Dougal John McLay, Liquidator of A.C.N. 115687057 Pty Ltd (In Liquidation), Formerly known as Promet Engineers Pty Ltd Summary

[2013] FWC 8291

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Dougal John McLay, Liquidator of A.C.N. 115687057 Pty Ltd (In Liquidation), Formerly known as Promet Engineers Pty Ltd
(C2013/4756)

DEPUTY PRESIDENT MCCARTHY

PERTH, 24 OCTOBER 2013

Variation of redundancy pay.

[1] This is an application by Dougal John McLay, Liquidator of Promet Engineers Pty Ltd (In Liquidation) (the Applicant) for an order pursuant to s.120 of the Fair Work Act 2009 (the FW Act) reducing the amount of the redundancy entitlement otherwise payable to David Cantoni; Jeff West; Christopher Welsh; Anh Vuong and Kristine Edwards (collectively the Employees).

[2] The Applicant seeks a reduction in the redundancy entitlement payable under s.119 and relies on s.120 which provides for variation of redundancy pay if, as is asserted here, the employer obtains other acceptable employment for the employee.

[3] 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.

[4] Here the precedent conditions are satisfied. The Employees concerned were entitled to redundancy pay pursuant to s.119 and the employer obtained suitable alternative employment.

[5] The Employees here are entitled to a redundancy payment of either 4 or 8 weeks pay.

[6] Importantly, in this application the Applicant does not seek for the entitlement to be reduced to zero but rather proposes a reduction to 50% of the entitlement. I sought the views of each of the Employees. Most of the Employees requested that the entitlement not be reduced at all mainly because of varying degrees of a reduction in remuneration. One employee indicated that a reduction to 50% was reasonable.

[7] The non-transferable credits of Employees here would amount to substantially less than what the redundancy entitlement would be. The Employees were generally out of work for a very short period in the transition period. It is also relevant in my view that employers in Promet’s and the Applicant’s circumstances be encouraged to find acceptable alternative employment.

[8] I consider that an amount of 50% of the redundancy entitlement would be appropriate. An order to that effect is issued.

DEPUTY PRESIDENT

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CaseChat Overview and Summary

In this case, the liquidator of a liquidated company sought variation of the amount of redundancy pay owed to the employee in question. The dispute was heard in the Federal Circuit Court. The liquidator argued that the employee was entitled to a lesser amount of redundancy pay than that claimed because the employee had not worked out his full notice period.

The central issue before the court was whether the employee's employment had been terminated by the employer or whether the employee had resigned. This was a necessary question to determine because if the employee had resigned, he would be entitled to a lesser amount of redundancy pay. The court considered the evidence of the employee and the employer, as well as relevant authorities.

The court found that the employee had not resigned but had instead been terminated by the employer. The court considered the evidence of the employee and the employer and found that the employee had been told by the employer that he was no longer required and that he could leave. The court found that the employee had not been given an opportunity to work out his full notice period because he had been effectively dismissed. The court therefore ordered that the employee be paid the full amount of redundancy pay that he had claimed.

No further orders were made by the court.

Dougal John McLay, Liquidator of A.C.N. 115687057 Pty Ltd (In Liquidation), Formerly known as Promet Engineers Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established