Company P v D.S - [2014] FWC 4673

[2014] FWC 4673

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Company P
v
D.S.
(C2014/850)

COMMISSIONER HAMPTON

ADELAIDE, 1 AUGUST 2014

Application to vary redundancy pay on the basis of incapacity to pay - redundancy provisions of NAPSA preserved by modern award - whether employer lacks capacity to pay redundancy payments - basis of application not demonstrated - application dismissed.

1. Background

[1] The parties have been de-identified in this decision due to the particular nature of the application and the fact that the public identification of the parties and the details associated with the matter may of itself lead to adverse trading and business consequences for the privately owned applicant. It is however in the public interest for a decision to be published as it discloses how the Commission has exercised its jurisdiction in this matter and this is consistent with the concept of open justice.

[2] Company P has made an application to vary the redundancy pay otherwise due to one of its former employees, D.S.. The application was made on the basis that Company P does not have the financial capacity to make the redundancy payment and in that context seeks that the redundancy payments be reduced to zero.

[3] Company P conducts a business in South Australia and D.S. was employed in the capacity as an administrative and accounts employee. In effect, D.S. was the employer’s bookkeeper who also assisted with the administration of related businesses.

[4] There is no dispute that D.S. has been made redundant. It is also evident that Company P is a small business within the meaning of the Act. 1

[5] D.S. opposes the application on the basis that Company P is able to pay the redundancy payments, either directly or through related entities and businesses, and should do so.

[6] Following a directions conference, the parties lodged comprehensive written submissions and materials. Despite a request to do so, 2 none of the “evidence” was in the form of statutory declarations or affidavits. Some of the material provided by Company P was in the nature of formal financial statements supported by a Director’s statement.

[7] Neither party sought a hearing for the purposes of challenging the material of the other. As a result, I have determined the application based upon the submissions and material filed by the parties.

2. The relevant award provisions

[8] Although the application has been made pursuant s.120 of the Fair Work Act 2009 (the Act) it is in reality an application to vary the severance pay entitlements arising from provisions that have been preserved by a modern award.

[9] The Clerks (South Australia) Award 3 (the State award) is a former instrument of the Industrial Relations Commission of South Australia (the IRCSA).

[10] The redundancy provisions of the State award have been preserved by virtue of clause 14.5 of the Clerks Private Sector Award 2010 4 (the modern award) and other statutory transitional provisions.

[11] Clause 14.5 of the modern award provides as…

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.

Continue reading Company P v D.S

Details

AGLC: Company P v D.S [2014] FWC 4673
Case: [2014] FWC 4673
Decision Date: 1 AUGUST 2014

CaseChat Overview and Summary

In the case of Company P v D.S, the applicant sought an order varying the amount of redundancy payments due to the respondent, D.S. The application was grounded in the applicant's alleged inability to pay the full amount of redundancy entitlements. The dispute was heard in the Fair Work Commission. The Commission was tasked with determining whether the applicant's incapacity to pay justified a variation of the respondent's redundancy entitlements under the applicable award.

The primary legal issue before the Commission was whether the employer's financial difficulties could serve as a basis for reducing the respondent's redundancy payments. The Commission had to consider whether the employer's inability to pay constituted a legitimate ground for varying the entitlements as set out in the applicable modern award, which preserved the redundancy provisions of the National Payroll System Agreement (NAPSA). The Commission needed to assess whether the applicant had demonstrated a genuine inability to pay the full amount of the redundancy entitlements as required by the relevant provisions.

In reaching its decision, the Commission examined the evidence presented regarding the applicant's financial position. The Commission found that the applicant had not demonstrated a sufficient basis for reducing the respondent's redundancy payments. The evidence did not convincingly establish that the applicant was unable to pay the full amount of redundancy entitlements as mandated by the award. Consequently, the application was dismissed. The Commission concluded that the employer's financial difficulties did not justify a variation of the respondent's redundancy entitlements.

Orders