Catering Industries NSW Pty Ltd v Jason Royal
[2023] FWC 1544
•29 JUNE 2023
| [2023] FWC 1544 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
Catering Industries NSW Pty Ltd
v
Jason Royal
(C2023/2737)
| DEPUTY PRESIDENT DEAN | CANBERRA, 29 JUNE 2023 |
Variation of redundancy pay.
Catering Industries NSW Pty Ltd (Applicant) has made an application pursuant to s.120 of the Fair Work Act 2009 seeking an order to vary the redundancy pay entitlement with respect to its former employee, Mr Jason Royal. The Applicant seeks to reduce the amount of redundancy pay Mr Royal is otherwise entitled to be paid to zero, on the basis that it had obtained ‘other acceptable employment’ for him within its own business for the purposes of s.120(1)(b)(i) but such offer was rejected.
The matter was heard by telephone on 27 June 2023. Mr Sam Gillani (National Human Resources Manager) appeared for the Applicant and gave evidence in support of the application.
Mr Royal did not file any material in accordance with the Directions issued by the Commission and did not attend the hearing.
Relevant legislative provisions
Section 119 of the Act relevantly provides as follows:
119 Redundancy pay
Entitlement to redundancy pay
(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
Section 119 goes on to provide the amount of redundancy pay by reference to the employee’s period of continuous service with the employer.
Section 120 of the Act provides:
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, FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that 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.
Background
The Applicant is a nationwide provider of hospitality, cleaning and laundry services predominantly in the residential aged care sector.
Mr Royal commenced employment with the Applicant in December 2019 and worked as a part time cook over 64 hours per fortnight.
On 23 March 2023 the Applicant advised all its employees employed at Warrigal Aged Care that it had lost the contract to provide services at Warrigal and as a result would cease operations at that site on 10 May 2023.
On 5 May 2023 Mr Royal was offered a part time role as a cook working 65 hours per fortnight at the same hourly rate of pay. He advised he was unable to work after 5:30pm and so the offer that had been made to him was adjusted so that all shifts finished at 5:30pm. Mr Royal rejected this offer because it would have required a longer travel time to attend work. In response, the Applicant increased the hourly rate of pay applicable to the role.
Mr Royal sought a higher rate of pay that what had been offered, and this was not accepted by the Applicant.
Mr Royal’s employment was covered by the Hospitality Industry (General) Award (the Award). Clause 42 of the Award provides that redundancy pay is in accordance with the NES. Mr Royal length of service entitles him to 7 weeks redundancy pay.
The Applicant seeks to reduce the redundancy pay to zero.
Evidence and submissions
Mr Gillani gave evidence as to the offers of alternative employment made to Mr Royal which are set out above and submitted that the Applicant has fulfilled its obligations under s.120 in that it consulted with Mr Royal and had made a number of offers of suitable alternative employment which were rejected by Mr Royal.
Consideration
There is no dispute that Mr Royal’s former position was made redundant and that he is entitled to a redundancy payment by virtue of s.119, which is 7 weeks in this case. There is also no dispute that the Applicant made alternative employment offers to Mr Royal which he rejected. The Applicant does not claim any incapacity to pay.
Accordingly, the issue to be determined is whether the ‘other employment’ offered to Mr Royal was ‘acceptable’ within the meaning of s.120(1)(b)(i). If I am satisfied that the employment offered to Mr Royal was acceptable, I will then proceed to consider whether to reduce the redundancy payment.
Acceptable alternative employment
It is well established that the question of whether the position offered was acceptable alternative employment must be determined objectively and that the mere rejection of the alternative employment does not make it objectively unacceptable.
The Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd[1] (Derole Nominees) considered what constitutes ‘acceptable alternative employment’ and held:
“What constitutes ‘acceptable alternative employment’ is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.
Yet, the use of the qualification ‘acceptable’ is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.”[2]
As put by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia[3]:
“[89] I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.”
In a similar vein the Full Bench in Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd[4] found that the determination of whether alternative employment is acceptable will involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters including the location of the employment and travelling time.
In Sodexo Australia Pty Ltd T/A Sodexo[5], Deputy President Sams considered various authorities in respect of the question of what constitutes ‘other acceptable employment’ and helpfully summarised the principles in the following terms:
“• the test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.
·‘acceptable employment’ is not identical employment, as no two jobs could be exactly the same.
·an employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.
·an employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.
·the acceptance of alternative employment by one or more persons in a group of redundant employees does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.
·There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment.”[6]
Conclusion
Having considered all the relevant factors objectively I am satisfied and find that the Applicant had obtained other acceptable employment for Mr Royal within the meaning of s.120(1)(b)(i).
Given this finding, the final issue is whether there should be a reduction in the amount of the redundancy payment. As outlined earlier, this is a matter of discretion which is to be exercised having regard to all of the relevant circumstances of the particular matter.
In this case, I consider there should be a reduction to zero as sought by the Applicant. This is because the offer was an offer of acceptable alternative employment and there was no evidence given by Mr Royal to dispute the acceptability of the offer.
An order giving effect to this decision will be issued accordingly.
DEPUTY PRESIDENT
Appearances:
S Gillani for Catering Industries NSW Pty Ltd.
Hearing details:
2023.
By video:
June 27.
[1] (1990) 140 IR 128.
[2] Ibid at 128.
[3] PR974699.
[4] (1988) 27 IR 226.
[5] [2016] FWC 4012.
[6] Ibid at [127].
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