FBIS International Protective Services (Aust) Pty Ltd

[2014] FWC 1922

[2014] FWC 1922 [Note: An appeal pursuant to s.604 (C2014/4854) was lodged against this decision - refer to Full Bench decision dated 21 October 2014 [[2014] FWCFB 6737] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

FBIS International Protective Services (Aust) Pty Ltd
(C2013/7271)

COMMISSIONER GREGORY MELBOURNE, 20 MAY 2014

Variation of redundancy pay.

Introduction

[1] FBIS International Protective Services (Aust) Pty Ltd (FBIS) have had a long-standing contract to provide security services to Asciano Executive Services Pty Ltd at various locations in different States of Australia. However, in late 2013 it was not successful in re-tendering for the contract and ceased providing services to Asciano on 31 October 2013. The new contractor, ACG National Pty Ltd (ACG), commenced in its place on the following day.

[2] FBIS employed 70 full-time employees on the Asciano contract as at 31 October 2013. Eleven of those employees were subsequently offered other work with FBIS. Another four were unable to find work with FBIS, or the new contractor, and were made redundant and paid their full redundancy entitlements by FBIS. The remaining employees were employed by the new contractor, ACG, on what FBIS submits are essentially the same duties, carried out at the same locations, with similar entitlements as applied previously.

[3] Section 119 of the Fair Work Act 2009 (the Act) provides an entitlement to redundancy pay, based on a scale of payments set out in the section. However, s.120 of the Act enables an application to be made to have that obligation varied. It states:

“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.” 1

[4] FBIS has accordingly made application under s.120 seeking an order “...for a reduction in its obligations to make redundancy payments to various employees consequent upon the loss of its contract to provide security services to Asciano Executive Services Pty Ltd” 2 because it has obtained “other acceptable employment”3 for those employees.

[5] However, it also raises a threshold issue about whether an application under s.120 is even necessary. It argues that because of the particular “change of contract” provisions in the Security Services Industry Award 2010, established under s.121(2) of the Act, no entitlement to redundancy payments in s.119 exists in this case.

[6] All of the employees named as Respondent’s to the application were notified by the Commission, and given the opportunity to appear in the proceedings. None of the employees elected to take up this opportunity. However, the Commission received five written submissions from employees. Three submissions were received from Mr Graham Crampton on various dates, (4 and 31 December 2013 and 24 January 2014), indicating they were also made on behalf of five other employees. A further written submission was received from Ms Denise Pickering on 3 February 2014. Five Brisbane based employees also provided a written submission on 3 February 2014. Each of these submissions from the various employees opposed the application.

[7] FBIS was represented by Mr Rohan Millar of Counsel who was granted leave to appear under s.596(2)(a) of the Act.

The Issues to be Determined

[8] There are various issues to be determined in this matter:

1. The “threshold” issue – do the employees have an entitlement under s.119, or has that entitlement been extinguished by the combined operation of s.121 of the Act and sub clause 12.5 of the Security Services Industry Award 2010?

2. If an entitlement does exist under s.119 has FBIS obtained “other acceptable employment for the employees” as provided for by s.120(1)(b)(i) of the Act?

3. If so, is it appropriate to reduce the redundancy pay entitlement otherwise due to those employees?

4. If it is appropriate to reduce the amount what should that “reduced amount” be?

The Evidence and Submissions

[9] As indicated, FBIS raises an initial threshold issue about whether, in the present circumstances, an application under s.120 is even necessary. It does so because it submits before an order under s.120 can have application there must first be an entitlement to redundancy payments under s.119. It questions whether that entitlement exists in this case. In support it refers, firstly, to s.121 of the Act which allows a Modern Award to limit the entitlement to severance pay arising under the National Employment Standards (NES). It submits a Full Bench of the Commission decided such a limitation should be included in the Security Services Industry Award 2010 when it inserted the “change of contract” provisions in sub clause 12.5 of the Award. The sub clause states:

“(a) This clause applies in addition to clause 8 - Consultation of this award and s.120(1)(b)(i) of the Act, and applies on the change to the contractor who provides security services to a particular client from one security contractor (the outgoing contractor) to another (the incoming contractor).

(b) Section 119 of the Act does not apply to an employee of the outgoing contractor where:

(i) the employee of the outgoing contractor agrees to other acceptable employment with the incoming contractor; and

(ii) the outgoing contractor has paid to the employee all of the employee’s accrued statutory and award entitlements on termination of the employee’s employment.

(c) To avoid doubt, s.119 of the Act does apply to an employee of an outgoing contractor where the employee is not offered acceptable employment with either the outgoing contractor or the incoming contractor.” 4

[10] FBIS submits both sub paragraphs (i) and (ii) above apply in the circumstances and therefore there is no redundancy pay obligation. It also submits that although the Award does not apply to the employees during the term of the existing Enterprise Agreement its application does not deal with entitlements arising under the Award. An application under s.120 is instead dealing with the NES entitlements contained in s.119. That entitlement in the security industry has been limited under s.121(2) of the Act by means of the sub clause now contained in the Security Services Industry Award 2010.

[11] It submits:

“It's on that basis that the Full Bench has seen fit to include in the Security Industry Award a provision disentitling an employee to redundancy pay upon a change of contract.” 5

And further:

“We're relying upon the limited scope of the NES under section 119 in relation to the present employees and that entitlement under the NES is limited because it doesn't apply in situations of changes of contract.” 6

[12] It further submits this is “precisely what was contemplated by the Full Bench in making the award exclusion from the NES in those terms,” 7 and therefore, “these employees are not redundant in any meaningful sense and should not be entitled to what's effectively a windfall gain by way of a redundancy payment when in reality they're continuing on in employment.”8

[13] FBIS also refers to the decision of Commissioner Spencer in ISS Facility Services Australia Limited 9 in support of its submission. It also dealt with a change of contract situation, on this occasion in the cleaning industry, and an application under s.120. FBIS referred, firstly, to the Commissioner’s statement at [42] in the following terms:

“By operation of s.121(2) of the Act a Modern Award may include a term specifying situations, above and beyond s.121, which limit the operation of s.119 to the termination of an employee’s employment.” 10

[14] It then refers to the Commissioner’s finding at paragraphs [49] and [50] where she states:

“The Respondent was a part-time employee both prior to redundancy and subsequently. The other terms of the employment; location and duties, are the same as is the remuneration rate. Only the hours vary but this situation may change by agreement between the Applicant and the Respondent.

The alternative employment, when viewed as a whole, is deemed to be acceptable and accordingly, as clause 14.5(b)(i) and (ii) of the Award are met, clause 14.5(c) is therefore invoked. That is, s.119 of the Act does not apply and the payment of redundancy is not applicable as the Respondent has been offered acceptable employment (although only half the income will be received) with the incoming contractor.” 11

[15] FBIS submits clause 14.5 in the Cleaning Industry Award is in the same terms as the Award sub clause in the present matter and Commissioner Spencer accordingly found no entitlement to redundancy pay exists. It submits “the same analysis should be pursued here and by reason of section 121(2) of the Act no entitlement under the NES arises.” 12

[16] In response to a question from the Commission FBIS acknowledged the circumstances before Commissioner Spencer can be distinguished because in that matter there was no Enterprise Agreement in place. However, it submitted in response:

“Correct. It was purely a matter of applying the award provision and if we didn't have the EBA in this case, this would be, in my submission, a very straightforward application. The EBA adds a gloss of complexity to it and in fact in terms of the application of the change-of-contract clause in the award the starting point is that the award is not applicable to the employment. I say that there is a limitation on the way that the NES can be said to apply in these circumstances because the award has limited the NES and the fact that the award doesn't apply to this employment during the life of the collective agreement doesn't effectively revive the NES in its full unconditional terms. It remains limited to not apply in situations of change of contract.” 13

[17] FBIS submits, in summary, that the National Employment Standards have been limited in their operation in the security industry by the combined operation of s.121(2) of the Act and sub clause 12.5 of the Award. There is therefore no entitlement to redundancy pay under the National Employment Standards in the current circumstances.

[18] FBIS made further submissions in support of its application under s.120 in the event its threshold submission was not determined in its favour. It submits the Commission has a broad discretion under s.120 and, in this case, the entitlement should be reduced to zero. It referred to three grounds, in particular, in support of this outcome.

[19] Firstly, it submits the requirements of s. 120(1)(b)(i) of the Act are made out on the facts. It submits it obtained alternative employment for the employees and played an active role in achieving this outcome.

[20] Mr Jarrod Christmas is employed by FBIS as its National Operations Manager. He detailed a series of discussions that took place with ACG representatives about the future engagement of existing FBIS employees. He provided details to ACG about those employees who agreed to allow FBIS to pass on their contact details. He also gave information about the requirements and arrangements associated with the existing FBIS Enterprise Agreement. He also indicated the employees were paid their wages up to and including 31 October 2013 by FBIS, together with all accrued leave entitlements in the following pay period. However, he believed one employee, Ms Denise Pickering, had been taken on by ACG in a lesser role. She had been employed by FBIS as a Supervisor with responsibility for four different sites, however, he understood she was now being employed by ACG in the classification of Senior Guard at a lower salary level.

[21] FBIS also submits the new employment constitutes “acceptable” employment. While conceding this is to be objectively determined the employees have taken up the job offers made to them by the new contractor. It also submits the nature of the work, the work locations, and the pay and conditions are essentially unchanged. The employees are effectively continuing in the same jobs, albeit with a different employer.

[22] It also submits that in determining what is “acceptable alternative employment” the Commission is not required to apply a “better off overall” test standard. The test instead requires a comparison between the current employment arrangements and what existed previously. In this context it referred to the often cited Full Bench decision in Australian Chamber of Manufacturers v Derole Nominees 14 (Derole Nominees) which held:

“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 like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 15

[23] It also made reference to the decision in National Union of Workers v Tontine Fibres 16 (Tontine) where the Full Bench stated (references omitted):

“The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer. In order to establish whether the alternative employment obtained by the employer is acceptable it is necessary to have regard to such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters (including the location of the employment and travelling time). It is also quite clear from the text of the provision that the Commission may remove the employer’s severance benefit obligations completely or may simply reduce them.” 17

[24] FBIS submits this is “a textbook example of what must by its very concept be acceptable alternative employment” with the employees “...suffering no detriment in the change that's been undertaken here.” 18 However, it acknowledged the employees have suffered some detriment through the loss of accrued entitlement to personal leave and the imposition of a qualifying or probationary period on commencement with the new contractor. They are also being viewed as new employees, rather than employees with a continuous period of service. This would have an impact, for example, in regard to long service leave accruals. It also acknowledged one employee, Ms Denise Pickering, appeared to be employed in a different role with the new contractor and acknowledged in her case there could be grounds for a separate order to be made, although this was not its primary position.

[25] The second reason put forward by FBIS in support of its application is that the employees are not truly redundant and continue to perform the same jobs, with only the identity of the employer having changed. It referred to the decision of the High Court in Amcor Limited v Construction, Forestry, Mining and Energy Union 19 in support of this submission.

[26] It finally made reference to the “Change of contract” clause in the Security Services Industry Award 2010, included by a Full Bench of the Commission, which recognised “a change of contract with the incoming contractor taking over some or all of the relevant staff of the outgoing contractor is a common occurrence in the security industry.” 20 It submits it would be anomalous in the present situation to require payment of redundancy pay in circumstances where the Full Bench has recognised that such payments are not required to be made under the Award.

[27] As indicated, the Commission received five written submissions from the various Respondent’s. Three were received from Mr Graham Crampton; one from Ms Denise Pickering, and another from five Brisbane based employees, namely Matthew Barber, Nicolas Giffen, Ronald Kent Griffith, Malcolm Graham Predl and Nicolas Soter.

[28] Mr Graham Crampton filed submissions on his own behalf and on behalf of employees at the Ingleburn site, namely himself, Mr Kim Wong, Mr Eric Reedman, Ms Michelle Smith, Mr Rodney Holden, and Mr Syed Zaidi.

[29] The first submission was received from Mr Crampton on 4 December 2013. It submits the employees feel “cheated” out of their entitlements as they were required to apply for a job with ACG by sending in resumes and attending interviews. He submits all FBIS did was to provide their telephone contact details to ACG. He also submits the Respondent’s entitlements were not carried over from FBIS to ACG, and all employees were placed on a six month probationary period with ACG. He also submits the employees who attended the interviews with ACG, but were not successful in gaining a position, were paid out their redundancy entitlements and this is “discriminating” treatment against those who accepted positions with the new employer. 21

[30] The submission also highlights concerns about the six month probationary period imposed by ACG and submits this could create a situation where employees are “missing out twice” if terminated during this period. 22

[31] The second submission received from Mr Crampton was sent in response to the directions issued by the Commission and received on 31 December 2013. It contained a “group submission” document from the above named employees at Ingleburn, as well as a personal statement from Mr Crampton.

[32] The group submission states:

“If FBIS said they got us the job and was negotiating with ACG, then why did they send everyone an urgent email on the last day we were employed with them on 31 October 2013 asking if we were employed by ACG and to send our contracts to them? FBIS should have known this if they got us the job.” 23

[33] It submits that as the employees were required to apply for positions and attend an interview they do not believe FBIS had any hand in obtaining alternative employment for the Respondents.

[34] Mr Crampton also submitted a witness statement. However, this was not formally entered into evidence at the hearing as Mr Crampton did not attend. He states he was employed by FBIS for over 12 years and further:

“FBIS say nothing has changed well; I don’t receive a 3% rise each year with the new company or vote on a new agreement as I did with FBIS, I was a supervisor with FBIS up until 31/10/13, I was not employed as a supervisor with the new company ACG I was employed only as a guard, I was also informed by our new manager in ACG prior to commencement that on our site there were no supervisors or senior guards that means I others didn’t retain the same position we held with FBIS. I and Kim Wong both negotiated a higher position after the 01/11/13, so how can everything be the same.” 24

[35] Mr Crampton also submits:

“I have been a security guard on this same site at Ingleburn for over 12 years and with Asciano/Patricks for over 16 years and have now been working for 3 different security companies on this Ingleburn site. The first company I worked for finished in 2001 and I went straight to the site to apply for a job with FBIS, I received that job, and I was doing the same job as I was with the prior company except my position changed from higher position as supervisor back to a guard. That prior company ended up paying me redundancy because there was no other position for me in there company (sic). When starting with FBIS I was doing the same job as I was with the prior company.

In both situation, commencing with FBIS and now commencing with ACG, I had to apply for the position, I had to send in a resume, I had to attend an Interview otherwise I would not have received a position in any of those companies, there would be only one difference, I had to sign a release form for FBIS to release my personal details because FBIS managers would not allow us to contact the new company ourselves and they would not release the new company name to us, that way they can use this section 120 and there agreement clause (sic), FBIS management had this all worked out.” 25

[36] The third and final submission from Mr Crampton was received on 24 January 2014 in response to the submissions from FBIS. He submits FBIS had a responsibility to notify the employees that the contract with Asciano was coming to an end within 28 days, as per the Agreement, and this was not done. He questions why employees weren’t asked about redeployment and says he discussed this with Steve Bitschkat, a Regional Manager at FBIS. Mr Crampton attaches an email from Mr Christmas to Mr Bruce Tresider, and points to a particular paragraph which states:

“FBIS will likely be required to pay redundancies to all employees who are terminated from employment and not offered acceptable alternative employment with ACG during the transition. For an offer from ACG to constitute acceptable alternative employment, the employee’s continuity of service needs to be recognised by ACG including all leave liabilities.” 26

[37] The second group of employees to file submissions in this matter, Mr Matthew Barber, Mr Nicolas Giffen, Mr Ronald Kent Griffith, Mr Malcolm Graham Predl and Mr Nicolas Soter, are Brisbane based. They did not attend the hearing either. In their written submissions, the group states that:

“...the applicant did not obtain acceptable employment on our behalf. To obtain employment with the new provider we were all required to submit applications and attend interviews. These interviews were not facilitated by FBIS and at any time the new provider could have replaced all staff with other staff of their own.” 27

[38] In relation to the efforts of FBIS to obtain the alternative employment the group states:

“All meetings, phone calls, facilitation and correspondence for obtaining employment with the new company were undertaken by us, with no assistance from FBIS. Most of our efforts to contact FBIS during the transition period went unanswered. Any efforts by FBIS to enter into an agreement with ACG regarding continuity of service are considered to not be of an appropriate level. FBIS has also not provided any evidence to show that the Respondent’s individual employment contracts were forwarded across to ACG for their perusal.” 28

[39] In relation to which instrument should cover the employees they state that:

“FBIS does not operate under the Security Services Industry Award (the Security Award). FBIS has chosen to operate under the FBIS International Protective Services (Aust) Collective Agreement 2012-2016. As such the component of the Security Award quoted does not apply to our situation. If the Commission believes that this clause is applicable, Clause 12.5(b)(ii) would require FBIS to pay all of our accrued statutory and award entitlements on termination of our employment.” 29

[40] Ms Denise Pickering was the final employee to file a submission in this matter. She submitted a brief statement, but again did not attend the hearing. The statement outlined her situation and submits her take home pay has been reduced by $967 per fortnight. In relation to the process undertaken she stated:

“I was asked by FBIS to write a letter saying I give them permission to pass my details on to ACG National. FBIS International did do this. I was contacted by ACG National and asked if I was interested in obtaining a position with them, I said yes, I was then told I would have to attend an interview and go through the process of applying for a job with ACG National like everyone else just because I already worked at the site or was the current supervisor does not mean I am guaranteed a job. I would have to apply and then be considered.

I went through the process of applying for a job with ACG; I was told they were going to offer me a position if I was interested. ACG would not tell me what position I was been offered only that it was a full time position at Dapto.

It wasn’t until I attended the company induction and signed my employment letter from ACG that I was told by Martyn Howard that I would not be retained as supervisor at Patrick Autocare at Dapto and that I was been demoted back to a guard.” 30

[41] As indicated, the Applicant has noted Ms Pickering’s situation differs from that of other employees now employed by ACG. It stated:

“...I would readily acknowledge that there would be sufficient basis for a separate order to be made in relation to Ms Pickering if, Commissioner, you were of the view that Ms Pickering's case compelled some different conclusion. There's sufficient basis for that.

The primary submission is that she's in the same position as everyone else. She's gone to new employment which in any view is acceptable alternative employment. It would be in some ways an unhappy analysis to start differentiating between employees. Having said that, her case is more compelling than the others because she has been able to say, ‘Look, I've lost as a result of this,’ and that does provide a basis for her to be viewed differently. I wouldn't urge that outcome upon you, Commissioner, but were you to reach that view, I would readily acknowledge it would be open to you.” 31

Consideration

[42] The circumstances associated with a new employer taking over a contract when the existing contractor is unsuccessful in re-tendering for that contract are obviously significant, and create a situation that is potentially disruptive and uncertain for the employees involved. The evidence also indicates that for some long-standing employees this was not the first time that they have been confronted with this situation. However, at the same time these circumstances are not unusual in the security services industry, and consequently there are provisions in place that relieve an employer of the obligation to make redundancy payments where the employer “obtains acceptable alternative employment” for the employees.

[43] As indicated, at the outset several issues potentially arise for determination. The first concerns the “threshold” issue raised by the Applicant. Do the employees have an entitlement under s.119 to redundancy payments, or has that entitlement been extinguished by the combined operation of s.21 of the Act and sub clause 12.5 of the Security Services Industry Award 2010?

[44] The Applicant’s submissions in support have been set out in some detail and are not re-stated now. I have also had regard to the decision of Commissioner Spencer in ISS that is referred to by FBIS, and her finding that because of the change of contractor provisions in the Award s.119 of the Act does not apply to employees covered by the Award in change of contract situations. Therefore, as there is no entitlement under s.119 there can be no order to reduce that entitlement under s.120.

[45] However, there is one important distinction between the circumstances in that matter, which is of particular relevance. FBIS is covered by an Enterprise Agreement, rather than a Modern Award as was the case in the matter before Commissioner Spencer. Clause 1.5.1 of that Agreement, the FBIS International Protective Services (Aust) Pty Ltd Collective Agreement 2012 - 2016 32, also provides that the Agreement operates in place of “any other award or collective agreement.”

[46] The existence of an Enterprise Agreement in this case, instead of an Award, means s.121(3) of the Act must also be considered. It states:

“(3) If a modern award that is in operation includes such a term (the award term), an enterprise agreement may:

(a) incorporate the award term by reference (and as in force from time to time) into the enterprise agreement; and

(b) provide that the incorporated term covers some or all of the employees who are also covered by the award term.” 33

[47] I am satisfied the requirements of section 121(3) mean the threshold argument put by FBIS fails. Section 121(3) provides that if a modern award includes “other exceptions” to the obligations contained in s.119 an Enterprise Agreement may incorporate the Award term. However, it continues to indicate it must do so “by reference” and indicate which employees are intended to be covered in this way. I am satisfied this requires that express reference to these matters must be included in the Agreement. I can find no such reference in the Agreement that covers FBIS and therefore am not able to conclude the requirements in s.121(3) have been satisfied. It therefore follows that the Agreement is not limited in regard to the operation of s.119 in the same way as the Award in the matter before Commissioner Spencer, and therefore the threshold argument fails.

[48] I now turn to consider whether an order should be made under s.120 and, if so, in what terms. I am satisfied, firstly, that FBIS has satisfied the requirement in s.120(1)(b) that it “obtains” other employment for the employees. In coming to this conclusion I have noted the submissions and evidence of Mr Crampton that the employees themselves did most of the work to obtain employment with the new contractor. He also submits they were still required to be interviewed before being engaged and were then subject to an initial probationary period. However, the evidence of Mr Christmas indicates there was a significant degree of contact, and in some cases negotiation, with the new contractor about engaging the employees, and on what terms. The employees were likely not aware of the extent of these discussions and the various proposals being canvassed. I am also satisfied that there is nothing unusual for the employees to be interviewed before being engaged, even in this change of contractor situation, and there are good reasons why this would occur. For example, it would be unusual if the employees were simply taken on by the new contractor “sight unseen.” The establishment of an initial probationary period, while likely to be an extra source of uncertainty for the employees at an already uncertain time, is also likely to be part of the new contractor’s normal employment practices. There is also no evidence that any employee was put off during this probationary period.

[49] The question of what is required by the word “obtains” was considered by the Full Bench in Derole Nominees. It indicated, firstly, it cannot mean obtain “in the fullest sense possible” because one employer is incapable of effecting a contract of employment with its employees and another employer, and the word must be given “some lesser meaning.” It concluded:

“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.” 34

[50] In Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai 35 (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. I am satisfied that the evidence of Mr Christmas, in particular, indicates FBIS has done enough in all the circumstances to “obtain” alternative employment for the employees.

[51] The tests to be applied in determining what is “acceptable alternative employment” are also well established. It is, firstly, a test that is to be applied objectively. “Acceptable” means that it must meet the relevant standard. The decision in Derole Nominees indicates that the work being of a like nature, the location, pay arrangements, hours of work, seniority, fringe benefits, workload and job security are all relevant considerations in this context.

[52] The onus of establishing that the alternative is acceptable also rests with the employer, and the Commission may remove a redundancy benefit obligation entirely, or may instead reduce it. 36 I am also satisfied that it does not require the new employment to be identical, or for it to be broadly comparable. In this context I note the statement of Senior Deputy President Watson in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia37 in the following terms:

“I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.” 38

[53] Vice President Lawler in Datacom also found that:

“Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.” 39

[54] There is also a suggestion that the employees who have ongoing employment have in some way been “cheated” or discriminated against because they have not received redundancy payments, when compared to those made redundant who did received these payments. However, this ignores the fact the employees who claimed to have been discriminated against remain in ongoing employment with income and other benefits continuing to be received and accrued. This situation can be contrasted with that of the employees made redundant who may well find their redundancy payments quickly eroded while they search for employment elsewhere.

[55] The issue of the employees non-transferable credits, such as personal or long service leave entitlements, is also one that I have given consideration to. It is evident from the Full Bench test cases that established the scale of redundancy payments that now appear in s.119 of the Act that redundancy entitlements are, in part, intended to compensate employees for the loss of these entitlements. It follows that where there is no continuity employment, or no recognition of these entitlements by the new employer, then this is a factor to be taken into account in terms of whether that employer has obtained adequate acceptable employment for the employees. In the present matter the employees have been paid out their accrued annual leave and long service leave accruals, (where the employee’s length of service meant they had gained such an entitlement). To the extent the employees have received these payments in advance of when they might otherwise have been entitled to them they can be said to have received some benefit as a result. However, as the submissions of Mr Crampton indicate, the employees have suffered some detriment, given that they now commence to accrue these entitlements as new employees with their new employer. However, these impacts are difficult to quantify and will depend, for example, on any future requirements to access personal leave, and how long the employees remain in employment with ACG in the future. As the decisions referred to earlier also indicate the existence of some detrimental alteration to employment conditions does not mean that acceptable alternative employment has not been obtained.

[56] The weight of evidence in this matter indicates the factors previous decisions of this tribunal have found should be had regard to in determining whether new employment is an acceptable alternative – work of a like nature, pay levels, hours of work, workload, work location, travelling time, terms and conditions of employment – are all factors in this case where there has been little or no change between what existed when the employees were employed by FBIS and what is now in place. I am accordingly satisfied that the overwhelming majority of the employees have been engaged by the new contractor on terms and conditions of employment that are essentially the same as those that applied when they were employed by FBIS. The evidence in fact indicates in some cases those terms and conditions are more advantageous than those that existed previously at FBIS. I am accordingly satisfied the test of what is acceptable alternative employment has been satisfied and FBIS should be relieved of any obligation to make redundancy payments.

[57] However, I am also satisfied that the circumstances involving Ms Denise Pickering warrant further consideration, based on her own evidence and the acknowledgements made by FBIS in its submissions about her situation. She has clearly been engaged by ACG on a level of salary that is substantially below what she was paid when employed by FBIS. Whilst reluctant to single out particular employees I am satisfied her circumstances warrant differential treatment. It is difficult to be precise about how her situation should be dealt with, however, I am satisfied it is appropriate to provide her with a redundancy entitlement based on her length of service with FBIS, but to reduce that entitlement by 50 percent of what it would otherwise be.

[58] Orders giving effect to this decision will be issued.

COMMISSIONER

Appearances:

Mr R Millar appeared on behalf of the Applicant.

Hearing details:

2014.

Melbourne:

12 February.

 1   Fair Work Act 2009 (Cth) at s.120

 2   Outline of Submissions of the Applicant at para 1.

 3   Transcript at PN227

 4   MA000016 at cl.12.5

 5   Transcript at PN170

 6   Ibid at PN171

 7   Ibid at PN176

 8   Ibid

 9   [2013] FWC 5396

 10   Ibid at [42]

 11   Ibid at [49]-[50]

 12   Transcript at PN187

 13   Ibid at PN191

 14   C037CRA Dec 1029/90 S Print J4414

 15   Ibid at page 5

 16   [2007] AIRC FB 1016

 17   Ibid at [24]

 18   Transcript at PN199

 19 (2002) 222 CLR at 241

 20   [2009] AIRCFB 963 at [15]

 21   Letter from Graham Crampton to Fair Work Australia, 29 November 2013 at page 3

 22   Ibid

 23   Letter from Mr Graham Crampton, Mr Kim Wong, Mr Eric Reedman, Ms Michelle Smith, Mr Rodney Holden, Mr Syed Zaidi to the Fair Work Commission on 31 December 2013 at page 1

 24   Statement of Graham Crampton dated 30 December 2013 at page 1

 25   Ibid at pages 1-2

 26   Attachment to Statement of Graham Crampton dated 24 January 2014

 27   Group statement of Mr Matthew Barber, Mr Nicolas Giffen, Mr Ronald Kent Griffith, Mr Malcolm Graham Predl and Mr Nicolas Soter at Para 5

 28   Ibid at para 9

 29   Ibid at para 14

 30   Statement of Denise Pickering, undated, received by the Fair Work Commission on 3 February 2014 by email

 31   Transcript at PN249 and PN250

 32   AE898880

 33   Fair Work Act 2009 (Cth) at s.121(9)

 34   C037CRA Dec 1029/90 S Print J4414 at page 4

 35   [2013] FWC 1327

 36   [2007] AIRC FB 1016

 37   PR974699

 38   Ibid at [89]

 39   [2013] FWC 1327 at [9]

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