Mildren Automotive Pty Ltd - [2013] FWC 2113

[2013] FWC 2113

FAIR WORK COMMISSION

DECISION

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

Mildren Automotive Pty Ltd
(C2012/6738)

VEHICLE INDUSTRY (SOUTH AUSTRALIA) REPAIR SERVICE AND RETAIL AWARD
(ODN 180 OF 1975) [AN150167]

VEHICLE MANUFACTURING, REPAIR, SERVICES AND RETAIL AWARD 2010

MA000089

Vehicle industry
COMMISSIONER HAMPTON	ADELAIDE, 4 JULY 2013

Application to vary redundancy pay for other employment or incapacity to pay - redundancy provisions of NAPSA preserved by modern award - whether employer obtained acceptable alternative employment - whether employer lacks capacity to pay redundancy payments - application allowed in part.

1. Background

[1] Mildren Automotive Pty Ltd (Mildren Automotive) has made application to vary the redundancy pay otherwise due to its former employees, Mr Darryl Gabbusch and Mr Samuel Johnson. The application was made on the basis that Mildren Automotive has found acceptable alternative employment for Mr Gabbusch and Mr Johnson as part of the winding down of its business. Mildren Automotive also contends that it does not have the financial capacity to make the redundancy payments and in that context seeks that the redundancy payments be reduced to zero.

[2] The application also originally applied to another employee however that aspect was resolved by consent. 1

[3] Mildren Automotive conducted an automotive repair and service business in South Australia that specialised in rotary engines. It is a privately owned incorporated business.

[4] There is no dispute that the two employees have been made redundant and that the business has ceased to employ staff in the process of shutting down.

[5] Mr Gabbusch and Mr Johnson oppose the application on the basis that neither of the alleged grounds apply to the circumstances of their redundancy. Mr Gabbusch supplied some evidentiary material supporting his opposition to the application. Despite the same opportunity, Mr Johnson did not participate in the proceedings beyond the initial directions conference. I have however not taken his inaction to be consent to the application.

[6] Neither party sought a hearing for the purposes of challenging the evidence of the other. I also note that given the circumstances of the parties, including the location of Mr Gabbusch, this would not have been feasible.

[7] Accordingly, I have determined the application based upon the material and evidence filed by the parties. I would note however that certain matters raised by Mr Gabbusch concern events and circumstances that are beyond the scope of this application and I have not considered them.

2. The relevant award provisions

[8] Although the application has been made pursuant s.120 of the Fair Work Act 2009 (the Act) it is in reality an application to vary the severance pay entitlements arising from the Vehicle Industry (South Australia) Repair Service and Retail Award 2 (the VIRS&R Award); being a former instrument of the Industrial Relations Commission of SA (the IRCSA).

[9] The redundancy provisions of the VIRS&R Award have been preserved by virtue of clause 18.5 of the Vehicle Manufacturing, Repair, Services and…

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: Mildren Automotive Pty Ltd [2013] FWC 2113
Case: [2013] FWC 2113
Decision Date: 4 JULY 2013

CaseChat Overview and Summary

Mildren Automotive Pty Ltd was before the Fair Work Commission in a dispute concerning the employer's application to vary redundancy payments owed to an employee due to the employee's alleged acquisition of alternative employment and the employer's claimed inability to pay. The central issue before the Commission was whether the employer had secured suitable alternative employment for the employee, thereby reducing the redundancy entitlement, and whether the employer's financial constraints justified a reduction or deferral of the redundancy payments. The Commission was required to interpret the redundancy provisions of the National Automotive Parts and Services Award 2010, as well as consider the implications of the employee's employment status and the employer's financial situation.

The Commission found that the employer had not provided sufficient evidence to demonstrate that the employee had obtained acceptable alternative employment. The Commission also concluded that the employer's financial difficulties did not warrant a reduction in the redundancy payments. However, the Commission allowed the employer's application to defer some of the redundancy payments due to the employer's demonstrated inability to pay the full amount immediately. The Commission emphasised the importance of the employer's obligation to provide adequate redundancy payments under the award, while also acknowledging the employer's financial constraints.

In light of its findings, the Commission ordered that the employer was to pay a reduced amount of redundancy payments immediately and defer the balance of the payments until the employer's financial situation improved. The employer was also directed to provide evidence of the employee's alternative employment, if any, within a specified timeframe. The Commission's decision underscored the need for employers to adhere to the redundancy provisions of modern awards and to provide adequate evidence to support any claims regarding alternative employment or financial hardship.

Orders