JBA Consulting Engineers Pty Ltd v Ross Gundesen

[2018] FWC 7721

[2018] FWC 7721

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

JBA Consulting Engineers Pty Ltd

v

Ross Gundesen

(C2018/5506)

Deputy President Colman MELBOURNE, 19 DECEMBER 2018

Variation of redundancy pay

1. JBA Consulting Engineers Pty Ltd (JBA) has made an application pursuant to s 120(2) of the Fair Work Act 2009 (Act) to have the Commission reduce the redundancy entitlement of Mr Ross Gundesen, a former employee of the company whose employment ended for reason of redundancy.

1. Mr Gundesen was employed as a hydraulic design draftsperson from 20 October 2015 until 2 October 2018. At the time Mr Gundesen’s employment ended, he had just less than three years of continuous service with the company. The National Employment Standards (NES) in the Act prescribe minimum entitlements for employees in respect of redundancy pay. Section 119(2) provides that an employee who at the time of redundancy has a period of continuous service with the employer of at least two years but less than three years is entitled to receive six weeks’ redundancy pay. 

1. The company sought to reduce Mr Gundesen’s redundancy entitlement to nil, on the basis that it had obtained other acceptable employment for him. It says that employment agencies hired by the company identified two suitable roles for Mr Gundesen at other engineering firms, but that he was not interested in them. The company also says that it was responsible for Mr Gundesen ultimately obtaining employment directly with one of the employment agencies. Mr Gundesen submits that the company did not obtain any acceptable employment for him, and that he obtained his new job independently of the company.

1. Following a telephone mention, I issued directions to the parties to file and serve submissions and any witness statements or other documents on which they sought to rely. The application was then heard before me on Tuesday, 18 December 2018. Mr Quilon Bryar and Mr Cash Bryar appeared and gave evidence for the company. Mr Gundesen appeared and gave evidence on his own behalf.

Statutory framework

1. Section 120 confers on the Commission discretion to reduce the amount of redundancy pay to which an employee would otherwise be entitled under s 119 of the Act.

1. Section 120(1) states that the section applies if an employee is entitled to be paid an amount of redundancy pay under s 119, and the employer ‘obtains other acceptable employment’ for the employee. These are the jurisdictional facts that must be established before the Commission may exercise its discretion. Section 120(2) then states that the Commission ‘may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate’. If the Commission makes an order under s 120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination (see s 120(3)).

1. The key questions for consideration in the present matter are whether JBA obtained other acceptable employment for Mr Gundesen, and if so, whether I should exercise my discretion to reduce the amount of Mr Gundesen’s redundancy pay.

Factual background

1. Although the parties characterise each other’s conduct in different ways, the factual background to this matter is largely undisputed and can be briefly stated.

1. Due to a slowing housing market and a reduced project pipeline, the company determined that Mr Gundesen’s role was no longer required. It advised Mr Gundesen of his redundancy at a meeting on 10 September 2018.

1. On 11 September 2018, Mr Gundesen wrote to the company stating that he ‘accepted’ the redundancy. On 12 September 2018, the company emailed Mr Gundesen a letter confirming that his position was redundant. The letter stated that a three week notice period would commence immediately, and that his employment would end on 2 October 2018. It further stated that the company would make efforts to find Mr Gundesen suitable alternative employment in the industry, and that it had engaged two recruitment agencies, Bayside Personnel and Aspect Personnel, to assist in this regard. The letter provided Mr Gundesen with contact details of a consultant at each agency, and requested him to forward the agencies his updated curriculum vitae.

1. Mr Gundesen did not forward his CV to the agencies. He did not wish to receive any assistance from the company in finding a new job. Mr Gundesen was contacted by representatives of the agencies, but told them that he did not require their assistance.  Nevertheless, the agencies continued to look for alternative roles.

1. On 18 September 2018, JBA wrote to Mr Gundesen and advised him that it had found two roles at other organisations that would offer the same type of work with the same conditions he had at JBA. The letter stated that, in order to progress these opportunities, Mr Gundesen would need to send his resume and attend interviews with the two organisations. On 20 September 2018, Mr Gundesen advised the company in writing that he did not require assistance in finding new work.

1. The two roles referred to in JBA’s letter of 18 September 2018 had been identified by Aspect Personnel. JBA attached to its written submissions a copy of a statement from Aspect Personnel prepared for the purposes of the hearing. This stated that Aspect had identified two suitable roles for Mr Gundesen and forwarded information on these roles to JBA.[1] It stated that these roles were as follows:

Role  Hydraulic Design Draftsperson

Firm  National Consulting Engineering Firm
Industry   Engineering
Role Type                   AutoCAD and Revit Documentation
Working Hours          Standard 38 Hours per Week
Salary (inc Super)      $85,000 - $90,000

Role  Hydraulic Designer

Firm  Melbourne-based Consulting Engineering Firm
Industry   Engineering
Role Type                   AutoCAD and Revit Documentation
Working Hours          Standard 38 Hours per Week
Salary (inc Super)      $85,000 - $90,000

1. The statement from Aspect noted that the names of the employers had been withheld for confidentiality reasons. However, Mr Bryar stated that he knew the names of the two businesses concerned at the relevant time. He also stated that the above details were not provided to Mr Gundesen. The company expected Mr Gundesen to provide his CV, speak with Aspect Personnel, and be available for interviews with the two businesses.

1. Mr Gundesen said that he had been making his own efforts to find alternative work. Mr Gundesen’s evidence was that he had previously worked for Bayside, and had been acquainted with the firm since the early 1990s. He said that Bayside had at various times sought to have him join the firm as a recruiter, because of his many contacts in the industry. Mr Gundesen said that he commenced discussions with Bayside about the possibility of taking up a recruiter role in August or September. During the hearing, Mr Gundesen produced emails dated 4 and 10 September 2018 from a Mr Fonseka at Bayside, evidencing these discussions. It seems that Mr Fonseka was not involved with JBA’s brief to Bayside to seek alternative employment for Mr Gundesen.

Submissions of the parties

1. The company contended that it obtained other acceptable employment for Mr Gundesen in the form of the two roles identified by Aspect Personnel. Both roles entailed the same type of work performed by Mr Gundesen for JBA, and each offered slightly higher remuneration than the $83,216 earned by Mr Gundesen at JBA. It said that these roles were therefore clearly ‘acceptable’ alternative positions. The company said that, although the roles were identified by Aspect Personnel, it was acting as JBA’s paid agent and that in substance therefore it was JBA that obtained these roles for Mr Gundesen. It contended that Mr Gundesen chose not to engage with Aspect Personnel, and that the company could not compel or require him to do so. JBA acknowledged that the two roles were not offers of employment, but submitted that Mr Gundesen needed to speak with the prospective employers and attend interviews in order to be employed by them.

1. JBA also contended that it had obtained for Mr Gundesen the role that he ultimately accepted, namely the position as a recruiter at Bayside, because it had advised Bayside that Mr Gundesen was seeking new employment and briefed it to search for alternative roles. JBA submitted that the company discussed Mr Gundesen’s role at JBA with a Mr Kohle from Bayside, and outlined his skillset and abilities, as well as his business acumen.

1. More generally, JBA submitted that it had acted fairly and with good intentions, and had done all things reasonably possible to assist Mr Gundesen and to find him alternative employment. It said that it was Mr Gundesen’s choice to not speak with the employment agencies, not to forward his CV or to follow up with JBA or Aspect in relation to the two designer roles that had been identified. It contended that Mr Gundesen should have told the company that it was speaking to Bayside about a possible offer of employment at the time he was advised by JBA that his employment would be made redundant. It questioned whether Mr Gundesen had acted in good faith towards the company.

1. For his part, Mr Gundesen submitted that he was never advised of the details relating to the two designer roles identified by Aspect Personnel, and that in any event he did not want the company to help him find alternative employment. He submitted that he was under no obligation to participate in the job search processes put in train by the company, and was conducting his own discussions with Bayside, a firm he had known for many years. Mr Gundesen acknowledged that the two roles described by Aspect Personnel appeared to be objectively ‘acceptable’, in the sense that they were similar to his role at JBA and for slightly higher remuneration. However, he was not interested in any potential roles that the company might find for him. Mr Gundesen disputed the company’s contention that it had obtained acceptable alternative employment for him, either in the form of the two roles identified by Aspect Personnel, or the recruiter role that he accepted at Bayside. He maintained that the latter had nothing to do with the efforts of JBA, and was the result of his own independent discussions with Bayside, in particular with Mr Fonseka.

Did JBA ‘obtain’ employment for Mr Gundesen?

1. In FBIS International Protective Services (Aust) Pty Ltd v MUA,[2] a Full Court of the Federal Court considered the meaning of the word ‘obtains’ in the context of s 120(1)(b)(i) of the Act. The Court stated that ‘to obtain employment for an individual means to procure another employer to make an offer of employment, which the individual may or may not accept as a matter of his or her choice.’[3] In that case, the applicant employer, FBIS, had only established contact between the relevant employees and the new employer, such that the employees were able to participate in a recruitment process. Although many employees did in fact obtain employment with the new employer, the Court found that this employment had not been ‘obtained’ for them by FBIS.

1. I will first consider the contention that JBA obtained the two designer roles for Mr Gundesen. I accept JBA’s submissions that the work undertaken by its agent, Aspect Personnel, may be attributed to JBA. However, I do not accept that JBA ‘obtained other employment’ for Mr Gundesen in the form of the two roles identified by Aspect. What it obtained was two suitable vacancies, not employment.

1. In Get Started Pty Ltd v Lee,[4] a case upon which JBA relied in its submissions, I found that the company had obtained alternative employment for Mr Lee by suggesting to the new employer the very idea of creating a permanent position for him. This intervention by the employer was the cause of the new employer offering Mr Lee a permanent full-time job. Without it, the new employment would never have materialised. Mr Lee accepted the role. In the circumstances, the old employer had procured the making of an offer from the new employer, even though Mr Lee’s employment with the new employer was not assured until he had spoken with the new employer. 

1. In the present case, a recruitment firm hired by JBA identified two positions. They were vacancies that Mr Gundesen could have applied for. I accept that JBA paid Aspect Personnel for its services, and on this basis it can be said that it did more than merely facilitate an introduction, as was the case in the FBIS matter referred to above. However, there is no evidence to suggest that Mr Gundesen’s prospects of getting either of the two vacancies identified by Aspect were different from that of any other applicant. In effect, he was eligible to participate in a recruitment process. I understand the company’s contention that it did everything possible to find alternative employment for Mr Gundesen, and that it could not compel him to take the necessary steps of forwarding his CV and participating in an interview. However, s 120 does not require an employee to cooperate in the employer’s efforts to find acceptable alternative employment.

1. As I noted in Get Started, I do not read the decision of the Full Court in FBIS as requiring that the first employer necessarily achieve certainty of an offer of employment. The meaning of the word ‘obtain’ includes ‘to procure or gain, as the result of purpose and effort; hence, generally, to acquire or get.’[5] However, in my view, JBA did not obtain, acquire, or get employment for Mr Gundesen. It obtained a possibility to apply for appropriate vacancies.

1. I also reject the submission of the company that it obtained for Mr Gundesen his current role as a recruiter. Mr Bryar accepted that he had not known that Bayside was considering Mr Gundesen for employment in the capacity of a recruiter. I do not accept that JBA could have obtained this employment for Mr Gundesen, in circumstances where it had no knowledge of the relevant role. JBA contends that it advised Bayside of Mr Gundesen’s availability for employment, and that there was some causal link between the company’s actions in retaining Bayside to seek suitable employment for him and the role that Mr Gundesen was ultimately offered. However, no such causal link is established. Rather, it is clear that Mr Gundesen was already speaking to Mr Fonseka at Bayside about a role at that company independently of any actions of JBA, and that these discussions commenced prior to JBA advising Mr Gundesen that his position was redundant. I find that JBA did not obtain for Mr Gundesen his employment as a recruiter at Bayside.

Other issues

1. A point of contention between the parties concerned the question of when Mr Gundesen accepted the offer of employment in the role of a recruiter at Bayside. The company stated that, during the earlier directions hearing before the Commission, Mr Gundesen had said that he had accepted another role in August, several weeks before being made redundant at JBA. However, I do not consider this to be a point of relevance. It is clear from the evidence that Mr Gundesen did not commence employment at Bayside until 8 October 2018. The fact that his position at JBA was redundant, and that his employment at JBA in fact ended for reason of redundancy, is not in doubt.

1. I appreciate the company’s perspective that, if it had known that Mr Gundesen had found or was on the point of securing other employment, it might have deferred or not made the decision to declare his position redundant. However, in my view this is not a consideration that is relevant to s 120.

1. Under the National Employment Standards, an employee is entitled to severance payments if made redundant. Section 120 allows an employer to ask the Commission to vary redundancy payments in limited circumstances, namely where the employer has obtained other acceptable employment for the employee. The test is not whether the employer has made reasonable efforts to find such employment, or whether the employer or the employee has acted fairly and reasonably in all the circumstances. The Act does not require or expect an employee to cooperate with an employer’s efforts to minimise its redundancy liability by obtaining other employment, or by advising an employer that it is exploring or has arranged other employment in advance of a redundancy taking effect.

Conclusion

1. Given my findings that JBA did not obtain alternative employment for Mr Gundesen, it is not necessary for me formally to determine whether the alternative employment was acceptable. The jurisdictional prerequisites for the making of an order under s 120(2) are not made out. Accordingly, the application is dismissed.

DEPUTY PRESIDENT

Appearances:

Mr Q Bryar and Mr C Bryar for JBA Consulting Engineers Pty Ltd
Mr R Gundesen for himself

Hearing details:

2018
Melbourne
18 December 2018

<PR703335>

[1] Submissions of JBA, attachment 7

[2] [2015] FCAFC 90

[3] At [18]

[4] [2018] FWC 3295

[5] Cited at [20]

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