Peachey's Engineering Pty Ltd

[2013] FWC 10244

[2013] FWC 10244

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
(C2013/6451)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 31 DECEMBER 2013

Application to vary redundancy pay for other employment - obligation to pay redundancy pay reduced to nil.

[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 pay it must otherwise pay Mr Julius Salcedo (“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. Mr Wayne Hooper, a director of the Applicant, by way of a statutory declaration, claimed that he did so by repeatedly pressing for the engagements of existing employees on the basis that they would ensure that “assets [would] be fully utilised and the value of the sales order book being purchased [would] be preserved and grown.”

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

Legislation

[5] The scale of redundancy pay is set out in s.119 of the Act. Section 120 of the Act sets out various rules and 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

[6] On 28 November 2013, the following correspondence was directed to the affected employee:

Dear Mr Salcedo

Re:         C2013/6451 – Application by Peachey’s Engineering

I refer to the above matter. As you are aware, this is an application made by your former employer, seeking to have the amount of redundancy pay it would otherwise have to pay you reduced (to nil), on the basis that it obtained you other acceptable employment. The relevant section of the Fair Work Act 2009 is included at the end of this email.

In support of its application, Peachey’s Engineering has provided the attached statutory declaration (from Mr Wayne Hooper) outlining the steps and actions it took to obtain you further employment.

Senior Deputy President Richards asks now that you provide a statutory declaration in response to that provided by Peachey’s. This declaration allows you to outline your position in relation to the application and dispute any of the claims made in the declaration (if you disagree with them). Alternatively if, after reading the declaration of Mr Hooper, you decide that you do not object to the company’s application to vary your redundancy pay under s.120 (to reduce it to nil), please advise the Commission of this in writing.

A statutory declaration must be signed by you and witnessed by a specified person, such as a Justice of the Peace, a solicitor, doctor. The full list of people who can witness a statutory declaration are listed on the form. A blank form is attached.

Upon receipt of your declaration, Senior Deputy President Richards will decide whether he can determine the matter on the basis of the written materials. If some of the facts are in dispute, the matter may be listed for a conference or hearing.

Please provide a declaration as soon as possible and by 5pm on 4 December 2013.

Extract from the Fair Work Act:

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.

[7] The affected employee did not reply to the above correspondence until 16 December 2013, and then after some further correspondence was sent seeking his views.

[8] The affected employee indicated that:

I do not have any objection to what [...] my former employer declared. I believe they have done their best to help me to get employment [with the new employer], for that reason I am fully convinced that I am not qualified or entitled to claim or receive any redundancy pay from LaserBond.

[9] In view of the demonstrated initiating efforts made by the Applicant to obtain the new employment, and taking into account that there is no contest between the Applicant and the affected employee in relation to 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 nil.

Conclusion

[10] The amount of redundancy pay the Applicant is obligated to pay the affected employee is reduced to nil.

SENIOR DEPUTY PRESIDENT

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