CCMG Pty Ltd T/A Central Coast Motor Group - [2022] FWC 657

[2022] FWC 657

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

CCMG Pty Ltd T/A Central Coast Motor Group

(C2021/7717)

DEPUTY PRESIDENT EASTON

SYDNEY, 24 MARCH 2022

Application to vary redundancy pay for other employment or incapacity to pay – case law and principles regarding exercise of discretion to reduce redundancy pay – whether employer obtained acceptable alternative employment – finding that the employer did obtain acceptable alternative employment for the employee – remedy – discretionary relief – the employee chose between the alternative employment or a full redundancy payment – not acceptable that the severance payment be heavily reduced – application granted.

The Applicant, CCMG Pty Ltd, made Mr Brady’s employment redundant on 10 November 2021. Mr Brady had been employed by the Applicant for nine years and is otherwise entitled to 16 weeks’ redundancy pay under the National Employment Standards. The Applicant has applied to reduce Mr Brady’s severance pay from 16 to 2 weeks because it offered Mr Brady redeployment into a new role.

Legislative Provisions

Within the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (FW Act), s.119 provides an entitlement to redundancy pay according to the table provided therein. Section 120 of the FW Act allows the entitlement under s.119 to be reduced to a lesser amount “that the FWC considers appropriate.” Sections 119 and 120 are in the following terms:

“119 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.

…”

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.”

There was no suggestion that CCMG Pty Ltd (CCMG) could not pay the amount, nor was there any controversy that CCMG had “obtained” alternative employment for Mr Brady (insofar as it offered him an alternative position). The central issue in this manner is whether the alternative employment offered to Mr Brady was “acceptable” employment.

The following general principles apply to the present application:

(a)the acceptability of the alternative employment is generally regarded to be an objective question to be answered by reference to objective factors;[1]

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FWC 657
Decision Date

CaseChat Overview and Summary

CCMG Pty Ltd, trading as Central Coast Motor Group, sought to reduce the redundancy pay owed to Mr Brady, who had been made redundant on 10 November 2021. Mr Brady, who had been employed by CCMG for nine years, was entitled to 16 weeks' redundancy pay under the National Employment Standards. CCMG applied to reduce Mr Brady's severance pay from 16 to 2 weeks, arguing that it had offered him a new role, which it considered acceptable employment under section 120(1)(b)(i) of the Fair Work Act 2009. The central issue was whether the alternative employment offered to Mr Brady was "acceptable," and if so, whether the amount of redundancy pay should be reduced.

The court considered various factors to determine the acceptability of the alternative employment, including whether the work was of a like nature, whether the location of the employment being offered was not unreasonably distant, whether the pay arrangements complied with award requirements, the hours of work, seniority, fringe benefits, workload, speed, and job security. The court also noted that the onus was on CCMG to provide evidence of the provision of acceptable employment. The evidence showed that Mr Brady's role as Fleet Manager was restructured to increase efficiency, and the alternative position offered to him required him to work an additional two days per month. CCMG proposed to increase Mr Brady's base weekly wage by $90 to compensate for the additional two days worked per month. However, Mr Brady disagreed with CCMG's characterisation of the alternative position, claiming it was in truth an Isuzu salesperson role with a different title.

The court found that the alternative employment offered to Mr Brady was acceptable within the meaning of section 120(1)(b)(i) of the Fair Work Act. Although the alternative employment was inferior to Mr Brady's previous conditions of employment as the Fleet Manager, the court considered the fluidity within CCMG's business and Mr Brady's career progression over his time with CCMG. The court concluded that the proposed alternative employment was sufficiently similar in its role and functions to constitute acceptable employment, when considered in light of Mr Brady's employment history.

The court exercised its discretion to reduce the amount of redundancy pay from 16 weeks to 12 weeks, considering the choice presented to Mr Brady and the fact that he made his decision without full information. The court considered that it was appropriate to reduce the amount of redundancy pay to reflect Mr Brady's longevity, the acceptability of the alternative position, and CCMG's genuine attempts to mitigate the effect of making Mr Brady's original position redundant.

Orders