Golden Glow Corporation (NT) Pty Ltd T/A Golden Glow Nursing v Ms Kelly Gahan
[2020] FWC 2159
•30 JUNE 2020
| [2020] FWC 2159 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Golden Glow Corporation (NT) Pty Ltd T/A Golden Glow Nursing
v
Ms Kelly Gahan
(C2020/1357)
COMMISSIONER SPENCER | BRISBANE, 30 JUNE 2020 |
Variation of redundancy pay – other acceptable employment not obtained – redundancy pay not varied.
INTRODUCTION
[1] Golden Glow Corporation (NT) Pty Ltd T/A Golden Glow Nursing (the Applicant/the employer)has applied pursuant to s.120(1)(b)(i) and sought a determination under s.120(2) of the Fair Work Act 2009 (the Act). The application sought to have the Commission reduce to nil the redundancy entitlement of Ms Kelly Gahan (the Respondent), a former employee of the Applicant. The variation to the redundancy pay was sought on the basis that the Applicant had obtained for the Respondent other acceptable employment.
[2] Ms Gahan was employed under the Nurses Award 2010 (the Award). Ms Gahan was employed by the Applicant from 29 October 2018 until her employment ended on 16 February 2020. The application pursuant to s.120 of the Act was made on 4 March 2020.
[3] Directions had been set for the exchange of submissions. The Applicant’s material was inadequate in response and further Directions were set. A Hearing was held by telephone. Mr Shane Klein, Industrial Organiser for the Australian Nursing and Midwifery Federation appeared for the Respondent. Ms Maureen Schaffer and Ms Joanne Kovac, Directors for the Applicant, appeared at the Hearing, with Ms Kassie Cardiff, HR Manager for the Applicant.
[4] Ms Schaffer indicated at the Hearing that she had not received nor read any of the Respondent’s material. It was confirmed that two sets of Directions and the Respondent’s material had been forwarded to Ms Schaffer’s correct email address. During the Hearing Ms Schaffer confirmed such had been received. In order not to further prejudice the Respondent further, Mr Stein as per the Hearing Directions was permitted to provide submissions on behalf of the Respondent and Ms Schaffer was given the opportunity after the Hearing to provide a written response to the Respondent’s material. The Respondent was then granted a reply to the Applicant’s written response.
BACKGROUND
[5] The Applicant provides a nursing service and decided to close its Alice Springs branch and make seven employees redundant. The Applicant sought to reduce each of the employee’s redundancy payment to nil, on the basis that they had obtained other acceptable employment for each of the seven employees. Directions were issued seeking submissions on these matters in terms of the new employment that the Respondent had obtained. The Directions also required a comparison between the job the Respondent held with the Applicant and the new job (the Applicant had obtained) on the following elements:
• Status;
• Rate of pay;
• Location;
• Hours of employment;
• Duties;
• Whether the other employment was obtained by the employer; and
• Whether the other employment was or was not acceptable and why.
[6] Ms Gahan was employed by the Applicant for a period of more than 12 months. Ms Gahan was paid an hourly rate of $30 and was employed on a part-time basis, working approximately 20 hours per week. She was paid two weeks’ notice.
[7] The Applicant submitted that following a meeting with their Accounting Firm on the 29 January 2020, the Applicant was informed that the Alice Springs office was not a financially viable branch. Ms Schaffer stated that she then contacted the Fair Work Commission to find out what process she needed to follow in order to close the office.
[8] On the 3 February 2020, Ms Schaffer held an “at risk” meeting at the Applicant’s Alice Springs office, which was attended by all the staff except Ms Maria Cooke (as she was on holidays) and Ms Leisal MacDonald, (who was informed of the meeting but did not attend).
[9] At that meeting, Ms Schaffer informed the staff that the Alice Springs office would be closing down. The staff were informed that they would all be paid the notice period of two weeks, except for those that were required to receive three weeks’ notice, including the additional week for being over 45 years of age. Ms Schaffer informed them that the office will be closed on the 14 February 2020, but they would be paid up to 17 February 2020 unless they were entitled to longer. One of the staff stated they had already heard from one of the clients that the business was closing down, which, Ms Schaffer conceded that was quite possible, as the Applicant was required to inform the Commonwealth Department of Health and Ageing that they were closing and needed to find alternative providers for the clients on Aged Care Packages. The Department had been notified on the previous Friday.
[10] It was accepted that the Respondent was entitled to 4 weeks’ redundancy pay, pursuant to clause 12 of the Nurses Award 2010 (the Award), which refers to section 119 of the National Employment Standards (the NES) and the Act.
RELEVANT ACT AND AWARD PROVISIONS
[11] Section 119 and 120 of the Act provide:
“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.”
(emphasis added)
[12] Section 120 confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise have been entitled under s.119 of the Act. This requires an assessment of whether the Applicant has obtained other acceptable employment for the Respondent.
[13] Clause 12 of the Nurses Award 2010 states:
“12. Redundancy
NOTE: Redundancy pay is provided for in the NES. See sections 119–123 of the Act.
12.1 Transfer to lower paid duties on redundancy
(a) Clause 12.1 applies if, because of redundancy, an employee is transferred to new duties to which a lower ordinary rate of pay applies.
(b) The employer may:
(i) give the employee notice of the transfer of at least the same length as the employee would be entitled to under section 117 of the Act as if it were a notice of termination given by the employer; or
(ii) transfer the employee to the new duties without giving notice of transfer or before the expiry of a notice of transfer, provided that the employer pays the employee as set out in paragraph (c).
(c) If the employer acts as mentioned in paragraph (b)(ii),the employee is entitled to a payment of an amount equal to the difference between the ordinary rate of pay of the employee (inclusive of all-purpose allowances, shift rates and penalty rates applicable to ordinary hours) for the hours of work the employee would have worked in the first role, and the ordinary rate of pay (also inclusive of all-purpose allowances, shift rates and penalty rates applicable to ordinary hours) of the employee in the second role for the period for which notice was not given.”
CONSIDERATION
[14] In determining an application made pursuant to s.120(1)(b)(i) of the Act, the Commission must first be satisfied that there is an entitlement to redundancy pay. 1 Where there is no entitlement to redundancy pay under s.119 of the Act, there can be no order to reduce the entitlement.2
[15] It was not in dispute that the Respondent was entitled to be paid 4 weeks’ redundancy pay, based on her period of employment, as her job had been made redundant. I am satisfied that the Respondent has an entitlement to redundancy pay pursuant to s.119 of the Act. The matter turns on whether the Applicant had obtained other acceptable employment for the Respondent.
[16] The Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 3 characterised “other acceptable employment” as follows:
“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 a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.”
[17] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 4 the Full Bench held:
“...We do not propose to repeat here the thoroughly detailed argument presented by counsel for the union. A considerable part of that case was devoted to questions of onus and to supporting the proposition that the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters. It was argued that the failure of the employer to adduce evidence of such matters caused the company to fail to make out a case for an exemption. We have no doubt that there is an onus on the employer invoking cl 51(c) and that matters of the kind referred to by the union may be relevant in assessing the position in a particular case. We do not believe it to be necessary to make that examination in every case. Where an employee has accepted alternative employment in circumstances as those here, then in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl 51(c) of the award...”
[18] Further, a Full Bench of the Commission in Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai 5 stated as follows:
“[8] In NUW v Tontine Fibres [2007] AIRCFB 1016 (Tontine) a Full Bench of the AIRC considered the meaning of the expression “acceptable alternative employment” in a redundancy provision in an enterprise agreement. It was common for enterprise agreements to reflect award provisions and contain redundancy entitlements that could be reduced if the employer obtained acceptable alternative employment (or some variant of that expression). The Full Bench observed:
“[23] It is well established... that the concept of acceptable alternative employment is to be determined objectively. As noted by a Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd.
[24] 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)…”
[9] 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.” [Footnotes omitted]
[19] The Applicant retains the onus to demonstrate that they ‘obtained’ the other acceptable employment. In FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia 6the Full Court of the Federal Court considered what is required by the term “obtains”, within the meaning of s.120(b)(i). The Full Court held that:
“20. With respect to the Full Bench’s reliance on the Shorter Oxford, the present might be one of those rare occasions on which it is useful to refer to the corresponding full entry in the Oxford English Dictionary itself. Relevantly, that reads:
To come into the possession or enjoyment of (something) by one’s own effort, or by request; to procure or gain, as the result of purpose and effort; hence, generally, to acquire, get.
We would not regard the references to “effort”, and to “purpose and effort” in this meaning as implying the existence of some kind, much less a strong kind, of “moving force” in bringing about the new state of possession referred to. They imply, rather, that the possession must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance. Moreover, we cannot perceive any reason why what is described as the “general” connotation of the word – “to acquire, get” – should not be regarded as a perfect fit for the purposes sought to be achieved by the relevant provision in the standard award clause before this provision became the subject of legislation.” 7
[20] In Australian Commercial Catering Pty Ltd v Marcelia Powell and Maria Togia, 8 the Full Bench of the Commission, in relying on FBIS, stated:
“…[t]he employer “obtains” other acceptable employment when it acquires or gets the employment by its conscious, intended acts.” 9
[21] Ms Schaffer stated that she arranged and conducted one on one meetings with each of the staff on Wednesday 5th February 2020. Ms Schaffer stated that she informed the staff that it was her intention to assist them to obtain employment as soon as possible. To that end, Ms Schaffer had arranged for one of the Managers from NT Friendship and Support, Ms Lucy Markoff, to visit the office the next day to discuss the possibility of employment with that organisation. Ms Markoff arrived on the afternoon of the 4February 2020 and talked with the staff about employment opportunities within her organisation. Ms Markoff also answered questions from the staff regarding their organisation and work conditions. Ms Schaffer stated that Ms Markoff encouraged all the staff who wanted employment to submit their resumes directly to her. She also told them that there were employment opportunities in the Katherine region as well. She left her information for any staff to take advantage of this offer, to contact her.
[22] Ms Schaffer stated that she contacted several other potential employers in Alice Springs and told them of the staff she had that required employment. Ms Schaffer stated that she received responses from Australian Regional & Remote Community Services (ARRCS) and Calvary Care, who both requested that Ms Schaffer ask any staff who would like employment to send through their applications. Ms Schaffer stated that she spoke on the phone with Link Up, which is the organisation that most of the Applicant’s NDIS clients were transitioning to. Link Up informed Ms Schaffer that they would like her staff to transition over as well to ensure continuity of care for the participants. Ms Schaffer communicated this information to the staff at that time. The submission by Ms Schaffer below, about general payment arrangements is indicative that whilst she endeavoured to organise a meeting with prospective employers there was no specific proposed employment.
Comparison of wages
[23] The Applicant submitted that as all support workers are likely to be employed under the Social, Community, Home Care and Disability Services Industry Award 2010, she considered they will all retain wages at the same rate as they had with the Applicant. She outlined that if any of the Respondents chose to work as Independent Contractors they would get paid more, although they would then need to pay their own taxes and Superannuation. The Nurses who are employed by other organisations would be paid according to the Nurses Award 2010. If they gain employment at the Alice Springs Hospital, they would be subject to their own Enterprise Bargaining Agreement and would therefore get paid more. Ms Schaffer submitted that if the Nurses stay working in the Community, their rate of pay probably wouldn’t change except for their yearly increments.
[24] Ms Schaffer stated that she arranged a meeting with ARRCS to introduce the Applicant’s Registered Nurses and also visited the Aged Care Assessment Team to arrange meetings with them for the Registered Nurses.
[25] The Applicant submitted that the Respondents all had several options of employment available to them, but due to health worker staff being in high demand, they would have had a choice of who they would go with. Ms Schaffer stated that she could not force them to work with employers that she had arranged for them. Ms Schaffer also stated that she was satisfied that all of the Respondents had been employed to their satisfaction by the time the Applicant’s office was closed. Whilst this was the view of Ms Schaffer, it was clear from her submissions that she did not hold any particular detail of what employment had ultimately been accepted. Further, she had no knowledge of who had gained employment and with who.
[26] Ms Schaffer submitted that she considered it seemed like a very good outcome for the staff and she was of the understanding that as there was no gap in employment, she could lodge a request for reduction of redundancy pay, based on this premise, and that the Commissioner would decide if that is the case and how much deduction would apply. Prior to the individual meetings held on the 5 February 2020, Ms Schaffer stated she had accessed the Fair Work Ombudsman (FWO) letter of termination of employment (redundancy) template. Ms Schaffer stated she followed the template instructions and completed this for each staff member.
[27] Ms Schaffer stated that the Redundancy Pay and Entitlements page on the Fair Work Commission website provided:
“An employer can apply to the Fair Work Commission to have the amount of redundancy they have to pay reduced if ‘The employer finds other acceptable employment for the employee’.”
[28] The Applicant submitted that based on that information and that Ms Schaffer stated she had ‘potentially secured’ several types of employment for each employee, Ms Schaffer stated she assumed that this satisfied the criteria for a reduction in the redundancy payments and therefore the application was legitimate. This was done, she submitted, on the basis that it did not specify that the employee had to accept the employment. However, the Applicant had not ‘obtained’ a specific job for the Respondent. The submission ‘potentially secured’ is not commensurate with ‘obtained’.
[29] The Respondent was advised on 5 February 2020 that her job had been made redundant effective as of 16 February 2020. The two weeks’ notice was provided by virtue of this notification some 17 days later on 4 March 2020. It was submitted on behalf of the Applicant that was there is no time frame for making the application, which was made on 4 March 2020, over two weeks after the Respondent had been made redundant.
[30] In relation to the employer securing ‘other acceptable employment’ at the relevant time DP Colman stated in Electricity Wizard Pty Ltd v Pasilika v Tauiliili: 10
“In my view, for an employer to avail itself of s.120, the other acceptable employment must be ‘obtained’ and offered to the employee while she or he is still employed by that employer. The section speaks of an employer obtaining other acceptable employment for the employee. This cannot occur once the relevant employment relationship has come to an end. In the present case, the other employment was not obtained until after Mr Tauiliili’s employment with Electricity Wizard ended.”
[31] There was no evidence provided that the Applicant obtained any of the Respondents other acceptable employment, or that this was done whist they were employed by the Applicant.
[32] The Applicant provided no evidence of obtaining other acceptable employment for this Respondent. The Respondent had been working 20 hours per week at $30 per hour employed under the Nurses Award 2010. The Respondent held a second job with a second employer and had increased her hours with her other employer following notice of her redundancy with the Applicant. She maintained this employer had been seeking for her to increase her hours and she responded and did so. The Respondent stated that the Applicant had no involvement in this matter.
[33] Ms Gahan also stated that she enrolled on her own initiative and was successful in being accepted in the Graduate Enrolled Nurse Program, commencing on 20 April 2020. Whilst the Applicant did request that the date of commencement be bought forward to assist the Respondent’s transition period, this was denied.
[34] Mr Klein set out that the Applicant’s application had been made more than 17 days after the redundancy had been implemented and his member had been without the redundancy payment.
[35] Mr Klein submitted there was no debate that Ms Gahan’s job had been made redundant by the employer. Further, he argued that the employer had not obtained other acceptable employment for his member. Ms Gahan had increased her hours of work with her other employer and enrolled in studies.
[36] The Respondent in this case obtained the other employment, through her individual efforts, rather than it being obtained by the conscious and intended pursuit of a specific job, on the basis of particularised acts by the Applicant.
[37] The Applicant did no more than make ‘general initial routine inquiries’ for possible opportunities. Specific communication about actual jobs was not made to the Respondent. The Applicant did not demonstrate a course of conduct that was maintained to ensure that as a result of such conduct that the Applicant secured a job for the Respondent. I consider that the Respondent was left to independently obtain further employment.
[38] The employer’s action in obtaining other acceptable employment must have a “strong moving force”. 11 The provision by the Applicant to other employers, of lists of redundant employees and their contact details simply provided a contact for any employee to enter the recruitment process.
[39] In the current circumstances the employer’s actions were deficient, in that at its highest it facilitated contact with another employer, but did not cause other acceptable employment to be offered or become available to the Respondent. The action that the employer took was of a preliminary nature and not a “strong moving force towards the creation of the available opportunity”. 12
CONCLUSION
[40] On the evidence, the Applicant has not obtained other acceptable employment for the Respondent. The Respondent was made aware of the Applicant’s enquiries for possible employment. However, such efforts to obtain employment, could only be described as minimal and general.
[41] Accordingly, this case did not advance to a proper comparison of the conditions of the other employment against the relevant indicia, and whether it was commensurate and acceptable when compared with the Respondent’s position. This was because the Applicant did not obtain the other employment. It is also taken into account that the Applicant did not file the section 120(1)(b)(i) applications or communicate such with the Respondent employees, until some time later. Nor was the Applicant responsive in these proceedings.
[42] No evidence demonstrated that the employer had obtained any other actual employment for the Respondent. Accordingly, the redundancy payment is not reduced or varied and four weeks redundancy payment in terms of a redundancy payment pursuant to section 120 (2) of the Act is payable to the Respondent.
[43] When taking all of the criteria and circumstances into account, in accordance with s.120(1)(b)(i), (2) and (3), and for the reasons set out above, the redundancy payment of four (4) weeks is not varied. It is Ordered that the Applicant is to pay the Respondent the full amount, as set out above, of redundancy pay that the Respondent is entitled to within 14 days of this decision.
[44] I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR718571>
1 Application by CAE Australia Pty Ltd [2012] FWA 7992 at [13]
2 Ibid
3 (1990) 140 IR 123 at 128
4 (1988) 27 IR 226 at 230 - 231
5 [2013] FWC 1327
6 [2015] FCAFC 90
7 Ibid at [20]
8 [2016] FWCFB 5467
9 Ibid at [37]
10 [2018] FWC 4556 at [24]
11 Serco Sodexo Defence Services Pty Ltd (SSDS) [2015] FWC 641.
12 Ibid.
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