Idameneo (No. 123) Pty Ltd T/A For Health Group v Ms Marina Zhao
[2025] FWC 235
•24 JANUARY 2025
| [2025] FWC 235 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Idameneo (No. 123) Pty Ltd T/A For Health Group
v
Ms Marina Zhao
(C2024/7861)
| COMMISSIONER DURHAM | BRISBANE, 24 JANUARY 2025 |
Variation of redundancy pay – whether acceptable alternative employment obtained – other employment found to not be acceptable – application dismissed
This decision concerns an application by Idameneo (No. 123) Pty Ltd T/A For Health Group (Idameneo/the Applicant) under section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay owing to an employee, Ms Marina Zhao.
Ms Zhao had been employed by Idemaneo for just over eight years in the role of Occupational Health Nurse – Enrolled Nurse, at their Browns Plains Medical and Dental Centre (the Centre).
In October 2024, Ms Zhao was advised that the Centre’s occupational health function would transfer to an associated entity of Idameneo, Logic Enterprises (WA) Pty Ltd (Logic).
Idameneo submit that Ms Zhao was offered a suitable alternative position with Logic at the same location and the same rate of pay, which Ms Zhao declined.
On 4 November 2024, Idameneo terminated Ms Zhao’s employment by way of redundancy. Pursuant to s.119 of the Act, Ms Zhao is entitled to a redundancy payment equivalent to 14 weeks’ pay, in addition to the required notice period, given or paid in lieu.
Idameneo have applied to reduce Ms Zhao’s redundancy entitlement to nil, on the grounds that Ms Zhao had rejected the offer of a suitable alternative position within Logic.
Ms Zhao advised my Chambers that she opposed the variation in redundancy payment and sought assistance from the Queensland Nurses' & Midwives' Union (QNMU) who subsequently represented her for this matter.
I issued directions to the parties to file and serve submissions and materials on which they sort to rely. The Applicant, represented by Ms Charmaine Breytenbach, People & Culture Business Partner for Idameneo and Ms Zhao represented by Mr Aaron Vass, Industrial Officer for the QNMU consented to the application being determined on the papers.
Legislation / Statutory Framework
Section 119 of the Act states as follows:
“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.
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
(3) A reference in this section to continuous service with the employer does not include periods of employment as a casual employee of the employer.”
Section 120 of the Act provides:
“120 Variation of redundancy pay for other employment or incapacity to pay
This section applies if:
(1) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and 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.”
The question for consideration in the present matter is whether Idameneo obtained other acceptable employment for Ms Zhao and if this is the case, whether I will exercise my discretion to reduce those amounts.
Factual Background
Ms Zhao was employed in the role of Occupational Health Nurse – Enrolled Nurse (Enrolled Nurse) with the Idameneo from 26 September 2016 until 4 November 2024. Ms Zhao was covered by the Nurses Award 2020 (the Nurses Award). In mid-2024, Idameneo decided to transition its occupational health operations to Logic.
On 21 October 2024, representatives for Idameneo met with Ms Zhao and presented her with a letter advising her position as an Enrolled Nurse was redundant and offering alternative employment as an Occupational Health Technician (Technician) within Logic. This proposed role was to be covered by the Health Professionals and Support Services Award 2020 (Health Services Award).
On 25 October 2024, Ms Zhao rejected the offer.
On 4 November 2024, Idameneo terminated Ms Zhao’s employment by way of redundancy. Ms Zhao has received payment for her accrued entitlements and statutory notice period, however she has not been paid any redundancy entitlement.
Submissions
The Applicant
Idameneo submit it consulted with Ms Zhao as per clause 29 of the Nurses Award, and advised Ms Zhao that her role was redundant, but that an alternative position was available with Logic.
Idameneo argue that the Technician role offered to Ms Zhao was similar in duties to her Enrolled Nurse role and believed that Ms Zhao had the necessary qualifications, experience, and skills to be successful in the role of Technician.
They further believe that the role was acceptable alternate employment as:
·It was at the same location as her original role;
·Idameneo was willing to accommodate her part-time work arrangement in place at the time, even though the new role was full-time;
·They had agreed to increase Ms Zhao’s rate of pay from $30.75 per hour to $35.00 per hour; and
·Ms Zhao’s seniority or long service leave entitlements would not be reduced.
Idameneo state that upon advising her intention not to accept the alternate role, Ms Zhao had not provided any reasons that the business could consider or consult on further.
The Respondent
In her submissions, Ms Zhao referred to DRW Investments Pty Ltd t/a Wettenhalls v Timothy Richards & Others (‘DRW Investments’), where Sams DP made the following pronouncement regarding the interpretation of the words “other acceptable employment” under s.120(1)(b)(i) of the Act:[1]
“[178] … The underlying principle as to what is ‘acceptable employment’ does not mean it must be acceptable to the employee. … The test is an objective one. …
…
[182] … In Vicstaff Pty Ltd (t/as Stratco) v May (2010) 204 IR 233 (‘Vicstaff’), Bissett C said at paras [29]-30]:29. The determination of whether or not alternative employment is acceptable must be determined objectively and not subjectively from the perspective of the employer or employees. That the alternative employment may be rejected does not objectively make it unacceptable nor does the fact that the employment was offered make it, by virtue of the offer, acceptable. …
30. It is therefore incumbent upon the employer (Vicstaff) in this matter to demonstrate that the alternative employment is acceptable taking into account all matters relevant in such a consideration. Had the alternative work been considered acceptable to the individuals one imagines they would have accepted the work offered.’
[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:
· rate of pay;
· hours of work;
· work location;
· seniority;
· fringe benefits;
· workload;
· job security;
· continuity of service;
· accrual of benefits;
· probationary periods;
· carer’s responsibilities; and
· family circumstances.
This list is not exhaustive. There may be other relevant factors.
[184] It is also necessary to take account of whether the employee is cooperative and
willing to meaningfully engage with the employer in discussions on any offers of alternative employment. An unreasonable refusal to accept the alternative employment or a failure to meaningfully engage with the employer about objectively reasonable offers, may result in orders to reduce the redundancy pay entitlement to nil. As the authorities make plain, these are factors which may influence the Commission’s exercise of discretion under s 120 of the Act.”
Additionally, Ms Zhao also referred to Children’s Services Support Unit (CSSU) Inc[2] where the Commission considered the skill set required by the alternative position to be relevant regarding whether it is “acceptable” within the meaning of section 120(1)(b)(i) of the Act.
Ms Zhao subsequently submits that the Commission must decide that Idameneo did not obtain ‘acceptable’ alternative employment for her within the meaning of section 120(1)(b)(i) of the Act on the basis that the proposed employment was not acceptable, having regard to the hours of work, required skill set, workload, and annual leave entitlement of the offered position.
Hours of work and their impact on her caring responsibilities
The alternative employment offered to Ms Zhao required her to work between 8:00am and 4:00pm. Her current role was undertaken between 7:00am and 3:00pm. Ms Zhao argues this change in hours would significantly impact her ability to manage her caring responsibilities and family circumstances, as she is responsible for collecting her three children from their school after 3.00pm.
Ms Zhao submits that she lacks a reasonable alternative to picking up her children at this time, specifically she notes there is no outside school hours care available on site at their school, nor does she have family or other support available to assist.
Required skill set
Additionally, Ms Zhao submits that the proposed role was unacceptable because it was not a nursing role and required her to perform many non-nursing duties. Ms Zhao is committed to a career in nursing and considers that accepting a non-nursing role would jeopardise her career, put her nursing registration at risk and limit her future ability to apply competitively for nursing roles with other employers.
Ms Zhao referenced that, to maintain registration, the Nursing and Midwifery Board of Australia (NMBA) requires nurses to have completed a minimum of 450 hours of nursing practice within the past five years. This requirement is assessed yearly when registration is renewed and can be audited at any time.
Ms Zhao states that a nurse who can show they are working in a role which requires nursing registration and the performance of clinical duties, has strong evidence that they meet recency of practice requirements. However, a nurse working in a non-clinical role, or a role which does not require nursing registration at all, may not be able to demonstrate they meet recency of practice requirements. Because of this, Ms Zhao was concerned that if she accepted the alternative role, she would soon have to find additional work as a Nurse to maintain her nursing registration.
Workload
Ms Zhao considered the workload of the proposed Technician role was significantly higher than that of her original position. Ms Zhao states that when she was operationally transferred to Logic, under her existing contract of employment, she had been regularly required to work unpaid overtime, which meant that she could not complete her shift at 3:00pm, significantly impacting her caring responsibilities and family circumstances, in particular school pick-ups.
Reduction in entitlements
Because the proposed employment was not a nursing role, it does not fall under the coverage of the Nursing Award, and instead was to be covered by the Health Services Award. As such the new role only attracted an entitlement of four weeks of annual leave per year, instead of the five weeks which Ms Zhao enjoyed in her role because of the operation of clause 22.2(a) of the Nurses Award. Ms Zhao argues that this reduced entitlement further underscores the unacceptability of the proposed employment.
Given the terms of the proposed employment were incompatible with Ms Zhao’s caring responsibilities, and at odds with her aspiration to continue her nursing career, she submits that the test set out in section 120(1)(b)(i) of the Act as to whether Idameneo obtained ‘acceptable’ employment has not been met.
Engagement in consultation
Noting that the extent to which an employee “is cooperative and willing to meaningfully engage with the employer in discussions on any offers of alternative employment” may affect how it exercises its discretion under section 120 of the Act[3], Ms Zhao submits that she was cooperative and engaged in discussions with Logic about the terms of the proposed employment.
Specifically, Ms Zhao notes that when the shift to Logic was first raised with her around April 2024, she had expressed her interest in a role with Logic.
Ms Zhao states that she engaged in discussions with Ms Cronin, Mr Blake Biffin (Operations Manager) from Logic and sought information regarding the new role including whether the location would remain the same, whether she would be able to keep her current roster, and what would happen if she refused to take a role offered by Logic.
On 1 July 2024, Mr Biffin called Ms Zhao to discuss the transition of her role from Idameneo to Logic. She recalls Mr Biffin advised Ms Zhao that the duties of the role would be the same, except that she would not be required to perform certain administrative duties, which she had been performing following the resignation of an administrative employee from Idameneo in April or May 2024.
Ms Zhao also asked if a pay rise could be included in the new role. Ms Zhao advised she would seek an increase to $35 per hour. Mr Biffin advised he would look into it, and that he was pretty sure he would be able to secure that rate or something close to it. Ms Zhao asked if anything else would change about her current role. Mr Biffin advised nothing else would change, except that she would be employed by Logic instead of Idameneo, noting that there is not much difference because both companies are part of the ForHealth group.
Ms Zhao states that Mr Biffin did not mention anything about a change in her role title, hours of work, yearly annual leave accrual, or qualifications required for the role.
On 6 August 2024, Ms Zhao received an ‘offer’ or a ‘contract’ via an internal system (Dayforce). Upon receipt of the offer, Ms Zhao attempted to contact Mr Biffin to discuss it but received an ‘out of office’ message and followed its instructions to use an alternative contact point.
Between 6 August 2024 and 14 August 2024, Ms Zhao spoke with Ms Cy Lindeberg (Operations Manager Logic - New South Wales and Victoria). Ms Zhao expressed her concerns about the offer. Ms Zhao states that she noted there was no change to her rate of pay, as discussed with Mr Biffon and noted the role title had changed and that it was apparently no longer a nursing position. She further expressed this could affect her nursing registration and her future career opportunities in nursing. Ms Lindeberg advised Ms Zhao that she could not make any decisions on Mr Biffin’s behalf. Ms Lindeberg advised Ms Zhao to reject the agreement in Dayforce and speak to Mr Biffin upon his return from leave.
At some time between 6 August 2024 and 14 August 2024, Ms Zhao rejected the offer in Dayforce.
On 14 August 2024, Ms Zhao received an email from Ms Lindeberg which was part of an email chain between Ms Zhao, Ms Stojkovski and Mr Biffin. Ms Lindeberg expressed her desire for Ms Zhao to provide information about her daily working activities, and noted some differences between an example of Ms Zhao’s working schedule and a typical Logic schedule. Ms Lindeberg advised “We will work with you on transitioning the current operating rhythm of Browns [Plains] into the Logic operating rhythm for clinics.”
Later that same day, Ms Zhao replied to Ms Lindeberg’s email and asked whether there was anything she needed to do to resolve the outstanding concerns raised about the pay rate for the new role and the other terms of the agreement. Ms Lindeberg replied to Ms Zhao’s email on the same day suggesting that People and Culture may be seeking to verify the pay rate discussion with Mr Biffin, and that Ms Zhao should ask People and Culture what information they need.
On 19 August 2024, Ms Zhao emailed Mr Biffin and advised she had rejected the offer in Dayforce because:
i. The hourly pay rate did not increase as expected;
ii. Her role title changed from “Occupational Health Nurse” to “Occupational Health
Assessor – Technician”; and
iii. The annual leave entitlement was reduced from five (5) weeks to four (4) weeks.
Ms Zhao again explained that she wished for the role to remain a nursing role because that aligned with her qualifications and nursing career goals. She further reminded Mr Biffin of their earlier discussion regarding that her role would not be changed, except that the pay rate would be increasing, and she would be operating under Logic procedures.
Later that same day, Mr Biffin replied to Ms Zhao’s email and confirmed Logic was able to offer her a $35 per hour pay rate. Mr Biffin also advised he would need to seek HR advice on whether the role could remain a nursing role, as Logic usually employed Occupational Health Assessors under a different award.
On 21 October 2024, Ms Zhao attended a meeting with representatives from Idameneo to discuss the impacts on her current role and future employment regarding the change to Logic. Ms Zhao submits Idameneo did not seek her views on the proposed employment during the meeting, or in the subsequent days leading up to their professed deadline on 28 October 2024. Instead, Idameneo presented the proposed employment as a “take it or leave it” offer, depriving Ms Zhao of the ability to comment on the role’s proposed terms and whether they were suitable.
It is Ms Zhao’s view that had Idameneo afforded her an opportunity to “meaningfully engage” in discussions about the offer, she would have expressed her concerns about it. However, Idameneo did not ask Ms Zhao for her views about the proposed employment until she had rejected it for the reasons she has set out in her statement.
Ms Zhao argues that Idameneo did not have a sound basis to form its view that the proposed employment was ‘acceptable’ before it terminated Ms Zhao’s employment because it did not take the basic first step of asking her for her views on the offer.
Given Ms Zhao’s cooperation and engagement with Logic, and with Idameneo on the limited basis it provided, Ms Zhao submits that the Commission should exercise its discretion under section 120 of the Act in favour of her receiving her full entitlement to severance pay under section 119.
Consideration
There are two elements to s.120(1)(b), I must first be satisfied that the position in question was obtained by the Applicant.
The second element is determining whether the position obtained was acceptable. If the position is found to be obtained and acceptable, I must then consider whether to reduce the amount owing to the Respondent.[4]
Was a position obtained
In this case, I am satisfied that by offering Ms Zhao the position of Occupational Health Technician, they did obtain alternative employment for her.
Was the alternative employment acceptable?
As noted by the Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd at 124:[5]
“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.”
The case law outlines the factors to be considered in relation to section 120(b)(i) of the Act. I address these factors as relevant below.[6]
Pay level/location
I accept that the location was unchanged, and that Logic had agreed to an increase in Ms Zhao’s salary. These factors weigh in favour of a finding that the offered position was acceptable.
Hours of Work, Caring Responsibilities and Workload.
Whilst I accept that Logic had agreed to continue Ms Zhao’s existing part time hours, Ms Zhao made it very clear that the proposed change in her rostered hours of work was not acceptable. Despite her concerns, the final offer made to Ms Zhao confirmed that her hours would change to 8:00am – 4:00pm. Having considered Ms Zhao’s submissions, I accept that this change in her rostered hours would have had a significant impact on her capacity to care for her three children and her father and was clearly not suitable to her.
Even in the event that the hours may have been amended at some point, Ms Zhao also points out that during the period that she was “operationally transferred” to Logic, under her existing contract and hours, which allowed her to finish at 3:00pm, the workload she experienced resulted in her having to work unpaid overtime on a regular basis, which she says, and I accept, significantly impacted her ability to manage her caring responsibilities and family circumstances. These considerations weigh against a finding that the offered position was acceptable.
Change of Award and reduction in entitlements
Again, despite Ms Zhao raising this issue on multiple occasions, Logic failed to address her concerns. I accept that losing a week’s annual leave would have been significant to Ms Zhao, particularly given she has three school age children. Viewed objectively, I find that it was reasonable for Ms Zhao to have taken this into consideration when assessing whether or not the proposed position was acceptable.
Required skill set and Impact on Nursing Career
It is clear that whilst some of the duties in the proposed role align with the original role, the fact remains that, despite Ms Zhao’s continued objections, the role offered to her was not a nursing role and could be performed without a Nursing Qualification or Registration.
I accept that Ms Zhao has spent her career as a professional Nurse and takes great pride in her profession. Viewed objectively, I accept that accepting a non-nursing role, would not only have impacted her ability to maintain her Registration, but would also have impacted on her personal and professional identity and her capacity to find future employment in her chosen career. This consideration does not weight in favour of a finding that the position offered was acceptable.
Engagement and Co-operation
Having considered the submission of the parties I accept that Ms Zhao meaningfully engaged with both Idameneo and Logic regarding the proposed position. Ms Zhao clearly outlined her concerns with the role and why she found it unacceptable. This consideration does not weigh in favour of a finding that she was offered acceptable employment.
Conclusion
Determining whether the role offered to Ms Zhao was acceptable requires an objective assessment of the suitability of the role to Ms Zhao in the context of her personal circumstances.
Having considered all of the submissions and circumstances of this matter, I find that, having meaningfully engaged in discussions regarding the proposed position, it was reasonable for Ms Zhao to have reached the conclusion that she was unable to accept the offer.
Consequently, I find that Idameneo did not obtain acceptable alternative employment for Ms Zhao within the meaning of section 120(1)(b)(i) of the Act.
As the requirements of section 120(1) have not been met, it is not open to me to consider any reduction in Ms Zhao’s redundancy entitlement. The application is therefore dismissed.
COMMISSIONER
[1] [2016] FWC 461, [178]-[184].
[2] [2014] FWC 7503.
[3] [2016] FWC 461, [184].
[4] Kelly Group (Administration) Pty Ltd [2023] FWC 2650.
[5] (1990) 140 IR 123.
[6] [2019] FWC 756, [24]; [2016] FWC 2880, [11].
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