Broadlex Services Pty Ltd v United Workers' Union

The appeal in Broadlex Services Pty Ltd v United Workers' Union was heard by the Federal Court of Australia. The central issue was the interpretation of the phrase “employment is terminated” in section 119(1) of the Fair Work Act 2009 (Cth), in the context of an employer reducing an employee's hours and salary against her will. The appellant, Broadlex Services Pty Ltd, sought to appeal a decision by the Local Court of New South Wales, which had found in favour of the respondent, United Workers' Union, and awarded the employee, Ms Brizitka Vrtkovski, redundancy pay. The court had held that Broadlex's unilateral reduction of Ms Vrtkovski's working hours from full-time to part-time, accompanied by a significant reduction in her salary, amounted to a termination of her employment contract and relationship, triggering her entitlement to redundancy pay under section 119(1).

The legal issues before the Federal Court involved the interpretation of "employment is terminated" in section 119(1) of the Fair Work Act, the effect of termination of a contract of employment on the employment relationship, and the statutory interpretation of the term "employment is terminated." Specifically, the court needed to determine whether the phrase referred to the contract of employment or the employment relationship, and whether the employee's acceptance of reduced working hours and salary constituted a termination of the employment relationship. The court was also required to consider whether the reduction of Ms Vrtkovski's employment from full-time to part-time, without her consent and for reasons unrelated to the normal turnover of labour, amounted to a termination of her employment and triggered her entitlement to redundancy pay.

The Federal Court found in favour of the Union, affirming the Local Court's interpretation of "employment is terminated" as encompassing both the contract and the relationship. The court held that by repudiating the employment contract, Broadlex terminated the employment relationship. Ms Vrtkovski's acceptance of reduced working hours and salary, without her consent, constituted her acceptance of the repudiation, bringing the employment contract to an end. The court concluded that this interpretation was consistent with the operation of the unfair dismissal provisions in Part 3-2 of the Fair Work Act. The court further determined that since Broadlex no longer required the full-time job to be done by anyone, Ms Vrtkovski was entitled to redundancy pay under section 119(1).

The Federal Court dismissed Broadlex's appeal, upholding the Local Court's decision and ordering that Broadlex pay the Union the previously awarded redundancy pay of $5,194.98, with interest of $502.56, and a civil penalty of $1,500. The court made no order as to costs, finding that neither party had applied for costs and that the conditions for an award of costs were not met.