Er 24 Pty Ltd T/A Er 24 v Mr Timothy O'Connor

[2017] FWC 402

[2017] FWC 402

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 Timothy O’Connor
(C2016/5775)

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 Mr Stephen John Brown [2017] FWC 397 1. That decision is issued with, and forms part of, each of the decisions of the Respondents who were employed as paramedics. That decision also includes the submissions of ER24 relevant to the Respondent in these matters. Mr O’Connor made individual submissions as below.

Applicant’s submission

[2] The Applicant submitted the Respondent was employed as a full time Paramedic at Hay Point Mine and was paid an hourly rate of $43.50.

[3] The Applicant submitted the Ambulance and Patient Transport Industry Award 2010 applied to the Respondent’s employment.

[4] The Applicant submitted the Respondent had served three (3) years and 6.5 months’ service with the Applicant.

[5] The Applicant submitted Mr O’Connor declined an offer of full time employment with CPA.

[6] The Applicant submitted that the conditions of the alternative employment was as follows:

“ 42. The alternative acceptable employment that was offered but declined by the Respondent was as follows:
a. Full-time paramedic 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 would have been paid on or around $43.50 per hour with CPA;
d. The Respondent’s hours of work would continue to be 84 hours per fortnight as required by the BMA contract;” 2

Respondent’s submissions

[7] The Respondent submitted he commenced employment with the Applicant on or about November 2012 as Paramedic/Rescue Paramedic. He had a 7 day on / 7 day off roster, alternating between day and night shifts and each shift was 12 hours in length. Whilst he was working, he would drive to Sydney airport (2 hours) and then fly to Mackay, Queensland. During work travel, the Applicant paid for a taxi to take him to staff accommodation which was about 20 minutes away.

[8] The Respondent submitted the Applicant relied on the case of Kilsby v MSS Security Pty Ltd 3which the Respondent rejected. The Respondent believed that the present circumstances are more analogous to the case of Transport Workers Union v Veolia Environmental Service (Australia).4

[9] The Respondent submitted, that the Applicant did not obtain employment for him, rather it was BMA (not the Applicant) who provided his phone number to a third party who then made contact. Further, the Respondent was required to apply via SEEK, where he competed against everyone else who applied. The Respondent stated he was not qualified for the job and would be required to spend $3500 on further qualifications. Accordingly, the Respondent stated he found work through his own endeavours, not from the actions of the Applicant. The new employment, the Respondent submitted, is in a different field, with some deficiencies, in particular his inability to continue nursing studies.

[10] In relation to the offer made by the Applicant, it was valued at approximately 30% less than his current employment. There were no flights, accommodation and vehicles provided, which the Respondent calculated would reduce his earnings by $37,320.

[11] The Respondent believed that before the tender process was announced, he had an expectation that his employment would be on-going. Further, the Respondent submitted he did not recall anything in the original contract about re-tendering or what happens if the Applicant was to lose a contract. Due to the size of the Applicant’s operation, the Respondent assumed he could be relocated if necessary.

[12] Concerning the outcome of the tender process, the Respondent submitted he was advised by BMA and also CPA and MSS (the successful tenderers) about a month before the Applicant made a formal announcement. After the tender process was complete, the Applicant denied CPA and MSS access to the site to liaise with the Respondent. This information was derived from the Applicant’s contract liaison.

[13] The Respondent submitted he accepted a position with Asciano and started working there from 11 July 2016. The position has the following conditions:

• Involves day to day running and coordination of bulk, freight, intermodal and coal train services across Australia;



• 12 hour shifts;



• Rotating roster, averaging 38-42 hour per week;



• Located in North Sydney;



• Base payment of $94 000; and



• This new position inhibits the continuation of study.

[14] The Respondent submitted the position offered by the Applicant was not acceptable for the following reasons:

• The position was for an Advanced Care Paramedic, not Paramedic;



• Hay Point is not a mine, it is coal terminal. He was not offered a job on a mine; and



• To undertake the new position, the Respondent needed further qualifications which led to an effective pay cut of in excess of $30,000.

[15] The Respondent concluded that the Applicant had not obtained acceptable alternative employment and therefore there should be no reduction in the redundancy payment.

Respondent’s submissions on ordinary and customary turnover of labour

[16] The Respondent disputed that the payment of redundancy was excluded on the basis of ‘ordinary and customary turnover of labour.’

[17] The Respondent submitted the Full Bench Decision of Compass Group (Australia) PL, 5 is relevant to his case as the Applicant in this case failed to provide historical evidence of dismissing employees at the end of contracts, as the Applicant did in Compass.6 Unlike Compass, the Respondent submitted the Applicant’s contracts for employment merely stipulate that the employment “may” be terminated, rather than the express and explicit advice that was contained in the Compass contracts.

[18] Further, in Compass, the Application satisfied the court that redeployment to another contract was an exception to the standard practice, while it was submitted by the Respondent that the Applicant in this case has led no such evidence. It was submitted that no evidence of the number of tenders, or the rolling nature of contracts has been provided by the Applicant. In addition, the Respondent submitted there is no evidence regarding the activity of the Applicant so far as the bidding on new contracts and, further, the workers had a reasonable expectation of continuing employment if they properly performed their work.

[19] The Respondent submitted the end of the contract was merely the occasion, rather than the cause of the dismissal.

[20] The Respondent submitted the Applicant’s case is deficient and lacks the critical information required to make out the case for the exemption.

Summary of Applicant’s material in reply on OCTOL

[21] 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.

[22] 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”.

[23] The Applicant relied on clause 14.1(b)(i) of the Respondent’s Employment Agreement (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…”.

[24] 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.

[25] 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.

[26] With respect to the Respondent’s Further Submissions, the Applicant submitted that the “normal features of the business” and “the business circumstances of the employer” is that the Employment Agreement was clear, that if a tender was lost employment would be automatically terminated. The Applicant submitted that if this position was to be altered the Agreement would have read differently, and that it was the mutual intention and standard practice of the parties to end the Employment Agreement once a tender was lost.

[27] The Applicant submitted that the Respondent would have been aware that the employment with the Applicant was subject to the successful re-tendering of the contract.

[28] The Applicant noted that, whilst the Kilsby decision (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”. Furthermore, the Applicant submitted that the obiter in the Kilsby Decision is relevant in particular to those Respondents that have the Security Services Industry Award 2010 MA000016 (Security Award) apply to their employment.

[29] 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.

[30] 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.

[31] The Applicant submitted that, should the Commission find that there is no entitlement to redundancy payment, there is no requirement for the Commission to determine whether a variation to redundancy payment is due.

[32] The Applicant agreed that if the Commission determined there is no entitlement to redundancy payment “due to the ordinary and customary turnover of labour” that the Applicant will discontinue or withdraw the matter and commence an application under s.739 of the Act.

Consideration

[33] In the reasoning provided in the decision of Mr Brown, I find that there is an entitlement to redundancy pay as per s.119.

[34] In considering making this order, it must be determined as per s.120(1)(b) whether the employment was obtained by the Applicant and that the employment was acceptable.

[35] As I have summarised in Brown, the Applicant did not “obtain” the current employment of the Respondent, and therefore it is not necessary to consider whether that employment is acceptable under s.120.

Conclusion

[36] Accordingly, for the aforementioned reasons I am not satisfied in accordance with s.120 (1)(b)(i) of the Act that I should exercise the discretion pursuant to s.120(2) of the Act to reduce the amount of redundancy pay.

[37] I Order accordingly.

COMMISSIONER

 1   A copy of the decision ([2017] FWC 397) was provided to the Respondent by email.

 2   Applicant’s submissions filed 5 October 2016 at [42]

 3   [2014] FWC 7475

 4 [2013] NSWIR Comm 22 at 82.

 5   [2015] FYCFB 8040.

 6   Ibid at 30.

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