Mantra Hospitality (Admin) Pty Ltd - [2013] FWC 1063

[2013] FWC 1063

FAIR WORK COMMISSION

DECISION

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

Mantra Hospitality (Admin) Pty Ltd
(C2012/6288)

DEPUTY PRESIDENT SAMS

SYDNEY, 22 FEBRUARY 2013

Application to vary redundancy pay - outsourcing of housekeeping functions - offer of alternative employment - lower rate of pay - whether offer is acceptable alternative employment - offer rejected - employee entitled to full redundancy benefits.

[1] This decision will determine an application, filed on 14 December 2012 by Mantra Hospitality (Admin) Pty Ltd (‘Mantra’ or the ‘applicant’), pursuant to s 120 of the Fair Work Act 2009 (the ‘Act’). Mantra seeks to vary the redundancy payments which would be otherwise payable to Ms Zaklina Miloskovska consequent upon her termination of employment on 10 December 2012, at the Pacific International Hotel, Bankstown (the ‘Hotel’).

[2] Attempts at settling the dispute in respect to the redundancy payments payable to Ms Miloskovska ultimately proved unsuccessful. Directions were issued for the parties to file evidence in the matter and a hearing was conducted on 12 February 2013. Ms Miloskovska was assisted by her sister, Ms Tatiana Vassilev and a Macedonian interpreter. Mantra was represented, with permission, by Mr C Pollard. Ms Miloskovska provided a chronology of events as she recalled them and gave oral evidence with the assistance of the interpreter. Mr Pollard relied on an affidavit of Mr Godwin Ibe Oparah, the General Manager of the Hotel.

Factual background

[3]

a) Ms Miloskovska was employed by Mantra for 6 ½ years under the terms and conditions of the Hospitality Industry (General) Award 2010 [MA000009].

b) Ms Miloskovska was promoted from the position of Housekeeping Attendant to Housekeeping Supervisor in March 2011. Her award rate of pay (as at 14 December 2012) was $21.00 per hour compared to $17.05 an hour for a Housekeeping Attendant.

c) In the second half of 2012, Mantra made a decision to outsource its housekeeping work to a contract cleaning company, Australian Hospitality Services (AHS).

d) All housekeeping staff were offered ongoing employment with AHS, without loss of continuity or entitlements.

e) Existing employees of Mantra were notified, on 13 November 2012, of the new arrangements which were to commence on 11 December 2012.

f) On 13 November 2012, in a letter signed by Mr Oparah, Ms Miloskovska was offered a full time room Attendant Level 2 position, with a recognition by AHS of her continuous service and accrued leave entitlements. No severance payments were to be paid.

g) However, in an unsigned letter of the same day, Mantra now indicated that a partial redundancy was payable if she chose not to accept the alternative position (Mr Oparah said this second letter should have been dated 4 December 2012).

h) The partial redundancy payment was calculated as $1651.10 being the difference between the $21.00 Supervisor rate and the Housekeeping Attendant rate of $17.05, multiplied by eleven weeks (418 hours) for 6.5 years service.

i) Ms Miloskovska ultimately…

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

Case: [2013] FWC 1063
Decision Date: 22 FEBRUARY 2013

CaseChat Overview and Summary

The case before the Fair Work Commission involved Mantra Hospitality (Admin) Pty Ltd and its employee, who had been made redundant due to the outsourcing of housekeeping functions. The employee contested the employer's determination that they were not entitled to full redundancy benefits as they had rejected an offer of alternative employment at a lower rate of pay. The employer argued that the alternative position was suitable and, therefore, the employee should receive reduced redundancy pay. The dispute was heard and determined by the Fair Work Commission.

The central legal issue in this case was whether the offer of alternative employment, which involved a reduction in pay, constituted suitable alternative employment under the relevant industrial instrument. If the offer was deemed suitable, the employee's entitlement to full redundancy pay would be diminished. The Commission needed to assess the criteria for suitable alternative employment and apply them to the facts of this case.

The Fair Work Commission found that the alternative employment offered did not meet the criteria for suitable alternative employment as it involved a significant reduction in pay and was therefore not acceptable. The Commission considered the nature of the alternative position, the employee's qualifications and experience, and the difference in remuneration. Given that the alternative employment did not provide a reasonable alternative to the employee's previous role, the employer's argument for reduced redundancy pay was rejected. Consequently, the employee was entitled to full redundancy benefits.

The final orders of the Fair Work Commission confirmed that the employee was entitled to the full redundancy pay as initially claimed. The employer was directed to pay the full amount within a specified period. The Commission emphasised the importance of suitable alternative employment in determining redundancy entitlements and highlighted the need for employers to offer positions that genuinely provide a reasonable alternative to the employee's previous role.

Orders