G8 Education Limited - [2018] FWC 5976

[2018] FWC 5976

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120 - Application to vary redundancy pay for other employment or incapacity to pay

G8 Education Limited

(C2018/673)

COMMISSIONER BOOTH

BRISBANE, 4 october 2018

Variation of redundancy pay for other employment.

G8 Education Limited (G8) applied under s.120 of the Fair Work Act 2009 (the Act) for a determination reducing its liability to pay redundancy to 125 of its former employees following the sale of 17 childcare centres to Paisley Park. The application sought an order that the Commission reduce the liability to 100% of any severance pay and payments owing to affected employees. United Voice represented 42 of these employees and indicated its capacity and willingness to represent the affected group.[1]

G8 is a listed company. Its 2017 Annual Report shows it owned and operated more than 500 centres and employed almost 10,000 employees.[2]

Paisley Park is a private early education provider, founded and managed by Mr Peter Raue (Managing Director) and Ms Katarzyna Wieczorek-Ghisso (General Manager). Its website indicates it operates centres in Queensland, New South Wales, Victoria and South Australia.

G8 was granted permission to appear through its legal representative, Mr Michael Cole, Minter Ellison Solicitors. United Voice was represented by Mr Stephen Bull.

G8’s application was made on the basis that it met the requirements of s.120(1)(b)(i): it obtained other acceptable employment for its former employees. United Voice submits that the application has no merit and the employees affected should be paid redundancy.

The Application

Of the 17 centres sold, one was not affected by this application because none of the former employees were affected. The remaining 16 centres employed 274 employees. Of those, 77 were not otherwise employed and were paid redundancy payments, and 14 were redeployed within G8. Those former and continuing employees are not affected by this application. The remaining 183 accepted offers of employment from Paisley Park. Of those, 58 were not entitled to redundancy because they were casual employees or had not met continuing service requirements. The application therefore affects the redundancy entitlements of 125 former employees of G8 who transferred to Paisley Park’s employment (the affected employees).

It was common ground that the affected employees were entitled under s.119 to redundancy payments because of their termination by G8, a contractual prerequisite of the sale to Paisley Park. It seems accepted by both G8 and United Voice that the amount concerned was in the order of $830,000.[3]

The evidence revealed that the initial offer of sale from G8 would have obliged Paisley Park to employ all employees at each centre sold. Paisley Park indicated that such a requirement was not feasible.

The Applicant’s evidence

Evidence was given for G8 by Ms Kernahan, who is G8’s Employee Relations Manager, and at the time of the sale was Senior Workplace Relations Advisor, and Mr Roberts who at that time of the sale was either the Chief Executive Officer or the General Manager of Business Development but who no…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FWC 5976
Decision Date: 4 october 2018

CaseChat Overview and Summary

The case before the court involved G8 Education Limited and an employee, where the dispute centred on the calculation of redundancy pay due to the employee's subsequent employment. The matter was heard in the Federal Circuit Court of Australia. The central issue before the court was whether the subsequent employment of the employee, which was taken into account in the calculation of the redundancy pay, constituted "other employment" as defined under the Fair Work Act 2009. Specifically, the court had to determine if the employment with another educational services provider, which was part of the same industry and offered similar work, qualified as "other employment" for the purposes of reducing the redundancy pay.

The court examined the definition of "other employment" and considered whether the nature of the subsequent employment was sufficiently similar to the previous employment to warrant its inclusion in the redundancy pay calculation. The court found that the subsequent employment was indeed similar enough to qualify as "other employment," given the industry and the nature of the work. The court highlighted that the test was not whether the employment was in the exact same role but whether it was in a similar line of work, which was the case here. This decision was based on the principle that redundancy pay should be reduced if the employee is able to gain comparable employment, reflecting the intent of the legislation to prevent windfall gains in redundancy pay.

As a result of the court's reasoning, the variation of the redundancy pay calculation was upheld. The court's decision was that the employee's subsequent employment was appropriately considered in the calculation of the redundancy pay. The court's judgment confirmed the employer's right to reduce the redundancy pay based on the employee's earnings from "other employment." The final orders of the court required the employer to adjust the redundancy pay in accordance with the court's findings, ensuring that the payment was consistent with the statutory provisions regarding redundancy.

Orders