EY Sweeney Research Pty Limited

[2016] FWC 313

[2016] FWC 313

FAIR WORK COMMISSION

DECISION

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

EY Sweeney Research Pty Limited
(C2015/5786)

DEPUTY PRESIDENT SAMS SYDNEY, 17 MARCH 2016

Application for variation of redundancy pay - transfer of business - applicant obtained acceptable employment – redundancy pay reduced to nil – determination made.

[1] This is an application, filed on 21 August 2015 by EY Sweeney Research Pty Limited(the ‘applicant’), pursuant to s 120 of the Fair Work Act 2009 (the ‘Act’) to vary redundancy pay in respect to 49 of its former employees. In its Form F45A application, Mr Bruce Heddle of Maddocks Lawyers, explained that the applicant seeks that the redundancy pay payable to these employees be reduced to nil, on the basis that they had been offered and accepted acceptable alternative employment, secured by the applicant for them with a related body corporate, Ernst & Young Services No. 2 Pty Limited (‘E&Y 2’).

[2] On 17 November 2015, in support of its application, the applicant filed an affidavit of M Bruce Heddle, the Solicitor for the applicant. The applicant sought, pursuant to ss 593(1) and 594(1) of the Act, that certain aspects of the affidavit as it related to individual employees not be published or disclosed. I so order and summarise the remainder of Mr Heddle’s affidavit below.

[3] Mr Heddle described the business of the applicant as the provision of market research services to private and public sector organisations in Australia. On 1 October 2014, the applicant was purchased by Ernst & Young Information Systems Pty Ltd (‘EYIS’), a corporate entity which is wholly owned by the partnership of Ernst & Young (‘Ernst & Young). This involved the applicant changing its name from Sweeney Research Pty Limited to EY Sweeney Research Pty Limited on 5 December 2014. The change in name of the applicant was notified to the National Union of Workers. The applicant continued to operate between 31 October 2014 and 30 June 2015 (the ‘completion period’), during which its business was integrated into and transferred to Ernst & Young, including payroll, processes for engaging new clients and suppliers, IT support, facilities management and ISO accreditation and market research standard membership. The applicant’s contracts were novated to Ernst & Young from 1 July 2015.

[4] Mr Heddle put that E&Y 2 and the applicant are associated entities within the meaning of s 50AAA of the Corporations Act 2001. He referred to the genesis of the NUW and AMSRO Market & Social Research Industry Agreement 2010-2013 and then the NUW and AMSRO Market Research Industry Agreement 2013-2016 (the ‘Agreement’), which commenced operation on 7 April 2015. The applicant was covered by this Agreement. All of the employees of the applicant covered by the Agreement had transferred their employment by E&Y 2 and the Agreement continued to apply to them by virtue of the Act’s transfer of business provisions.

[5] Mr Heddle explained that all employees of the applicant received written offers of employment from E&Y 2 between 4 and 12 June 2015. These offers were conditional on the employees resigning their employment with the applicant. 59 employees accepted the offer as at 7 July 2015. A further 153 casual employees of EY Sweeney were offered casual employment E&Y2. 121 of these employees accepted casual employment with E&Y 2 and 32 did not respond. No further offers were made to the this latter group of 32 casual employees. Prior to the acquisition by E&Y 2, all permanent employees of EY Sweeney were required to execute an undertaking that they would comply with the policies of Ernst & Young, as did 152 of the casual employees, but only if working on audit clients of Ernst & Young.

[6] Mr Heddle described the process of consultation between EY Sweeney and its employees. On 18 May 2015, employees were invited by email to attend briefing sessions on 21 and 22 May 2015. A further briefing was held on 25 May 2015. They were also given a list of frequently asked questions. EY Sweeney also corresponded with the Union between 18 May and 9 June 2015.

[7] Mr Heddle said that all permanent and some casual employees in the Sydney and Melbourne offices of EY Sweeney had changed their work locations on 30 October 2015. The Ernst & Young Melbourne office was 2.5km away from the EY Sweeney Melbourne office and the Ernst & Young Sydney office was 900m away from the EY Sweeney Sydney office. A number of casual employees remained at EY Sweeney’s Sydney and Melbourne offices.

[8] Mr Heddle described the terms and conditions of employment for all transferring employees as follows:

• work patterns remained the same;



• rates of pay had not decreased;



• classifications and positions were mapped and analysed by Ernst & Young and all transferring employees were given an internal Ernst & Young rank;



• employees received a number of benefits from the time of the acquisition to which they had not previously been entitled, including superannuation, life and salary continuance insurance, salary packaging arrangements and banking products;



• career progression opportunities and job security remained the same; and



• service entitlements and accrued, but unused leave entitlements were recognised by E&Y 2.

[9] On 1 December 2015, the Commission wrote to the employees in respect to whom the applicant sought orders, referring them to the application and a redacted copy of the affidavit of Mr Heddle and asking that they advise the Commission, by no later than 15 December 2015, if they intended to object to the orders sought by the applicant. On 14 December 2015, the Commission received a written objection from one of the affected employees and the matter was listed for conference on 11 January 2016. On 24 December 2015, the employee withdrew their objection. Accordingly, the conference listed for 11 January 2016 was cancelled and I indicated to the parties that I would determine the application ‘on the papers’.

The statutory context and relevant authorities

[10] The legislative provisions relevant to this application are to be found in ss 119 and 120 of the Act 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

(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

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; or

(ii) cannot pay the amount.

(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.

[11] Having considered the extensive material filed by the applicant, and there being no objection to the orders sought from the employees or the Union, I am satisfied that the applicant obtained ‘acceptable employment’ for the affected employees, within the meaning of s 120 of the Act. Given this finding, I consider it appropriate that any redundancy entitlement otherwise due to the employees, be reduced to nil. A determination to that effect will be issued contemporaneously with this decision.

DEPUTY PRESIDENT

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