Fresh Food Industries Pty Ltd
[2010] FWA 8533
•5 NOVEMBER 2010
[2010] FWA 8533 |
|
REASONS FOR DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Fresh Food Industries Pty Ltd
(C2010/5047)
COMMISSIONER CLOGHAN | PERTH, 5 NOVEMBER 2010 |
Redundancy pay.
[1] On 24 September 2010, Fresh Food Industries Pty Ltd (“the Employer”) made application to Fair Work Australia seeking variation of redundancy pay as it had found acceptable alternative employment for the employees named in the application.
[2] The Employer made application pursuant to s.120 of the Fair Work Act 2009 (“the Act”).
[3] The application was the subject of a conference on 15 October 2010. The conference was attended by Mr Daniel Doherty as a representative of the five (5) named employees in the application.
[4] The grounds upon which the application was made are set out as follows: “The Company has sold a business unit to another non associated company. The purchasing company is offering all affected employees employment in substantially similar job capacities and on remuneration no less favourable”.
[5] The matter was set down for a hearing on 28 October 2010 as the intended transfer of business was 1 November 2010.
[6] At the conclusion of the hearing, I indicated to the Employer that I would provide a Decision on the application by 3pm that day to give the parties certainty as to their situation as at 31 October 2010.
[7] An Interim Decision dismissing the application was provided to the parties prior to 3:00pm on 28 October 2010 and I advised that further reasons would be provided in due course. This Decision provides those further reasons.
[8] The application related to five employees, which was subsequently reduced to four employees, for reasons not associated with this Decision.
[9] The employees have their employment conditions, in part, regulated by the Clerks Private Sector Award 2010, the Road Transport and Distribution Award 2010 or the Storage Services and Wholesale Award 2010.
[10] With one exception, the employees had approximately six (6) years service with the Employer; the exception employee, had approximately three (3) years of service.
[11] The relevant provisions of the Act are as follows:
Subdivision B - Redundancy Pay
- Section 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 |
- Section 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, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA 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.
[12] At the conference on 15 October 2010, the Employer advised, and this was confirmed by Mr Doherty on behalf of the employees, that each of the employees had verbally been offered employment with the new owner of the business immediately after their current employment terminated.
[13] During the conference on 15 October 2010, I advised the Applicant, among other things, that it would be necessary to demonstrate, by way of documentation, that each of the employees subject to the application had received and accepted an offer of employment with the new owner of the business.
[14] At the hearing on 28 October 2010, the Applicant tendered four documents entitled “Re: Offer of Employment”. The documentation was dated 25 October 2010 and addressed to the four employees subject of the application.
[15] Mr Doherty, when asked by the Tribunal whether the employees had accepted the offer of employment responded:
“No, they haven’t.”
“THE COMMISSIONER: When do you expect them to make that decision?”
“MR DOHERTY: Sir, the situation was that we had asked for a letter of employment. That wasn’t forthcoming at the time until this hearing earlier on took place. Mr Matthews then emailed the new owner, asking for that to happen as late as yesterday, with the new owner. I spoke to him about it, telling him we had this meeting tomorrow at 11 am. I then visited the premises at 10 to 5 last night and nothing had been done. He assured me that this would be done over night. I then rang this morning at 8 o’clock, nobody was there to do any letters.”
“Then I left their premises at 10 o’clock this morning with only three done, but it’s definitely not the way we saw the letters written out. In the letter, if I say, it’s got here also, and Ms (indistinct) and Ms Dougherty have read the letters, but not signed because it’s got here, the reassignment of the services, “That full employment entitlements have been received”. Nothing has happened as you’re aware, so nothing has been signed. There is also - our understanding, there was no change in the salary packages for the employees and the working conditions. That is not the case.”
“THE COMMISSIONER: When you say, ‘It’s not the case’, what are you saying to me, that the conditions have changed for those employees that are transferring over?”
“MR DOHERTY: That’s right. I just take it in my case, in discussions - I sent Mr (indistinct) yesterday copies of how I saw the letters of employment should be written because the previous night he said, “I’ve got to get these employment done as you’ve asked”, and I thought I’d write them out as the previous ones we had before, and then when I emailed him over - I’ve got a difference in my salary package of $5000 because there is a car involved. He agreed to the new figure that was in the previous ownership, of $98,000, and on the letter you can see it’s 93.”
“And just on the ladies, because I haven’t had the (indistinct) because I told them I had to leave for this meeting. The ladies were doing more than 40 hours a week, to get the work done. He has stated to me that it’s a 38 hour week which is okay, we take that onboard, but he’s expecting that all the work currently to be carried out, on his side of it, to be carried out in that 38 hour week. I said at the moment that’s impossible to take onboard. The major issue there is he’s got in his letter there that we’ve already been given the acceptance of entitlements.” 1
[16] While it appears that the Applicant has had good intentions to secure ongoing employment with the new business owner, this has not come to fruition in a satisfactory way. Further, Mr Doherty expressed the feeling of employees that the matter had “gone beyond...A bit of a joke” 2. Mr Doherty submitted that the application be concluded and provide certainty for the employees.
[17] In conclusion, the Applicant has been unable to meet the terms of the application and s.120(1)(b)(i) of the Act. Having reached such a finding, I consider it inappropriate to exercise the discretion provided to the Tribunal in s.120(2) of the Act. An Order to dismiss the application is now issued.
COMMISSIONER
Appearances:
Mr B Matthews, the Employer.
Mr D Doherty, representing the Employees.
Hearing details:
2010
Perth
28 October
1 PN 55 to PN 61
2 PN 67
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