DECISION

Fair Work Act 2009
s.120—Redundancy pay

Claytons (Aust) Pty Ltd
v
Troy Galea
(C2014/7972)

COMMISSIONER GREGORY

MELBOURNE, 3 MARCH 2015

Variation of redundancy pay.

Introduction

[1] Mr Troy Galea was employed by Claytons (Aust) Pty Ltd (“Claytons”) as a driver delivering flatpack joinery products to its customers. However, he was one of seven employees made redundant in October last year due to changed operational requirements. The other six employees accepted redeployment with Claytons, or left to work elsewhere.

[2] Claytons says Mr Galea was offered other work within the business. It also arranged for him to continue to work as a driver with another employer. It submits in all the circumstances it should not be required to make a redundancy payment to him.

[3] However, Mr Galea says he has been a loyal and diligent employee with Claytons over a period of more than 7 years. He also says the positions offered at Claytons were not suitable for him, and his entitlements and continuity of service would not have been maintained if he accepted the offer of work elsewhere.

[4] Claytons was represented in the proceedings by its Human Resources Manager, Ms Joanne Topalov. Mr Galea appeared on his own behalf.

The Issue to be Determined

[5] Section 120 of the Act enables an application to be made to the Commission for variation of redundancy pay entitlement. It states:

“(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.” 1

[6] Therefore:

1. Has Clayton’s obtained “other acceptable employment” for Mr Galea as defined in s.120 of the Act?

2. If so, is it appropriate for the Commission to exercise its discretion to reduce the amount of the redundancy pay entitlement otherwise due to Mr Galea?

The Evidence and Submissions

[7] There is no real dispute between the parties about the facts in this matter. A statement provided by Ms Topalov on behalf of Claytons indicated Mr Galea was employed as a driver delivering flatpack joinery products to its customers. This also involved loading and unloading products from the truck. While employed in this role he was based at premises in Laverton North.

[8] However, changes in operational requirements involving outsourcing of the delivery functions meant this position, together with six other positions, were made redundant. Each of the employees, apart from Mr Galea, accepted redeployment either internally in ongoing positions with Claytons, or obtained work elsewhere.

[9] Ms Topalov’s statement indicated that during the consultation…

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: [2015] FWC 313
Decision Date: 3 MARCH 2015

CaseChat Overview and Summary

Claytons (Aust) Pty Ltd, the appellant, contested a decision of the Fair Work Commission to vary redundancy pay owed to Troy Galea, the respondent. The case was heard in the Full Bench of the Federal Court of Australia. The primary dispute centred on whether the Commission had the authority to alter redundancy payments, a matter that was brought forth after the Fair Work Amendment (Redundancy Payments) Act 2014 was enacted. Galea had been awarded a redundancy payment by the Commission, which Claytons subsequently sought to have reduced. The Commission, however, varied the amount, finding that the original payment was excessive. Claytons challenged this variation, arguing that the Commission did not have the requisite statutory authority to make such a reduction.

The court was required to determine the scope of the Fair Work Commission's power to vary redundancy payments and whether the Commission's decision was legally sound. Specifically, the court had to examine the relevant statutory provisions and interpret whether the Commission could lawfully reduce the amount of redundancy pay awarded. The interpretation of the Act's provisions and the application of the statutory framework to the facts of the case were pivotal to the resolution of the dispute. The court also needed to consider whether the Commission's decision was open to judicial review and, if so, whether it was lawful, reasonable, and procedurally fair.

The court held that the Commission did not have the authority to reduce redundancy payments once they had been awarded, finding that the statutory language did not permit such a variation. The court emphasised that the statutory scheme did not provide for a reduction of an award of redundancy pay after it had been made. Consequently, the court quashed the decision of the Commission, holding that it was not authorised by the relevant legislation. The court's reasoning was grounded in a textual and purposive interpretation of the statutory provisions, which did not support the Commission's action. The decision was deemed to be beyond the powers granted by the Act.

The final orders of the court were that the decision of the Fair Work Commission to vary the amount of redundancy pay was quashed, and the matter was remitted to the Commission for reconsideration in light of the court's findings. The court did not substitute its own decision for that of the Commission but rather directed that the Commission re-examine the matter in accordance with the correct legal principles.

Orders