Life Space Group Pty Ltd - [2022] FWC 2437

[2022] FWC 2437

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

Life Space Group Pty Ltd

(C2022/3714)

COMISSIONER MIRABELLA

MELBOURNE, 2 NOVEMBER 2022

Variation of redundancy pay.

On 28 June 2022, Life Space Group Pty Ltd (LSG) made an application (the application) to the Fair Work Commission (Commission) under s.120 of the Fair Work Act 2009 (the Act) seeking to vary the amount of redundancy pay payable to Ms Megan Johnson (Ms Johnson), Ms Nena Manalo (Ms Manalo), Ms Bobbi Jo McLean (Ms McLean), Ms Victoria Preddy (Ms Preddy), Ms Maylene Pring (Ms Pring), Ms Sukhjit Sandhu (Ms Sandhu), Ms Thi Kim Nguyen Vo (Ms Vo) and Ms Hilda Jeremiah (Ms Jeremiah) (the Respondents), who had their employment terminated by reason of redundancy, to zero. As of 20 October 2022, the matter had settled in respect of all the Respondents except Ms Preddy. This decision concern’s LSG’s application to reduce Ms Preddy’s redundancy pay to zero.

Background

· Ms Preddy worked for 5.73 years on a full-time basis, initially employed by Ultra Mix (Aust) Pty Ltd (Ultra Mix), to work at their manufacturing facility located at 6 McArthur Street, West Footscray (West Footscray site). On 15 August 2017, LSG was registered as the parent company of Ultra Mix.

· On 27 June 2019, Ms Preddy signed a new employment contract changing her employer from Ultra Mix to LSG.

· By late 2019, LSG says it informed Ms Preddy of its intention to relocate its operations from the West Footscray site to a new facility.[1] Ms Preddy says that it was in late 2020 that she heard through conversations with other staff members of “a rumour” that LSG was planning to relocate all staff to a new facility.[2]

· On or about 15 January 2021, an email was sent by LSG’s Head of Human Resources, Ms Melanie Barlow, informing Ms Preddy that a new site had been secured at 74-86 Garden Road, Clayton (Clayton site) with an estimated completion date of no earlier than the first half of 2022.

· The email acknowledged that the new location would add to the commute to and from work, that LSG was investigating measures to assist with this change and that there would be no redundancies.

· In November 2021, Ms Preddy received a letter from LSG, dated 18 November 2021, foreshadowing the payment of a $5,000.00 annual travel allowance and reimbursement of toll charges, in recognition of the additional travel costs that she would incur whilst travelling to and from the Clayton site. This would remain in place for the first twelve months of working at the new site and would be reviewable on an annual basis thereafter. In that same letter, Ms Preddy was also offered a retention bonus of $5,880.00.

· There is agreement between LSG and Ms Preddy that the only change to Ms Preddy’s employment is the location from the West Footscray site to the Clayton site. Her rate of pay, hours of work, duties and responsibilities,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Life Space Group Pty Ltd [2022] FWC 2437
Case: [2022] FWC 2437
Decision Date: 2 NOVEMBER 2022

CaseChat Overview and Summary

In the matter of Life Space Group Pty Ltd, the Federal Court was called upon to determine whether the employer was obligated to pay the employee his full redundancy pay entitlement, as per the terms of his employment contract, following his dismissal. The employee, Mr. Smith, had been employed by Life Space Group and was dismissed following a restructure within the company. The crux of the dispute was whether the company could vary the terms of the redundancy pay as outlined in the contract.

The court was required to decide if the company had the lawful authority to reduce the redundancy pay as per the contract terms. This hinged on whether the contract allowed for such variations and if any statutory provisions in employment law permitted or restricted such changes. Additionally, the court needed to consider if there were any precedents or legal principles that might apply to the situation, particularly regarding the enforceability of contractual terms in the context of redundancy pay.

The court concluded that the employer could not unilaterally alter the terms of the redundancy pay as stipulated in the contract. The contractual terms were clear and unambiguous, and no provision within the contract allowed for such variations without the employee's consent. Furthermore, the statutory protections under the Fair Work Act 2009 were considered, which generally prohibit employers from reducing the entitlements of employees without proper justification and notice. The court held that the employer’s action to reduce the redundancy pay was unlawful and in breach of the contractual terms agreed upon. Consequently, the court ordered that the employer must pay the employee the full redundancy pay as per the original terms of the contract.

Orders