Catering Industries NSW Pty Ltd v Leoni Seychelles
[2023] FWC 1543
•29 JUNE 2023
| [2023] FWC 1543 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
Catering Industries NSW Pty Ltd
v
Leoni Seychelles
(C2023/2638)
| 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, Ms Leoni Seychelles. The Applicant seeks to reduce the amount of redundancy pay Ms Seychelles is otherwise entitled to be paid to zero, on the basis that it had obtained ‘other acceptable employment’ for her within its own business for the purposes of s.120(1)(b)(i) but such offer was rejected.
Ms Seychelles opposes the application and asserts that the positions offered were not acceptable employment.
The matter was heard by telephone on 27 June 2023. Mr Sam Gillani (National Human Resources Manager) appeared for the Applicant and Ms Freedman appeared with permission on behalf of Ms Seychelles.
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.
Ms Seychelles commenced employment with the Applicant in March 2018 and worked on a full-time basis, most recently as Chef Manager, between the hours of 6am to 2:30pm Monday to Friday. From August 2021 she performed her work at Warrigal Aged Care.
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 Ms Seychelles was offered a role as a Chef, on a full time basis, with the hours of work to be Wednesday to Friday, 11am to 7pm, and Saturday to Sunday, 7am to 4pm. The role would be split between two sites.
Ms Seychelles, through her solicitor, rejected this offer on 8 May 2023. The correspondence from her solicitor included that the terms of the offer were vague, and she was only given one business day to respond. The correspondence stated two reasons that the offer was considered unacceptable: first, the role was not suitably similar and second, Ms Seychelles was not available during the required hours due to her carer responsibilities. The correspondence went on to state that in the circumstances, Ms Seychelles’ employment would cease by way of redundancy effective 11 May 2023, and she expected her entitlement to redundancy pay would be paid to her.
The Applicant replied by letter dated 10 May, in which it stated that the advice provided to employees on 23 March about the loss of the contract was not advice of Ms Seychelles’ redundancy. Instead, it was notice of the loss of the contract and the commencement of consultation with regard to finding alternative employment. The Applicant’s letter went on to explain why it considered the offer to be acceptable alternative employment, including that:
a.There was no change to Ms Seychelles rate of pay:
b.The role continued to be full time (with slightly higher hours per week);
c.Ms Seychelles would remain a permanent employee with continuity of service;
d.The location of the sites where the work would be performed was comparable to her existing work location in terms of travel time; and
e.She would receive weekend penalties for work performed on Saturday and Sunday.
The Applicant’s letter also stated that Ms Seychelles’ manager was unaware of any carer responsibilities that she had that might restrict her ability to perform work, and that if she was unable to work on weekends, a part time chef position (ie Wednesday to Friday) was available to her.
On 11 May 2023, Ms Seychelles’ lawyers responded, stating that Ms Seychelles was unable to work weekends or evenings, and that she had never been rostered on weekends or evenings since her employment had been full time. The offer of a part time position was also rejected on the basis it was not a reasonable alternative to her current full time position. The response also highlighted that while the role was full time, the Chef position had a lower level of responsibility than her current Chef Manager position. The response went on to say that:
“We are firmly of the view that your offer is not a reasonable offer of employment and Catering Industries have failed to find a suitable alternative to our client’s current employment. In the circumstances, our client’s role will cease today by way of redundancy, in accordance with your letter dated 23 March 2023. If our client’s severance entitlements are not paid to her in accordance with our obligations pursuant to the Fair Work Act 2009, we are instructed to commence proceedings for recovery of any outstanding amount. We intend to rely on this correspondence as to the issue of costs”.
Ms Seychelles’ employment ceased on 11 May 2023.
Ms Seychelles’ 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. Ms Seychelles’ length of service entitles her to 10 weeks redundancy pay.
The Applicant seeks to reduce the redundancy pay to zero.
Evidence and submissions
The Applicant
Mr Gillani gave evidence as to the offers of alternative employment made to Ms Seychelles which are set out above and submitted that the Applicant has fulfilled its obligations under s.120 in that it consulted with Ms Seychelles and had made offers of suitable alternative employment which were rejected by Ms Seychelles.
The Applicant submitted that Ms Seychelles was promoted to Chef Manager in December 2022, and she had since on occasions worked until 3:30pm to cover staff shortages.
The Applicant also submitted that Ms Seychelles met with her manager on 28 March 2023 and was offered a part time role at her current rate of pay across two sites, working on Tuesday and Thursday from 11am to 7pm, and on Friday from 6am to 2pm. I note Ms Seychelles disputed that this offer was made.
Ms Seychelles
Ms Seychelles contends that the offers of employment were not acceptable for reasons including that:
a. The role of Chef was a lower level role than her Chef Manager role, and she had worked hard to progress to this level;
b. She has responsibility to care for her elderly parents, and she drives approximately 3 hours to her parents’ home to stay with them over the weekend to provide live-in care, returning home after dinner on Sunday nights. She said she shares this role with her sister who provides live-in care during weekdays. She further stated if she and her sister are unable to care for their parents, they would need to move into an aged care facility, which would place a significant financial burden on them;
c. Her husband is employed as a full time transport driver and works night shifts, starting typically at 6pm. The only time they are able to spend together is during the afternoons on weekdays, and this time is extremely important to them both; and
d. The part time role would not meet her financial requirements.
She gave evidence that the Applicant was on notice of her carer and family commitments and the Applicant made the offers knowing she would not be able to accept them.
Additionally, the submissions made on Ms Seychelles’ behalf included that:
a. In determining whether an offer was ‘acceptable’ each employee’s individual circumstances must be taken into account;
b. Her working arrangements had been in place for five years, and were designed to accommodate her carer and family commitments;
c. In her circumstances, such a drastic change to her hours of work were objectively unacceptable, rather than merely inconvenient;
d. The offer represented a significant reduction in her seniority;
e. No genuine attempt was made by the Applicant to ensure that the offered alternatives took into account her individual circumstances;
f. No consultation took place with her about the availability or suitability of alternative roles;
g. The Applicant had engaged in deceptive, misleading and coercive conduct by encouraging employees to resign to deprive them of their redundancy entitlements; and
h. As a result of the Applicant’s conduct, Ms Seychelles had been forced to incur significant legal costs.
Consideration
There is no dispute that Ms Seychelles’ former position was made redundant and that she is entitled to a redundancy payment by virtue of s.119, which is 10 weeks in this case. There is also no dispute that the Applicant made alternative employment offers to Ms Seychelles which were rejected. The Applicant does not claim any incapacity to pay.
Accordingly, the issue to be determined is whether the ‘other employment’ offered to Ms Seychelles was ‘acceptable’ within the meaning of s.120(1)(b)(i). If I am satisfied that the employment offered to Ms Seychelles 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]
Consideration
I do not consider the offer of part time employment to be an acceptable offer because of the financial consequences to Ms Seychelles.
In contrast to the part time offer, there are factors that weigh for and against a finding that the offer of ongoing full-time employment was an acceptable offer. On the one hand, the full time Chef position was at the same rate of pay and within a similar travel distance, with continuity of service. While the role was at a slightly lower level, the difference in my view was not substantial. On the other hand, Ms Seychelles’ family and caring responsibilities would be significantly impacted.
Having weighed all the relevant factors objectively, I am on balance satisfied and find that the Applicant did not obtain other acceptable employment for Ms Seychelles within the meaning of s.120(1)(b)(i).
This is because of the particular, individual circumstances of Ms Seychelles regarding the combination of her family and caring responsibilities, for which a change in rostered hours/days would have a very significant impact. In this case I consider the evidence supports a finding that these circumstances are more than just a personal preference of Ms Seychelles.
I am not, however, satisfied that the Applicant, and Mr Gillani in particular, was aware of the extent to which Ms Seychelles’ circumstances would impact her ability to consider alternative employment, and this should be taken into account by Ms Seychelles before she makes any costs application which has been foreshadowed.
For completeness, it is unnecessary to make any findings about the allegation made by Ms Seychelles that she was encouraged to resign. It is not a relevant factor in the decision required to be made by the Commission in this application.
As a result of these findings, this application is dismissed.
DEPUTY PRESIDENT
Appearances:
S Gillani for Catering Industries NSW Pty Ltd.
A Freedman of Baker Deane & Nutt Solicitors for Leoni Seychelles.
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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