GP Down South Limited T/A GP Down South

[2021] FWC 4521

[2021] FWC 4521

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

GP Down South Limited T/A GP Down South
(C2021/3883)

COMMISSIONER WILLIAMS PERTH, 27 JULY 2021

Variation of redundancy pay.

[1] This is an application made pursuant to s.120 of the Fair Work Act 2009 (the Act) by GP Down South Limited T/A GP Down South (the Applicant). The respondent employee is Mrs Giuliana Argentina La Mancusa (Mrs La Mancusa).

[2] The Applicant is applying for the Commission to reduce the redundancy pay payable to Mrs La Mancusa on the basis that the Applicant has obtained other acceptable employment for Mrs La Mancusa.

[3] Sections 119 and 120 of the Act are relevant and are set out below.

“Subdivision B—Redundancy pay

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.”

[4] Also relevant in the determination of this matter is the applicable enterprise agreement, the GP Down South LTD Enterprise Agreement 2019 [AE507396] (the Agreement).

[5] The Agreement, at clause 32 - Redundancy, provides at 32.5 that in a particular redundancy the employer may apply to have the general severance pay prescription varied if the employer has obtained suitable alternative employment for an employee.
[6] The Commission invited Mrs La Mancusa to provide a submission in reply to the application, but she has not done so.

Background and factual findings

[7] The application states that Mrs La Mancusa’s original position as an administration officer was 30 hours per week and the hourly rate of pay was $26.00

[8] Mrs La Mancusa has been offered and has accepted other employment as an administration program support officer which is for 21 hours per week at the higher hourly rate of $30.51.

[9] The application states there will be no loss of Mrs La Mancusa’s accrued entitlements of annual leave, personal/carer’s leave and long service leave. The work is in the same location.

[10] The Applicant seeks that the redundancy pay that would have been payable of $9,360 is reduced to $2,808.

Other acceptable employment?

[11] Considering these facts above the issue to be determined by the Commission is whether the offer of alternative employment amounted to “other acceptable employment” within the terms of s.120 of the Act and “suitable alternative employment” within the meaning of the Agreement and then if it was, whether the amount of redundancy pay payable should be reduced as the Applicant’s seeks.

[12] As noted by the Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 1 at 124:

“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 provisions 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 elections 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.”

[13] The determination of whether the position offered was other acceptable employment must be determined objectively and not subjectively from the perspective of the employer or the employee.

[14] As was explained by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 2 at [89]:

“...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.”

[15] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 3 a Full Bench of the Commission found that the determination of whether alternative employment is acceptable will involve a consideration of 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.

[16] In National Union of Workers v Linfox Australia Pty Ltd 4 Watson VP considered the following criteria:

(a) the employee's skills, experience and physical capacity;

(b) the rates of pay, hours of work, duties and conditions of employment associated with the proposed job;

(c) whether or not continuity of employment is provided to the employee;

(d) the extent of any additional travel distances from home to the new place of work and whether the employee has to substantially alter their method of travelling to and from work in order to attend to duty; and

(e) the level of any compensation.

[17] In my view the term “acceptable alternative employment” considered in this case law is the same as the term “other acceptable employment” used in s.120 of the Act and the term “suitable alternative employment” used in the Agreement and hence the case law is directly applicable in this matter.

Conclusion

[18] In this instance I accept that the new position that Mrs La Mancusa has accepted is other acceptable employment for the purposes of s.120 of the Act and suitable alternative employment under the Agreement.

[19] The reduction sought by the Applicant in the redundancy pay payable is in my view appropriate in the circumstances.

[20] The redundancy pay payable to Mrs La Mancusa will be varied and will now be $2,808.

[21] An order [PR732180] to that effect will be now issued.

Printed by authority of the Commonwealth Government Printer

<PR732179>

 1 (1990) 140 IR 123.

 2   PR974699.

 3 27 IR 226.

 4   [2008] AIRC 647.