Ikon Administration Pty Ltd

[2019] FWC 5269

[2019] FWC 5269

The attached document replaces the document previously issued with the above code on 31 July 2019.

Amended paragraph numbering.

Associate to Deputy President Gostencnik

Dated 31 July 2019

[2019] FWC 5269

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Ikon Administration Pty Ltd
(C2019/2538)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 31 JULY 2019

Application to vary redundancy pay.

[1] Ikon Administration Pty Ltd (Applicant) applied under s.120 of the Fair Work Act 2009 (Cth) (Act) seeking to reduce the redundancy pay entitlement of one of its former employees, Mr Rajesh Sathineti (Respondent). The Applicant is seeking for the varied obligation to be nil on the grounds that it obtained other acceptable employment for the Respondent. A hearing of the application was held on 17 June 2019.

[2] The Respondent commenced employment with the Applicant on 17 June 2011, 1 initially on a temporary visa and subsequently was assisted by the Applicant to obtain his Permanent Residency through sponsorship.2 Between June 2011 and April 2019, the Respondent performed three different roles – Day Shift Supervisor, Assistant Manager and most recently Events Manager3 (since 2017) until he ceased employment with the Applicant on 12 April 2019.4

[3] Section 120 of the Act provides as follows:

“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] In or around November 2018, the Applicant was successful in securing a further contract with the Melbourne Convention and Exhibition Centre (MCEC), where the Respondent was based. The organisational structure of the Applicant was presented to MCEC, which indicated that the Respondent’s position was Operations Manager not Events Manager. 5 The Applicant also felt that this title better represented the duties and seniority of the Respondent’s role and the two positions of Events Manager and Operations Manager essentially consisted of the same duties.6

[5] In or around February 2019, the Respondent’s Manager, Mr Jamie McGuinness, explained to the Respondent that his position of Events Manager would become an Operations Manager role with some minor additional duties. 7 At this stage, the Respondent was also provided with a position description for the Operations Manager role.8

[6] The Applicant says that the Respondent showed interest and had the ability to perform the role, however, would be expecting an increased salary to which the Applicant advised there was no consideration to increase the Respondent’s salary to take on the role. 9

[7] On 1 April 2019, the Applicant made a formal offer of employment to the Respondent for the position of Operations Manager, which it considered to be a comparable role. The Applicant contends that the offer of employment contained provisions that were more favourable than the Respondent’s current contract of employment.  10

[8] A comparison of the Respondent’s 2017 contract and the new offer of employment was provided by the Applicant in the below table: 11

[9] On 8 April 2019, the Respondent indicated that he would not be accepting the offer and on 10 April 2019 the Applicant’s HR Manager, Mr Michael Hoang, further met with the Respondent to discuss the offer. 12 At this meeting, the Respondent again indicated that he would not be accepting the offer as he felt that the additional duties warranted an increase in salary, that he was unable to work Good Friday due to personal commitments and that he did not believe it was a comparable role due to the additional duties.13

[10] The Applicant says the two roles are comparable and commensurate with the Respondent’s skills, salary and experience for the following reasons:

a. The location was the same;

b. The contractual hours of work were the same;

c. The salary was the same;

d. The seniority of the position was the same;

e. The knowledge/skills experience level of the positions were the same or similar; and

f. Both roles were full time. 14

[11] The Respondent contends that the new role as Operations Manager had significantly more duties and responsibilities 15 including management responsibilities, number of direct reports, performance appraisals, senior stakeholder management, purchasing and invoicing and payroll,16 although during evidence the Respondent accepted that he could perform the duties of the Operations Manager role with some additional training.17 The Respondent also accepted that his role as Events Manager was an operational role.18 The second issue the Respondent raised was the extended work hours he believed would be necessary to meet the requirements of the additional responsibilities and working on public holidays.19

[12] The Respondent has indicated that he is not able to work Good Friday as he has personal commitments and as his faith does not allow him to work. 20 The Applicant states that the Good Friday Appeal was the busiest day of the year at MCEC and whoever occupied the Operations Manager role would be required to work it.21 The Applicant contends that working on Good Friday is not a new expectation and that it was also in the Respondent’s contract of employment for the Events Manager role.22

[13] The Respondent submits that he was asked to leave the Applicant on 12 April 2019 after a discussion with HR regarding the role of Operations Manager that had been offered to him. The Respondent says that he was asked to sign a termination letter and was informed that the Applicant would pay him four weeks in lieu of notice as there was no agreement on the new role at that time. 23

[14] The Applicant submits that on 12 April 2019, it met with the Respondent and asked if he had thought about the matter. The Applicant says that the Respondent expressed that he wanted to be paid a redundancy entitlement of around 13 weeks since the Applicant was not prepared to increase his salary for the Operations Manager role. 24 The Applicant issued a cessation of employment letter to the Respondent and the parties agreed to resolve the issue by the lodgment of this application.25 Essentially, the Applicant argues that the offer of employment was a cosmetic change in title only and any additional duties would be minimal.26

[15] During evidence, the Respondent explained that the two main reasons for not accepting the offer of employment was that there would be additional duties with no increase to his salary and the expectation of having to work on Good Friday. 27 The Respondent says that in the last eight years he has never had to work Good Friday.28

[16] I turn now to consider whether given all the circumstances the Applicant has obtained acceptable alternative employment for the Respondent. Before doing so, it is necessary to say something about whether the circumstances of this case may be properly characterised as a redundancy.

[17] On the face of the evidence summarised above, the Applicant appears not to have made a decision that the job (that is the collection of duties) performed by the Respondent are no longer required to be performed by anyone. Nor has it redistributed the duties previously performed by the Respondent amongst existing employees so that the “job” performed by him no longer exists or is required.

[18] Instead, the Applicant appears to have proposed to unilaterally alter the Respondent’s job by proposing a change in title, the addition of some duties, and minor alterations to the contract of employment. In substance, the “job” continues to be required and exists.

[19] Nevertheless, as the parties proceeded to argue the case as a redundancy to which s.120 applies, I will determine the matter accordingly.

[20] In Australian Chamber of Manufacturers v Derole Nominees Pty Ltd, 29 a Full Bench of the Australian Industrial Relations Commission (AIRC) observed that:

“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.” 30

[21] The differences in the employment conditions between the redundant position and the employment is plainly relevant to the question whether the employment is “acceptable”. The concept of “other acceptable employment” was considered in NUW v Tontine Fibres 31wherein a Full Bench of the AIRC observed:

“[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)…”

[22] The decision was cited with approval in Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai, 32 which explained further:

“[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.”

[23] Taking into account the evidence given and the authorities cited above, I accept that the location, salary and hours of work as between the Events Manager role and the Operations Manager role are the same. There is no evidence before me to conclude as the Respondent argues that the additional duties would result in working extending hours beyond his working hours as Events Manager. The only point of difference between the roles would be the additional duties (which the Respondent accepted could be done with additional training) and the requirement to work on Good Fridays. Since by any measure the position offered was in terms of hours, general duties, remuneration, work location and other employment conditions the same as the Respondent’s position of Events Manager, I consider the offer of employment as Operations Manager to be acceptable employment within the meaning of s.120(b)(i) of the Act. This is so notwithstanding the addition of some duties, for which the Respondent was, or would with some training, be suited. The acceptance of the alternative employment would also have resulted in a continuity of service. Section 120 is therefore engaged.

[24] Section 120(2) provides a broad discretion to reduce the amount of redundancy pay otherwise payable under s.119 of the Act to a specified amount that the Commission considers appropriate in circumstances where one of the matters in s.120(1)(b) is attributable to the employer. Plainly, here the Applicant obtained the other acceptable employment for the Respondent. Whereas here, the Respondent has rejected the acceptable employment obtained for him and which features no reduced income or other employment conditions and continuity of service, this suggests a significant reduction (possibly to nil) in the redundancy entitlement. However, this is not the only relevant consideration.

[25] A matter I consider relevant is the operation of the NES entitlement to public holidays under s.114 of the Act. It is evident that the parties discussions about the alternative employment proceeded without considering the impact of the NES on the proposed contractual term that the Respondent work on Good Friday public holidays.

[26] It is apparent that the Respondent was not aware of his right pursuant to s.114(3) of the Act to refuse a request from an employer to work on a public holiday on reasonable grounds. 33 If the Applicant was aware of this, it did not draw the right to the Respondent’s attention during discussions. It may be the case that the Respondent’s religious beliefs provided him with a reasonable basis to refuse the request to work on a Good Friday.

[27] I also accept that on the face of the 2017 contract, the Applicant could insist that he work ‘all public holidays’, however, that contract must be read subject to the Respondent’s rights under the NES. Ultimately, the “right” to require public holiday work, is not likely enforceable as the NES provision concerning public holiday allows for a “request” and a refusal of a request both of which operate subject to reasonable grounds. Self-evidently, the reasonableness of the request or of the refusal can only be assessed by reference to the circumstances that pertain at the time the public holiday is to be worked. Moreover, it appears uncontroversial that the Respondent did not work Good Fridays at any stage during his employment with the Applicant. 34 Therefore, there is no material difference between the 2017 contract and the new offer of employment as the NES would regulate the requirement to work public holidays in both instances.

[28] Given that the Respondent was not aware of his rights under the NES, I can understand the Respondent’s refusal of the offer of employment based on the requirement to work Good Friday which he says is contrary to his religious beliefs and contrary to the practice during his period of employment. Knowledge of the right to refuse a request to work on a public holiday on reasonable grounds might have caused the Respondent to accept the alternative employment. The Applicant’s assertion of an unqualified right to require work on a public holiday was erroneous. The erroneous assertion was likely also to have contributed to the Respondent’s decision making. In these circumstances, I do not consider that a reduction to nil is appropriate.

Conclusion

[29] I consider, having regard to the matters discussed above, that the offer of employment that the Applicant made to the Respondent was “acceptable employment” within the meaning of s.120(1)(b)(i) of the Act and was obtained by it for the Respondent. Therefore, one of the circumstances set out in s.120(1) is engaged and my discretion under s.120(2) may be exercised. However, for the reasons given, I consider that a lesser amount should be payable.

[30] The Respondent had been employed for more than 7 years but less than 8 years. His redundancy pay entitlement under s.119 was 13 weeks’ pay or $19,134.50. I consider the Applicant’s obligation to make a redundancy payment to the Respondent should be reduced to 5 weeks’ pay. The sum represented by 5 weeks’ pay is $7,359.42. That amount must be paid to the Respondent within 7 days of the order which I will make.

[31] An order to this effect is separately issued in PR710810.

DEPUTY PRESIDENT

Appearances:

M Hoang for the Applicant.

R Sathineti, Respondent.

Hearing details:

2019.

Melbourne:

June 17.

Written submissions:

Applicant, 16 May and 7 June 2019.

Respondent, 3 June 2019.

Printed by authority of the Commonwealth Government Printer

<PR710809>

 1   Exhibit 1, Applicant’s Outline of Submissions at [1]; Exhibit 2, Respondent’s Outline of Submission

 2   Exhibit 1 at [2]-[3]

 3   Ibid at [4]; Exhibit 2

 4   Exhibit 1 at [5]; Exhibit 2

 5   Exhibit 1 at [7]–[8]

 6   Ibid at [9]–[10]

 7   Ibid at [11]-[12]

 8   Ibid at [13] and Attachment A; Exhibit 2

 9   Ibid at [14]–[15]

 10   Ibid at [17]–[18] and Attachment B

 11   Ibid at [19] and Attachment C

 12   Ibid at [20]-[21]

 13   Ibid at [21]

 14   Ibid at [21(g)]

 15   Exhibit 2 at p.1

 16   Ibid at pp.1-2

 17   Transcript at PN146-PN148

 18   Ibid at PN160-PN161

 19   Exhibit 2 at p.2

 20   Exhibit 1 at [21(e)]; Transcript at PN192

 21   Ibid at [21(f)]

 22   Transcript at PN183-PN187

 23   Exhibit 2 at p.1

 24   Exhibit 1 at [22(a)]-[22(c)]

 25   Ibid at [22]-[23]

 26   Ibid 1 at [49]

 27   Transcript at PN188-PN192; PN198-PN199

 28   Ibid at PN183 and PN186

 29 (1990) 140 IR 123

 30   Ibid at 124

 31   [2007] AIRCFB 101

 32   [2013] FWC 1327

 33   Transcript at PN247-PN248

 34   Ibid at PN183; PN186-PN187; PN197; PN202; PN209