Hilton Worldwide T/A Hilton Brisbane v Mrs Victoria Harrison

[2015] FWC 262

[2015] FWC 262

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Hilton Worldwide T/A Hilton Brisbane
v
Mrs Victoria Harrison
(C2014/4939)

COMMISSIONER SPENCER BRISBANE, 13 JANUARY 2015

Variation of redundancy pay.

[1] This decision relates to an application filed pursuant to s.120 of the Fair Work Act 2009 (Cth) (the Act). The application has been made by Hilton Worldwide T/A Hilton Brisbane (the Applicant).

[2] The Applicant has applied to the Fair Work Commission (the Commission) seeking that the redundancy entitlement of Mrs Victoria Harrison (the Respondent) be reduced to nil.

[3] The Applicant has made the claim on that basis that the Applicant submits that it has obtained other acceptable employment for the Respondent.

[4] Directions were issued for the filing of material in the application. The parties were directed to ensure that their submissions included submissions in relation to whether the matter should proceed by way of formal hearing or determination on the papers. The Applicant did not address the issue; however, the Respondent requested that the matter be determined on the papers. A conference was held. On the basis of the nature of the application, the material filed in the matter and the views of the parties, the Commission determined that the matter could efficiently be determined on the papers.

[5] While not all submissions and evidence filed in this matter have been referred to, all of such have been considered.

[6] This matter was considered at the same time as four separate applications which arise from the same changes to employment. The Commission has issued separate decisions on the basis that the parties filed material in relation to the applications separately. There is a significant overlap in the circumstances and consideration in all matters. The decisions reflect these similarities, however each matter has been considered on the basis of the submissions and evidence of the parties as well as the findings and consideration of the Commission in each matter.

Background

[7] The Respondent was employed full-time working 38 hours per week as a laundry attendant at the Applicant’s Brisbane hotel. The Respondent had worked for the Applicant since 28 May 2001.

[8] A meeting was held on with the Applicant, Respondent and other employees to discuss the changes to the employees’ positions and working hours. Following the meeting, the Applicant met with the Respondent individually. The Respondent was provided with an estimated redundancy calculation, based on 12 years of continuous service.

[9] The Respondent was offered a permanent-part time position working 112 hours per 4 week cycle (an average of 28 hours per week). The Respondent signed a Letter of Offer for this permanent part-time position which came into effect some days later.

Relevant legislation and award clauses

[10] The National Employment Standards (NES) prescribe the minimum entitlements to redundancy pay pursuant to s.119 of the Act:

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

[11] The application has been made pursuant to s.120 of the Act which provides:

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.

[12] The Applicant specifically relies upon s.120(1)(b)(i).

[13] The Applicant submitted that the Hilton Brisbane Enterprise Agreement 2010 (the Agreement) covered and applied to the employment of the Respondent. Clause 6.3 of the Agreement provides that redundancy pay is provided for in the NES.

Applicant’s submissions and evidence

[14] The Commission issued Directions to the parties regarding the filing of submissions and evidence relating to the application. The Applicant filed a Letter of Offer signed by the Respondent and a response to the Respondent’s submissions. Following the conference, the Applicant filed further material detailing the hours worked by the Respondent, and the commencement date and entitlement to redundancy pay.

[15] The Applicant indicated in the application that the Applicant had obtained acceptable employment for the Respondent in the form of a permanent-part time position working 28 hours per week.

[16] The Applicant indicated in the application that the amount of redundancy owing in total, for the Respondent, is five weeks wages, however the estimated redundancy calculation provided to the Respondent states that the Respondent would be entitled to 12 weeks pay. The Applicant later submitted that the Respondent’s entitlement to redundancy payment is 12 weeks.

[17] The Applicant provided a Letter of Offer signed by the Respondent for part-time employment with the Applicant. The Applicant has made limited submissions regarding s.120(1)(b)(i) of the Act and how such employment was “acceptable” employment. The Applicant submitted that the role and entitlements remained the same, with a reduction in working hours only.

[18] The Applicant’s response indicates that the Respondent worked extra hours per week where mutually agreed, after the alternative employment commenced. The Applicant submitted that the Respondent had a conversation with the Executive Housekeeper, Robyn Lindsay, to the effect that the Respondent wished to work 4 days per week rather than 3 days. The Applicant submitted that the next roster was changed so that the Respondent worked 7 hours per shift, 4 days per week.

[19] In justifying, on a business case, the redundancies, the Applicant stated that occupancy levels in the hotel have been at reduced levels and therefore it had been necessary to reduce employment across relevant departments.

Respondent’s submissions and evidence

[20] The Respondent filed a statement in response to the application and an affidavit.

[21] The Respondent submitted that after the group meeting, the Respondent agreed to an individual meeting with the Applicant. In the meeting, the Respondent stated that she informed the Applicant that she didn’t agree with a reduction to 28 hours per week and was told that if she did not agree to the part-time position that she would be made redundant.

[22] The Respondent submitted that she was provided with an Offer of Employment and an estimated redundancy calculation.

[23] The Respondent submitted that she was upset and stressed that she could be made redundant, due to the fact that she was a sole earner, that because of her age she would not be able to find employment easily and because she was not skilled. The Respondent submitted that she felt coerced and pressured into signing the Offer of Employment, and she signed it because she did not want to lose her job.

Consideration

[24] An application pursuant to s.120 has multiple elements of which the Commission must be satisfied prior to issuing an Order.

[25] Firstly, the wording of the section is that an entitlement to redundancy pay must exist in order for the Commission to vary that redundancy pay entitlement. The Commission has previously held that in order for s.120 of the Act to have any application there must first be an entitlement to redundancy pay pursuant to s.119 of the Act. 1 Further, it was held that where there is no entitlement under s.119 there can be no order to reduce the “entitlement” pursuant to s.120.2

[26] It is noted that the period of service has been stated as 13 years on the application, however, the application also states that the Respondent’s entitlement to redundancy is 5 weeks. The redundancy estimation provided to the Respondent was 12 weeks pay based on 12 years of service. The Respondent later submitted that the entitlement to redundancy pay is 12 weeks. Under s.119 of the Act, a period of over 10 years service corresponds with an entitlement to redundancy pay of 12 weeks. It is sufficient for the purposes of this decision that both parties accept, and the Commission is satisfied, that the Respondent has an entitlement to redundancy pay, pursuant to s.119 of the Act, subject to any order that the Commission may make.

[27] Employees are entitled to redundancy pay pursuant to the provisions of the Act, and s.119 relevantly provides that an employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated 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. I accept that the Respondent’s position of full-time laundry attendant was terminated at the employer’s initiative because they no longer required the job to be done by anyone. The full-time position was made redundant and the Respondent has an entitlement to redundancy pay.

[28] The critical issue is, on the material, should the Respondent forgo an entitlement to her redundancy payment in circumstances where there the Respondent has continued to be employed by the Applicant, albeit with a reduction in hours by 10 hours per week.The onus rests solely on the Applicant to prove their case under either of the alternatives put in s.120.

[29] The Commission must consider the submissions and evidence regarding any alternate employment to enable the Commission to assess the “acceptable” nature of that employment. The Applicant made limited submissions in respect of the “acceptable” nature of the permanent part-time position. However, the Respondent accepted an offer of employment with reduced hours. The Respondent submitted that she believed she was pressured to do so by the Applicant and in addition, would have had difficulty finding another job if she had not done so.

[30] In the matter of Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 3, the Full Bench stated 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.” 4

[31] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 5, the Full Bench stated:

“...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...” 6

[32] The Respondent has accepted the alternative employment, the position as laundry attendant and the pay level is the same, while, on the evidence, the hours of work have changed. Objectively, a reduction in 10 hours of work per week results in a substantially lower income for the Respondent.

[33] Despite the fact that the Respondent has accepted the alternative employment, given the reduction in hours of work (while all other conditions remain the same), this does not constitute acceptable alternative employment. The Applicant has not demonstrated that the alternative employment was acceptable pursuant to s.120(b)(i) of the Act to obviate their total obligation to pay redundancy.

[34] The Applicant had a significant period of employment, had minimal notice of the change and submitted, based on her circumstances, she had little option but to accept the alternative employment. The reduction in hours would have an on-going negative financial impact on the Respondent.

[35] Accordingly, in all the circumstances, I am satisfied that, in accordance with s.120 (1)(b)(i) of the Act, I should exercise my discretion pursuant to s.120(2) of the Act and reduce the amount of redundancy pay on the basis that the alternative employment has been obtained by the Applicant but with a reduction in hours.

[36] An employee has an entitlement to 12 weeks redundancy for over 10 years of service. I have exercised my discretion to reduce the amount to seven (7) weeks redundancy payment (based on a 38 hour week at the base rate of pay at the date of the redundancy). This amount, less the appropriate tax, is payable within 14 days from the date of this Decision.

[37] I Order accordingly.

COMMISSIONER

 1   Application by CAE Australia Pty Ltd [2012] FWA 7992 per Watson VP at [13].

 2   Ibid; also refer M & S Dickson [2011] FWA 5206 per Lewin C.

 3 (1990) 140 IR 123.

 4 (1990) 140 IR 123 at pp128.

 5 (1988) 27 IR 226.

 6 (1988) 27 IR 226 at pp230 - 231.

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