Catering Industries NSW Pty Ltd T/A Catering Industries

[2021] FWC 4720

[2021] FWC 4720

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Catering Industries NSW Pty Ltd T/A Catering Industries
(C2021/2391)

COMMISSIONER YILMAZ MELBOURNE, 3 AUGUST 2021

Variation of redundancy pay.

Background

[1] Catering Industries NSW Pty Ltd T/A Catering Industries (the Applicant) has made an application under s.120 of the Fair Work Act 2009 (the Act) seeking an order to reduce the redundancy pay to which Mr Ribej Gurung is entitled. The application is made pursuant to s.120(b)(i) of the Act on the basis that the Applicant submits that it obtained and offered acceptable alternative positions within the Applicant’s business, and that the offers were refused. The Applicant does not rely on s.120(b)(ii) of the Act.

[2] Mr Gurung was employed by the Applicant for a period of one year and three months from 20 January 2020 until 26 April 2021 in a full-time position of chef manager working 40 hours per week at the rate of $31.42 per hour. Mr Gurung’s employment was covered by the Hospitality Industry (General) Award 2020 which states that redundancy pay is provided for in the NES. It is also not in dispute that Mr Gurung’s employment was terminated by the Applicant because it no longer required the job to be done as provided in s. 119(1) of the Act and that the amount of redundancy pay to which Mr Gurung is entitled is 4 weeks in accordance with s. 119(2). The Applicant seeks that the redundancy pay be varied to nil.

[3] Directions were issued requiring that the parties file submissions, witness statements or documents in support of, and in response to the application. The parties agreed for the decision to be made on the papers.

Legislation

[4] Section 119 of the Act provides the entitlement to severance pay payable by an employer if an employee’s employment is terminated due to redundancy. The amount of redundancy pay is dependent on the period of continuous service with the employer and ranges from 4 weeks to 16 weeks. This provision applies to national system employers and those employers not excluded by s.123 of the Act.

[5] Section 120 of the Act provides as follows:

“120 Variation of redundancy pay for other employment or incapacity to pay

(1) [When section applies]

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) [Amount may be reduced by amount FWC considers appropriate]

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) [Redundancy pay is amount in determination]

The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”

[6] Section 120 of the Act allows an employer to apply to the Commission to vary its obligation to make redundancy payments. While an employer may make an application to vary its obligation to pay severance payments, the onus rests on the employer to satisfy the Commission that the grounds on which it relies justifies the Commission to use its discretion. The grounds must relate to other acceptable employment obtained by the employer for the employee, or the employer’s incapacity to pay the amount due. The Commission has the discretion to reduce the employer’s obligation to pay the employee’s entitlement to nil or to a partial amount.

[7] The standards concerning s.120 (b) (i) have been dealt with in a number of decisions of this Commission. The use of the word “obtains” in s.120 (1)(b)(i) relates to action by the employer to “cause acceptable alternative employment to become available to the employee,” 1 and “must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance.”2

[8] Further, the meaning of “other acceptable employment” has been considered; importantly “acceptable” requires that the alternative employment meets a relevant objective test. The test is not whether the alternative employment is identical, but consideration of whether the work is of a like nature, the effect of location, pay, the hours of work, workload, job security, fringe benefits, compliance with statutory conditions, seniority and the like, and not whether the employee finds the alternative employment to be acceptable. 3

Evidence and submissions

[9] The Applicant provides contract services in catering, cleaning and laundry at various aged care and retirement villages nationally. Mr Gurung was employed as a chef manager on 20 January 2020 at Blue Cross Ruckers Hill in Northcote. Soon after commencing employment Mr Gurung moved residence to Geelong. Following his change of residence, Mr Gurung travelled daily from Geelong to Northcote.

[10] The Applicant submits that its client advised on 25 March 2021 that the site in Northcote would close from 26 April 2021. Mr Gurung was given notice of the impending closure of the site on 29 March 2021. Following consultation, Mr Gurung was offered the option to transfer firstly, with continuity, to Blue Cross Hilltop in Preston, and subsequently, as an alternative, to Blue Cross The Gables in Camberwell. The letter of offer dated 14 April 2021 and email correspondence was submitted in evidence.

[11] Both offers of employment were the same role of chef manager, the rosters, responsibilities and wages were the same. The Applicant provided evidence that the travel time from Geelong to Mr Gurung’s place of work was 1 hour and 24 minutes, the travel to Preston would be 1 hour and 21 minutes and 1 hour and 17 minutes to Camberwell.

[12] Mr Gurung declined both offers of employment on 19 April 2021. In email correspondence Mr Gurung states:

“Before COVID started I moved to a new address in Geelong which is 80 km away from the current workplace Rucker’s Hill, Northcote. Despite the travel time I continue working here as I chose this workplace when I applied for the job. Also, another fact I was attached to this place, residents and staff.

Since, the Aged care itself is closing down and all the residents and staff are moving in different places there is no such reasons for me to travel 3 hours for work. This was the reason I declined the offer in both sites. Kavinay and Onker both knows that I have been travelling from Geelong to work since a year.

I believe, I had verbally mentioned the appropriate reason for not being able to accept the offer to Kavinay and Onker. However, I still got the offer letter for same site without my agreement.

I would happily accept the offer if it was suitable for me to travel. Thank you!”  4

[13] On 26 April 2021, the Applicant confirmed the termination of employment effective from the same date after Mr Gurung declined both offers of employment. The Respondent further offered Mr Gurung casual hours should he prefer greater flexibility.

[14] On 20 June 2021 I received submissions via email from Mr Gurung confirming that he had received two offers of alternative employment by the Applicant which he rejected, and he attached a copy of email correspondence between himself and the Applicant regarding the lack of suitable employment closer to his residence and the email further enquires whether he is entitled to redundancy. 5 Mr Gurung advised that the submissions and evidence of the Applicant were accurate.

Consideration

[15] Mr Gurung moved to Geelong soon after commencing with the Applicant and prior to the effects of COVID-19; more than 80km travel one way daily for over a year from Geelong to Northcote. Google map evidence shows the two offers represented a shorter travel time but a greater distance of either of 3.1 – 4.3km. This distance is negligible, and while marginally further in distance, travel time is less for both alternative employment locations.

[16] Mr Gurung declined the offers for the reason of travel time and because he would no longer be working with the staff and residents located at Northcote. The objective test is whether the Applicant “obtained” the alternative position and whether the position, location and other considerations are acceptable as alternative employment options rather than consideration of Mr Gurung’s personal reasons for rejecting the alternative positions.

[17] I am required to be satisfied that the Applicant obtained alternative employment, and the uncontested evidence is that two positions were obtained by the Applicant and offered based on continuous employment on the same conditions and in the same position but at alternative sites of comparable distance. The difference in the distance travelled is measured comparative to his usual place of work to his home, the distance in travel does not require the employer to find alternative work closer to home. The distance is to be a reasonable alternative.

[18] I note that correspondence from the Applicant to Mr Gurung confirmed in writing the offer and informed him that the offer in its view was reasonable, and further should he choose to decline the offer, his employment will be terminated without an entitlement to redundancy pay. 6 This application was filed on 28 April 2021 after Mr Gurung’s employment came to an end on 26 April 2021.

[19] While Mr Gurung had inquired whether he would be entitled to redundancy, he was in my view aware that severance pay was at risk should he not accept one of the alternative employment options with his employer. The position is redundant following the closure of the site in Northcote where Mr Gurung worked, but the alternative positions obtained by his employer- the Applicant, were acceptable. While Mr Gurung’s decision to decline the distance of travel, the distance of the alternative employment is not due to the employer but a decision of Mr Gurung to reside more than 80 km from his usual place of employment. The alternative employment cannot be said to cause undue travel distance comparatively to his usual place of work.

[20] In this matter having been satisfied that the Applicant had obtained suitable alternative employment, I determine that the severance pay entitlement to Mr Gurung is nil.

COMMISSIONER

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 1   Australian Chamber of Manufactures v Derole Nominees Pty Ltd,(1990) 140 IR 123.

 2   FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia, [2015] FCAFC 90.

 3   Op Cit; Re Clerks Salaried Staffs (Agriculture Award) 1999, Print S1216, 24 November 1999; Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397.

 4   Email of 19 April 2021 from Mr Gurung to Mr Gillani.

 5   Email correspondence of 24 April 2021 between Messrs Gurung and Gillani.

 6   Letter of 14 April 2021.