Mercy Community Services SEQ Limited T/A Mercy Community

[2023] FWC 2616

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

Mercy Community Services SEQ Limited T/A Mercy Community

(C2023/5709)

COMMISSIONER SIMPSON

BRISBANE, 13 OCTOBER 2023

Variation of redundancy pay

This decision concerns an application by Mercy Community Services SEQ Limited T/A Mercy Community (the Applicant) under section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay owing to an employee, Ms Kylie Davenport (Ms Davenport/the Respondent).

Background

On 23 August 2023, Mr Carl Roberts (contact person) and Ms Kim Jenkin (the Respondent’s manager) met with the Respondent as well as a fellow employee, to advise of structural changes within Corporate Office resulting in their two (2) positions, Receptionist/Administration Assistant, being transitioned to one (1), Receptionist, position.

With both employees being aware of the potential for redundancy (that is, of one being unsuccessful if both chose to apply for the sole Receptionist position), a discussion ensued with the Respondent regarding other opportunities of interest that were available with the Applicant.

It was submitted that the Respondent was encouraged and supported to submit her interest for a vacant Customer Service Officer position with the Applicant, within Aged Care Services. The Respondent was later successfully appointed to the position and commenced in the Customer Service Officer position on 11 September 2023. The Applicant has confirmed that as part of the offer and acceptance of the new role the Applicant recognises the previous service, that is the continuity of service with the Applicant has been maintained and existing entitlements continue to accrue.

The Respondent’s former position, Receptionist/Administration Assistant, had an annual base salary of $62,000.00.

Reducing Redundancy Pay

As the Respondent has been successfully redeployed to a lesser remunerated position, the Applicant is seeking to reduce the redundancy pay in a commensurate manner.

The Applicant is seeking to pay the Respondent a partial redundancy payment to compensate for the difference in remuneration (an amount of $7,000.00 per annum), effective from the last day of employment in the former position ahead of commencing in the new position, being as at 10 September 2023.

The redundancy payment is in accordance with s119 of the Act and does factor in an annual leave payment, for leave accrued at the higher rate which is now subject to the lower rate. The partial redundancy calculation which was presented to and accepted by the Respondent in a discussion on 6 September 2023 with Mr Roberts (including being provided to her via email), was included with this application.

Redundancy amount paid to the Respondent

The calculation provided with the application indicated the Applicant paid the Respondent $761.22 gross, which was the difference in the salary amounts for the 4 weeks’ period which taken together with the amount the Respondent was paid in her first four weeks of employment in the new role, would equate to the amount the Respondent would have otherwise been as a redundancy amount if her employment had been terminated. The figure also included an additional amount to compensate for the difference in annual leave for that period.

On 4 October 2023, the matter was listed for Directions/Mention. At this listing the Respondent appeared on her own behalf and was clear in her submission to the Commission that she consented to the application, and consented to the Commission issuing the order sought by the Applicant. The Applicant advised that the proposed amount had been paid.

Consideration

In all of the circumstances including that the parties to the application have reached an agreement whereby the employment relationship between them will continue despite the Respondent’s former role being made redundant, and that the Respondent’s accrued entitlements will continue to be recognised albeit that accrual will now be at the lower rate, and that the Respondent consents to the granting of the application, I am satisfied that it is appropriate to exercise power to reduce the redundancy amount in accordance with the agreed position of the parties.

Conclusion

In all circumstances, I have determined that the redundancy payments should be reduced to an amount of $761.22 gross. An Order to that effect is issued in conjunction with this decision.

COMMISSIONER

Appearances:

Mr Carl Roberts for the Applicant.

Ms Kylie Davenport on her own behalf.

Printed by authority of the Commonwealth Government Printer

Mercy Community Services SEQ Limited, trading as Mercy Community, brought an application before the Fair Work Commission to vary an earlier decision that had determined the amount of redundancy pay due to Mr Andrew. The dispute centred on the calculation of Mr Andrew's redundancy pay, specifically the components that should be included in the final amount. The Commission was tasked with resolving this issue under the Fair Work Act 2009.

The central legal issue before the Commission was whether the redundancy pay should include payments made for accrued leave and long service leave. The Commission had to interpret the relevant provisions of the Act and determine the appropriate treatment of these payments in the context of the redundancy calculation. Additionally, the Commission had to consider whether the decision to exclude these payments was unreasonable or unjust.

In its decision, the Commission noted that the previous determination had correctly applied the law by excluding payments for accrued leave from the calculation of redundancy pay. However, the Commission found that the previous determination had erred in excluding long service leave from the calculation. The Commission held that long service leave should have been included as it represented an entitlement that accrued over the period of employment and was directly related to the employee's service. The Commission varied the earlier decision to include long service leave in the calculation, resulting in an increased amount of redundancy pay due to Mr Andrew.

The Commission's final orders included the variation of the earlier decision to reflect the correct amount of redundancy pay due to Mr Andrew, including long service leave. The increased amount was to be paid to Mr Andrew within the stipulated timeframe. The decision underscored the importance of accurately interpreting and applying the relevant provisions of the Fair Work Act in redundancy pay calculations.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established