Midcity DDS Pty Ltd T/A Priceline Pharmacy Anzac Square

[2017] FWC 4357

[2017] FWC 4357

FAIR WORK COMMISSION

DECISION

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

Midcity DDS Pty Ltd T/A Priceline Pharmacy Anzac Square
(C2017/3931)

COMMISSIONER SPENCER BRISBANE, 5 OCTOBER 2017

Variation of redundancy pay.

INTRODUCTION

[1] An application pursuant to s.120 of the Fair Work Act 2009 (the Act) was made by Midcity DDS Pty Ltd T/A Priceline Pharmacy Anzac Square (the Applicant) seeking to vary the amount of redundancy pay to be made to Ms Breanna Friend (the Respondent).

[2] The Respondent commenced employment with the Applicant on 16 March 2013 and was employed as a, “Pharmacy Intern,” from 7 December 2015 until 12 July 2017. The Applicant submitted that following a review of the pharmacy’s performance over the previous financial year and the fact that the Respondent would soon be registered as a Pharmacist, the Applicant did not have the capacity to employ another Pharmacist at that store. It was not contested that the Respondent’s position was being made redundant.

[3] The Applicant submitted that they had, “obtained other alternative employment,” (in accordance with s.120(1)(b)(i) of the Act) for the Respondent, however the Respondent had declined the position. Accordingly, the Applicant made an application to vary the amount of redundancy pay to nil, pursuant to s.120(2) of the Act. The Respondent submitted that the alternative position was unreasonable given the distance of the commute to the new workplace. The Respondent stated she had applied for and obtained other employment on her own initiative. The Respondent was seeking eight weeks redundancy pay based on her length of service.

[4] Directions were set for the filing of material. The parties agreed for the matter to be determined on the papers, however given that there was a dispute regarding whether the alternative employment was acceptable, the matter was listed for hearing by telephone on 4 September 2017.

[5] At the hearing, the Applicant was represented by Mr Ciaran Scully-Clausen, Human Resource Business Partner of the Applicant, and Mr Ameet Jeraj, Business Owner of the Applicant, and the Respondent represented herself.

[6] Whilst not all evidence and submissions are referred to in this decision, all of such have been considered.

RELEVANT PROVISIONS

[7] Pursuant to s.119 of the Act:

“119 Redundancy pay

Entitlement to redundancy pay

(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.

Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

Amount of redundancy pay

(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

Redundancy pay period
Employee’s period of continuous service with the employer on termination		Redundancy pay period
1	At least 1 year but less than 2 years	4 weeks
2	At least 2 years but less than 3 years	6 weeks
3	At least 3 years but less than 4 years	7 weeks
4	At least 4 years but less than 5 years	8 weeks
5	At least 5 years but less than 6 years	10 weeks
6	At least 6 years but less than 7 years	11 weeks
7	At least 7 years but less than 8 years	13 weeks
8	At least 8 years but less than 9 years	14 weeks
9	At least 9 years but less than 10 years	16 weeks
10	At least 10 years	12 weeks

[8] The application has been made pursuant to s.120 of the Act which provides:

“120 Variation of redundancy pay for other employment or incapacity to pay

(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.

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

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”

SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE

[9] The Applicant set out the background to the Respondent’s job being made redundant as follows:

“The Respondent in this matter, Ms Breanna Friend, originally commenced employment with Midcity DDS Pty Ltd on 16 March 2013. On 7 December 2015, the Respondent commenced a new role in the business as a Full Time Pharmacy Intern, after graduating with a Bachelor of Pharmacy. On completion of the Respondent’s required 1,824 hours as a Pharmacy Intern, we continued her employment whist she undertook final examinations to become fully registered as a Pharmacist.

On review of the Pharmacy’s performance over the prior financial year, and in consideration of the fact that the Respondent would be registering as a Pharmacist imminently, it was identified that we did not have the capacity at Midcity DDS Pty Ltd to employ another Pharmacist in addition to those already employed with the business. Further to this, the decision was also made that upon completion of the Respondent’s internship we would not employ another Pharmacy Intern, as the business no longer required the role to be performed. As such, at the point which the Respondent registered as Pharmacist, the role of Pharmacy Intern would conclude by way of redundancy.

In reference to the Respondent’s entitlement to redundancy pay, it is our determination that as specified in the Pharmacy Industry Award 2010 and the National Employment Standards the Respondent is entitled to receive redundancy pay in accordance with Section 119 of the Fair Work Act 2009. Whilst Midcity DDS Pty Ltd has less than 15 full time equivalent staff, it has other associated entities which would lead to the number of staff being in excess of 15. In consideration of this fact and based on the Employee’s period of continuous service with the employer at termination being at least 4 years but less than 5 years, the Respondent would be entitled to 8 weeks’ redundancy pay.

On 12 July 2017, the respondent was provided with notice that the position of Pharmacy Intern at Midcity DDS Pty Ltd would be made redundant. Along with this notice the Respondent was advised that we had identified a suitable role for her redeployment.” 1

[10] The Applicant submitted that the Respondent was employed by the Applicant in a full time capacity as a, “Pharmacy Intern,” and was paid at a rate of $23.23 per hour. The Applicant submitted that the Respondent had been employed with the Applicant since 16 March 2013 and in the position of Pharmacy Intern since 7 December 2015. The Applicant submitted that their determination was that the Respondent was entitled to redundancy pay under s.119, in accordance with the Pharmacy Industry Award 2010 and the National Employment Standards. Further, the Applicant submitted that the Respondent’s continuous service of between four and five years entitled her to the equivalent of 8 weeks’ redundancy pay.

[11] In regard to the specific offer of the alternative employment, the Applicant submitted:

“The Respondent was offered Full Time Employment at 38 hours per week in the position of Pharmacist at an associated entity, IPG Loganholme Pty Ltd T/A Chemmart Pharmacy Loganholme, which we were in the process of acquiring. This role was offered at the base pay rate for a Pharmacist of $26.28 per hour with applicable penalty and loading rates payable as set under the Pharmacy Industry Award 2010. The role was to commence as soon as practicable after the Respondent received full registration as a Pharmacist (please find attached “Friend, Breanna - Employment Contract - Full Time Hourly Employees 13072017” with this submission).

In response to the offer of redeployment which was made on 12 July 2017, we were not advised by the Respondent until 18 July 2017 that she had accepted another role with a different employer and would not be accepting the offer of redeployment. At no point did the Respondent raise any issues regarding our offer with respect to the role, rate of pay, location or hours (please find attached “Friend, Breanna - Email Correspondence 18072017” with submission).

In comparison to the Respondent’s role of Pharmacy Intern at Midcity DDS Pty Ltd, the offer of redeployment to the role of Pharmacist at IPG Loganholme Pty Ltd maintained similar or more favourable conditions for the Respondent as per below.

Hours of employment: The Respondent’s role as a Pharmacy Intern was Full Time, 38 hours per week. The role offered as a Pharmacist was also Full Time, 38 hours per week.

Status: The role of Pharmacist is a more senior role with increased status within a Pharmacy, in comparison to the position of Pharmacy Intern.

Duties: A Pharmacy Intern may only work under the supervision of another qualified Pharmacist. A Pharmacist is able to work independently and dispense medication without supervision, including providing direction to other staff members.

Rate of pay: The Respondent’s base rate of pay as a Pharmacy Intern was $23.23 per hour. The redeployment role offered as a Pharmacist was at a base rate of $26.28 per hour, an increase of over $3.00 per hour.

Location: The Respondent’s role at Midcity DDS Pty Ltd was based in the Brisbane CBD, with no available parking options on site, but with several public transport options available. The offer of redeployment at IPG Loganholme Pty Ltd required a reasonable commute of 26 Minutes and 31.0km according to Google Maps from the respondent’s residential address and is well serviced by public transport options. There is also onsite parking available for staff.

In our opinion the offer of redeployment to the role of Pharmacist with IPG Loganholme Pty Ltd represented an acceptable option with an increased rate of pay, responsibility and seniority for the Respondent. For this reason and those stated above, we apply to have the 8 weeks’ redundancy pay be varied to nil, in consideration of the genuine offer of acceptable redeployment for the Respondent.” 2

[12] The Applicant provided a letter provided to the Respondent dated 12 July 2017, which constituted a notification of redundancy and offer of redeployment. The Applicant submitted that the position offered was also full time at 38 hours per week; the position (of Pharmacist) was of an elevated status to the former (of Pharmacy Intern); the rate of pay would be accordingly increased by $3.05 per hour (to $26.28); and that the duties performed would be broadened in accordance with the role of an unsupervised Pharmacist.

[13] The Respondent had worked for the Applicant at the Respondent’s Anzac Square business, in Brisbane. The alternative employment offered by the Applicant was located at Loganholme.

[14] The Applicant submitted that the new location was less than half an hour’s drive from the Respondent’s place of residence at Bowen Hills. It submitted that there were parking options available and the new location was serviced by public transport. The Applicant submitted that there was no parking on-site available at the previous location. It was submitted that the public transport options available were, “consistent with the average commute for a person living and working in a large city or metropolitan area.” 3

[15] The Applicant submitted that there was no capacity for another Pharmacist at the Applicant’s level in the Anzac Square business and that accordingly, there would be no capacity to engage her as a Pharmacist.

SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE

[16] The Respondent submitted that the location of the offered redeployment was unsuitable for her needs, given the location of her residence and the lack of her own vehicle or driver’s licence. She submitted that the Applicant was aware of these circumstances and stated that, based on using South-East Queensland’s public transport planner, Translink, her daily commute of 15 minutes would increase to 70 minutes to get to Loganholme.

[17] She was also concerned about potential disruptions or delays in service causing her to be late to work and about travelling during non-peak periods, for example returning home after late trading, which may take a longer period of time and may pose risks to her personal safety.

[18] The Respondent submitted that the promotion to the position of Pharmacist was part of the natural course of progression after completing 1,824 hours as a Pharmacy Intern under supervision, passing exams and becoming registered. Therefore, the Respondent submitted her employment could not continue as a Pharmacy Intern after registration, as that would breach the Pharmacy Industry Award 2010, and therefore that it was expected that she would continue her employment as a Pharmacist once registered. She also submitted that even after the completion of the supervised hours that her contract of employment had no end date and she was thus entitled to remain employed as a Pharmacy Intern until registration.

[19] Finally, the Respondent submitted that she had been on stress leave since 11 July 2017 until her termination, and supplied as evidence a medical certificate from a psychiatrist. She attributed the state of her mental health to her work life over the preceding six months and, “as a result of how the Applicant was managing the store.” 4

[20] In respect of the Respondent’s mental health condition, the Applicant submitted that there had been no approach by the Respondent to the Applicant to raise any concerns about the effect of the work environment on her mental health. Further, the Applicant submitted that the date of the medical certificate was after the commencement of consultation with the Respondent about the redundancy, and there was no supporting evidence for the Respondent’s claim that the deterioration of her mental health was due to her employment and that it had been occurring over the previous six months.

[21] The Respondent submitted at the hearing that she had concerns that no firm position was offered to her prior to the redundancy and further, at one stage, there was no alternative employment offered. The Respondent also stated that she had concerns continuing to work for the Applicant given the issues that had occurred in the past six months leading up to the redundancy. She confirmed that even if the travel time was acceptable she would not have agreed to the alternative employment offered.

CONSIDERATION

[22] In determining an application made pursuant to s.120 of the Act, the Commission must first be satisfied that there is an entitlement to redundancy pay. 5 Where there is no entitlement to redundancy pay under s.119 of the Act, there can be no order to reduce the entitlement.6

[23] It was not in dispute that the Respondent was entitled to be paid redundancy pay. Further, the amount required to be paid was not in dispute and there was no suggestion that the dismissal was not a case of genuine redundancy.

[24] I am satisfied that the Respondent has an entitlement to redundancy pay pursuant to s.119 of the Act. The matter turns on whether the Applicant had obtained, “other acceptable employment,” for the Respondent. The Applicant directly obtained an alternative job as a Pharmacist (as she had advanced to) for the Respondent at another business located in Loganholme.

[25] The Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd, held that:

“What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 7

[26] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd, the Full Bench, in considering acceptable alternative employment, held that:

“...We do not propose to repeat here the thoroughly detailed argument presented by counsel for the union. A considerable part of that case was devoted to questions of onus and to supporting the proposition that the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters. It was argued that the failure of the employer to adduce evidence of such matters caused the company to fail to make out a case for an exemption. We have no doubt that there is an onus on the employer invoking cl 51(c) and that matters of the kind referred to by the union may be relevant in assessing the position in a particular case. We do not believe it to be necessary to make that examination in every case. Where an employee has accepted alternative employment in circumstances as those here, then in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl 51(c) of the award...” 8

[27] The differences in the employment conditions between the redundant position and the redeployment offered to the Respondent must be considered in relation to whether the other employment was, “acceptable”. The concept of other acceptable employment was considered in the decision of Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai, 9 where it was held that:

“[8] In NUW v Tontine Fibres [2007] AIRCFB 1016 (Tontine) a Full Bench of the AIRC considered the meaning of the expression “acceptable alternative employment” in a redundancy provision in an enterprise agreement. It was common for enterprise agreements to reflect award provisions and contain redundancy entitlements that could be reduced if the employer obtained acceptable alternative employment (or some variant of that expression). The Full Bench observed:

“[23] It is well established... that the concept of acceptable alternative employment is to be determined objectively. As noted by a Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd:

“What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.”

[24] The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer. In order to establish whether the alternative employment obtained by the employer is acceptable it is necessary to have regard to such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters (including the location of the employment and travelling time)…”

[9] Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.” 10 [Footnotes omitted]

[28] The Respondent submitted that the alternative position was unacceptable on the basis that it would substantially increase her travel time. She submitted that public transport was her only option and would take her between 70 and 84 minutes to travel between her place of residence and the business. The commute also gave rise to concerns for the Respondent about personal safety and ensuring punctuality to work. It is not clear on the submissions and on the evidence provided, from where specifically the safety concerns emerge or how the Applicant could mitigate those concerns. At the hearing, the Respondent indicated concern at finishing late; the Applicant indicated this would not occur given the number of pharmacists.

[29] The Applicant considered the redeployment offer was acceptable given that it was reasonable to assume that the Respondent may be able to obtain a vehicle for the purposes of commuting to work and that the driving time was reasonable for a commute in a large metropolitan city. It further considered that the travel time by public transport was also reasonable.

[30] The Respondent noted that the Applicant’s assessment of the driving time (if the Respondent purchased a vehicle), according to Google Maps, would not reflect driving conditions including during peak travel time. Moreover, it was submitted that no consideration should be given to the driving time, as the Respondent did not hold a driver’s licence. Accordingly, the Respondent would be reliant on public transport, which she submitted represented an addition of approximately 50 minutes each way to her daily commute.

[31] The Commission must assess the alternative employment on an objective basis. Deputy President Sams in Spotless Services Australia Limited addressed the issue of additional travel time in an offer of alternative employment: 11

“[20] That said, I return to consider whether the additional travelling time made the offer of reemployment objectively unacceptable alternative employment. While I sympathise with the extra inconvenience and cost the employees would have been required to accept, particularly in the context of their relatively low wages and part time hours, I am unable to conclude that a daily travel time of around 1 hour and 40 minutes return trip, or an additional travel time of 50 minutes return, constitutes a sufficient basis for refusing the offer of reemployment at Eraring.

[21] Accordingly I find the offer of reemployment to Eraring was ‘acceptable employment’ within the meaning of s 120 of the Act. Given this finding, the onus on the applicant to demonstrate that its offer of re-employment was ‘acceptable employment’ has been discharged. I consider that no amount of redundancy pay is applicable in these circumstances. The application is granted and a determination to that effect will be issued contemporaneously with this decision.” 12

[32] The Applicant submitted that it was not standard practice to put a newly registered Pharmacist as the sole operating pharmacist in a business. The Logan Hyperdome pharmacy had at least two to three senior pharmacists at any one time operating and therefore, they considered this would be an appropriate role for the Respondent to receive guidance in her new role.

[33] The Applicant also submitted that most of the pharmacists in the group would travel a similar distance to ensure employment in pharmacy roles and the Applicant considered that the travel time was reasonable in a large city like Brisbane.

[34] In response to the Respondent’s concerns about travelling late at night, the Applicant submitted that the Logan Hyperdome pharmacy traded from 8:00 am to 6:00 pm. The Respondent stated this was in comparison to her prior employment in the Anzac Square position, where she may have worked a shift until 7:00 pm, therefore the time of night when the Respondent would be travelling from Logan would make the return to her home time equivalent.

[35] The terms of the offer of redeployment are sufficiently comparable, particularly given the alternative offer provided a full-time Pharmacist role. It is clear that the offer of the Pharmacist position offered improved employment conditions, in terms of an increased wage rate and being, as stated, a permanent role of a Pharmacist (which was the advanced position sought by the Respondent after the completion of the internship) with similar hours. The position was suitable considering the Respondent was soon to be registered as a qualified Pharmacist. However, whilst the location of the alternative job has been significantly considered, it does not outweigh an objective comparison between the two positions.

[36] There are no facts before the Commission relating to the issues referred to by the Respondent, with respect to the working environment at the Anzac Square pharmacy. It has been taken into consideration that the Respondent made it clear at the hearing that she did not seek to continue employment with the Applicant.

CONCLUSION

[37] Taking into account all of the circumstances, the discretion pursuant to s.120(2) of the Act should be exercised to reduce the amount of redundancy pay. “Other alternative employment” (in line with s.120(1)(b)(i)) was “obtained” by the Applicant for the Respondent. It is recognised that the alternative position represented an increased travel time for the Respondent. The increased travel time is not excessive, in terms of what would be considered a reasonable period of travel time, particularly in circumstances of obtaining employment in the advanced position of Pharmacist, and does not render the alternative employment unacceptable.

[38] The alternative position is considered to be, “other acceptable employment.” It was at the improved position of a Pharmacist and at an increased hourly rate. The increased travel time is not considered to be excessive or unreasonable in the circumstances. It has been taken into consideration that the Respondent had obtained employment and not seriously considered the Applicant’s offer. Accordingly, the redundancy payment is reduced to nil and an Order [PR595840] reflecting such will issue separately.

COMMISSIONER

Appearances:

Mr Ciaran Scully-Clausen and Mr Ameet Jeraj on behalf of the Applicant.

Ms Breanna Friend on her own behalf.

Hearing details:

2017.

Brisbane:

4 September.

 1   Submissions of the Applicant dated 2 August 2017 at page 1.

 2   Ibid at page 2.

 3   Submissions of the Applicant in Reply dated 15 August 2017 at page 1.

 4   Submissions of the Respondent dated 8 August 2017 at page 1.

 5   Application by CAE Australia Pty Ltd [2012] FWA 7992 per Watson VP at [13].

 6   Ibid.

 7 (1990) 140 IR 123 at 128.

 8 (1988) 27 IR 226 at 230 - 231.

 9   [2013] FWC 1327.

 10   Ibid at [8] – [9].

 11   [2013] FWC 4484.

 12   Ibid at [20] – [21].

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