Lejoman Holdings International Pty Ltd

[2014] FWC 6509

[2014] FWC 6509

FAIR WORK COMMISSION

DECISION

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

Lejoman Holdings International Pty Ltd
(C2014/6108)

COMMISSIONER BULL SYDNEY, 17 SEPTEMBER 2014

Variation of redundancy pay - application to vary NES entitlement - employer obtained other acceptable employment for employee - redundancy entitlement reduced in part.

[1] In this matter, Lejoman Holdings International Pty Ltd (the Applicant), seeks relief from its statutory obligation to make redundancy payments to six of its previous employees. The names of the employees are:

● Sanjay Arora,
● Fernando M Gomes,
● Fidel G Arenas Pena,
● Adam Hazlewood,
● John Huxtable; and
● Batbayar Badamsed

(the Respondents)

[2] The application was made on 28 August 2014, pursuant to s.120(2) of the Fair Work Act 2009 (the Act) which provides the Fair Work Commission (the Commission) with a discretion to reduce or remove an entitlement to redundancy pay should the Commission consider it appropriate. Section 120(2) of the Act states:

120(2) On application by the employer, FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWC considers appropriate.

[3] Section 120(2) of the Act applies where the terms of s.120(1) are met:

120(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.

(my emphasis)

Background

[4] The application advised that the redundancy provisions of the Storage Services and Wholesale Award 2010 (the Award) would apply as there was no enterprise agreement that applied to the employee’s employment. Clause 13 - Redundancy of the Award provides that redundancy pay is provided for under the National Employment Standards (NES).

[5] The Applicant states that the Respondents have each worked for the employer for one year and 10 months.

[6] Section 119 of the Act sets out a minimum NES entitlement to redundancy pay for national system employees. The NES provides for a payment of 4 weeks redundancy where at least 1 year but less than 2 years continuous service has been completed by the employee.

[7] The exclusions from redundancy pay provided for in s.121 of the Act were not raised in this application.

[8] In its application, the Applicant submits that while it does not argue that it does not have the capacity to pay the amount of redundancy due, the Applicant has obtained other acceptable employment for each of the six employees.

[9] Accompanying the application were six letters of offers of employment, dated 27 August 2014, addressed to each of the six employees for positions at IFC Warehousing & Distribution Pty Ltd.

[10] On this basis the Applicant seeks to reduce the amount of redundancy payable from 4 weeks to 2 weeks.

[11] On 4 September 2014, the Commission sought the views of the employees with respect to the application to reduce the amount of redundancy pay and whether or not they supported or opposed the application.

[12] On 11 September 2014, the Applicant provided six statements from each of the employees. The statements were dated 9 September 2014 and signed by each of the employees.

[13] Each employee advised the Commission in their statements that they had been made redundant by the Applicant but had been offered alternative employment at IFC Warehousing and Distribution Pty Ltd which they have each accepted. The letters of offers of employment state that the commencement date of the new positions with IFC Warehousing and Distribution Pty Ltd would be 1 September 2014.

[14] The employees state that they had been advised by Mr Ashley Hayes, Managing Director of the Applicant that if they were to accept the alternative offer of employment than the company would seek for the reduction in redundancy pay being reduced from 4 weeks to 2 weeks pay.

[15] Each statement confirms that the employees support the application to reduce their redundancy pay to 2 weeks pay.

Conclusion

[16] The Applicant has advised the Commission that it has obtained other acceptable employment for each of the employees, which the employees have accepted. Section 120(1) and (2) of the Act provides that if the employer obtains other acceptable employment for the employee, on application by the employer, the Commission may determine that the amount of redundancy pay is reduced to a specified amount that the Commission considers appropriate.

[17] Based on the statements made by each of the employees, I am satisfied that the employees were made aware of the application to the Commission to reduce the amount of redundancy pay and do not oppose the application.

[18] The Applicant has satisfied the Commission that the discretion available to reduce or eliminate its redundancy pay obligations to the employees should be exercised. Pursuant to s.120(3) of the Act the amount of redundancy pay to which the employees would have been entitled to under s.119 is reduced from 4 weeks to a period of 2 weeks redundancy pay.

[19] An order (PR555578) will issue reflecting this decision.

COMMISSIONER

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