployment options but unfortunately we cannot offer an alternative position moving forward. Your employment is terminated effective 19th July 2019.
Statutory notice periods, redundancy payments (if due), other accrued entitlements, and superannuation will be calculated and notified to you separately in due course” [11]
[11] Exhibit 1, T Documents, T13, P134
The applicant did not receive a redundancy payment. She seeks a review of that decision. At the hearing and in a written statement the applicant submitted:
“I was not made aware that by working out a notice period until 19 July 2019 I would not have received all of my entitlement within the FEG Act…I hope that the Tribunal can consider whether the date to determine the size of the business for the purposes of the Act to be 5 July 2019 when I was notified of my termination, or alternatively 12 July 2019 when the business ceased operating.”[12]
[12] Exhibit 8, Statement of the Applicant.
LEGISLATION
The applicant’s letter of offer from Ontime Management provides that any termination of her position would be in accordance with the Clerks Award 2010.[13] That award refers to the National Employment Standards (NES)[14] and the provisions of the Fair Work Act 2009 (Cth) (FW Act) apply. So much is common ground.
[13] Exhibit 1, T Documents, T5 p56.
[14] A note to clause 14 of the Clerks – Private Sector Award 2010 states “NOTE: Redundancy pay is provided for in the NES. See sections 119 – 123 of the [FW] Act.”
Section 117(1) of the FW Act provides:
An employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the date the notice is given).
…
The letter of 16 July 2019 quoted above is such a letter.
Section 119 of the FW Act is the section that establishes a right to redundancy payment in certain circumstances. It provides so far as is relevant for present purposes:
(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated…
(b) because of the insolvency or bankruptcy of the employer.
…
In the present case Ontime Management was insolvent and that is the undisputed reason why the applicant’s employment was terminated.
Section 121 of the FW Act provides that s 119 does not apply in particular circumstances. It provides so far as is relevant:
(1) Section 119 does not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1) (whichever happened first):
(a) the employee’s period of continuous service with the employer is less than 12 months; or
(b) the employer is a small business employer.
…
The term “small business employer” is defined in section 23 of the Fair Work Act which provides as follows:
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted…
(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
…
The decision maker found Ontime Management had three associated entities being those in Ontime Group.[15] The Respondent submitted that there is now insufficient evidence to support a finding by the Tribunal that the entities were associated on 16 July 2019.[16]
[15] Exhibit 1, T Documents, pT20 p213.
[16] Exhibit 3, p18, paragraph 64.
The evidence given before me established that the four companies involved were associated entities. However, on the relevant date, 16 July 2019, Ontime Management employed 5 employees[17] whilst none of the other Ontime Group companies employed any employees.
[17] Exhibit 2, ST1 p234.
CONSIDERATION
The applicant was given notice of termination on 16 July 2019 and her employment ceased on 19 July 2019. The employment of her erstwhile fellow employees had ceased a week or two before that. As at 16 July 2019 and as at 19 July 2019 the company for which she was working, Ontime Management, and the other companies in the Ontime Group had a total of less than 15 employees. Therefore, both the company which employed her and the Ontime Group did fall within the definition of “small business employer”.
It would be convenient to stretch the meaning of the word “immediately” in s 121(1) back to when the other employees were given notices of termination but that is a step too far.[18] It is unfortunate that by agreeing to finish up work to assist her employer she, and a couple of fellow employees, inadvertently suffered for their generosity, by missing out on a right they would otherwise have had to an advance of a redundancy payment under the provisions of the FEG Act.
[18] Litster v Forth Dry Dock and Engineering Co-Ltd (In Receivership) [1990] 1 AC 546 at 569;
My approach is consistent with that of other decisions.[19]
[19] Gayed and Sec, Department of Jobs and Small Business [2019] AATA 1132; Kable the Secretary, Attorney-Gen's Department [2019] AATA 3963; Mi and Secretary, Department of Employment [2016] AATA 419; Yeo and Secretary, Attorney-Gen's Department [2020] AATA 117.
I respectfully suggest that the attention of the Attorney General be drawn to the injustice that appears to be created in this kind of matter when the intention of the legislature was to enact beneficial legislation.
The decision under review is affirmed.
I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President R I Hanger AM QC
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Associate
Dated: 30 October 2020
Date of hearing: 12 October 2020 Date final submissions received: 12 October 2020 Applicant: By Microsoft Teams Counsel for the Respondent: Ms K Cooke Solicitors for the Respondent: HWL Ebsworth Lawyers
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