Certified Security Pty Ltd trading as Trustee for Clifford & Co Unit Trust T/A Clifford & Co Response Services

[2014] FWC 788

[2014] FWC 788

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Certified Security Pty Ltd trading as Trustee for Clifford & Co Unit Trust T/A Clifford & Co Response Services
(C2013/6446)

COMMISSIONER LEE MELBOURNE, 3 FEBRUARY 2014

Application to vary redundancy pay for other employment or incapacity to pay.

[1] This matter involves an application made pursuant to section 120 of the Fair Work Act 2009 (the Act) for variation of the obligation to pay redundancy pay pursuant to section 119 of the Act. The application is made by Certified Security Pty Ltd trading as Trustee for Clifford & Co Unit Trust T/A Clifford & Co Response Services (the Applicant), in relation to three former employees. The Applicant asserts that it obtained other acceptable employment for the employees as provided for in section 120(1)(b)(ii) of the Act.

[2] I listed the matter for Mention by telephone on 31 October 2013. The Applicant was notified of the listing by email and fax, and the employees were notified by post care of their new employer Nyrstar Hobart.

[3] At the listed time, Mr R Clifford and his wife Mrs N Clifford attended on behalf of the Applicant. None of the employees advised of the listing attended.

[4] During the Mention hearing the Applicant submitted that it had lost a contract to supply services to Nyrstar Hobart on 15 February 2013. As a result of losing this contract, the employees of the Applicant were made redundant.

[5] Importantly, Mr Clifford submitted that at the time of the termination of employees’ employment the Applicant employed a total of 10 employees, including Mr Clifford.

[6] An application under section 120 of the Act, for variation of redundancy pay for other employment or incapacity to pay, applies if an employee is entitled to be paid an amount of redundancy pay by the employer because section 119 of the Act applies.

[7] However, subsection 121(1)(b) of the Act provides that section 119 does not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1), the employer is a small business employer.

[8] Section 23(1) of the Act sets out the meaning of small business employer as follows:

“23 Meaning of small business employer

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and

(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.”

[9] If the Applicant in this matter was, in fact, a small business employer as defined in section 23 of the Act, at the relevant time, then by virtue of the operation of section 121 of the Act the Applicant is excluded from an obligation to pay redundancy pay pursuant to section 119 of the Act. As section 120 only applies when an employee is entitled to be paid an amount of redundancy pay because of the operation of section 119 then, if the Applicant was at the relevant time a small business employer as defined in the Act, there is no entitlement under section 119 and therefore it would follow that section 120 has no application.

[10] At the Mention I advised the Applicant that, due to the above reasoning, I was inclined to dismiss the application.

[11] The key question to be determined is whether or not the Applicant was a small business employer at the relevant time. At the Mention, I had only the submissions of the Applicant. In order that the affected former employees of the Applicant had an opportunity to be heard on the question of whether or not the Applicant was in fact a small business employer at the time the employees were terminated, I issued a Statement and Directions for the filing of materials by the Applicant and provided an opportunity for affected former employees to provide submissions as to whether the employer was a small business employer at the relevant time.

Applicant’s submissions

[12] The Applicant provided a statutory declaration, declared by Mr R Clifford. Mr Clifford attested that on 15 February 2013 (and immediately prior), there were 10 employees of the Applicant.

Submissions of affected employees

[13] The Commission received a submission from one affected employee, Mr Tony Piper dated 14 November 2013. That submission advised that the “statutory declaration from Mr. R. Clifford is totally true and correct.”

[14] The Commission received submissions from another affected employee, Ms Marika Webster on 18 and 27 November 2013. The submission provided by Ms Webster on 18 November included a copy of an “Individual Transitional Employment Agreement 2008.4” and contained submissions regarding redundancy entitlements under a number of different individual and collective agreements.

[15] The submission referred to the number of staff employed by the Applicant stating that:

“2007-2010 Clifford & Co was a medium business as they held 2 contracts on 2 different sites and employed 18 staff and 1 manager.”

[16] The submission again refers to the size of the business at a later stage as follows;

“When Clifford & Co reverted back to a small business they did not remove the clause of redundancy entitlements”.

[17] The submissions received on 27 November included a copy of the Clifford & Co Response Services Employee Collective Agreement 2008”, a letter from the employer to the affected employee dated 8 December 2010 and a signed position description also dated 8 December 2010.

Consideration and Conclusion

[18] The Applicant has provided a statutory declaration; appropriately sworn, declaring that at the relevant time the Applicant employed 10 employees.

[19] One affected employee, Mr Piper has provided a submission indicating that the statutory declaration provided by the Applicant is true and correct.

[20] The submission provided by the other affected employee, Ms Webster, indicates that at some time between 2007 and 2010 the Applicant employed 18 people. The affected employee does not contest however, that at the relevant time the Applicant employed 10 people.

[21] The submissions of Ms Webster also point to entitlements to redundancy under various instruments. These are not relevant to my consideration in this matter. It may be the case that affected employees are entitled to redundancy under either individual or collective agreements or transitional instruments. The task before me is to determine whether the employees are entitled to redundancy payments pursuant to section 119 at all, prior to determining if there is a capacity to vary the obligation to pay pursuant to section 120 of the Act.

[22] It is clear, on the basis of submissions and evidence received, that the Applicant was a small business employer at the relevant time. Following from my reasoning above, by virtue of the operation of section 121 of the Act, the Applicant is excluded from an obligation to pay redundancy pay pursuant to section 119 of the Act.

[23] The Applicant’s application to vary the redundancy pay for other employment or incapacity to pay cannot have jurisdiction as the section only applies if an employee is entitled to be paid an amount of redundancy pay by the employer.

[24] For the above reasons, I dismiss the application for want of jurisdiction.

COMMISSIONER

Appearances:

R Clifford and N Clifford for the Applicant

Hearing details:

2013.

Melbourne.

October 31 (Mention).

Final written submissions:

Applicant, 13 November 2013

Affected employees, 27 November 2013

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