C & J Durham Pty Ltd T/A Your Care Hub
[2024] FWC 873
•4 APRIL 2024
| [2024] FWC 873 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
C & J Durham Pty Ltd T/A Your Care Hub
(C2024/1140)
| COMMISSIONER SIMPSON | BRISBANE, 4 APRIL 2024 |
Variation of redundancy pay – Application dismissed
This decision concerns an application by C & J Durham Pty Ltd T/A Your Care Hub (the Applicant) under section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay owing to an employee, Ms Samantha Black (Ms Black/the Respondent). At the conclusion of the hearing of the Application on 4 April 2024 I delivered an oral decision to the parties that I have decided to dismiss the application. I indicated that written reasons for that decision would follow shortly thereafter. Below are those reasons.
Background
Ms Black had been employed by the Applicant since 18 October 2022 as a Support Coordination Service Manager. She was employed under the Social, Community Home Care and Disability Services Industry Award 2010 (the SCHADS Award) at the classification level of 6.1 under the SCHADS Award and earned $51.90 per hour. It was agreed between the parties at the hearing of the matter that that Ms Black worked a 40-hour week, that her weekly wage was $2,076, and her redundancy entitlement was four weeks’ pay equating to $8,304 if this application is unsuccessful.
On 5 February 2024 the Applicant advised Ms Black that due to financial constraints, the Applicant was seeking to undergo a restructure. As a result of this, Ms Black was informed that her position may be made redundant.
The Applicant commenced a period of consultation with Ms Black in relation to the potential redundancy. A final consultation meeting was held on 19 February 2024. On 21 February 2024, the Applicant informed Ms Black in writing that her position would be made redundant, and her employment would cease on 23 February 2024. The Applicant offered to redeploy Ms Black to a Support Coordinator position. In this position, Ms Black was to be employed at pay level 5.2 of the SCHADS Award, attracting an hourly rate of $48.52. It was clarified at the hearing on 4 April that this was for a 38 hour per week position. Ms Black was requested to advise by 23 February 2024 as to whether she accepted the redeployment offer. She was informed that if she did not accept the redeployment offer, her redundancy pay may be reduced following an application to the Fair Work Commission (the Commission).
On 23 February 2024, Ms Black advised in writing that she would not be accepting the redeployment offer. Ms Black noted that while she felt she would be able to complete the role that had been offered to her there was “some uncertainty attached to the new contract that was offered”. Ms Black’s employment ended on 23 February 2024.
On 26 February 2024, the Applicant made this application. Under s.119(2) of the Act, Ms Black is entitled to 4 weeks of redundancy pay. In its application, the Applicant initially sought that the redundancy pay be reduced to two weeks’ pay, however later filed an amended application that sought that the redundancy pay be reduced to nil, or any other amount deemed appropriate by the Commission, on the basis that it had obtained other acceptable employment for Ms Black, and that it does not have the capacity to pay 4 weeks of redundancy. The Applicant confirmed at the hearing that this was the remedy it sought.
Applicant’s Submissions
The Applicant submitted that it obtained other acceptable employment for Ms Black in the form of the Support Coordinator position. In the Applicant’s view, this position is substantially similar to the former Support Coordination Service Manager position, with the only material difference being that the Support Coordinator lacks many of the managerial responsibilities associated with the former role, and in that sense is a less senior role. The skills and duties of the two roles are otherwise the same.
The Applicant further submitted that the business is suffering “severe financial strain” arising from increasing debt to the Australian Taxation Office (ATO), and accordingly does not have the finance to fully pay the other redundancies it is facing, including the 4 weeks of redundancy pay owing to Ms Black.
On 20 March 2024, the Applicant filed evidence in support of its contention that it does not have the capacity to pay the redundancy, including information regarding the financial position of the business, such as its profit and loss statement and an account report of moneys owing to the ATO. The Applicant also provided correspondence signed by its accountant Walker Hill Chartered Accountants setting out the month-on-month profit and loss for the period from 1 July 2023 to 29 February 2024, the historical debts to the ATO, and a prediction about the financial position of the Applicant.
The Applicant made an application for a confidentiality order in respect of this evidence, and on 21 March 2024, I issued an Order under s.594 of the Act that this evidence be kept confidential.
Respondent’s Submissions
Ms Black submitted that she did not believe the redeployment offer made by the Applicant was genuine, as she was not given a fair and reasonable opportunity to consider the offer and the Applicant had pre-determined the outcome of the redundancy. She also stated that the alternative employment was not acceptable, as it attracted a lower hourly rate compared to her previous position and did not have adequate job security. However, Ms Black agreed with the Applicant’s submissions regarding the skills and duties of the role as compared to the Support Coordination Service Manager position.
Hearing
A hearing was held before me on 4 April 2024. Ms Caroline Grieve, Director of the Applicant, appeared for the Applicant, represented by Mr Nathan Forwood, HR Business Partner of People Squared. The Respondent appeared on her own behalf. Neither party sought to call witness evidence as such but sought to rely on their written material and oral submissions made at hearing. In the course of the hearing I sought clarification and further information from the Applicant and Respondent in relation to nature of the work, pay, working hours, skills, duties, seniority and location of the old role compared to the proposed new role.
I also sought further information from the Applicant about the certain figures contained in the profit and loss statement provided. Without disclosing in this decision information that is intended to be confidential by force of the Confidentiality Order the Commission has issued, it is sufficient to say that further information I sought pertained to:
the total trading income for the month of February 2024, as compared to the preceding months;
(ii)amounts spent on consultants and accountants in the month of February 2024 as compared to the preceding months, and including in relation to the conduct of these proceedings before the Commission;
amounts spent on legal expenses in the month of February 2024 as compared to the preceding months;
(iv)amounts spent on maintenance and repairs in the month of February 2024 as compared to the preceding months;
amounts spent on wages and salaries in the months of February 2024 as compared to the preceding months.
The Applicant advised during the hearing that it had recently taken on an additional 10 to 15 staff.
Relevant legislation
Section 120 of the Act states as follows:
“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
On the basis of the information provided, it is apparent that the position that had been offered by the Applicant to the Respondent for redeployment contained a lower rate of pay, less seniority and slightly less hours of work. I am not satisfied that that the position offered was “other acceptable employment” within the meaning of s.120(1)(b)(i).
On the basis of the information provided I am not satisfied that the Applicant “cannot pay the amount” within the meaning of s.120(1)(b)(ii). Whilst the confidential material discloses that in recent times the Applicant has been experiencing losses, and has some outstanding tax obligations, there is an arrangement in place to manage the tax issue. The Applicant has been capable of otherwise meeting its ongoing expenses, continues to employ in the order of 40 employees and has recently increased that number. It is undergoing a process of restructuring with external advice and is likely to improve its position. Further it has been capable of meeting other expenses in the month of February that in my view were within its discretion to not prioritise over the payment of the redundancy sum owing to the Respondent.
As set out above, the Applicant has not made out its case in relation to either of s.120(1)(b)(i) or (ii) and for that reason the application is dismissed. An order to the effect will be issued separately and concurrently with this decision. It follows that the Redundancy amount must be paid in accordance with the requirement to do so in s.119 of the Fair Work Act 2009.
COMMISSIONER
Appearances:
Mr Nathan Forwood and Ms Caroline Grieve for the Applicant.
Ms Samantha Black on her own behalf.
Hearing details:
2024
By Microsoft Teams
4 April.
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