DECISION

Fair Work Act 2009
s.120—Redundancy pay

Coolabah Landscapes
v
C Cooper
(C2015/1203)

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT WATSON	MELBOURNE, 27 FEBRUARY 2015

Variation of redundancy pay – application dismissed.

[1] On 13 January 2015, Coolabah Landscapes applied, pursuant to s.120 of the Fair Work Act 2009 (the Act), to vary redundancy pay in respect of Mr C Cooper, an employee engaged under the Building and Construction General On-site Award 2010 [MA000020] (the Building Award).

[2] On 16 January 2015, I wrote to Coolabah Landscapes (copied to Mr Cooper) indicating that it was my preliminary view that the Fair Work Commission (the Commission) did not have power to vary redundancy entitlements arising from the Building Award, setting out my reasons for that view, and inviting Coolabah Landscapes and Mr Cooper to consider and respond to my preliminary view by 30 January 2015.

[3] On 21 January 2015, Mr Cooper responded with some questions which were addressed in correspondence of my Associate of the same date.

[4] Since no response was received from Coolabah Landscapes, I wrote to the company (copied to Mr Cooper) again on 3 February 2015, referring to my 16 January 2015 correspondence. I indicated that in the absence of a response by 11 February 2015, I would publish a decision dismissing the application on the basis that there was no power for the Commission to make the order sought for the reasons set out in my 16 January 2015 correspondence.

[5] On 3 February 2015, Coolabah Landscapes responded advising that it had not seen my 16 January 2015 correspondence, until shown a copy by Mr Cooper, explaining the redundancy and advising that as Coolabah Landscapers then employed less than 10 people, “fairwork” had indicated that it did not have to pay redundancy.

[6] I responded on 4 February 2015 (copied to Mr Cooper) reiterating the concerns about the power of the Commission to make the order sought expressed in my 16 January 2015 correspondence, adding my view that the exclusion within s.121 of the Act from the obligation to pay redundancy entitlements under s.119 in respect of a small business does not arise in respect of an entitlement arising from an Industry Specific Redundancy Scheme in a modern award.

[7] I sought advice from Coolabah Landscapes by 11 February 2015 if it wished to:

● discontinue its application made pursuant to s.120 of the Act;

● continue the application and advise me that it accepts the proposition that s.120 of the Act does not provide power for the Commission to vary redundancy entitlements arising from clause 17—Industry Specific Redundancy Scheme of the Building Award, in which case I would issue a decision dismissing the applications for want of power/jurisdiction; or

● challenge the proposition that s.120 of the Act does not provide power for the Commission to vary redundancy entitlements arising from the Industry Specific Redundancy Scheme in clause 17 of the Building Award, by making written submissions setting out the basis upon which Coolabah Landscapes challenges the proposition.

[8] No response was received from Coolabah Landscapes by 11 February 2015.

[9] On 16 February 2015, a final opportunity was provided, through correspondence from my Associate for Coolabah Landscapes to respond, by 25 February 2015.

[10] In the absence of a response, I presume Coolabah Landscapes presses its application and in those circumstances, I now determine the application.

[11] The application by Coolabah Landscapes seeks, under s.120 of the Act, to vary redundancy entitlements of Mr Cooper. Mr Cooper is an employee engaged under the Building Award. That proposition has not been contested by Coolabah Landscapes which, according to its web-site, are Registered Building Practitioners with the Victorian Building Authority. 1

[12] In my view, the Commission does not have power under s.120 of the Act to vary redundancy entitlements arising from the Building Award.

[13] Sections 119 and 200 of the Act are relevant to the application. Sections 119 and 200 of the Act are found in Subdivision B – Redundancy pay of Division 11 – Notice of termination and redundancy pay of Part 2–2—The National Employment Standards of the Act.

[14] Section 119 of the Act prescribes the entitlement of an employee to be paid redundancy pay in specified circumstances of redundancy under the National Employment Standards (NES), with a scale of redundancy payments based on continuous service with the employer on termination.

[15] Section 120 of the Act provides for 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.”

[16] It may be noted from s.120(1) that s.119 (the power of the Commission to vary redundancy pay arising from the NES in s.119) applies if an “employee is entitled to be paid an amount of redundancy pay by the employer because of section 119”. It may be further noted from s.120(3) of the Act that s.120 affords the Commission a power to reduce the “amount of redundancy pay to which the employee is entitled under section 119”. [emphasis added]

[17] Subdivision C imposes limits on the scope (and operation) of Division 11 – Notice of termination and redundancy pay of Part 2–2 —The National Employment Standards of the Act. Relevantly, s.123(4) provides that Subdivision B – Redundancy pay of Division 11 does not apply to “an employee to whom an industry-specific redundancy scheme in a modern award applies” (in s.123(4)(b)).

[18] This means that the entitlement to redundancy pay under s.119 of the Act, as a result of the NES, and the power under s.120 of the Act to vary that NES entitlement (both of which are in Subdivision B (Redundancy pay) of Division 11) does not apply to “an employee to whom an industry-specific redundancy scheme in a modern award applies”.

[19] Clause 17 of the Building Award provides an “Industry specific redundancy scheme”. The “Industry specific redundancy scheme” was included by the Australian Industrial Relations Commission Award Modernisation Full Bench when making the Building Award. 2

[20] It follows that the entitlement to redundancy pay of employees to whom the Building Award applies arises from clause 17 of the Building Award and not from the NES entitlement in s.119 of the Act.

[21] As a result, the Commission has no power to vary redundancy entitlements of employees to whom the Building Award applies under s.120 of the Act. The power to vary a redundancy pay entitlement under s.120 of the Act only arises in respect of an employee who is entitled to be paid an amount of redundancy pay by the employer because of s.119 and s.120 provides a power to reduce the amount of redundancy pay to which the employee is entitled under s.119.

[22] I further note that the exclusion, in s.121 of the Act from the obligation to pay redundancy pay under the NES, in s.119 in respect of a small business employer also does not apply in respect of redundancy entitlements which arise from the Industry specific redundancy scheme in clause 17 of the Building Award and not from the NES in s.119 of the Act. There is no similar exclusion in clause 17 of the Building Award.

[23] On the basis of the analysis of the relevant parts of the Act above, I find that s.120 of the Act does not provide the Commission with power to vary the redundancy pay entitlements under the Building Award of Mr Cooper and must be dismissed on that basis.

SENIOR DEPUTY PRESIDENT

1 [2009] AIRCFB 345, at paras 75–82.

Printed by authority of the Commonwealth Government Printer

Coolabah Landscapes v C Cooper

[2015] FWC 1337

27 FEBRUARY 2015

DECISION