ER 24 Pty Ltd T/A ER 24 v Mr Stephen John Brown

Case •

[2017] FWC 397

•

26 MAY 2017

No judgment structure available for this case.
[2017] FWC 397
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 Stephen John Brown
(C2016/5769)

COMMISSIONER SPENCER

BRISBANE, 26 MAY 2017

Variation of redundancy pay – multiple applications – changed basis of application – ordinary and customer turnover of labour.

Introduction

[1] This Decision relates to an application made under s.120 of the Fair Work Act 2009 (Cth) (the Act) for a variation to redundancy pay. The application has been made by ER 24 Pty Ltd T/A ER 24 (the Applicant). The Applicant filed 29 applications, relating to 15 former security employees and 14 former paramedic employees. This Decision relates to one of the applications, in respect of Mr Stephen John Brown, a former paramedic employee. However, there is some commonality between the Decisions based on the material. This decision [2017] FWC 397 provides the substantive reasoning for the individual decisions of the 14 former paramedic employees as referred to in each of those decisions issued separately, and therefore this decision also sets out the applicable legislation and principles, and forms part of each of the decisions of the paramedic employees.

[2] The Applicant has made these application’s pursuant to s.120(1)(b)(i) of the Act, on the basis that the Respondents have an entitlement to redundancy pay but that the Employer had obtained other acceptable employment for the Respondents.

Orders to Produce – Refused

[3] Directions were set for the Applicant to file their material in relation to s.120(1)(b)(i) of the Act. The Applicant then made applications for Orders Requiring Production of Documents for the Respondents to produce information regarding their new employment. The Applicant sought the following documents from the Respondents:

  • The two (2) latest pay slips of the Respondent;


  • The letter of offer issued to the Respondent from their new employer;


  • The Employment Contract between the Respondent and their new employer; and


  • The list of the duties undertaken by the Respondent in their new position.


[4] Initially, the main issue to be determined in this matter is whether the Applicant employer has obtained other acceptable employment for the relevant Respondent employees and not whether the employees have been successful in otherwise obtaining employment. I refused to grant the Orders, noting that the onus is on the Applicant to make out their case in the first instance; that is that the Applicant has obtained other acceptable employment for the Respondent parties, and the specific circumstances of that other acceptable employment. In seeking these Orders, the Applicant was effectively asking the Respondents to discharge the Applicant’s onus, to make out their case.

Section 120(1)(b)(i)/Section 119(1)(a)

[5] At the subsequent time of filing submissions and contrary to the applications that were filed, the Applicant stated that they have filed the applications on the basis that there was no entitlement to redundancy pay under s.119(1)(a) of the Act, due to the terminations being a result of the ‘ordinary and customary turnover of labour’.

[6] It is well settled that the Commission’s power to vary redundancy pay under s.120 of the Act is only enlivened if an employee is entitled to be paid an amount of redundancy pay by the employer because of s.119 of the Act. However, section 119 of the Act provides for an exception to an entitlement to redundancy pay (the Exception) where the termination was due to the ordinary and customary turnover of labour. The Applicant, in their submissions, argued that all of Respondents are not entitled to redundancy pay due to the fact that the terminations of employment were due to the ordinary and customary turnover of labour.

[7] Somewhat unusually, by arguing that the terminations were due to the ordinary and customary turnover of labour, the Applicant was asking the Commission to find that the pre-requisites for their own application under s.120 had not been met and, as argued on behalf of some Respondent’s, there was no jurisdiction in relation to the applications.

[8] In the alternative, the Applicant requested that, if the Commission does not find that the terminations were due to ordinary and customary turnover of labour (and consequently that there is an entitlement to redundancy pay under s.119), the Commission reduce the amount of redundancy pay.

[9] Therefore, the Applicant was now conducting its application under s.120 such that it is seeking a determination from the Commission as to whether there is an entitlement to redundancy pay under s.119, or, whether the terminations were due to the ordinary and customary turnover of labour. This was not canvassed in the original applications, nor was permission sought from the Commission to amend their original applications; the Applicant simply provided submissions seeking an alternative determination than that sought in their application.

[10] These matters have required multiple sets of Directions, involving 29 Respondents and with some complexity to manage given the Applicant’s altered arguments, and in circumstances where there were a large number of unrepresented Respondents (only 5 of the 29 Respondents had representation.) Therefore the Applicant has been permitted to run their (altered) argument, and sought submissions from the Respondents in respect of ordinary and customary turnover of labour. The alternative course would have potentially meant another application, service of that on the 29 Respondents, and further delay for the Respondents.

[11] The Applicant has, in their final submissions in reply in respect of the issue of ordinary and customary turnover of labour, somewhat incongruously, indicated that if the Commission finds that the terminations were due to ordinary and customary turnover of labour, the Applicant will withdraw the applications and commence an application under s.739 of the Act.

[12] It is noted that if the Applicant had believed that there was no entitlement to redundancy pay under s.119 (as they are now arguing), a more appropriate course for a determination as to that entitlement would have been under a dispute application under s.739 of the Act, prior to the Respondents’ employment finishing, where the Commission may consider an entitlement under an Award or the NES. To be clear on what has been a further possibly proposed course by the Applicant, given the absence of any previously raised dispute in relation to the exception, and that the employment relationships between the Applicant and the Respondents have ended, the opportunity to commence a dispute under the appropriate procedure, resulting in a s.739 application, has been lost.

[13] As stated above, multiple Directions were required, including specifically in relation to the issue of ordinary and customary turnover of labour (as per the prior reasoning).

[14] The Directions were set for the Applicant to file their submissions in relation to the application under s.120(1)(b)(i), the Respondents to file their responses, and the Applicant to file material in reply.

[15] After the Applicant raised this new argument of ordinary and customary turnover of labour in their submissions, an opportunity was provided, by way of a further Direction, for the Respondents (given they were mainly unrepresented) to file their responses to this argument. A recent Full Bench authority on the issue; Compass Group (Australia) Pty Ltd v National Union of Workers; United Firefighters' Union of Australia (Compass) 1 and a previous Decision of the Commission as currently constituted, which was relied on by the Applicant in their submissions; Kilsby v MSS Security Pty Ltd T/A MSS Security (Kilsby).2 Accordingly, these were brought to the parties attention, and links to access these Decisions were provided.

[16] The Applicant was given an opportunity to file submissions in response, but, despite being provided with the link to the Compass Decision, did not specifically address the Full Bench authority in Compass, their submissions relied on the Kilsby Decision, which was released prior to the Full Bench Decision.

[17] Further, in their submissions in reply with respect to one of the Respondents, the Applicant invited the Commission to further Direct them to file evidence in relation to dismissing employees at the end of their contracts, which was a relevant consideration in the Compass Full Bench Decision. On this issue, in order that the Applicant could present their case (as per their request to the Commission for further Directions) and make any further submissions, it was confirmed that, in lieu of setting any further Directions, these matters were listed for hearing by telephone. Once this course was confirmed, the Applicant then indicated that they did not wish to make any further submissions. It was confirmed that to bring this matter to finality, the hearing would proceed. The hearing was recorded and a copy of the transcript provided to all parties. Those unable to attend the hearing were provided with an opportunity to respond to any matters raised at the hearing, via the transcript.

Background

[18] The Applicant has applied to the Fair Work Commission (the Commission) seeking to have the redundancy entitlement of Mr Stephen John Brown (the Respondent) and others reduced to nil. In the Form 54A - Application to vary redundancy pay filed by the Applicant, the Applicant stated that the Respondent had been employed on a full-time basis with the Applicant for 2 years and 2.5 months, and is entitled to 6 weeks redundancy pay. The application states that the entitlement to 6 weeks redundancy gives an amount, which is sought to be varied to nil, of $11,539.08.00 (less any applicable tax).

[19] The Applicant provides security, emergency response, nursing and paramedic employees to various mine sites and tender for their contract work.

[20] The Applicant had a number of their employees employed at seven (7) Billiton Mitsubishi Alliance (BMA) mine sites. The contract for the BMA mine sites was for a period of approximately three (3) years.

[21] On or around 16 May 2016, BMA advised the Applicant that they were unsuccessful in securing the ongoing tender for their BMA mine sites’ contracts and that the Applicant’s services on the BMA mine sites would end on 30 June 2016.

[22] The Director of the Applicant sent an email, dated 16 May 2016, to all affected employees notifying them that the Applicant would hold the BMA contracts and be ‘on site’ until 1 July 2016.

[23] The new providers of services at the BMA sites were CPAG Health and Medical and Security (CPA) and MSS Strategic Medical and Rescue (MSS).

Relevant Award and legislative clauses

[24] The Respondent’s employment was covered by the Ambulance and Patient Transport Industry Award 2010 3 (the Award). The Applicant provided the Respondent’s were employed under individual contracts of employment. The individual contracts referenced that the employment of the Paramedic employee’s was classified according to the Schedule in the Award.

[25] Clause 12 of the Award deals with redundancy. Clause 12.1 states as follows:

    “Redundancy pay is provided for in the NES”.

[26] The Award applicable to the Paramedic employees does not contain an exception to s.119 of the Act to account for contractual changes as does the Security Services Industry Award 2010 (Cth) applicable in other matters.

[27] The National Employment Standards (NES) prescribe the minimum entitlements to redundancy pay pursuant to s.119 of the Act:

119 Redundancy pay

    Entitlement to redundancy pay

    (1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

      (a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

      (b) because of the insolvency or bankruptcy of the employer.

    Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

    Amount of redundancy pay

    (2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

    Redundancy pay period

    Employee’s period of continuous service with the employer on termination

    Redundancy pay period

    1

    At least 1 year but less than 2 years

    4 weeks

    2

    At least 2 years but less than 3 years

    6 weeks

    3

    At least 3 years but less than 4 years

    7 weeks

    4

    At least 4 years but less than 5 years

    8 weeks

    5

    At least 5 years but less than 6 years

    10 weeks

    6

    At least 6 years but less than 7 years

    11 weeks

    7

    At least 7 years but less than 8 years

    13 weeks

    8

    At least 8 years but less than 9 years

    14 weeks

    9

    At least 9 years but less than 10 years

    16 weeks

    10

    At least 10 years

    12 weeks

[28] The application has been made pursuant to s.120(1)(b)(i) of the Act which provides:

120 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…

    (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.

    (underline added)

[29] Directions were set as follows:

    “[7] In the … circumstances where the application is made under s.120(1)(b)(i), the Employer will be required to establish that, pursuant to s.120(1)(a) of the Act, the Employee was entitled to be paid redundancy pay in accordance with s.119 of the Act; and that the Employer has obtained other acceptable employment for the Employee.”

[30] The Directions asked the parties to address whether there was an entitlement to redundancy under s.119, and provide information in relation to the remuneration and conditions of the alternative employment found, including (in comparison to the former position); its status, rate of pay, location, hours of employment, and duties. The Directions also requested submissions on whether the alternative employment was obtained by the Employer; whether the alternative employment was or was not, acceptable, and why; the length of the Respondent’s service with the Applicant; and how much redundancy payment the Respondent is entitled to.

Summary of Applicant’s Submissions

[31] The Applicant submitted that the Mr Brown was employed by the Applicant in a full-time paramedic position at Saraji Mine, and paid an hourly rate of $45.79. The Applicant submitted that the Respondent’s length of service with the Applicant was 2 years and 2.5 months. The Applicant submitted that if the Respondent was entitled to redundancy pay under s.119, they would be entitled to an amount of $11,539.08, representing 6 weeks payment for between two and three years’ service.

[32] The Applicant submitted that there was no entitlement to redundancy pay under s.119, and in the alternative, if there was found to be an entitlement to redundancy pay, the Applicant submitted that the Commission should reduce the amount of redundancy pay to nil on the basis that the Applicant had obtained other acceptable employment for Mr Brown. As a further alternative, the Applicant submitted that the redundancy payment should be greatly reduced.

[33] The Applicant relied on a Decision of the Commission in Kilsby
v MSS Security Pty Ltd T/A MSS Security (Kilsby) 4 where the Commission considered Clause 12.5 of the Security Services Award 2010 and s.119 of the Act, in circumstances where the employee’s employment was terminated due to a loss of contract. In that Decision, it was held that the termination of employment was due to the ordinary and customary turnover of labour.

[34] The Applicant submitted that the circumstances in the current matter were analogous to Kilsby due to the following reasons:

    “a. The Applicant is in an industry which relies on the successful tendering for contracts in order to have work for their employees to undertake. In circumstances in the past where the Applicant has been unsuccessful for the re-tender of contracts the Applicant has no alternative employment to offer to their employees and in these circumstances the employee’s employment has been terminated.

      i. The above is analogous to the Kilsby Decision as the employer Respondent in the Kilsby Decision was also reliant on securing of tenders and contracts in order to supply a labour force.

    b. The current employment contracts of the Applicant provides in clause 14.1(b)(i) that the contract “will terminate automatically if…the Employer’s contract with the operator of a Nominated Mine Site is terminated or comes to an end”.

      i. The above is analogous to the Kilsby Decision as the employer Respondent in the Kilsby Decision had a clause in their employment contracts specifically addressing the situation of being unsuccessful in securing tenders for the contract work.

      ii. It is distinguishable from the current case due to the express clause in the employment contracts in the Kilsby Decision which provided that in the situation where employment is terminated due to an unsuccessful re-tender for a contract this does not constitute a redundancy payment pursuant to s 119(1)(a) of the Act due to being “due to the ordinary and customary turnover of labour”. The Applicant’s contract specifically goes beyond this.

      iii. In addition, the employer Respondent in the Kilsby Decision had provisions in their letter of appointment which provides same and also refers to clause 12.5 of the Security Award. That is, in the event they were unsuccessful in securing on-going tenders the letter of appointment set out redundancy was not payable on those grounds.

      iv. Furthermore, the employer Respondent in the Kilsby Decision relied on findings from the Fair Work Ombudsman (FWO) that investigated a previous claim for redundancy payment in similar circumstances to the employee Applicant. The FWO findings concluded that in those circumstances redundancy payment is not due pursuant to ss 119(1)(a) and 119(1)(b) of the Act.

      v. Notwithstanding the distinguishable features from the Kilsby Decision, the Applicant submits that due to the clause in the employment contracts the Kilsby Decision is overall analogous with the current circumstances.

    c. The Applicant communicates via information briefs sent to all employees advising them of any tender renewal dates for on-going contracts. An example of an information brief is set out in the attachment Example Information Brief to these submissions. The Example Information Brief clearly provides to the Applicant’s employees “as everyone is aware Wesfarmers Curragh are currently rewriting their scope of works for the upcoming tender for Emergency Services onsite. To provide some stability Wesfarmers Curragh Corporate and ER24 have agreed to a six month extension to our current contract. The new extension is current up to and including the 30 September 2016.”

      i. The above is analogous to the Kilsby Decision as a part of the ratio decidendi in the Commission’s decision was that the employer Respondent had previously communicated to the employee Applicant that their position and ongoing employment was subject to successfully retendering for the contract.

    d. The loss of the BMA sites contract was not due to the Applicant not re-tendering for the contract nor was it due to a general economic downturn.

      i. In the ratio of the Kilsby Decision the Commission noted the factors that was considered in its decision that redundancy payment not being payable (pursuant to ss 119(1)(a) and 119(1)(b) of the Act) was due to the termination of the employee’s employment and not due to the general downturn nor did the employer Respondent turn down the contract.

    e. Majority of the Respondent’s length of service with the Applicant is between two (2) to three (3) years’ service. The BMA sites contract was for a period of on or around three (3) years.

      i. The Kilsby Decision also alludes to the factor of service being an integral factor. Subsequently the employee Applicant in this case only had employment linked with that particular contract. Analogous to this is that majority of the Respondents in this matter have only had employment with the Applicant for the duration of the BMA sites contract.”

[35] The Applicant submitted that their unsuccessful re-tender of the BMA sites contract constitutes ordinary and customary turnover of labour and therefore, under s.119(1)(a), there was no entitlement to redundancy for the Respondent.

[36] As an alternative submission, if it was found that there was an entitlement to redundancy pay under s.119 of the Act, the Applicant submitted it should be reduced pursuant to s.120(1)(b)(i). This involves a consideration of whether the other employment was obtained by the Applicant and whether it is acceptable. With respect to whether the other employment is acceptable, the Applicant submitted that the following factors have been considered in previous cases:

  • Whether the work is of a like nature;


  • Whether the location of the employment being offered is “not unreasonably distant”;


  • The hours of work;


  • Whether the positions are similar; and


  • The conditions being no less favourable 5


[37] The Applicant included a list of steps they took in ‘obtaining’ the other employment, as follows:

    “a. Upon learning that the Applicant was unsuccessful in re-tendering for the BMA mine site contracts immediately contacted BMA to inform them that they would contact the incoming provides (CPA and MSS) to ensure they obtained acceptable alternative employment for the Respondents;

    b. Arranged weekly meetings with BMA to keep them informed in any issues that may arise in the process of ensuring the Respondents obtained acceptable alternative employment with CPA and/or MSS;

    c. Immediately communicated to the Respondents about the unsuccessful re-tender for the BMA mine sites;

    d. Issuing the Respondents with a consultation letter that provided the qualifications required for obtaining acceptable alternative employment with CPA and/or MSS;

    e. The consultation letter provided if any Respondents required time off to obtain any further qualifications that a written request is to be forwarded to the Applicant;

    f. Providing a tailored list to CPA and MSS of the applicable Respondents to the qualifications each incoming provider required;

    g. The Applicant writing to CPA and MSS stating they wished to work with them where possible to secure their employees with acceptable alternative employment;

    h. The Applicant directed senior management to exclusively focus their efforts on working and liaising with CPA and/or MSS to obtain acceptable alternative employment with the Respondents;

    i. The Applicant held information and consultation sessions with the Respondents in relation to the job advertisements of CPA and MSS and provided information based on the communications regarding the positions with either of the incoming providers;

    j. The information and consultation sessions were held over a range of sites, times and dates for the Respondents;

    k. A summary of the information and consultation sessions were communicated to the Respondents via email correspondence;

    l. The Applicant requested a list of the Respondents that had applied for a position with CPA and MSS;

    m. The Applicant stated to CPA and MSS that they were willing to assist with identifying any requirements that may be missing in the Respondent’s application to the incoming providers in order to secure acceptable alternative employment;

    n. The Applicant requested from CPA and MSS a list of the Respondent’s that had been offered or planed on offering positions to; and

    o. The Applicant advised CPA that they were a number of Respondents that were willing to relocate or obtain extra qualifications if required.”

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

[39] The Applicant offered the Respondent redeployment within ER24 Pty Ltd. The Applicant provided details of the other employment as follows:

    “…the Respondent was offered redeployment as per the attachment marked TW16 of Mr Wicht’s Affidavit. The terms of the redeployment were as follows:

      a. Full time Paramedic (rescue/security) at Curragh Mine; and
      b. A salary of $95,000 per annum.

    41. The Respondent was previous employed with the Applicant on the following terms:

      a. Full time Paramedic at Saraji Mine; and
      b. A salary of $100,00 per annum.”

[40] The attachment marked TW16 to the Statement of Mr Tommy Wicht, Accountant and Human Resources Officer of the Applicant, is a letter from the Director of the Applicant, Mr Matt Willis, to the Respondent Mr Brown, dated 26 May 2016. The letter is entitled “Re: Offer of Redeployment – Stephen Brown”. The letter is extracted as follows:

    “…We refer to the General Notice issued on Monday, 16 May 2016 (Notice) and the Consultations of Restructure letter dated 20 May 2016.

    As set out in the Notice we were unsuccessful in the tender of the contract with BMA and the end date of the current contract is Thursday 30 June 2016. As such, there will be a restructure within ER24 Pty Ltd (ER24).

    We would like to make the following offer of redeployment to you:

    Current Contract:

  • Full Time Paramedic – Saraji Mine - $100,000.


    Proposed Contract:

  • Full Time Paramedic (Rescue/Security) – Curragh Mine - $95,000.


    Please confirm back in writing if you would like to accept or decline this offer. Unfortunately due to the tight timeframe this offer of redeployment will expire at 5pm on Friday 27 May 2016…”

[41] The Spreadsheet of Employment Comparisons provided with the application indicates that the position at the Curragh Mine would be paid at an hourly rate of $43.50, rather than the $45.79 an hour the Respondent had earned in the redundant position at Saraji Mine. The Spreadsheet indicates that “no response” was received from the Mr Brown as to the offer of redeployment.

[42] In summary, the Applicant submitted that in the first instance, there is no entitlement to redundancy payment due to the ordinary and customary turnover of labour. In the alternative, it was submitted that the redundancy payment should be reduced to nil due to Applicant obtaining other acceptable employment by offering to redeploy the Respondent within ER24Pty Ltd, and in the alternative, if the Commission finds there is an entitlement to redundancy payment payable by the Applicant, that the steps taken by the Applicant should be considered in reducing the redundancy payment payable.

Summary of Respondent’s Submissions

[43] In relation to the entitlement under s.119, the Respondent submitted that as per clause 12.1 of the Ambulance and Patient Transport Industry Award and s.119 of the Act , he is entitled to redundancy pay.

[44] The Respondent provided the following table, summarising the offer of redeployment:

ER24 Former employment

ER24 Alternative Offer

Status

Paramedic (Site Contact)

Paramedic (rescue/Security)

Rate of Pay

$100,000

$95,000

Location

Saraji Mine

Curragh Mine

Hours of Employment

Full Time

Full Time

Duties

Paramedic

Paramedic/Rescue/Security

[45] The Respondent submitted that the alternative employment offered by the Applicant was not accepted by him, due to the fact it was less pay, a demotion to his original employment by the Applicant as Paramedic Site Contact (where he was team leader to 3 other Paramedics). The Respondent submitted that he then sought employment with the incoming contractor MSS via their advertisement on the Seek website.

[46] The Respondent submitted that the Applicant did not obtain the Respondent’s employment with MSS and that “the only thing ER24 did was provide a list and qualifications to MSS”. The Respondent stated he made the application and competed for his position with MSS, and had to upgrade his skills for the new position at his time and expense. The Respondent stated that he “got the position with MSS because of my work ethics, rapport with MSS Rescue and dedication, the client BMA requested I stay at Saraji Mine with the new contract winners”.

[47] The Respondent submitted that the offer of redeployment within ER24 Pty Ltd was not acceptable as follows:

    “The above alternative employment offered by ER24 is deemed to be “unacceptable Employment” because of the following points laid out by Fair Work Australia, I declined the offer of Alternative Employment by telephone to Jason Scott (I was not in a position to reply in writing as was not near computer access) Mr Scott accepted by decision verbally and wished me the best for the future this occurred on the 27th May 2016 at 1658 after a missed call from Jason at 1641.

    Factors considered by FWA when an employer applies to vary the amount of redundancy pay include:

    Pay levels: if the salary offered for an alternative job is similar to or the same as the redundant position, this could be viewed as suitable to acceptability of the offer. Where there is a reduction in the salary, FWA would determine the reasonableness, or otherwise, of the lower salary. The offer from ER24 was for less pay…

    Hours of work: where the offer involves a change of starting time and/or finishing time, a change from shift work to day work, or vice-versa, or work on different days of the week, this may be deemed unsuitable, depending on the circumstances of the individual employee. FWA may take into account matters such as the employee’s family responsibilities when determining the suitability of the offer.

    Employment status/seniority: the offer of a non-managerial position to a manager may be unsuitable because a certain ‘status’ is associated with the current position. Such an offer could be viewed by FWA as a demotion. The offer from ER24 was not a Supervisory role…

    Job security: this can be a factor in the offer of casual work to an employee because, with casual employment, there is no guarantee of continuing employment. Also, if the new position offered is of a temporary nature, this could be viewed as unacceptable. The offer from ER24 at Curragh Mine had less job security, the Curragh contract was due to end in September 2016…” 6

    (emphasis added by Respondent)

Summary of Applicant’s material in reply

[48] The Applicant refuted the allegation that “the only thing [the Applicant] did was provide a list and qualifications to MSS”. The Applicant submitted it provided acceptable alternative employment to the Respondent, in being redeployed within the Applicant’s remaining mine sites. Further, the Applicant submitted that it emailed to the Respondent a copy of the information sessions held by the Applicant the previous week and advised the Respondent to apply directly through the seek advertisements.

[49] The Applicant submitted it was clear from Mr Wicht’s Affidavit in particular, there was regular correspondence with Mr Nick Prass of MSS, regarding the Respondent(s) and the application process in securing acceptable alternative employment with MSS.

[50] The Applicant submitted that, had it not been for the employment with the Applicant, there would be no way for BMA to make a specific request for the Respondent to remain at the site working for MSS.

[51] The Applicant submitted that the Respondent had reduced the efforts and discounted the great lengths the Applicant went to ensure that the Respondent was provided with acceptable alternative employment with MSS within the commercial realities.

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

[53] The Applicant provided a copy of the Respondent’s most recent signed contract of employment with the Applicant dated 19 August 2015 and referred to the following extracts:

  • Clause 14.1(x) which provides the Respondent’s Contract may be terminated if “[the Applicant’s] contract with the operator of the Nominated Mine Site is varied or comes to an end”; and


  • Clause14.1(b) which again provides the Respondent’s Contract may be terminated if “[the Applicant’s] contract with the operator of the Nominated Mine Site is terminated or comes to an end”.


[54] 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.

Further material from Respondent

[55] The Respondent provided the following correspondence to the Commission, seeking to reply to the Applicant’s material in reply, outside of the Directions, and providing the following information:

    “good morning,

    do we have a right of reply to their last email, it puts me in a bad look, the only evidence they present other than a quick email to/from MSS and a few phone calls of unknown duration is the "staff list of names and qualifications" to MSS, it has been trivialized because at no time has a reference clinical/character been given to us or MSS/CPA etc

    the information sessions held were held on my days off or they wanted me in the city after a night shift or my day shift i didn't get into Brisbane till 1930hrs at night, i live 3 hours north of Brisbane, i requested to meet with management on the sunshine coast where 2 of the management team live...

    they say that i did not put in that i think they have to pay redundancy, thats a given in that they are seeking to reduce it to nil or at worst for them 85%, can you advise please or is it all said and done, many thanks

    steve”

Summary of Respondent’s Submissions in relation to ordinary and customary turnover of labour

[56] Further Directions were set for the Respondents to provide submissions specifically on the issue of “ordinary and customary turnover of labour”.

[57] The Respondent provided email correspondence to the Commission containing his submissions as follows:

    “my employment was not terminated because of "ordinary and customary turnover of labor" the contract was lost due to a downturn in the resource sector and cost cutting in contracts by BMA, many contract companies have held onto contracts in the industry by meeting the expectations of the current economical climate including ER24 keeping other contracts aside from BMA

    my employment was continuing with the applicant by way of their offer of another position within the company, my termination came about in that the new position offered was not "other acceptable employment".

    up until the notification of the loss of contract i was verbally reassured by ER24 managers that i would have another position within the company due to my being a good employee which is backed up by the fact another position was offered...

    the subsequent position was unsuitable in the fact it was less pay a demotion in my position and the job security was not there with the new position being a month to month contract between Wesfarmers and ER24”

[58] The Respondent included further submissions in this correspondence which relate to whether the Applicant obtained other acceptable employment as follows:

    “so in my case i am seeking redundancy due to the fact that Er24 had not sourced acceptable employment for me...

    When is an employer exempt from the obligation to pay redundancy pay under the Fair Work Act 2009 (Cth)?

    Under section 120 of the Fair Work Act 2009 (Cth) (FW Act), an employer can apply to the Commission to vary the amount of redundancy pay due to the employee (including to nil). The Commission will only reduce the redundancy pay obligation if it is satisfied that the employer has obtained “other acceptable employment” for the employee.

    In three recent cases, the Commission considered whether the employers had obtained other acceptable employment for the relevant redundant employees. In order to have ‘obtained’ the employment for the employee, the employer’s actions must have been a ‘strong moving force’ towards the creation of the relevant job opportunity. The next question is whether the employment was ‘acceptable’ which is based the objective consideration of a number of factors such as pay, hours of work, location and job security.

    Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd [2014] FWCFB 6737 (21 October 2014) (FBIS case)

    In October last year, FBIS International Protective Services (Aust) Pty Ltd (FBIS) was ordered to pay redundancy pay to 49 security industry workers who became redundant when FBIS lost its contract to supply security services to Asciano’s stevedoring operations. FBIS had applied under section 120 of the FW Act for a redundancy pay exemption on the basis that it had sourced employment for the workers with ACG National Pty Ltd (ACG), the incoming contractor.

    The Commission found that FBIS had not done enough to obtain the exemption because FBIS’s act of providing ACG with two lists of employees and their contact details “simply facilitated an invitation by ACG to [FBIS’s] employees to apply for a position and undertake an interview” and “did no more than to secure the employees an opportunity to enter the recruitment process of ACG which may or may not have resulted in an offer of employment”. That is, FBIS had not secured employment for the employees and actually had no knowledge of which employees had been offered employment or of the terms and conditions offered by ACG. Despite also requesting ACG to make arrangements to meet the employees through FBIS (which was rejected), attempting to negotiate a commercial agreement with ACG about the employees’ continuity of service and accrued entitlements and providing ACG with a copy of its existing enterprise agreement, the Full Bench stated that the limited actions of FBIS, which did no more than establish contact between its employees and ACG, “[fell] well short of action which ‘causes acceptable alternative employment to become available to the redundant employee’ and [FBIS] was not a ‘strong, moving force towards the creation of the available opportunity’”.

    Serco Sodexo Defence Services Pty Ltd (SSDS) [2015] FWC 641 (28 January 2015) (SSDS case)

    In a similar case from January 2015, Serco Sodexo Defence Services Pty Ltd (SSDS) failed to obtain an exemption from the obligation to pay redundancy pay to the majority of its workforce after it lost 5 out of 6 defence contracts with the Defence Department. SSDS applied for variation orders under section 120 of the FW Act on the basis that it had obtained other acceptable employment for the redundant employees, primarily with the incoming contractors. Commissioner Roe heard the case in three parts based on the employees’ location. This decision was about the NSW/ACT employees.

    Commissioner Roe noted that this was the first case involving a very large number of employees as previous applications had always dealt with limited numbers of employees with an assessment being made of each employee’s specific circumstances. However, he said that the finding must still be that the employer obtained the employment for “each of the employees”.

    As a starting point, Commissioner Roe noted that there were differing levels of cooperation between SSDS and each of the incoming contractors. As a result, he had to determine whether the actions of SSDS had obtained alternative employment for each group of employees with the relevant incoming contractor. Adopting the approach in the FBIS case, Commissioner Roe stated there must be a “casual connection between the purpose and effort of the employer and the gaining of employment or an offer of employment, by the employee” and confirmed that the test is whether the actions of the employer are a “strong moving force” towards the job offer being made.

    Commissioner Roe’s conclusion was that although SSDS expended “considerable resources” in the process and its actions went considerably beyond what was required under the consultation provisions of the relevant enterprise agreements covering the employees, its actions fell well short of what was required under section 120. In coming to this conclusion, Commissioner Roe distinguished the situation where an applicant has to go through a competitive selection process for a job and the situation where a direct appointment occurs without a selection process. In this case, each of the incoming contractors had competitive selection processes so the relevant question that had to be asked was whether the applicant would have been successful regardless of the actions of the outgoing employer, given the attributes and actions of the applicant and the needs and actions of the incoming contractor. If the answer to the question is “yes” and the applicant would have been successful anyway, then it was less likely that the outgoing employer would be found to be a ‘strong moving force’ behind the job offer being made.

    Commissioner Roe considered a number of steps taken by SSDS to assist the employees but found that they were not sufficient for him to say that SSDS was a strong moving force in creating the employment opportunities. For example, whilst SSDS assisted employees to upgrade their security clearances to obtain certain positions and make them more attractive, it was the employees who applied for and gained these qualifications; SSDS’s practice of assisting employees with drafting of their applications and resumes was not widespread and whilst this would have improved the quality of their applications, there was no evidence that this materially influenced the decision-making process and the assistance was not done as part of any agreement with the incoming contractors; SSDS provided information about the recruitment process and the incoming contractors but the evidence revealed that many employees did not rely on SSDS to obtain information but found it externally; and there was no general practice that allowed employees to attend interviews, medical appointments and information sessions on paid SSDS time.

    In the case of one incoming contractor, MSS, Commissioner Roe did not dismiss the application altogether because whilst the actions of SSDS were not sufficient to obtain acceptable alternative employment for each redundant employee, the actions did make a significant difference. For example, SSDS had entered into an agreement with MSS which gave preference to SSDS employees; and SSDS made facilities available for MSS to conduct interviews, assisted employees with their job applications and advised SSDS employees of job opportunities. The majority of SSDS’s employees were successful in obtaining jobs with MSS. As a result, Commissioner Roe was willing to hear further evidence in respect of the individual employees but SSDS declined this opportunity.

    s 120 application to vary redundancy pay, Datamars (Australia) Pty Ltd T/A Datamars [2015] FWC 1269

    In February 2015, Datamars (Australia) Pty Ltd (Datamars) made an application under section 120 of the FW Act to vary the redundancy pay owed to its former General Manager, Mr Tim Scott, because it had obtained “other acceptable employment” for him. Mr Scott’s position came redundant after Datamars acquired a new business, Zee Tags. Datamars then offered Mr Scott the position of Business Development Manager, which he rejected because it was not acceptable to him.

    SDP Richards noted that although Mr Scott’s contract provided that he would be employed in “such other positions as may be required by the company”, the fact that Mr Scott “contracted freely to accept the possibility of multiple positions cannot set aside the operation of s.120 of the Act where Mr Scott’s position is made redundant”.

    SDP Richards had regard to the authorities in relation to the test of acceptability for alternative employment, which involves an objective consideration of matters including pay, hours of work, location, seniority, fringe benefits, workload and speed and job security. However, this list is not exhaustive and the Commission looks at the totality of the circumstances, with no one factor being determinative. He also noted the Full Bench’s view [1] that employees should minimise the hardship of redundancy by accepting alternative employment (where found to be “acceptable”) and that the employee’s subjective views about the alternative employment are to be given no weight.

    The onus to prove the acceptability of the alternative position lay with Datamars. SDP Richards said that “[t]here is no requirement that an alternative position in order to be acceptable must slavishly replicate every term and condition of the prior position...[s]ome features of the alternative position may well be inferior to the prior position, with the alternative position manifesting some compensating or offsetting benefits of another kind”.

    In Mr Scott’s case, there were a number of factors which supported Datamars’ case including that the remuneration was the same, the level of job security was the same and the hours of work were the same. Mr Scott would also be part of a much larger organisation with a wider range of opportunities on offer. However, SDP Richards’ dismissed Datamars’ application, finding that the “absence of any definable and substantial executive/strategic function and a very different measure of seniority and status in the new position [inhibited] a determination that the alternative position was acceptable”. In the new role, Mr Scott would have more of a sales focus than an executive focus and would cease reporting directly to the Chief Operating Officer and would report to the new General Manager Asia-Pacific. He would cease to exercise a number of functions and key responsibilities such as human-resource decision-making, OH&S matters and profit and loss of the business. Datamars was also unable to identify at the time who Mr Scott would be responsible for managing, whereas previously he had managerial responsibilities.

    In the alternative, Datamars submitted that the redundancy pay should at least be reduced. However, SDP Richards stated that “it is not the case that where an offer of alternative employment has been made (but does not amount to “acceptable alternative employment” under the Act) the redundancy obligation should be discounted to the degree that the alternative offer approaches acceptability”.

    What you need to do to claim the redundancy pay exemption?

    The above cases demonstrate that there is a high threshold that an employer must meet before it can claim the redundancy pay exemption in section 120 of the FW Act. An employer must first “obtain” the employment for the employee which requires the employer’s actions to be a ‘strong moving force’ behind the creation of the alternative employment. The alternative employment must then be “acceptable”.

    In the SSDS case, Commissioner Roe gave the following examples of what steps an employer can take to show that they have obtained employment for a redundancy employee:

    Approaching the incoming employer and securing an agreement to employ a particular employee without the need for a selection process; Providing information about a job opportunity which the employee would not otherwise have had access to; Providing assistance to an employee and/or reaching agreement with the incoming employer which causes the job offer to be made or was a strong moving force towards the job offer; In the context of a group of employees, reaching agreement with an incoming contractor ttion process.
    It is clear that providing assistance and information to employees in what is otherwise a competitive recruitment process is not sufficient.

    Employers also need to make sure that the alternative role is acceptable, based on all of the relevant factors considered overall. A role that may seem acceptable due to equivalent pay and hours may still be unacceptable if there is a significant diminution in seniority, status and responsibilities.” 7

Summary of Applicant’s submissions in reply on ‘ordinary and customary turnover of labour’

[59] The Applicant submitted that it has made the applications under s.120 as, prima facie, there is an entitlement to redundancy payment. The Applicant submitted that if, prima facie, the Commission finds that redundancy payment is due (i.e. that the redundancy was not “due to the ordinary and customary turnover of labour”), then the Applicant relied on its submissions regarding “obtaining acceptable alternative employment” for the Respondent and would therefore seek a variation of the redundancy payment pursuant to s.120(1)(b)(i) of the Act.

[60] The Applicant submitted, in the current circumstances, given the number of Respondents in the application, that it was in the interests of expediency for the Commission make a finding on whether the exception to redundancy payment pursuant to s.119 applies, that is, whether terminations were “due to the ordinary and customary turnover of labour”.

[61] The Applicant relied on clause 14.1(b)(i) of the Respondent’s Employment Agreement as evidence to show that the Respondent was aware the employment will terminate automatically if the contract with an operator comes to an end. Clause 14.1(b)(i) of the Respondent’s Agreement provides that “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…”.

[62] The Applicant submitted that, by the Employment Agreement’s very nature, the Respondent’s employment would be terminated automatically if the Contract came to an end and therefore there was not a “reasonable expectation” of continued employment.

[63] The Applicant submitted that clause 14.1(b) of the Employment Agreement does not purport, in any way, to overrule or contract out of the NES provisions.

[64] The Applicant noted that, whilst the Kilsby Decision arose in the context of a s 739 dispute matter, it addressed threshold matters relevant to the current proceedings given the Applicant maintains its submissions regarding the “ordinary and customary turnover of labour”.

[65] The Applicant submitted that the Commission, in the Kilsby Decision, considered that the terminations of employment were not due to the general downturn, nor did the employer Respondent turn down the contract. As such, considering the factors set out in the Kilsby Decision, the Applicant submitted that redundancy payment is not due to any of the Respondents on the basis that the unsuccessful re-tender of the BMA sites contracts constituted “ordinary and customary turnover of labour” and pursuant to s.119(1)(a) of the Act, there is no entitlement for redundancy pay owing to the Respondents.

[66] The Applicant submitted that they conceded to the jurisdiction of s.120 of the Act in this matter, and that the matter is being pursued as a variation to redundancy payment pursuant to s 120(1)(b)(i) of the Act, on the basis that there is a prima facie entitlement to redundancy payment.

Consideration

[67] An application pursuant to s.120 has multiple elements, of which the Commission must be satisfied, prior to issuing an Order.

[68] Firstly, s.120 of the Act only applies if an employee is entitled to be paid an amount of redundancy pay by the employer pursuant to s.119 of the Act. 8 Where there is no entitlement under s.119, there can be no order of the Commission to reduce the entitlement pursuant to s.120.9

[69] Employees are entitled to redundancy pay pursuant to the provisions of the Act. Section 119 relevantly provides that an employee is entitled to be paid redundancy pay by the employer, if the employee’s employment is terminated at the employer’s initiative, because the employer no longer requires the job done by the employee, to be done by anyone, except where this is due to the ordinary and customary turnover of labour.

[70] Unusually in this matter, it was the Applicant’s submission that the Respondent’s had a prima facie entitlement to redundancy payment under s.120, while simultaneously submitting that the Exception applied such that the employees had no redundancy entitlement under s.119 of the Act. This approach is somewhat confusing and may have unnecessarily complicated this matter in that the Applicant’s primary position has the effect that the Applicant submits that the Commission’s order should be to dismiss its own application. If it was the Applicant’s position that the employees were not entitled to a redundancy payment by operation of the Act then it was entitled to put that position to relevant employees. It would then be a matter for any employee that disputes this matter to pursue any alleged entitlement through the approach jurisdiction.

Ordinary and Customary Turnover of Labour

[71] The relevant extract from section 119 of the Act is repeated for ease of reference as follows:

119 Redundancy pay

    Entitlement to redundancy pay

    (1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

      (a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or…

[72] The Applicant submitted that the employment of the Respondent was terminated at their initiative because they no longer required the job done by the Respondent to be done by anyone and that this was due to the ordinary and customary turnover of labour. Therefore, the Applicant argued, the Respondent is not entitled to be paid redundancy pay by the Applicant.

[73] The Applicant relied on the Decision of Kilsby and submitted that the present circumstances were similar to this matter. The Applicant’s argument can be summarised as follows:

  • The Applicant is in an industry which relies on the successful tendering for contracts and if unsuccessful for the re-tender of contracts, and no alternative employment can be offered, the employee’s employment has been terminated.


  • The current employment contracts of the Applicant provides that the contract “will terminate automatically if…the Employer’s contract with the operator of a Nominated Mine Site is terminated or comes to an end”.


  • the employer in the Kilsby Decision relied on findings from the Fair Work Ombudsman (FWO) that investigated a previous claim for redundancy payment in similar circumstances to the employees of the Applicant. The FWO findings concluded that in those circumstances redundancy payment is not due pursuant to ss 119(1)(a) and 119(1)(b) of the Act.


  • The Applicant communicates via information briefs sent to all employees advising them of any tender renewal dates for on-going contracts. The Example Information Brief clearly provides to the Applicant’s employees “as everyone is aware Wesfarmers Curragh are currently rewriting their scope of works for the upcoming tender for Emergency Services onsite. To provide some stability Wesfarmers Curragh Corporate and ER24 have agreed to a six month extension to our current contract. The new extension is current up to and including the 30 September 2016.”


  • The loss of the BMA sites contract was not due to the Applicant not re-tendering for the contract nor was it due to a general economic downturn.


  • Majority of the Respondent’s length of service with the Applicant is between two (2) to three (3) years’ service. The BMA sites contract was for a period of on or around three (3) years.


Consideration of ‘ordinary and customary turnover of labour’ exception

[74] A Full Bench of the Commission in Compass Group (Australia) Pty Ltd v National Union of Workers; United Firefighters' Union of Australia 10 considered the exception to a redundancy entitlement due to “ordinary and customary turnover of labour” in the context of s.119 of the Act. The Full Bench held as follows:

    “[27] In order to determine whether the Exception applies in a given case it is necessary to consider the normal features of the business and then determine whether the relevant terminations are properly described as falling within the ordinary and customary turnover of labour in that business. This is a question of fact, to be determined on the basis of the circumstances of each termination and each business. It necessarily focuses on the business circumstances of the employer.

    …

    [33] Based on the material before us, we are of the view that it was the common practice of Compass to terminate the employment of employees when a contract is lost, especially Department of Defence contracts. It was also common for employees to be redeployed where this was possible. The notion of employing employees for a particular contract implies a link between the contract and the employment. It carries with it the understanding that loss of the contract could well lead to termination of the employment. Indeed this was expressly stated in many of the relevant contracts. Although the contracts are worded differently, they often contain a clause similar to the following:

      “Term of Employment:
      As the Company is a contractor, your employment is subject to operational demands, requirements of the client and tenure of the contract which the Company has with its clients. Continuous employment, salary, working hours and/or conditions cannot be guaranteed during quiet periods in the business, eg semester breaks, sporting calendars and/or if village numbers fluctuate (less or more).

      As a result of changes in operational demands, requirements of the client and tenure of the contract, you may be given the opportunity or required to transfer to another location. If this occurs, your salary, terms and conditions maybe varied. These changes will be discussed with you and confirmed in writing. Please be aware that if the alternate position offered is not accepted by you then the Company may be unable to continue to employ you further in which case your employment will be terminated by the Company giving notice in accordance with the provisions of this contract.

      This offer of employment is made on the basis that you may be required to work at different sites, depending on the Company and the Client’s needs.”

    [34] Compass had a long standing practice not to make redundancy payments at the conclusion of contracts pursuant to the Exception. If this position was sought to be altered, one would have thought that a variation to the terms of the standard redundancy clauses in Compass enterprise agreements would have been made. No such variations were made. This suggests that the mutual intention of the parties to the agreements was to apply Compass’ interpretation of the standard redundancy pay wording.

    [35] In all of the circumstances, it is in our view appropriate to make the findings contended for by Compass. More specifically, we have concluded that the terminations of employment arose from the loss of the Department of Defence contracts and in the context of Compass’ business, this was due to the ordinary and customary turnover of labour.”

[75] In line with the above Full Bench Decision, it is necessary to consider the normal features of the Applicant’s business and then determine whether the termination of the Respondent’s employment is properly described as falling within the ordinary and customary turnover of labour in that business.

[76] The circumstances of each termination and each business must be considered. Further, the focus is on the business circumstances of the Applicant.

[77] It is accepted that the Applicant’s business is in an industry which relies on the tendering for contracts. The employment contract of the Respondent links the Applicant’s contract with the Respondent’s employment. Clause 14.b(1) of the Respondent’s employment contract states that the employment agreement will terminate automatically if the Applicant’s contract with the operator of the Nominated Mine Site is terminated or comes to an end.

[78] The business circumstances of the Applicant was such that if no redeployment could be made within the Applicant, the Respondent’s employment would be terminated.

[79] However, the Full Bench in Compass also took into account the ‘longstanding practice’ of that employer not to make redundancy payments at the conclusion of contracts pursuant to the exception. At the hearing, Mr Tommy Wicht on behalf of the Applicant confirmed that ER24 Pty Ltd had, in circumstances of previous loss of contracts, paid employees redundancy pay where they could not be redeployed within ER. The Applicant submitted that they did this as a goodwill gesture and it was due to the fact that they had now lost 7 contracts at once that they were relying on the exception for ‘ordinary and customary turnover of labour’. There was no evidence of the Applicant in terms of relying on the exception to pay redundancy (due to the terminations being ordinary and customary turnover of labour), prior to filing submissions in respect of these applications before the Commission.

[80] It is noted, however, that the original applications were made under s.120(1)(b)(i) and did not seek the variation of redundancy pay on the basis of an incapacity to pay. This was open to the Applicant if there was a financial issue with the payment of redundancy related to the loss of the 7 contracts.

[81] On the information before the Commission, I am not satisfied that the termination of the Respondent’s employment, in the context of the Applicant’s business, was due to the ordinary and customary turnover of labour. It was not the Applicant’s practice to rely on this exception, as Mr Wicht stated that redundancy payments had ben made in the past albeit in ‘goodwill’. Further, the fact that the applications were made stating that there was an entitlement to redundancy pay, with no mention of ordinary and customary turnover of labour, and was only raised in the Applicant’s submissions (following a refusal of the Commission to issue Orders requiring production of documents), does not lead to the conclusion that it was the common practice of the Applicant to rely on this exception.

[82] Accordingly, the exception in s.119 for the ordinary and customary turnover of labour, is not applicable in these circumstances.

[83] I am satisfied, that the Respondent has an entitlement to redundancy pay, pursuant to s.119 of the Act, subject to any order that the Commission may make. Relevantly, what now must be considered under an application to vary redundancy pay under s.120(1)(b)(i) is whether the Applicant obtained other acceptable employment for the Respondent.

s.120(1)(b)(i) - whether other employment was ‘obtained’ and ‘acceptable’

‘Obtained’

[84] The Applicant included case authority relating to whether other acceptable employment was obtained, which is a relevant consideration under s.120(1)(b)(i).

[85] The Applicant refers to Re Clothing Trades Award 1982(1) 11and in particular, the following extract:

    “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”.

[86] Further, the Applicant relied on the Full Court of the Federal Court of Australia decision of FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia 12 (FBIS Decision), which is extracted as follows:

    “with respect to the Full Bench’s reliance on the Shorter Oxford, the present might be one of those rare occasions on which it is useful to refer to the corresponding full entry in the Oxford English Dictionary itself. Relevantly it reads: to come into the possession or enjoyment of (something) by one’s own effort, or by request; to procure or gain, as the result of purpose and effort; hence, generally, to acquire, get”.

…

    …the possession must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance”.

[87] The Applicant submitted that the Full Court in the FBIS Decision upheld the decision of the Full Bench of the Commission in that the application to vary redundancy payment pursuant to s 120(1)(b)(i) of the Act was not permitted due to the determination that the Applicant did not undertake enough actions to be deemed to have obtained acceptable employment for the employees. The Applicant summarised the actions that had been taken by the Applicant in the FBIS Decision as follows:

  • Having discussions with the incoming provider about future engagements of their employees;


  • Providing the incoming provider with contact details of the employees;


  • Providing the incoming provider with information about the arrangements within the enterprise agreement that had applied to the employees; and


  • Provided advice to the incoming provider that the Applicant had paid the employees their wages up to and including the end date of the contract and paid all accrued leave entitlements


[88] The Applicant submitted that these steps could be distinguished from the steps taken by the Applicant in this matter, outlined at [39] above.

[89] A Full Bench of the Commission in The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd 13 summarised the case authority in relation to whether other acceptable employment had been “obtained”, as follows:

    “[42] The question of what is required by the word “obtains” was considered by the Full Bench in Derole Nominees. It found:

      ‘The word ‘obtains’ does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate.

      It follows that ‘obtain’ must be given some lesser meaning. The Shorter Oxford Dictionary (3rd ed revised) provides as its relevant meaning, the definition of ‘obtain’ as ‘to procure or gain, as the result of purpose and effort’. It seems to us that meaning is of assistance here; that is, the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind.” 14 [citations removed]

      And

      “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’ 15

    [43] In Datacom Vice President Lawler also expressed the view that the word “obtains” in the context of s.120 should be given a very broad interpretation. 16

    [44] In Allman v Teletech International Pty Ltd, 17 Marshall J considered whether Teletech International Pty Ltd (Teletech) had been “able to arrange alternative employment” which appeared in provisions for relief from the obligation to pay redundancy payments within relevant workplace agreement, upon its employees being offered employment by Telstra upon taking over a contract formally held by Teletech. His Honour considered the Full Bench decision in Derole Nominees, finding that “[t]here is no material difference between obtaining alternative employment and being able to arrange it.”18

    [45] Justice Marshall found that Teletech assisted its employees to apply for jobs with Telstra, had active involvement in the transition of the employees to work with Telstra, met with Telstra to discuss the possible employment of the employees by Telstra and secured a commitment from Telstra that Telstra would give all redundant Teletech employees the opportunity to apply for employment with Telstra. He found:

      ‘Teletech was not, however, a strong moving force towards the creation of the available opportunity. The available opportunity arose because Telstra was to perform functions formerly performed for it by Teletech. Telstra required staff. It made sense for it to approach Teletech staff. Teletech did not secure the offer of a job for Teletech staff with Telstra. As counsel for the applicants submitted, Teletech arranged an opportunity for the employee applicants to participate in a recruitment process undertaken by Telstra.’ 19

    [46] Whilst accepting that Teletech brought the employees and Telstra together and that Teletech’s conduct was one of the factors that brought about the employment, Justice Marshall found that it did not mean that Teletech was able to arrange the employment, finding that Teletech facilitated its staff applying for jobs with Telstra, competing on their merits for the available positions. 20 His Honour found that:

      ‘The encouragement and facilitation of a process is not the same as doing everything possible to ensure a result. Arranging alternative employment means bringing about that employment should the employee choose to accept it. Anything short of that, such as competing with competitor applicants (albeit limited to two categories of applicant: existing Telstra and Teletech employees) does not meet the test provided by the relevant sub-clause in the AWAs.’ 21

[90] On the evidence above, the Commission is satisfied that the Applicant obtained an alternative offer of employment within ER24 Pty Ltd, which the Respondent declined. Whether or not that offer was “acceptable” is discussed below. The Applicant obtained this employment in that it offered the offer of redeployment, without any condition as to making a new application.

[91] The Applicant submitted that it also obtained alternative employment for the Respondent with the incoming contractor MSS. However, the Applicant’s actions detailed above, including meetings with, and providing lists and qualifications to, the incoming contractors, does not meet the requisite standard for “obtaining” other employment, in circumstances where the Respondent was required to apply for the position through Seek, and compete with other applicants for the position. The actions of the Applicant are analogous to those in Allman, the Applicant encouraged and facilitated a process but could not be said to have done everything possible to ensure a result. The Respondent still had to apply and compete with competing applicants.

‘Acceptable’

[92] The Commission must consider the ‘other’ employment, to enable the Commission to assess the “acceptable” nature of that employment.

[93] In the matter of Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 22, the Full Bench stated as follows:

    “What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

    Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 23

[94] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 24, the Full Bench in considering acceptable alternative employment stated:

    “...We do not propose to repeat here the thoroughly detailed argument presented by counsel for the union. A considerable part of that case was devoted to questions of onus and to supporting the proposition that the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters. It was argued that the failure of the employer to adduce evidence of such matters caused the company to fail to make out a case for an exemption. We have no doubt that there is an onus on the employer invoking cl 51(c) and that matters of the kind referred to by the union may be relevant in assessing the position in a particular case. We do not believe it to be necessary to make that examination in every case. Where an employee has accepted alternative employment in circumstances as those here, then in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl 51(c) of the award...” 25

[95] The differences in the employment conditions between the redundant position and the alternative position offered to the Respondent must be considered in relation to whether the other employment was “acceptable”.

[96] The Respondent submitted that the offer of redeployment to a position within ER24 Pty Ltd was not acceptable as it was at a different location and with less pay and status, and further, that the offer of redeployment to the Curragh Mine had less job security, as the Curragh contract with ER24 Pty Ltd was due to end in September 2016. The Respondents subjective views are not determinative of what is acceptable employment is, the Commission must assess the alternative employment on an objective basis. The terms of the offer of redeployment are sufficiently comparable that I am satisfied the position was acceptable within the meaning of the act. However, job security is a significant factor but in my view, does not outweigh an objective comparison between the two positions. The Respondents rely upon job security as a relevant matter in this consideration; it is the case that the Applicant’s employment was always subject to the condition that the employment would be terminated if the Employer’s contract was not to be continued.

[97] While I accept that the scenario where a contract of employment specifies a particular end date, as opposed to an event on which the contract will terminate, it is nonetheless that it cannot be said the Respondent was a permanent on going employee with significant job security.

[98] No material was filed in relation to whether the position with MSS was “acceptable” or otherwise. However, having considered that the Applicant did not “obtain” the MSS employment, it is not necessary to consider whether that employment was acceptable.

Conclusion

[99] Accordingly, for the aforementioned reasons, taking into account all of the circumstances, I am satisfied that, in accordance with s.120 (1)(b)(i) of the Act, I should exercise the discretion pursuant to s.120(2) of the Act, to reduce the amount of redundancy pay, on the basis that other employment was ‘obtained’ (as per the case law) by the Applicant in terms of their offer of redeployment within ER24 Pty Ltd, but while the resultant position provided terms that were not exactly the same, I am nonetheless satisfied. However, a significant factor in determining whether I should exercise the discretion to vary redundancy pay, and if so by what amount, is the fact the job security with the alternate position was not certain beyond September 2016

[100] The Respondent has an entitlement to 6 weeks redundancy pay for at least 2 years but less than 3 years of service. I have exercised my discretion to reduce the amount to three (3) weeks redundancy payment.

[101] An Order [PR586692] reflecting the terms of this Decision will issue separately.

COMMISSIONER

 1   [2015] FWCFB 8040

 2   [2014] FWC 7475

 3   [MA000098]

 4   [2014] FWC 7475

 5   Australian Commercial Catering Pty Ltd v Fair Work Commission [2015] FCAFC; Sutherland Division of General Practice Incorporated [2012] FWA 5615.

 6   Affidavit of Stephen John Brown filed 12 October 2016

 7   Response of Mr Stephen John Brown filed 28 October 2016

 8   Application by CAE Australia Pty Ltd [2012] FWA 7992 per Watson VP at [13].

 9   Ibid; also refer M & S Dickson [2011] FWA 5206 per Lewin C.

 10   [2015] FWCFB 8040

 11 (1990) 140 IR 123.

 12 [2015] FCAFC 90.

 13   [2014] FWCFB 6737.

 14 (1990) 140 IR 123, at 127.

 15 (1990) 140 IR 123, at 128.

 16   [2013] FWC 1327, at para 12.

 17 [2008] 178 IR 415.

 18 [2008] 178 IR 415, at 418.

 19 [2008] 178 IR 415, at 419.

 20 [2008] 178 IR 415, at 419.

 21 [2008] 178 IR 415, at 419.

 22 (1990) 140 IR 123.

 23 (1990) 140 IR 123 at pp128.

 24 (1988) 27 IR 226.

 25 (1988) 27 IR 226 at pp230 - 231.

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Cases Citing This Decision

13

Er 24 Pty Ltd T/A Er 24 v Mr Vaughan Tocher [2017] FWC 415
Er 24 Pty Ltd T/A Er 24 v Mr Paul Young [2017] FWC 413
Er 24 Pty Ltd T/A Er 24 v Mr Brian Wells [2017] FWC 412
Cases Cited

12

Statutory Material Cited

0

Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd [2014] FWCFB 6737
COMMISSIONER ROE [2015] FWC 641
Datamars (Australia) Pty Ltd T/A Datamars [2015] FWC 1269