Epichealth Pty Ltd T/A Epichealth Medical Clinic - Yarra Glen v Lily Somers

[2024] FWC 3531

[2024] FWC 3531

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

Epichealth Pty Ltd T/A Epichealth Medical Clinic – Yarra Glen
v

Lily Somers

(C2024/8492)

COMMISSIONER MIRABELLA MELBOURNE, 18 DECEMBER 2024

Variation of redundancy pay

1. On 29 November 2024, Epichealth Pty Ltd (the company) applied for an order under s.120 of the Fair Work Act 2009 (the Act) to reduce the redundancy entitlement of Ms Lily Somers. Ms Somers has been employed in the position of a medical receptionist in the company’s medical centre since March 2022.

1. Ms Somers will have worked for the company for just over two years and there is no dispute that she would be entitled to 6 weeks redundancy pay pursuant to s.119 of the Act.

1. The company has applied to reduce Ms Somers’ redundancy pay entitlement to nil because it negotiated with the prospective new owner of the business to offer employment to all existing staff, including Ms Somers. It contends that this is ‘other acceptable employment’ for the purposes of s.120(1)(b)(i). In response to directions in this matter, Ms Somers replied ‘after reading through the material that has been provided by Peggy, I do not wish to provide any further evidence’. That is, she did not contest the submissions of the company.

1. Section 120 of the Act gives the Fair Work Commission (the Commission) the discretion to vary a redundancy pay amount to which an employee would otherwise be entitled under s.119 of the Act. Section 120 applies if the employee is entitled to an amount of redundancy pay under s.119 (s.120(1)(a)) and the employer either obtains ‘other acceptable employment’ or cannot pay the amount of the redundancy pay (s.120(1)(b)). The Commission’s discretion in s.120(2) to vary the redundancy pay to a specified amount (including a nil amount) that it considers appropriate can only be exercised if the conditions of s.120(1) are met. Where an order under s.120(2) is made, the reduced redundancy pay to which the employee is entitled will be the amount specified in the determination (s.120(3)).

1. In this matter, I need to consider whether the company obtained ‘other acceptable employment’ for Ms Somers and if so, whether I should exercise my discretion to reduce her redundancy pay.

Background

1. The company operates a medical centre at 1 Symonds Street Yarra Glen and sold the business to a new owner effective 1 December 2024.

1. The business will continue to operate as a medical centre at the same location.

Submissions

1. The company submitted that it obtained acceptable employment for Ms Somers within the meaning of s.120 of the Act. It said it obtained a suitable role as a medical receptionist in the medical clinic under the new ownership. They submit that the 6 weeks redundancy pay amount to which Ms Somers is entitled should be reduced to nil, because the new position will not cause any reduction in the terms and conditions of her employment and will be performed at the same location as her current position. Ms Somers does not dispute this submission.

Consideration

1. It is not in dispute that the company obtained other employment for Ms Somers. It engaged with discussions with the prospective new owner and the company submits that during these discussions the new owner agreed to offer employment to all staff on the same conditions as they were currently employed. Further, the company submits it sent a list of all staff to the prospective new owner and arranged a meeting with the new owner and all existing staff. Further, the new owner issued an Employment Agreement to Ms Somers. This is relevant because s.120 applies only where the employer obtains ‘other acceptable employment for the employee’; that is, Ms Somers must have been an employee when the offer was made.

1. The question of whether the other employment is ‘acceptable’ is an objective assessment. The ‘other employment’ may necessarily be different in some regard to the existing employment. In assessing whether other employment is acceptable, it is relevant to consider the differences between the existing employment and the role that has been offered by the company and accepted by Ms Somers.

1. Firstly, the location of the role is the same. Further, Ms Somers would be paid the same, would work the same number of hours, have the same title and do the same work.

1. Although, the ‘other employment’ offered does not need to be the same as Ms Somers’ job prior to the new ownership, it appears for all material purposes that it is. The question I need to answer is whether the other employment offered to Ms Somers by the company was objectively acceptable; that is, capable of being agreed to or suitable.

1. I find that the company did obtain ‘acceptable other employment’ for Ms Somers for the purposes of s.120(1)(b)(i) of the Act.

1. Having satisfied the requirements of s.120(1), I must now consider whether to exercise my discretion to reduce Ms Somers’ redundancy pay. In my view, and taking all the relevant matters into consideration, it is appropriate to reduce Ms Somers’ redundancy pay.

Conclusion

1. I am satisfied that the company obtained other acceptable employment for Ms Somers, and that in the circumstances I should exercise my discretion to reduce the redundancy pay to which she is entitled to nil.

1. An order will be issued separately reflecting this decision.

COMMISSIONER

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