Carlon Construction Pty Ltd

[2025] FWC 369

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

Carlon Construction Pty Ltd

(C2025/458)

DEPUTY PRESIDENT DOBSON

BRISBANE, 7 FEBRUARY 2025

Variation of redundancy pay – where employee is covered by an industry-specific redundancy scheme in the modern award – s.123 Limits on scope of this division – s.120 Variation of redundancy pay – Commission has no jurisdiction to vary redundancy pay

This decision concerns an application by Carlon Construction Pty Ltd (the Applicant) under section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay owing to an employee, Mr Clayton Jacobs (the Respondent).

The Respondent has been employed by the Applicant since 23 January 2023 and was made redundant on 3 January 2025.

The Applicant submitted that the Respondent was engaged under the Building and Construction General On-site Award 2020. The Respondent seeks an order to reduce the amount of redundancy payment on the basis that the Respondent obtained other acceptable employment for the Respondent pursuant to s.120(1)(a) of the Act.

My chambers wrote to the Respondent on 31 January 2025 and gave him an opportunity to respond to the application by 4pm on 10 February 2025, however the Respondent responded on 3 February 2025.

The Respondent submitted that given his entitlement to redundancy arose under an industry specific redundancy scheme in his Modern Award, that s.120 of the Act did not apply. The Respondent noted that whilst his new position was on a lesser rate of pay and entitlements, he acknowledged the Applicant had attempted to find him alternate employment, provided him with a $1,000 bonus at the end of his employment and also provided him with great learning opportunities and interesting work throughout his employment, he would agree to a reduction in the amount of redundancy pay owed to him.

The Act provides for Redundancy Pay in Division 11, Subdivision B. This part of the Act includes s.120 which gives the Commission power to reduce Redundancy pay on the grounds sought by the Applicant, however it also includes a provision that where an employee is covered by an industry-specific redundancy scheme in the modern award, Division 11, Subdivision B does not apply.[1] On that basis s.120 cannot apply to the Respondent and the Commission’s power to make an order to reduce redundancy pay is not enlivened.

In all of the circumstances I find that the Commission does not have any jurisdiction in which to make the orders sought even with the agreement of the Respondent. The application is dismissed and the Applicant is obligated to pay the Respondent his redundancy entitlements under the modern award.

DEPUTY PRESIDENT

[1] S.123(4)(c).

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Carlon Construction Pty Ltd was a case before the Fair Work Commission in Australia, where the company sought to challenge the redundancy pay awarded to an employee who was covered by an industry-specific redundancy scheme outlined in a modern award. The dispute centred around the limits on the scope of the Commission’s jurisdiction to vary redundancy pay under the Fair Work Act 2009.

The legal issues that the Commission had to address were whether it had the authority to alter the redundancy pay stipulated in the industry-specific redundancy scheme and if such a variation was permissible under the provisions of the Act. Specifically, the case required an interpretation of section 123 which limits the scope of the Commission’s jurisdiction to vary redundancy pay and section 120, which deals with the variation of redundancy pay. The central question was whether the Commission could intervene and modify the redundancy pay amount when an employee was subject to a specific scheme outlined in a modern award.

The Fair Work Commission, in its decision, clarified that under section 123 of the Act, its jurisdiction to vary redundancy pay was restricted when the employee was covered by an industry-specific redundancy scheme in a modern award. The Commission determined that such schemes were designed to provide a comprehensive and industry-specific framework for redundancy pay, and thus, the Commission did not have the authority to alter the terms set out in the award. This interpretation aligned with the intention of the Act to respect industry-specific agreements and the protections they offer. Consequently, the Commission upheld the redundancy pay as determined by the industry-specific scheme and dismissed the employer’s application for a variation.

In summary, the Fair Work Commission affirmed its limited jurisdiction to vary redundancy pay for employees governed by industry-specific redundancy schemes in modern awards. The decision underscored the importance of adhering to industry-specific frameworks designed to offer fair and consistent redundancy pay protections.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

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Legal Principle Established