Er 24 Pty Ltd T/A Er 24 v Mr Jay Kumudchandra Dave

[2017] FWC 387

[2017] FWC 387

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

ER 24 Pty Ltd T/A ER 24
v
Mr Jay Kumudchandra Dave
(C2016/5754)

COMMISSIONER SPENCER BRISBANE, 26 MAY 2017

Variation of redundancy pay.

[1] This Decision arises out of a number of applications made by ER 24 Pty Ltd (the Applicant) for orders varying redundancy pay said to be payable to a number of former employees. These reasons should be read in conjunction with my substantive reasoning in ER 24 Pty Ltd T/A ER 24 v Ms Susan Mary Berthun [2017] FWC 383 1. That decision is issued with, and forms part of, each of the decisions of the Respondents who were employed as security. That decision also includes the submissions of ER24 relevant to the Respondent in these matters. Mr Dave made individual submissions as below.

Applicant’s submissions

[2] The Respondent, Mr Dave, was employed by the Applicant in a full-time security position at Hay Point Mine paid an hourly rate of $28.00 per hour.

[3] The Security Services Industry Award 2010 (the Award) applied to the Respondent’s employment.

[4] The Respondent had served two (2) years and 2.5 months’ service with the Applicant.

[5] Due to the Respondent’s length of service being more than two (2) years but less than three (3) years the Respondent is entitled to six (6) weeks redundancy payment. Based on the Respondent’s base rate of pay and their ordinary hours worked the redundancy payment would equate to $7,056.00.

[6] Further, the Applicant submitted that, in addition to the list of steps above, they took the following steps in obtaining other employment:

“b. Email correspondence from the Applicant to the Respondent as per the attachment marked TW54 in Mr Wicht’s Affidavit which provides that the positions for CPA or MSS must be applied for directly through the Seek advertisements and that there is no missing requirements for the Respondent’s transfer to CPA or MSS;
c. In email correspondence from the Applicant to Mr Lawton of CPA the Applicant enquired whether CPA had received an application from the Respondent as set out in Mr Wicht’s Affidavit as per attachment marked TW99;
d. In email correspondence from Mr Lawton from CPA to the Applicant Mr Lawton advised that the application from the Respondent has now been received as set out in Mr Wicht’s Affidavit as per attachment marked TW100; and
e. The Applicant received confirmation from CPA that the Respondent had obtained acceptable alternative employment with CPA as per attachment marked TW102 in Mr Wicht’s Affidavit.”

[7] The Applicant provided details of the other employment as follows:

“a. Full-time security position;
b. Located at Hay Point Mine;
c. The Applicant has made every reasonable enquiry as commercially permissible and made a great effort in verifying the rate of pay. The draft orders sought in relation to this will illuminate and verify the Applicant’s submission that the Respondent is on or around $28.00 per hour base rate of pay with CPA;
d. The Respondent works 84 hours per fortnight as required by the BMA contract; and
e. The duties the Applicant believes the Respondent undertakes with CPA based on the scope of service for the unsuccessful BMA tender is as follows:

i. Execute site access duties through the effective use of the company’s training and access management systems (TAMS);
ii. Maintain high level customer service throughout interactions with site personnel and visitors;
iii. Complete and communicate all scheduled and requested TAMS reports to the sites;
iv. In cases of security threats act within the accountabilities of the respective sites security processes;
v. Fulfil front of house accountabilities during site closures and emergency activations;
vi. Execute patrols of the sites boundary and internal facilities; and
vii. Monitor sites CCTV network.”

Respondent’s submissions

[8] The Respondent provided the following submission to the Commission:

“I was employed by ER24 as a Full Time/Permanent Site Access Controller/Security Guard at BMA Saraji Coal Mine and commenced work on 27th May 2013 then later transferred as a Full Time/Permanent Security Guard to BMA Coal Terminal at Hay Point until 30th June 2016. I was working a 7 day on/7 day off [84, hour roster]. Employed by ER24 for a total period of 3 years and 1 month.

When I commenced working for ER24 my pay rate was $31.00 per hour then this rate was reduced to $28.00 per hour.

After working for ER24 for over 3 years I am entitled to 7 weeks Redundancy pay.

ER24 upon losing the contract on all BMA mine sites ER24 did not assist us in finding new employment or help in securing a position with Corporate Protection Australia(CPA) the Security company that took over from ER24, I approached CPA Australia and applied for employment with them online from seek.com.au, Proof of that application also attached with this letter.

I also have included a copy of my Tax Group Certificate for your review. The group certificate caused some confusion when doing my tax this year I discover that the “Type Box” you can see it is marked with a “R” this means I was made a lump sum payment of Redundancy by ER24. This was not the case. I was only paid my annual leave, there was no redundancy payment of any kind made.

I am entitled to a “Redundancy” 7 weeks pay as per contract states.
I have attached last two(2) payslips and a copy of my last Tax Group Certificate with ER24 to this letter.”

Summary of Applicant’s material in reply

[9] The Applicant refuted the Respondent’s allegation that they “did not assist or help in securing a position with [CPA]”.

[10] The Applicant referred to the Affidavit of Mr Hendrik Mare, Project Manager of the Applicant, as evidence that the Applicant directed time and resources to assisting the Respondents in securing acceptable alternative employment with CPA. Mr Mare stated as follows:

“7. On or around 23 May 2016 I attended a meeting with Mr Matt Willis, Director, Mr Chris Wicht, Director, Mr Jason Scott, General Manager, Mr Tommy Wicht, Human Resources/Accounts, Mr John Hickson, Operations and Training Coordinator, Mr Hans Wicht, Head of Resource and Logistics (Head Office Meeting).

8. The purpose of the Head Office Meeting was to discuss and implement the demobilisation plan to ensure a smooth transition for ER24 employees to obtain acceptable alternative employment with the new providers.

9. During the Head Office Meeting Mr Willis directed me and Mr Hickson to visit each mine site and conduct face-to-face information sessions with every employee affected by the unsuccessful tender.

10. ln the Head Office Meeting, Mr Willis directed me that my main priority from that day until the end of the BMA contract on 1 July 2016 was to keep our employees up to date with any developments in obtaining alternative employment with the new providers and to answer any questions the employees may have.”

[11] Further, the Applicant submitted that it emailed to the Respondent a copy of the information sessions held by the Applicant and further reiterated there were no missing requirements for the transfer of their employment to CPA.

[12] The Applicant refutes the argument that they were not involved in the Respondent’s new position with CPA, as there was regular correspondence with CPA, Ms Millwood and Mr Lawton regarding the Respondents and the application process in securing acceptable alternative employment with CPA.

[13] The Applicant admitted that CPA and the Applicant are not related business entities and submitted that no material submitted by the Applicant suggests that this may be the case.

[14] The Applicant submitted that the Respondent has discounted the great lengths the Applicant went to ensure that the Respondent was provided with acceptable alternative employment with CPA within the commercial realities (unbeknownst to the Applicant) their efforts were being severely undermined simultaneously by the actions of BMA. In this respect, the Applicant submitted as follows:

“In the Respondent’s submissions, they have provided email correspondence from BMA that was sent directly to the Respondent on 21 May 2016 without the prior consent of the Applicant (while the Respondent was in employment with the Applicant). The BMA correspondence contained a link to apply to CPA via their seek advertisements.

Given that BMA advised the Applicant of the unsuccessful tender on or around Monday 16 May 2016 and did not seek the Applicant’s consent prior to sending same, the Applicant considers this action of BMA undermining their efforts to secure acceptable alternative employment with CPA.

As per Mr Willis’ Affidavit, the Applicant advised BMA that they wish to work with the incoming providers in order to assist the Respondents in obtaining acceptable alternative employment. At no time did BMA advise the Applicant that they were intending on providing links to jobs with the incoming providers directly to the Respondent.”

[15] The Applicant submitted that the Respondent has transferred employment at the same location, on relatively the same pay as with the Applicant, has had her entitlements paid out by the Applicant and was arguing that redundancy payment is due and owing to what was essentially a ‘shirt swap’.

[16] The Applicant noted that, on the Respondent’s materials, Mr Rodney Norris from BMA had sent directly to the Respondent (without the Applicant’s consent) information pertaining to the job opportunities at CPA and submitted that this action undermined the considerable efforts made by the Applicant in diverting their head office management team exclusively concentrating their time and attention to securing the Respondent(s) employment with the incoming providers.

[17] The Applicant submitted that Mr Wicht’s Affidavit (at [68]) provides that the Applicant emailed Mr Lawton of CPA specifically following up whether CPA had received the Respondent’s application and whether they were proceeding to offer the Respondent employment.

[18] The Applicant submitted that they enquired with CPA a list of the Respondents that had applied and been offered a position with the Applicant as evidenced at paragraph 73 of Mr Wicht’s Affidavit. It was submitted that CPA confirmed that the Respondent did apply and was subsequently offered a position with them.

[19] The Applicant submitted as followed in relation to the Respondent’s group certificate:

“10. In relation to the reference to the Respondent’s group certificate, in the event that the Commission finds that redundancy is payable, the Applicant is required at law, to indicate on the group certificate that the pay out of annual leave was in relation to a redundancy payment. In the event that the Commission agrees that redundancy is not payable due to the ordinary and customary turnover of labour, the Applicant will consult with their Accountant and re-issue any group certificates as necessary. In the event that the Commission finds that redundancy payment is due and is varied to a reduced amount or nil, the Applicant is of the view that the group certificate is accurately recorded as payment type “R” as the unused annual leave paid out on termination of employment is due to the position ending due to the non-renewal of the BMA Contract.”

[20] The Respondent’s individual employment contract is extracted as follows:

“14. Termination
14.1. This Agreement may terminate or be terminated in the following circumstances:
(a) By the Employer without notice if the Employee engages in:

(x) The Employer's contract with the operator of the Nominated Mine Site is varied or comes to an end;

...

(b) This Agreement will terminate automatically if either of the following occur:

(i) The Employer's contract with the operator of the Nominated Mine Site is terminated or comes to an end.”

[21] The Applicant submitted that the Respondent was aware that their employment was dependent on the Applicant’s on-going contract with the mine site operator.

Conclusion

[22] On the reasoning provided in the decision of Ms Berthun, I find that there is no entitlement to redundancy pay under s.119. The effect of clause 12.5(b) of the Award is that s.119 does not apply.

[23] Accordingly, on the evidence before the Commission, the Respondent has agreed to other acceptable employment with an incoming contractor and the Applicant has paid to the Respondent his accrued statutory and award entitlements on termination of the Respondent’s employment.

[24] The Commission is objectively satisfied that the employment with the incoming contractor is “other acceptable employment” on the basis that Mr Dave’s current employment is substantially the same as his previous employment with ER24, as he is working similar hours at the same rate of pay, with similar duties. It is clear on the basis of the authorities I have summarised in Berthun that the enquiry is not whether the employee in question considers the employment acceptable, but rather, whether it is objectively acceptable. There is, on the evidence, a difference between the two positions in some respects. On fine balance, I am satisfied that the new employment is other acceptable employment with the incoming contractor that has been agreed to by Mr Dave.

[25] I Order accordingly.

COMMISSIONER

 1   A copy of the decision (PR589518) was provided to the Respondent by email.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR589522>