Peachey's Engineering Pty Ltd

[2013] FWC 9450

[2013] FWC 9450

FAIR WORK COMMISSION

DECISION

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

Peachey's Engineering Pty Ltd
(C2013/6450)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 31 DECEMBER 2013

Application to vary redundancy pay for other employment – obligation to pay redundancy pay reduced by 50%.

[1] This is an application under s.120 of the Fair Work Act 2009 (“the Act”), by which the Applicant, Peachey’s Engineering Pty Ltd (a wholly owned subsidiary of and which trades as Laserbond Ltd), has sought to reduce the amount of redundancy it must otherwise pay Mr Matthew Harms (“the affected employee”). The Applicant seeks the reduction on the basis of the efforts it has made to obtain other acceptable work for the affected employee.

Background

[2] The Applicant entered into an asset sale (its client base and various major items of equipment including fabrication jigs and fixtures) with the new employer (of the affected employee), and ceased to be an employer and will cease to operate its business as a consequence.

[3] During the sale process, the Applicant agitated the matter of the employment of the existing employees by the new employer. The Applicant did so on the basis of the skills and experience of its employees and their ability to operate the business assets and satisfy the requirements of the client base.

[4] Subsequently, the new employer has offered alternative employment to the affected employee, amongst others.

[5] The application was subject to a conference between the Applicant and the affected employee.

Legislation

[6] The scale of redundancy pay is set out in s.119 of the Act. Section 120 of the Act 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 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.

The Evidence

[7] Following the conference which explored the basis for the Applicant having obtained the employment and the acceptability of the alternative employment with the new employer, the Applicant and the affected employee agreed as to the relevant facts.

[8] In view of the demonstrated and initiating efforts made by the Applicant to obtain the new employment, and taking into account some variations from the prior terms and conditions of employment compared with the new terms and conditions of employment with the new employer, the amount of redundancy pay the Applicant must pay to the affected employee is reduced to 7 weeks or 50% of the original obligation.

[9] The parties, in fact, have agreed as a matter of record and by way of their direct communications that this is a conclusion with which they both concur in the circumstances.

Conclusion

[10] The amount of redundancy pay to which the affected employee is entitled is reduced to 7 weeks of pay or 50% of the Applicant’s original obligation.

SENIOR DEPUTY PRESIDENT

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