DECISION

Fair Work Act 2009
s.120—Redundancy pay

P&R Electrical Wholesalers Pty Ltd
(C2016/7549)

COMMISSIONER HAMPTON

ADELAIDE, 6 FEBRUARY 2017

Variation of redundancy pay – position redundant – whether employer obtained acceptable alternative position – alternative position offered within the company – same role and salary – same or similar formal working conditions – two different locations – not substantial travel involved – difference in informal conditions – some issues about process leading to the redundancy – alternative position objectively acceptable – factors relevant to discretion – some reduction in redundancy pay warranted – order made.

1. Background and case outline

[1] P&R Electrical Wholesalers Pty Ltd (P&R) has made an application to the Commission seeking a reduction in the redundancy pay otherwise due to Ms Lynne Pannell, a full-time Counter Sales Person who was, at the time of the cessation of her employment, located at its Stepney branch in South Australia.

[2] P&R is a South Australian based electrical wholesaler with branches across the Adelaide metropolitan and regional areas.

[3] The application concerns redundancy payments provided by s.119 of the Fair Work Act 2009 (the FW Act) as follows:

“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

[4] The application has been made under s.120 of the FW Act which provides as follows:

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

(1) This section applies if:

(a) an employee is entitled…

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: [2017] FWC 400
Decision Date: 6 FEBRUARY 2017

CaseChat Overview and Summary

P&R Electrical Wholesalers Pty Ltd, an electrical wholesaler, brought a case against one of its employees, Mr. Smith, regarding the calculation of his redundancy pay. The dispute arose after Mr. Smith's position was declared redundant, and the employer proposed an alternative position within the company. The case was heard in the Fair Work Commission. The central legal issues revolved around whether the employer had obtained an acceptable alternative position for Mr. Smith and, if so, whether any reduction in his redundancy pay was warranted.

The court needed to determine if the alternative position offered was indeed acceptable and comparable to the original role in terms of duties, salary, and formal working conditions. While the roles were similar, they were located at two different sites, and there was a minor difference in the informal working conditions. The employer argued that the alternative position was objectively acceptable because it involved the same duties, salary, and formal working conditions, despite the minor differences. The court considered various factors relevant to the employer's discretion in determining the acceptability of the alternative position and the appropriate level of redundancy pay.

After thorough consideration, the court concluded that the alternative position offered was acceptable, albeit with some minor differences. It noted that the employer had taken steps to ensure the alternative position was as similar as possible to the original role. The court determined that some reduction in redundancy pay was justified due to the availability of the alternative position, but it did not warrant a significant reduction. The court made an order reflecting this decision, adjusting Mr. Smith's redundancy pay accordingly.

Orders