Converga Pty Ltd v Amanda Eastwood

[2014] FWC 2591

[2014] FWC 2591

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Converga Pty Ltd
v
Amanda Eastwood
(C2014/3251)

COMMISSIONER GREGORY MELBOURNE, 26 JUNE 2014

Variation of redundancy pay.

Introduction

[1] Converga Pty Ltd (Converga) provides a diverse range of services to businesses including a staff placement service. In November 2013 three staff placed with its client, ANZ, and located in the Esanda building in Spring Street in the Melbourne CBD, were told the building was to be redeveloped and would be vacated in the early part of 2014. In addition, as part of the relocation, only one of the three staff would have an ongoing position. The employees were also told Converga was prepared to assist them to find work elsewhere, and if other positions could be found within Converga the employees would also have the opportunity to express an interest in those positions.

[2] One of the employees, Ms Amanda Eastwood, who has been employed by Converga since June 2011, and located for most of that time at the Spring Street site, believes the changes mean her position has been made redundant and she is entitled to a redundancy payment. Under the relevant provisions in s.119 of the Act, given her age and length of service, she would have a redundancy entitlement equivalent to 6 weeks pay. However, Converga has made application under s.120 of the Fair Work Act 2009 (Cth) for a variation of its redundancy pay obligation to Ms Eastwood because it submits it has obtained other acceptable employment for her, even though she refused to take up this offer.

[3] Section 120 of the Act 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

The Issue to be Determined

[4] The following issues are to be determined in the context of this matter.

1. Has Converga obtained “other acceptable employment” for Ms Eastwood as defined in s.120 of the Act?

2. If so, is it appropriate to reduce the redundancy pay entitlement otherwise due to Ms Eastwood, and by what amount?

The Evidence and Submissions

[5] Converga submits Ms Eastwood entered into an employment contract with it in June 2011 which stated under the heading, “Position Details”:

“You will be employed as a Casual Customer Service Team Member, Level 2 – Year 1, initially reporting to the Customer Service Manager, Laky Evmorfias. Your title may vary from time to time as determined by site operational requirements. You are expected to be available to work in alternate locations. Your initial location is Vic Relief Pool.” 2

[6] It also submits two of its managers, Ms Lorraine Monteith and Mr Daniel Alexander, met with the three employees located at the Esanda building at 85 Spring Street in November 2013 to advise the building would be closing at the end of February 2014 as the site is to be redeveloped. The three employees were employed at that location by Converga on behalf of its client, ANZ. It submits each employee was advised at the time to look for work outside of the organisation, and that time off for interviews would be provided and paid for. It also submits Ms Eastwood, who was working as a receptionist, was advised of a vacant receptionist role close by at 55 Collins Street. It submits it was suggested she apply for the role but Ms Eastwood indicated she was not interested in that position, and had applied for another role outside of the organisation.

[7] Converga submits the employees also asked about the option of redundancy and were told Converga’s policy was to look to redeploy employees before any consideration of redundancy and redundancy payments.

[8] On 11 February Converga submits it again met with the employees at the Esanda building to confirm the roles would come to an end from close of business on 7 March and it would endeavour to find other employment for them. A further discussion took place with Ms Eastwood on 14 February, and there was discussion about an offer of work in the relief pool. It submits Ms Eastwood indicated she was interested in this role providing permanent work was guaranteed. It also understood Ms Eastwood continued to apply for positions outside of the organisation and attended several interviews.

[9] On 25 February it received an email from Ms Eastwood inquiring as to what was to happen when her placement at Spring Street finished on 7 March. She was advised if she had not obtained another position by then it proposed she be transferred to a position with its client, ANZ, located at 55 Collins Street. It submits Ms Eastwood then requested more details about the role and whether it was similar to her current position. She was subsequently provided with the following email on 27 February from Ms Lorraine Monteith, a Client Service Manager at Converga:

“Hi Amanda, 


We have made every attempt to ensure the most suitable alternative employment is arranged for you. 


We have compared various aspects of your existing and new role and matched them to be most similar, as detailed below: 


Position title: Will remain the same - 'Team Member' 


Duties: You will be performing administrative duties and all 'Key Accountabilities' will remain the same as outlined in your position description.

Pay: Will remain the same - There will be no change in your hourly rate of pay and you will continue to be paid under the Clerks - Private Sector Award 2010.

Hours of Work: Will be 8:00am - 4:30pm with a 1 hour lunch break. Currently 8.30am – 5pm.  


Employment type: Will remain the same - full time. Job security also remains the same as a part time employee. 


Seniority status: Will remain the same - non managerial role 


Skills and qualifications: Administrative type skills will be transferable and sufficient training will be provided as required.

Location: The new workplace will be within a 5 minute walk from the previous workplace. 


As you can see, the new position should barely have an impact to your current employment circumstances, given the roles being so similar. It will be a great opportunity for you to also expand your knowledge of the business and gain new skills.

If you have any further queries, please give me a call. 


Kind regards 
Lorraine” 3

[10] However, Ms Eastwood’s email response indicated “I don’t think this role is a suitably acceptable role for me, so will not be accepting this.” 4

[11] Further discussions took place on 3 March and again on the morning of 7 March with Ms Monteith and Mr Patrick Redmond and Ms Eastwood in an endeavour to establish what her intentions were. She was then sent a further email by Mr Redmond, a Senior Account Manager, late in the day on 7 March confirming Converga was offering her the role at 55 Collins Street and suggesting she take time over the long weekend to make up her mind about the offer and respond accordingly. This email was sent to her at work, as well as to her home address. However, Ms Eastwood did not respond and did not attend for work in the new role after the long weekend.

[12] Converga also submits a standard Team Member job description, which encompasses a range of duties employees can be required to perform, is available on its website. It also submits Ms Eastwood had been provided with details about the role at 55 Collins Street at an earlier point in time, and the email from Mr Redmond on the afternoon of 7 March was simply following up to try and clarify her position in response.

[13] Ms Eastwood submits she was employed by Converga as a concierge/receptionist at Esanda at 85 Spring Street. She confirmed she and the other two Converga staff members located at the Esanda building met with their Managers in November last year to discuss the closure of the Esanda building. She submits they were told Converga would endeavour to find work elsewhere, but they should also look externally and would be allowed to attend job interviews, and could be provided with referees, if necessary. Ms Eastwood submits she was already aware of a concierge role at 55 Collins Street with the ANZ, and believed it should have been offered to her. However, she was told she would need to apply for the role.

[14] She said further discussions took place in January 2014. She asked about redundancy at that time and was told Converga would not consider employees to be redundant in this situation, nor would they consider redundancy payments. However, she submits that in a further telephone discussion on 11 February she was told by Mr Redmond that redundancy would be offered, and discussions later took place about a payout figure being provided. However, on 14 February she was contacted by Ms Monteith and advised no redundancy payments would be made and, instead, other job roles would be offered.

[15] She said she then sent an email to Ms Monteith on 25 February to ask what was happening after 7 March, and was informed if she did not obtain another position she was to be offered the role at 55 Collins Street. She said that this was the first time she had heard of this offer and asked for a job description and details to be provided. She said she received a response two days later, but there was no job description attached, and the email simply confirmed the job title, duties, pay, hours of work, employment type and seniority would stay the same. The location would also be close by. She subsequently sent an email response on 28 February indicating she wouldn’t be accepting the role as it wasn’t a “suitably acceptable role for me.”

[16] She said she then had a further discussion on 3 March with her Managers in which the position at 55 Collins Street was offered, however, she then took some leave in that week and remained unsure about what positions, if any, were going to be offered to her. She confirmed a redeployment position was finally offered in the email from Mr Redmond she received late in the day on 7 March, but that this was “all too late” and she was not actually sure what the role involved.

[17] She concluded by indicating:

“Then on my last day, March 7 2014, I again had a meeting with Patrick and Lorraine, who claimed that the 2 roles were offered to me and that I didn't take them. I still refused to take a role that was not offered to me. Later that afternoon a redeployment letter was emailed to me by Patrick at 4.4Spm -15 minutes before my role was redundant. This was something that should have been sent weeks before. I was asked to reconsider my option of leaving and to think about it over the weekend. I replied stating that as the matter was now being dealt with by the Fair Work Commission that I could not comment and that I would be waiting for the decision from the Fair Work Commission. As I had already emailed on February 28 2014 stating I wouldn't be accepting the role, I believe I didn't have to tell them again.” 5

Consideration

[18] The requirements associated with the provisions now contained in s.120 of the Act have been considered in a number of previous decisions of the Tribunal. Firstly, the question of what “obtains” requires was considered by a Full Bench in Australian Chamber of Manufactures v Derole Nominees 6. It held, firstly, it cannot mean obtain “in the fullest sense possible” because one employer is incapable of affecting a contract of employment with its employees and another employer, and the word must be given “some lesser meaning.” The Full Bench concluded:

“Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer's ability to "obtain" alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.” 7

[19] In Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai 8 Vice President Lawler also expressed the view that the word “obtains,” in the context of s.120, should be given a very broad interpretation.

[20] The tests to be applied in determining what is “acceptable alternative employment” are also well established. It is, firstly, a test to be applied objectively and not just by whether the employee wishes to take on the alternate role being offered. “Acceptable” also means it must meet the relevant standard. The decision in Derole Nominees found the work being of like nature, the location, pay arrangements, hours of work, seniority, fringe benefits, workload and job security are all relevant considerations in this context.

[21] The onus of establishing that the alternative is acceptable also rests with the employer, and the Commission may remove a redundancy benefit obligation entirely, or may instead reduce it. I am also satisfied it does not require the new employment to be identical, or for it to be broadly comparable. In this context I note the findings of Senior Deputy President Watson in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 9 in the following terms:

“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.” 10

[22] VP Lawler also found in Datacom that:

“Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.” 11

[23] There are several matters that I consider relevant to the determination of this matter, having regard to the authorities referred to. Firstly, Ms Eastwood was originally employed under the terms of the contract of employment that stated she could be “expected to be available to work in alternate locations.” This requirement reflects Converga’s business of placing employees in its clients’ businesses, and then being required to change those arrangements when client requirements change.

[24] Secondly, Ms Eastwood and two other employees were told in November last year that their placement at the Esanda building in Spring Street would conclude at the end of February because the building was being redeveloped. They were also told they would be assisted to find work elsewhere, but could also remain with Converga if positions became available. Two of the three employees, apart from Ms Eastwood, have in fact continued to be employed by Converga.

[25] A series of meetings and informal discussions then occurred in the early part of 2014. I accept Ms Eastwood was advised at one stage in these discussions that redundancy could be an option as a result of her current placement coming to an end, although it is also clear this option was shortly after taken “off the table” following the involvement of Mr Parks.

[26] Ms Eastwood also indicated she was never provided with specific details about any alternate position being offered to her by Converga and it was only late in the day on her last day at the Spring Street location that it was confirmed she had been offered a position elsewhere, namely with the same client, ANZ, at a location nearby at 55 Collins Street.

[27] I have no reason to doubt Ms Eastwood felt the role and responsibilities associated with the position at 55 Collins Street had not been set out and discussed with her in precise detail. However, I am also satisfied she was provided with some details about the role, and an offer to take up that opportunity, well before 7 March. I refer, in particular, to the email sent to her on 27 February from Ms Lorraine Monteith, which set out the details about position title, duties, pay rate, hours of work, employment type, seniority status, skills and qualifications and location. I also note Ms Eastwood responded to the email by indicating, “I don't think this role is a suitably acceptable role for me, so will not be accepting this.” 12

[28] It also appears that had Ms Eastwood shown interest in this opportunity she would have been able to obtain more detail about what was involved, before making a final decision about whether to take up the offer or not. However, given her response to the email, indicating she would not be accepting the offer, this did not eventuate.

[29] Section 120 of the Act requires that “acceptable employment” be obtained. I am satisfied the offer of work at 55 Collins Street falls into this category, given it involved the same rate of pay, similar hours of work, the exercise of similar administrative skills, and was at a location within five minutes walk of where she was previously situated. I am also satisfied that despite Ms Eastwood’s rejection of this offer Converga have satisfied the requirement to “obtain” this position for her and it would, in fact, have continued to be her employer, if accepted.

[30] I have also referred to the authorities that have established what constitutes “acceptable alternative employment” is a test to be applied objectively, and is not based simply on whether the employee wishes to take on that role or not. Those authorities have also confirmed that factors such as the work being of like nature, the location, pay arrangements, hours of work, seniority, fringe benefits, workload and job security are all relevant considerations in this context. However, it need not necessarily be identical employment, and might be on terms that are less advantageous to that of the redundant position. In all the circumstances of this matter I am satisfied the work was directly comparable to Ms Eastwood’s previous responsibilities, and was work that had been obtained by her employer. It also provided an ongoing opportunity to continue to be employed by Converga at a location close by to where she had been previously working. However, Ms Eastwood declined to take up this opportunity as evidenced by her response to the email from Ms Monteith sent to her on 27 February 2014.

[31] I am accordingly satisfied the test of what is “acceptable alternative employment” has been satisfied. In addition, given that the pay rates were to be the same and her continuity of employment preserved had Ms Eastwood taken up the offer, I am satisfied in all the circumstances Converga should be relieved of any obligation to make redundancy payments to Ms Eastwood. An order to this effect will be issued.

COMMISSIONER

Appearances:

Mr Joseph Yusnanda appeared on behalf of the company.

Ms Eastwood appeared on her own behalf.

Hearing details:

2014.

Melbourne and Sydney:

3 April.

 1   Fair Work Act 2009 (Cth) at s.120

 2   Amanda Eastwood Signed Contract, provided in email from Joseph Yusnanda to the Chambers of Commissioner Gregory received 13 March 2014

 3   Email correspondence from Lorraine Monteith to Amanda Eastwood dated 27 February 2014, provided in email from Joseph Yusnanda to the Chambers of Commissioner Gregory received 13 March 2014

 4   Email correspondence, details not supplied, provided in email from Joseph Yusnanda to the Chambers of Commissioner Gregory received 13 March 2014

 5   Submissions of the Respondent, undated

 6 (1990) 140 IR 123

 7   Ibid

 8   [2013] FWC 1327

 9   PR974699

 10   Ibid at [89]

 11   [2013] FWC 1327 AT [9]

 12   Above n. iv

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