Northpoint Fleurieu Pty Ltd T/A Northpoint Fleurieu

[2020] FWC 6521

[2020] FWC 6521

FAIR WORK COMMISSION

DECISION

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

Northpoint Fleurieu Pty Ltd T/A Northpoint Fleurieu
(C2020/7686)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 8 DECEMBER 2020

Variation of redundancy pay – general manager - alternate job offer within same business – whether acceptable alternate employment – discretionary considerations – application dismissed

[1] On 15 October 2020 Northpoint Fleurieu Pty Ltd (Northpoint, the Applicant or the Employer) applied to the Commission under section 120 of the Fair Work Act 2009 (FW Act) to vary the amount of redundancy pay payable to a former employee, Roderick Cameron (Mr Cameron, the Respondent or the Employee).

[2] Northpoint does not seek to vary the amount of redundancy pay to nil. It seeks an order to vary the amount from $36,923.84 (a sum equivalent to 16 weeks) to $24,611.84 (being 16 weeks calculated by reference to an alternate position offered but not accepted).

[3] Mr Cameron opposes the application.

[4] Following a conference of the parties, directions were issued by Commissioner Hampton on 23 October 2020. Materials were filed by Northpoint and Mr Cameron.

[5] On 26 November 2020 the matter was reallocated to me for hearing and determination.

[6] I heard the matter by phone on 30 November 2020. Both parties were self-represented. Jason Romano, Human Resources Manager, appeared for Northpoint together with its Managing Director Robert Hoey.

[7] Mr Romano and Mr Cameron gave evidence. The evidence of each was reliable within their sphere of knowledge and recall. Most matters in dispute are not issues of fact but differences of opinion or conclusions to be drawn from the facts.

Facts

Northpoint Fleurieu

[8] Northpoint operates a motor vehicle franchise at Victor Harbor in regional South Australia, some 85 kilometres south of Adelaide. Northpoint is headquartered in Adelaide. The Victor Harbor franchise is but one of its motor vehicle dealerships.

[9] Northpoint acquired the Victor Harbor dealership in September 2018 from a previous franchisee the McIlroy Auto Group (McIlroy).

[10] From September 2018 to February 2020 the dealer principal (franchise operator) of Northpoint Fleurieu was Mr Hoey (who was also the Northpoint group’s Managing Director).

[11] In 2019 Northpoint sought expressions of interest for a new dealer principal to operate the Northpoint Fleurieu franchise. The successful candidate was Ty Clarke, who in February 2020 became dealer principal.

[12] Northpoint Fleurieu is a full service motor vehicle dealership for the Hyundai, Mitsubishi and Toyota brands. It includes new and used car sales (including fleet sales), a parts department and service workshop. At relevant times it employed approximately 25 persons working from Victor Harbor with one sales consultant based in Adelaide.

Mr Cameron’s employment

[13] Mr Cameron’s professional qualifications are in accounting. He holds a Bachelor of Commerce (Accounting) and Diploma in Accounting. He is currently studying a Masters in Tax Law (incomplete).

[14] Mr Cameron commenced employment (with McIlroy) at the Victor Harbor dealership in 2011 as Administration Manager and then (in about 2012) became Financial Controller. In November 2017 he was promoted to General Manager.

[15] Upon the franchise being sold in 2018, Mr Cameron was retained by Northpoint as the dealership’s General Manager.

[16] Mr Cameron’s duties as General Manager largely remained intact upon sale of the business.

[17] In dispute is the extent to which Mr Cameron undertook sales or fleet sales work as General Manager.

[18] When the dealer principal vacancy arose, Mr Cameron expressed some interest but did not proceed with a bid after discussions with Mr Hoey. In dispute is whether, at the time, Mr Hoey advised Mr Cameron that his sales proficiency was insufficient to be dealer principal. I accept Mr Cameron’s evidence that this is what he was told 1.

[19] Mr Clarke, who became dealer principal, had until February 2020 been an employee of the franchise reporting to Mr Cameron. Upon Mr Clarke becoming dealer principal, Mr Cameron reported to Mr Clarke and through Mr Clarke, to Mr Hoey in head office.

Redundancy

[20] During 2020, in light of the new dealer principal and the economic impacts of COVID-19, efficiencies needed to be found and the dealership undertook some restructuring.

[21] A decision was made by Northpoint (collectively by Mr Hoey and Mr Clarke) that the Northpoint Fleurieu General Manager position would cease to exist.

[22] On 17 September 2020, in discussion with Mr Clarke 2 and by letter3, Northpoint advised Mr Cameron of its intention to make his position redundant.

[23] Over the following fortnight, discussions occurred orally 4 and via email exchanges between Mr Clarke and Mr Hoey (for Northpoint) and Mr Cameron. Those discussions concerned two principal issues: the terms of the proposed redundancy (should Mr Cameron leave the business) and the terms of a proposed alternate position (should Mr Cameron remain in the business). The discussions gave rise to areas of disagreement and frustration on both sides which strained and ultimately saw relations break down between persons who until then had a generally mutually respectful and productive relationship.

[24] Mr Cameron felt disappointed but not entirely surprised by the decision to make his role redundant. He felt rushed and bullied into making an important career decision and developed distrust when it became apparent to him that Mr Hoey was unaware of a term of his employment as General Manager which (according to Mr Cameron) had been negotiated with McIlroy and carried over entitling him to an end of year bonus in addition to monthly commissions paid on sales. Whether that bonus is payable and owing remains a matter of separate contractual dispute between the parties.

[25] Whilst making the General Manager position redundant, Northpoint did not want to lose Mr Cameron to its business. It proposed to create a new (but lesser) position in the Northpoint Fleurieu dealership of ‘Fleet Sales and Financial Administration Manager’. The nature of that position and the terms under which it was offered are discussed below.

[26] On 2 October 2020 5 Mr Clarke, assisted by Mr Romano from head office, gave Mr Cameron formal notice of redundancy by letter dated 1 October 2020. The redundancy was to take effect from 6 November 2020. The letter read, in part:6

“As a result of the operational review into the need for an efficient internal company re structure, we have decided to make the position of General Manager based in Victor Harbor redundant.

We would like to keep you and your skills within the business, so therefore during this operational review we have made attempts to find you an alternative position within the company. We have identified a potential position for you as a Fleet Sales and Financial Administration Manager based at Victor Harbor, which we would like you to strongly consider. We would therefore propose a transfer to lower paid duties by way of redundancy. The proposed role pays ($80,000 per annum) and you would be paid the difference of this and your current salary ($120,000.00 per annum) in accordance to your redundancy entitlements calculation as cited below.

Based on your length of service, your notice period is 5 weeks (including 1 week for being over 45 years old and completing at least two consecutive years of service.). We ask that you assist us in this transition by working through that notice period. You are also due a redundancy entitlement of 16 weeks. A full calculation of your expected transfer, redundancy and entitlement figures will accompany this letter for your further information. Giving you your due notice today, the official end date of the General Manager position and the start of your new position, will be Friday 5^th November.

In addition to your redundancy, should you choose not to take up the proposed position, you will be paid your accrued entitlements (such as annual leave and long service leave, if entitled) and any outstanding pay, including superannuation, up to and including your last day of employment and would ask that you please return all company property to us on your last day of work.”

[27] Later that afternoon Mr Cameron, by email, accepted the redundancy “in protest’ and rejected the offer of the alternate position. He wrote:

“I therefore am accepting the redundancy package offered, "in protest" as I do not believe this is a genuine redundancy.

I am not interested in taking a lower paid role with Northpoint Fleurieu, In addition the role on offer is almost identical to my current role for approx $50k less per year.

I am deeply disappointed in how I have been treated given the loyalty and dedication I have given Northpoint Fleurieu. The way this process has been handled is not in line with the principles North point promote. I have not been treated with "Respect or Professionalism" at any point and feel that what you promote is misleading.”

[28] Relations between Mr Cameron, Mr Clarke and Mr Hoey became further strained in the weeks that followed, as Mr Cameron took leave on medical grounds and as the bonus dispute remained unresolved. Mr Cameron sought to only discuss matters relating to his employment either by email or if in person, with a support person present.

[29] Mr Cameron’s work in the dealership ended earlier than intended on 26 October 2020 although the redundancy took effect on 6 November 2020. He was permitted to use his company provided vehicle and fuel card until 6 November.

Payments on redundancy

[30] Mr Cameron worked for Northpoint (including prior service with McIlroy) for between nine and ten years. It is not in dispute that under the terms of the FW Act (National Employment Standards) Northpoint was required to pay Mr Cameron 16 weeks redundancy pay (in addition to notice on termination).

[31] It is not in dispute that 16 weeks equates to $36,923.84.

[32] To date, and although his redundancy has taken effect, Northpoint have paid Mr Cameron only $24,611.84 of this amount. It has withheld the difference ($12,312.00) pending determination of these proceedings. No order or stay order has been sought or granted to that effect.

The variation application

[33] Northpoint made this application to the Commission on 15 October 2020 (9.28am) some thirteen days after Mr Cameron had in protest accepted the redundancy offer and concurrently rejected the offer of alternate employment.

[34] Northpoint did not serve its application on Mr Cameron. The Commission did so at 2.48pm on 15 October 2020. The first Mr Cameron learned of the Employer’s application was when an administrative officer of the Commission contacted Mr Cameron on 15 October 2020 to confirm his contact details as stated in the application.

[35] It is not clear from the evidence when Northpoint decided to make the application. It submits that it had no intention to do so prior to Mr Cameron rejecting the offer of alternate employment. Mr Romano’s evidence was that Northpoint expected Mr Cameron to reach an agreement to take up the alternate position.

[36] The afternoon prior to filing the application saw disagreement over the disputed bonus reach an impasse. This occurred during a telephone discussion between Mr Cameron, Mr Hoey and Mr Clarke on the afternoon of 14 October 2020. Mr Cameron advised Northpoint that he would be taking legal advice on the matter. The next day (at 2.35pm, after these proceedings were filed) Mr Cameron sent Mr Hoey and Mr Clarke an email standing his ground, saying that he was no longer comfortable discussing the matters face to face, seeking future communication by email and expressing the view he had been bullied and intimidated. Mr Cameron then took a week of personal leave, on medical advice, returning on 23 October 2020.

[37] It was not until 26 October 2020 that Mr Hoey told Mr Cameron that his desire to have a support person present was frustrating the operational handover, and that Mr Cameron was no longer required to work out the remainder of the notice period.

Submissions

[38] Northpoint submit that the redundancy pay should be varied for the following reasons:

•  the alternate position offered was objectively acceptable alternate employment;

•  the Employer made the offer with genuine intent to keep Mr Cameron employed in the business;

•  the terms of the position included not only a new job but in addition a limited redundancy payment designed to recognise differences between the roles and soften the blow of redundancy;

•  the position was designed having regard to Mr Cameron’s skills and attributes;

•  Mr Cameron’s service would be continuous;

•  the Employer tried to negotiate the position with Mr Cameron in good faith;

•  the Employer did not present the position as a fait accompli but sought to workshop and negotiate matters of detail with Mr Cameron;

•  the position was well remunerated with scope for a comparable level of commissions to be earned and with comparable provision of a company car and fuel card with unlimited personal usage;

•  the position would enable Mr Cameron to remain in employment at the same location, retain job security and remain attached to the motor vehicle industry; and

•  it is fair to make the variation as the Employer is not seeking to reduce the redundancy pay to nil, but simply to an amount that reflects a difference between the two positions.

[39] Mr Cameron submits that the variation should not be made for the following reasons:

•  the position offered was not acceptable alternate employment;

•  the position would result in a significant reduction in income each year, affecting his living standard;

•  the position would result in reduced superannuation each year, compromising his retirement planning especially taking into account compounding;

•  the position is a lesser position and effectively a demotion;

•  the position carries lesser status and seniority. Inside the dealership, staff who had been reporting to Mr Cameron would no longer be reporting to him;

•  the position does not reflect his educational qualifications, his skill set, core competencies or career path;

•  the position is a sales and marketing position and he has no established qualifications, expertise or experience in sales and marketing;

•  he has a pre-existing medical condition which makes constant travel and regular movement in and out of motor vehicles difficult;

•  the manner and time frames in which he was asked to respond to the offered position were unfair and evidenced bullying and intimidation;

•  he was misled by Northpoint because he was never told the employer would try to subsequently reduce the redundancy pay on offer;

•  it would be unfair to reduce the amount of redundancy pay because that would have the effect of retrospectively distorting the choice he was given between the redundancy and the alternate position; and

•  it would be unfair to reduce the amount of redundancy pay because he agreed to the amount on offer and thereby a contract exists which should not be disturbed.

Consideration

[40] Section 120 of the FW Act 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.”

Jurisdictional prerequisites

[41] Northpoint has standing to make the application. It was at all relevant times Mr Cameron’s employer.

[42] It is a jurisdictional precondition to considering an application under section 120 that the employee is entitled to be paid an amount of redundancy pay under the FW Act.

[43] I am satisfied that this is so. Northpoint is a national system employer. None of the exclusions or limits specified in sections 121 or 123 of the FW Act apply.

[44] Mr Cameron maintains the view that his redundancy was not genuine. He accepted the redundancy ‘under protest’ because he believed it was a ruse to employ him in a broadly identical position for lesser pay and that the position he held was still required to be done. If this is correct, not only would the Employer’s section 120 application be beyond jurisdiction, but Mr Cameron would not be entitled to redundancy pay under the FW Act.

[45] On the material before me, I am satisfied that a redundancy took place. The position of General Manager held by Mr Cameron ceased to exist from 6 November 2020. That job, with all its duties combined into the singular role of General Manager, was no longer required. That elements of a role are dispersed and continue to exist following a business restructure does not mean that the former position was not redundant. For reasons that follow, I am satisfied that the alternate role offered to Mr Cameron was materially different to that of General Manager. As there was a redundancy, Northpoint was required to make redundancy payments to Mr Cameron under section 119 of the FW Act. The Commission’s jurisdiction is enlivened.

[46] Northpoint does not seek variation of the amount payable on the ground of incapacity. It does so on the ground that it had obtained other acceptable employment for Mr Cameron (section 120(1)(b)(i) FW Act).

[47] There is no doubt in this case that Northpoint “obtained” the alternative employment for Mr Cameron. It organised a new position within its own business. It ultimately made a definitive offer of the new position in such a manner that Mr Cameron could accept the same.

Relevant principles

[48] The critical issue in this matter is whether the alternative position was “acceptable”.

[49] It is well established in this jurisdiction that the concept of acceptable alternative employment is to be determined objectively. It is not a question of subjective opinion; such as whether the employer believed it acceptable or whether the employee considered it unacceptable. As noted by the Full Bench in Australian Chamber of Manufacturers and Derole Nominees Pty Ltd: 7

“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.”

[50] The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer 8. It is a serious step for the Commission to make an order to limit or remove an employee’s statutory entitlement to redundancy payments.9

[51] In order to establish whether the alternative employment obtained by the employer is acceptable, it is necessary to have regard to all relevant matters including (non-exhaustively) factors such as pay levels, hours of work, seniority, fringe benefits, workload, job security, location and travelling time. 10

[52] It is also clear that acceptable employment does not mean identical employment; however, it has been held by the Commission that:

“…the objective test of acceptability appears to be that the alternative work bears a sufficient comparability to the original work and is not unreasonably removed from the employee’s original duties, skills set, qualifications, experience and other terms and conditions of employment. The test is not whether or not the employee is capable of carrying out the new employment as such, it is whether there is sufficient correlation between the relevant indicia of the current work and the alternative employment as proposed.” 11

[53] Further, employees should not unreasonably refuse offers of alternative employment merely because they wish to access the benefits of redundancy pay. 12

[54] If the Commission is satisfied that acceptable alternative employment has been obtained, a discretion then arises (but only then) to reduce all or some of the redundancy pay having regard to the relevant circumstances. 13

Was the alternate position “other acceptable employment”?

[55] I now consider the position of Fleet Sales and Financial Administration Manager offered to Mr Cameron. I leave aside for the moment consideration of any consequences of the process following its rejection.

[56] Northpoint proposed the position in general terms on 17 September 2020. In the fortnight that followed it initially sought to workshop the duties and terms of the new position with Mr Cameron and mould them around its view of his strengths and what the new position was worth. It did so because it initially had a clear view that it did not want to lose Mr Cameron and valued a number of the attributes he brought to the business, in particular his relationship-building capacity.

[57] For Mr Cameron’s part, he was initially open to considering a continuing role in the business but sought precision on its terms (duties wise and financially) and a capacity to compare and contrast the position on offer with the terms of redundancy so as to make a call in his best interests.

[58] As the relationship deteriorated over the fortnight, the dispute over the alleged contractual bonus emerged large, trust was eroded and the position on offer became less attractive to Mr Cameron. He ultimately saw himself being asked to do a similar job for less pay.

[59] Although a number of different iterations of the position description were exchanged, the final offer was as follows: 14

“Purpose and Scope of Position

The main focus of the Fleet and Administration Manager is to achieve predetermined budgets with a strong focus on marketing to grow sales to new and potential guests and for the integrity of the administration function of the Northpoint Fleurieu dealership. All duties are to be carried out in accordance with all Franchise and company policies and procedures and any additional specific requirements as per your contract of employment.

Duties, Responsibilities & Accountabilities

1. Adhering to Northpoint's common purpose and values of ‘Creating a Memorable Experience’

2. On time monthly reporting of actual sales performance against set targets with variance and revised projections

3- Monitoring the sales revenue, margin, and expense performance initiating corrective action where required

4. Monitoring competitors sales & product strategies, campaigns and events to optimise market share

5. Partnering with HR with recruiting, selecting and training of Fleet Sales Consultants

6. Providing motivational support, fostering teamwork and empowering others

7. Account management excellence to increase sales to existing guests/organisations

8. Developing and evaluating programs related to fleet transactions to achieve higher closing rates

9. Understanding the guests objectives, criteria and decision making processes

10. Partnerships with NPF pre-delivery and parts department to facilitate timely Fleet deliveries of vehicles

11. Management of fleet department P&L to maximize financial return to dealership through effective gross maximization and expense control

12. Forming long term business partnerships with guests in order to leverage future transactions

13. Identifying and exceeding needs of guest by providing in-depth advice and service

14. Complete registration tasks for all Fleet vehicles

15. Lease vehicle registrations including monthly reporting

16. Complete and coordinate the registration and service books/key process and Fleet Sales

17. Ensure vehicles are RDR'd to accuracy in reporting procedures, using correct SAP ID's

18. Maximise data integrity-valid email address and other personal information

19. Achi eve a smooth Fleet RDR flow-do not leave to end of month

20. Maintain familiarity with state laws governing dealer delegates

21. Accurate completion of source documents required by Service SA within a timely manner

22. Coordination of TFM lease vehicle process - sourcing quotes, preparing vehicles to be returned on time

23. Assist with deal close down.

24. Liaise with other staff members when administrative problems occur

25. Actively participate in dealership and Toyota training meetings and activities

26. Participate in building/supporting a culture of teamwork and continuous improvement

27. To successfully achieve Key Performance Indicators (KPIs).

28. Any other lawful instruction given to you by the Dealer Principal or Managing Director.

29. Production of monthly Profit/ Loss report”

[60] To consider whether the position on offer was acceptable alternate employment reference is required to the position made redundant.

[61] Clearly, the positions do not need to be identical for the alternate position to be objectively acceptable, otherwise no redundancy would exist. There does however need to be a “sufficient correlation” 15 having regard to relevant indices. As noted by Hampton C in The Trustee for Altman Unit Trust No 1 trading as Southgate Holden “it is the overall role and responsibilities that must be considered rather than some form of numerical comparison of stated duties”.16

[62] No single job specification of the General Manager position is in evidence. However, two documents provide clear insight into the role. The first is a document prepared for internal purposes prior to these events titled “Rod’s Roles”. 17 The second is Mr Cameron’s description of his duties as General Manager in his CV submitted to Northpoint in 2017 when the dealer principal appointment was under consideration.18

[63] The first of these documents identifies nine subject matters:

“Rod’s Roles

General Manager – Main duties to oversee all of the below

Financial Controller –

- Oversee complete accounting function

- Cashflow Management

- Budgeting

- Variance v Budget Analysis

- Oversee the administration of the entire business

- EOM Financial Reporting. Mitsubishi, Toyota, Internal Profit & Loss Reports

- Calculate Staff Commissions

- Cost reduction

- Business Development

Fixed Operations – Additional Since NPF Take Over, Ryan Seymour Service Manager (Redundant Jan19)

- Oversee front and back end of service department

- Oversee all warranty procedures

- Oversee parts department

HR – Additional since NPF, use to be Kirsty McIlroy’s Role

- Maintain employee records

- Update JD’s

- Prepare contracts

- Discipline employees if required

Safety – Maintain a safe working environment

Fleet – Additional since NPF Take Over – Was Shared with Derek McIlroy since Danielle Wise left.

- Manage online Portal SG Fleet & LeasePlan

- Maintain relationships with fleet companies and major fleet clients

- Ensure sold vehicles are delivered on time. (Mel Trenerry & Garry Fishlock to assist)

TFL – Liaise with Jes to ensure all TFL requirements are met

Training – Liaise with Jes Hankinson to ensure staff are being enrolled in required training

GEM – Additional Since NPF, shared role KM & RC

- Address all guest complaints

Support – Support Sales departments when required”

[64] The second of these documents identifies nineteen duties:

•  “Full Accounting Function

•  Prepare, Review and Lodge Monthly Financial Statements (HMCA, MMAL, TMCA, AutoTeam)

•  Cashflow Management & Analysis

•  Prepare Financial Reports for Key Stakeholders

•  Prepare and Lodge Monthly BAS

•  Prepare Internal Department Analysis

•  Benchmark & Monitor All Departments

•  IT Manager

•  Budgets and Forecasts

•  Cost Control and Reduction

•  Monitor and Maintain Internal Controls

•  Budget Vs. Actual Targets (Variance Analysis)

•  Maintain Compliance and Regulations (Accounting & Government)

•  Identifying Opportunities (Cash, Profit & Issues)

•  Planning Financial Strategic Objectives

•  Monitor and Identify Internal Trend Issues

•  HR – Recruitment, KPI Reviews & Performance Management, WHS, Training & Development

•  Develop Policies & Practices

•  Fleet Sales”

[65] Whilst both positions reported to the dealer principal, the level of seniority of the position on offer was different and, objectively considered, lesser. I conclude that it was largely a discrete sales role, without the depth and breadth of that of General Manager. It was inherently transactional in nature, not strategic. In terms of reports, whereas as General Manager Mr Cameron had multiple staff reporting to him (including fixed operations such as parts and workshop) in reality no such breadth or depth of managerial or supervisory responsibility existed in the position on offer. Like Mr Cameron, employees in fixed operations would report to the dealer principal.

[66] In contrast, sales was only one discrete element of Mr Cameron’s myriad responsibilities and duties as General Manager. Whilst business records indicate that Mr Cameron ‘transacted’ some 230 sales whilst General Manager and managed an online portal for three fleet customers, he was generally not the officer who secured a customer fleet order or marketed fleet sales. Rather, and whilst he assisted with quoting, a substantial number of these sales were made by others but allocated (in some instances by head office) to the Victor Harbor dealership and to Mr Cameron (as General Manager) for relevant follow up / delivery. He was empowered to assign the delivery task to other employees in the dealership and on occasions did so. His customer-facing role with respect to sales was not significant. I accept Mr Cameron’s evidence that the sales he personally secured (that is, by securing the customer, marketing a vehicle and then closing the sale) were considerably fewer and were primarily single vehicle sales to friends and family 19.

[67] Further, as General Manager Mr Cameron was not contractually required to personally transact any level of sales. In the alternate role, meeting a predetermined sales budget each month was a contractual condition. A failure to transact pre-budgeted sales each month would have been a performance failure impacting Mr Cameron’s job security. This was not so in any direct sense with respect to the General Manager’s role where fixed operations, and not just vehicle sales, impacted dealership profitability.

[68] In terms of hours of work, the alternate position was a full time role, as was the redundant position.

[69] Both positions were based at the Victor Harbor dealership. Whilst Mr Cameron drew attention to the fact that a pre-existing medical condition may be compromised by regular motor vehicle travel and getting into and out of vehicles, there is insufficient evidence before me to conclude that that either vehicle travel or usage is a material basis on which the offer could be said to be unacceptable. Whilst the position would have required considerable time ‘on the road’ and its description required the appointee to “enter and exist vehicles regularly”, Mr Cameron lives 50 km from Victor Harbor. As General Manger he made this commute, a daily round trip of 100km in a vehicle.

[70] Both roles came with a company supplied vehicle and fuel card, both with unlimited personal usage.

[71] Given this, was the alternate position “acceptable’ in objective terms?

[72] I am satisfied that the offer was a genuine offer, not set up to fail. Northpoint acted in what it considered to be common interests to retain the benefit of some of Mr Cameron’s skills and experience whilst providing ongoing employment to Mr Cameron.

[73] I also take into account that, accompanying its offer, Northpoint offered a limited redundancy payment should the position be taken up. The limited payment was 16 weeks at the difference between the base salary of the position on offer and the base salary of the redundant position (the amount that is the subject of this claim). In doing so, Northpoint sought to acknowledge its obligation to make a redundancy payment, to recognise disadvantage to Mr Cameron as a consequence of the redundancy and to soften the blow.

[74] In doing so Northpoint acted reasonably.

[75] However, the test under section 120 is not whether the employer acted reasonably in offering or seeking to negotiate the alternate employment or whether it believed the alternate employment was acceptable or the best it could do in the circumstances. It is whether the offer was “acceptable” on an overall objective basis.

[76] Whilst the offer was genuinely made and moulded to try to keep Mr Cameron in the business, I do not consider that the position of Fleet Sales and Financial Administration Manager as offered was acceptable alternate employment.

[77] Three considerations are telling.

[78] Firstly, the role offered was primarily one of sales and marketing. The position description itself describes the job as having “a strong focus on marketing to grow sales” and requires a “minimum 2 years’ experience in a similar role or extensive experience in a sales role with a proven sales record”. This was not Mr Cameron’s core skill set, qualifications or career background. Fleet sales involve relationship-building and focusing heavily on forging relationships with customers. Mr Cameron had aptitude in relationship-building and, as noted, had transacted some sales in the past. He had acknowledged in his CV that he had performed “fleet sales” but his evidence also correctly noted that this was but one of nineteen tasks he performed as General Manager. 20 The other eighteen were managerial, administrative and strategic, not sales or marketing. He was not a salesperson or marketer. He was an accountant with expertise in financial administration and business management. Being asked to work on the road as a salesperson responsible for marketing and building relationships with existing fleet customers, finding new fleet customers, convincing customers to purchase vehicles and meeting sales targets required a materially different aptitude to that of a business manager and financial controller. That Mr Cameron might have been capable of doing the job is not to the point. Whatever his adaptability, the job he was being offered was not his core competency.

[79] Secondly, the role was not truly managerial. Administrative responsibilities incorporated into the position were only a minority component of the offered position (on the evidence, likely to be no more than 30%). Qualitatively, they were not of the same depth or seniority that could be characterised as managerial. In the new role, at least initially no staff would report to Mr Cameron. He would manage himself, not a team. Though the position description contemplated fleet sales consultants reporting to the appointee, no such positions existed and the evidence before me was that a sales consultant might be seconded on a project-by-project basis. Though Northpoint submitted that the role was still managerial, it conceded that there were “no direct reports” 21. The administrative role was largely transactional account management and associated with closing fleet sales and putting in place relevant financial terms and after sales service. There was no real sense that the administrative functions were managerial in the sense of overseeing staff or broader strategic or budget planning beyond the narrow issue of his predetermined budget for fleet sales. This is in significant contrast to the General Manager role which Northpoint’s own submission described as a “high position”22.

[80] Thirdly, and crucially, there was a significant and material reduction in remuneration. The base rate of the position on offer was $80,000 per year. This compared to the base rate Mr Cameron was earning of $120,000. This represents a reduction in base salary of one third. For any employee, that is significant. Superannuation, at 9.5% on both positions, would be materially less as contributions would be calculated on the lower base salary. Even taking into account the limited offer of redundancy pay accompanying the position, the adverse financial impact would have been felt sixteen weeks into the position being held.

[81] It is not to the point that Northpoint estimated that Mr Cameron could have realistically earned $40,000 per year on top of his base rate as commission on fleet sales thus taking his earnings to a comparable level of $120,000 per year. This submission ignores that fact that Mr Cameron’s remuneration package as General Manager included commissions on top of his base rate of $120,000. Leaving aside the contractually disputed end of year bonus, as General Manager Mr Cameron was entitled to monthly commission on profit. The evidence is that as General Manager he earned around $30,000 to 40,000 per year commission on this account alone. Mr Cameron’s evidence is that on current figures he was on track to receive total commissions in 2020/21 of about $60,000. Taking likely commissions into account, on the employer’s best case, Mr Cameron was being asked to reduce his income by around 25% per year ($160,000 to $120,000). It is also relevant that the formula for determining monthly commissions was materially different between the two roles; as General Manager it was a percentage of dealership profit; in the position offered it was proposed as a percentage of fleet sales he personally transacted per month.

[82] Overall, the offered position was materially lesser in remuneration and seniority and not directed at Mr Cameron’s core competencies as a manager and accountant.

[83] Whilst Northpoint made a genuine effort to keep Mr Cameron in the business, for these reasons it cannot be objectively concluded that its offer of the position of Fleet Sales and Financial Administration Manager was an offer of acceptable alternate employment.

Discretionary matters

[84] Had I found that the Northpoint’s job offer was acceptable alternate employment, there are strong discretionary considerations that would in any event have weighed against making the variation sought.

[85] Whilst there is no obligation under the FW Act for an employer to inform an employee that it is contemplating lodging an application to reduce redundancy pay that is payable, a failure to do so has potential to materially distort an employee’s decision-making. This, together with other contextual matters, may render it unfair to make the order sought.

[86] In this matter, that would be so.

[87] I have found that Northpoint filed this application on 15 October 2020, some thirteen days after Mr Cameron had (albeit in protest) accepted the redundancy offer and rejected the alternate employment.

[88] The evidence clearly establishes that it was of material importance to Mr Cameron during the fortnight during which he weighed up his options (17 September 2020 to 2 October 2020) to know precisely what terms of redundancy were being proposed. No criticism can be reasonably levelled at Mr Cameron for seeking that precision. I reject Northpoint’s assertion that Mr Cameron was preoccupied with what the dollar payout would be. A senior manager with substantial service being involuntarily made redundant and having their career progression interrupted at its very height is well entitled to protect their economic interests. It is highly relevant to making a choice between accepting a redundancy package or accepting alternate employment in the business to know (and take financial advice upon) the redundancy terms on offer.

[89] Further, at 15 October 2020, when the application was made, Mr Cameron was still employed. Mutual duties of good faith and fidelity existed though the relationship was fast deteriorating.

[90] At no time prior to filing these proceedings in the Commission did Northpoint inform Mr Cameron that it was considering doing so or had done so. As noted, the first Mr Cameron learned of the Employer’s application was when an administrative officer of the Commission contacted Mr Cameron on 15 October 2020.

[91] Northpoint submit that it did not make a decision to lodge this application until sometime after Mr Cameron had rejected the alternate offer and thereby could not be said to have misled Mr Cameron. It says that it did not tell Mr Cameron of its application because it had been operating on the belief that Mr Cameron would accept the alternate offer 23.

[92] Giving an employee a choice between a redundancy or a different position, but then assuming they will take the different position is hardly respecting their choice. Mr Clarke had told Mr Cameron in writing on 29 September 2020 that “you have been offered an option” and “the decision is yours” 24. Yet Northpoint seek to vary the very basis on which that choice was offered and agreed. Not informing Mr Cameron of a consequence or potential adverse consequence of one of the choices he was invited to make was unfair. Further, a full two weeks transpired after the choice was exercised and the alternate position not accepted before filing these proceedings. At no time in that period was Mr Cameron informed that the employer believed he would take up the position or invited him to reconsider in light of it having formed the view that it should seek variation of the quantum of redundancy pay on that account.

[93] A further interaction occurred in this period which also muddied the waters. On 8 October 2020, with final calculations of the termination payment still in dispute, Mr Clarke informed Mr Cameron that Northpoint was awaiting “approval by the fair work commission” 25. The following day (9 October 2020) Mr Cameron queried what this meant26. Mr Clarke replied that “as far as the FWC is concerned, we are making sure we have got all of the correct areas covered.”

[94] In fact, on neither 8 nor 9 October 2020 did the Commission have any dealing with the matter nor had its inquiries line been contacted. Mr Romano’s evidence was that Mr Clarke was operating under a misunderstanding, and what Northpoint (via Mr Romano) was actually doing was checking the Fair Work Ombudsman website to clarify its redundancy pay obligations. Whist that may be so, Mr Cameron’s email to Mr Clarke seeking clarification was copied to Mr Romano and Mr Clarke’s reply, incorrect as it was, was copied to Mr Romano and to Mr Hoey. No officer of Northpoint corrected the record. Although inadvertent, Mr Cameron was allowed to labour under the false belief that somehow Northpoint were, on 8 and 9 October, obtaining the Commission’s approval for his redundancy when in fact this was not so.

[95] Whilst an employer is fully entitled to exercise its right to make an application under section 120, the Commission is vested with a discretion whether to make an order even where the jurisdictional fact (of acceptable alternate employment) is established. This means that issues of fairness and reasonableness must also be taken into account.

[96] That Northpoint is not seeking to reduce the amount of redundancy pay to nil, but rather by a lesser amount is relevant. Also relevant is that the position on offer carried with it a limited redundancy payment, an approach I have found was reasonable on Northpoint’s part.

[97] However other factors point to unfairness:

•  despite telling Mr Cameron that he had a “choice” whether to accept the redundancy or the alternate position, Northpoint unilaterally took action to change the basis on which the redundancy offer had been made because Northpoint believed that Mr Cameron’s refusal to accept its alternate offer was unreasonable;

•  at the time of making the application, Northpoint knew that Mr Cameron had accepted the offer and that the quantum of the redundancy pay was material to the discussions which had preceded his acceptance;

•  Northpoint led Mr Cameron to believe that he would receive a materially higher dollar figure than what Northpoint now believe should be paid;

•  Northpoint took no steps between the acceptance of the redundancy and filing these proceedings to inform Mr Cameron that his rejection of the alternate position would or had triggered a belief that it should pay a lesser redundancy amount;

•  albeit inadvertent, Northpoint misled Mr Cameron about whether it was seeking or had obtained Commission approval for its proposed termination payment, and did not correct the record when it was apparent that Mr Cameron sought clarification; and

•  Northpoint unilaterally decided to withhold a portion of the redundancy pay payable to Mr Cameron in light of these proceedings despite the redundancy having taken effect and his employment ceased.

[98] In combination, these factors would weigh against the exercise of a discretion to reduce the redundancy pay by the sum sought.

Conclusion

[99] Having not found that Northpoint obtained acceptable alternate employment for Mr Cameron, it is not open to the Commission to consider whether redundancy pay payable to Mr Cameron under the FW Act should be varied.

[100] A consequence of this decision is that the full amount of redundancy pay payable to Mr Cameron under the FW Act is payable by Northpoint.

[101] A necessary jurisdictional fact required to be made out by Northpoint is not established. There is no other basis on which the application is advanced. The application must accordingly be dismissed. An order 27 to this effect will be made in conjunction with the publication of this decision.

DEPUTY PRESIDENT

Appearances:

Mr J Romano with Mr R Hoey for Northpoint Fleurieu Pty Ltd T/A Northpoint Fleurieu

Mr R Cameron, the Respondent, on his own behalf

Hearing details:

2020
Adelaide (by telephone)
30 November

Printed by authority of the Commonwealth Government Printer

<PR725144>

 1 R1 paragraph 24

 2 R1 Appendix A

 3   A1 Appendix A

 4   17 September 2020, 23 September 2020, 24 September 2020,25 September 2020: R1 Appendices A, B, D and F

 5   Meeting notes: R1 Appendix H

 6 R1 Appendix K

 7 (1990) 140 IR 123 at [128]

 8   Re Target Retail Agreement 2001, PR916204, 4 April 2002 at 6

 9   Clothing and Allied Trades Union v Hot Tuna (1988) 27 IR 226

 10   Re Clerks Salaried Staffs (Agriculture Award) 1999, Print S1216, 24 November 1999

 11   Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 (16 May 2007) at [26]

 12   UW v Tontine Fibres [2007] AIRCFB 1016; Spotless Services Australia Limited [2013] FWC 4484

 13   Re Clerks Salaried Staffs (Agriculture Award) 1999, Print S1216

 14 R1 Appendix AD (Mr Cameron’s handwritten annotations omitted)

 15   Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 (16 May 2007) at [26]

 16   [2018] FWC 3542 at [63]

 17 R1 Appendix AQ

 18 R1 Appendix AH

 19 R1 paragraphs 14 - 15

 20 R1 Appendix AH page 2

 21   A1 paragraph 18

 22   A1 paragraph 33

 23   A1 paragraph 31

 24 R1Appendix M Email 29 September 2020 5.20pm

 25 R1 Appendix L

 26 R1 Appendix M

 27   PR725145