Penrith Aquatic and Leisure Ltd T/A Ripples Leisure Centre

[2020] FWC 1356

[2020] FWC 1356

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Penrith Aquatic and Leisure Ltd T/A Ripples Leisure Centre
(C2020/108 – C2020/126)

Amusement, events and recreation industry
COMMISSIONER JOHNS	SYDNEY, 14 MARCH 2020

Variation of redundancy pay.

[1] On 8 January 2020 Penrith Aquatic and Leisure Ltd T/A Ripples Leisure Centre (Applicant/Ripples) made an application to the Fair Work Commission (Commission) pursuant to s.120 of the Fair Work Act 2009 (Cth) (FW Act) in relation to a redundancy payment otherwise due to 19 employees (Affected Employees).

[2] The Applicant is seeking that the redundancy pay that would otherwise be due to the Affected Employees be reduced to zero on the basis that, it contends, it obtained for all of them “other acceptable employment”.

[3] On 14 January 2020 I programmed the matter for hearing on 26 February 2020. In advance of the hearing the parties filed the following materials:

a) Application dated 8 January 2020,

b) Statutory Declaration of Roland Hassall, Lawyer, dated 9 January 2020 attesting to the service of materials on affected employees,

c) Email from Sparke Helmore containing an amended annexure of redundancy entitlements dated 17 January 2020,

d) Email from Sparke Helmore containing a further amended annexure of redundancy entitlements dated 28 January 2020,

e) Applicant’s Outline of Argument dated 28 January 2020,

f) Statement of Peta Basso, Human Resources Business Partner, Penrith City Council dated 28 January 2020,

g) Email objection from Emma Gallagher dated 31 January 2020,

h) Applicant’s Reply dated 18 February 2020, and

i) Further email from Ms Gallagher dated 20 February 2020.

[4] On 19 February 2020 the Applicant consented to the Commission determining the matter on the papers filed in the proceeding. On 20 February 2020 Ms Gallagher also consented to the same. Consequently, the hearing listed for 26 February 2020 was vacated.

[5] In coming to this decision the Commission, as presently constituted, has had regard to all of the materials filed in the matter.

Background to the application

[6] In its application the Applicant summarised the relevant background as follows:

“Penrith Aquatic and Leisure Limited (Ripples) provides the community of the Penrith Local Government Area, the catchment of Penrith as a Regional City, and visitors fitness, health and wellness, aquatic and leisure activities/facilities.

Ripples has, until recently, managed and operated assets of the Council of the City of Penrith (Council), namely the Ripples Leisure Centre, Ripples Hydrotherapy Centre, Ripples Penrith (the Assets), in accordance with a service agreement entered into between Ripples and Council. The employees listed in Annexure A (the Employees) were employed by Ripples to work in the Assets.

Ripples and Council have recently agreed not to renew the service agreement and, as a result, the Assets will be returned to Council management (the Return of Assets).

In negotiating the Return of Assets, Ripples has taken pro-active steps to provide acceptable alternative employment to the Employees. The steps taken include:

•  advocating to the Council that the Employees were, having regard to past performance, a suitable pool of candidates from which to fill the positions created as a result of the Return of Assets,

•  providing information to the Council and cooperating with the Council to facilitate its decision making process regarding the offer of employment made to the Employees,

•  affording the Employees the opportunity during paid work hours to meet with the Council in order to discuss available employment offers,

•  affording continuity of service and recognising all accrued leave balances which are not paid out on the cessation of employment with Ripples, and

•  reaching an agreement with Council that a key consideration of the Return of the Assets was a willingness of the Council to offer employment to the Employees.

The totality of the circumstances affecting the Employees, see Annexure A and B, show that (except for two persons) these offered positions stipulate similar pay levels, hours of work, seniority, workload and job security. The acceptable employment remains within the Assets, that is, at the same work location as the employment with Ripples.

The two exceptions are:

•  the position offered to Emma Gallagher, which involves a reduction in hours at the request of Ms Gallagher, and

•  the offer made to Lynette Wooden shows a 5-hour reduction in hours to accommodate Ms Wooden’s request not to work weekends.

Each of the Employees accepted the positions offered and commenced the acceptable employment on 26 August 2019.

The Employment conditions have remained in line with the previous entitlements and in several instances have improved in circumstances where there were previously no provisions for access to certain type of leave which are afforded under the Local Government (State) Award 2017 – being the industrial instrument which now covers the Employees.

The Employees were informed by way of correspondence of Ripples’ intention to make this application and the availability to meet in order to discuss the application. A copy of such correspondence is annexed in Annexure C. Ripples has not received any enquiry from any of the Employees as a result of that correspondence.”

Statutory framework

[7] Sections 119 and 120 of the Act form part of the National Employment Standards (NES) and prescribe minimum standards in respect of Notice of termination and redundancy pay in Division 11 of Part 2–2 of the Act. Section 119 sets out the amount of redundancy pay to which an employee is entitled, subject to variation under s.121, exclusions in s.120, the effect of transfer of employment situations in s.122 and limits on the scope of Division 11 of Part 2–2 of the Act.
[8] The redundancy pay provided by s.119 is 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

[9] Section 120 of the FW 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, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA 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.”

[10] As stated in the Full Bench decision in Maritime Union of Australia v FBIS International Protective Services (Australia) Pty Ltd 1 (FBIS Decision),

“It is clear that the power to reduce an amount of redundancy pay under the NES is only enlivened if, relevantly “an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119”. 2

The Penrith Aquatic and Leisure Ltd Agreement 2015 [AE418228]

[11] Clause 4 of the Penrith Aquatic and Leisure Ltd Agreement 2015 (Agreement) deals with “Workplace Change and Redundancy”. Sub-clause (xiii) – (xxi) deal with “Severance Pay” and provide as follows:

“(xiii). This subclause shall apply where an employee is terminated due to redundancy.

(xiv). Ripples shall be exempt from the operation of this subclause where the employee concerned has been offered, but has refused to accept, an alternative position within the Company's organisation structure of comparable skill and accountability levels and remuneration no less than the position previously held by the employee.

(xv). In addition to any required period of notice, and subject to subclause (xi) and (xii) of this clause, the employee shall be entitled to the following:

Complete years of service with Ripples	Entitlement
Less than 1 year	Nil
1 year and less than 2 years	5 weeks pay
2 years and less than 3 years	9 weeks pay
3 years and less than 4 years	13 weeks pay
4 years and less than 5 years	16 weeks pay
5 years and less than 6 years	19 weeks pay
6 years and less than 7 years	22 weeks pay
7 years and less than 8 years	25 weeks pay
8 years and less than 9 years	28 weeks pay
9 years and less than 10 years	31 weeks pay
10 years and thereafter	34 weeks pay

(xvi). During a period of notice of termination given by Ripples, an employee shall be allowed leave to attend interviews without loss of pay during each week of notice for the purpose of seeking other employment. Ripples requires that the employee shall provide proof of attendance at an interview.

(xvii). If the employee agrees to be redeployed by Ripples into a lower paid position, the employee's existing salary and conditions shall be maintained for a period equivalent to the amount of notice and redundancy pay that the employee would be entitled to under this Agreement. Provided that should the employee resign during the period of salary maintenance, as provide for by this subclause, the balance of any notice and redundancy pay that the employee would have been entitled to for the remainder of the period of salary maintenance shall be paid on termination.

(xviii). Ripples shall, upon receipt of request from an employee to show employment has been terminated, provide to the employee a written statement specifying the period of the employee's employment and the classification or type of work performed by the employee.

(xix). Ripples shall, upon receipt of a request from an employee whose employment has been terminated, provide to the employee an "Employment Separation Certificate" in the form required by the Department of Human Services.

(xx). In the event that Ripples determines that a position is redundant, Ripples where practicable, shall firstly offer such redundancy on a voluntary basis.

(xxi). Subject to an application by Ripples and further order of the Fair Work Commission, Ripples may pay a lesser amount (or no amount) of severance pay if Ripples obtains acceptable alternative employment for an employee. (my emphasis)”

Authorities – “other acceptable employment”

[12] In Spotless Services Australia Limited t/as Alliance Catering 3 Deputy President Sams usefully identified the authorities relevant to “other acceptable employment” and the task to be performed by the Commission,

[60] The question of what constitutes ‘other acceptable employment’ in the context of a redundancy situation, has been considered by the Commission and its predecessors in many and varied circumstances and industries over a number of years. In Derole Nominees, a Full Bench of the Australian Industrial Relations Commission (AIRC) said at pp 128-129:

‘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.

This approach to the test demonstrates that any alternative employment available to the eighteen former employees of the company cannot be regarded as “acceptable” merely because a number of other former employees took up employment at the new location. The relevant aspects of the job must be examined objectively to determine whether the employment is “acceptable”.

…

The exemption provision imports the notion that an effort of a sufficient kind by an outgoing employer may cause his obligation for redundancy pay to be reduced; a decision by an employee not to co-operate with the employer may well disentitle the employee to all or some of the payment.’ (my emphasis)

[61] In Oscar Oscar Group Services Pty Ltd v Lees [2012] FWC 3901 (‘Oscar Oscar’), Commissioner Asbury (as Her Honour then was), said at paras [18]-[19]:

‘[18] The question of whether alternative employment is acceptable, must be assessed on an objective basis. It is relevant to the assessment that redundancy payments are not made solely for the purpose of assisting employees to find alternative employment. Redundancy payments are intended to tide an employee over during the search for alternative employment, and to compensate the employee for loss of credits for sick leave, long service leave and other entitlements based on length of service. The question of whether previous service with the previous employer is recognised as service with the new employer, will also be relevant.

[19] Other considerations will be whether the alternative employment is of a like nature; a reasonable distance from the previous employment; whether pay and conditions are comparable; hours of work and job security in relation to the new position. The fact that an alternative position does not meet the personal preferences of an employee, may place the right to receive full redundancy pay at risk, where the employee refuses a position that is found to be acceptable on an objective basis.’ (my emphasis)

[62] Senior Deputy President Watson in Feltex said at a para [33] and [89]:

‘[33] The parties accept, as do I, that matters to be considered in assessing whether alternative acceptable employment has been obtained include matters such as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security, the location of work, continuity of service and accruals and the application of probationary periods. The relevant authorities also demonstrate that this listing of matters is not exhaustive and the question of whether an employment is acceptable alternative employment will be decided on the peculiar facts of a matter. Further, the authorities suggest that acceptable employment is not synonymous with identical employment, although the basis of the 2004 variation of the TCR test case provision suggests that, whilst not identical, terms and conditions should be substantially similar and no less favourable, overall, than the terms and conditions applicable to the employee at the time of the redundancy.

…

[89] I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.’

[63] In Vicstaff Pty Ltd (t/as Stratco) v May (2010) 204 IR 233 (‘Vicstaff’), Bissett C said at paras [29]-[30]:

‘[29] The determination of whether or not alternative employment is acceptable must be determined objectively and not subjectively from the perspective of the employer or employees. That the alternative employment may be rejected does not objectively make it unacceptable nor does the fact that the employment was offered make it, by virtue of the offer, acceptable. Further, that one of the persons out of a group may have accepted the employment does not make the employment acceptable for the others in the group.The reasons for the acceptance of alternative employment are many and varied and general conclusions should not be drawn from a particular circumstance.

[30] It is therefore incumbent upon the employer (Vicstaff) in this matter to demonstrate that the alternative employment is acceptable taking into account all matters relevant in such a consideration. Had the alternative work been considered acceptable to the individuals one imagines they would have accepted the work offered.’

[64] In DRW Investments t/as Wettenhalls v Timothy Richards & Others [2016] FWC 461, I said at para [183]:

‘[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:

•  rate of pay;

•  hours of work;

•  work location;

•  seniority;

•  fringe benefits;

•  workload;

•  job security;

•  continuity of service;

•  accrual of benefits;

•  probationary periods;

•  carer’s responsibilities; and

•  family circumstances.

This list is not exhaustive. There may be other relevant factors.’

[65] The above decisions have some common features, including:

•  The test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.

•  ‘Acceptable employment’ is not identical employment, as no two jobs could be exactly the same.

•  An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.

•  An employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.

•  The acceptance of alternative employment by one or more persons in a group of redundant employees, does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.

•  There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment.

[13] In deciding the present matter I adopt the approach set out by the Deputy President and the authorities referred to by him. It seems to me that the phrase used in the Agreement (“acceptable alternative employment”) should be taken to have the same meaning as the term “other acceptable employment” which is used in section 120 of the FW Act. Hence the case law is directly applicable in this matter. This approach has also been adopted by Commissioner Williams in Re Electricity Networks Corporation T/A Western Power. 4

All matters

[14] The following matters were advanced by Ripples and were uncontested by the Affected Employees. Consequently, I make the following findings of fact:

a) Prior to 26 August 2019 Ripples managed and operated the assets of the Council, namely the Ripples Leisure Centre, Ripples Hydrotherapy Centre and Ripples Penrith (Assets) in accordance with an occupation agreement between Ripples and Council. 5

b) Although Ripples operated independently from Council it was managed by a Board of Directors which comprised members of Council and was underwritten by Council. 6

c) Ripples was covered by the Penrith Aquatic and Leisure Ltd Agreement 2015.

d) The Affected Employees were employed by Ripples to work in the Assets. 7

e) On 24 June 2019 Ripples and Council agreed not to renew the service agreement and, as a result, the Assets were returned to Council management (Return of Assets). Each of the Affected Employees was employed by Ripples on the day prior to the Return of Assets. 8

f) The Board of Ripples sought to ensure that each of the Affected Employees could be provided with ongoing employment under the Local Government (State) Award (which applies to the Council) on terms and conditions no less favourable to their employment with Ripples. 9

g) On 26 and 27 June 2019 representatives of Ripples and the Council met with the Affected Employees. Affected Employees were provided with information about the proposed transition of management from Ripples to Council. The Affected Employees were informed that alternative offers of employment will be made to them. 10

h) From 1 July 2019 Council/Ripples met with Affected Employees and assisted them to apply for roles with Council. Ripples also afforded Affected Employees time to attend interviews and discuss employment offers with Council during paid work hours. 11

i) From 7 August 2019 – 22 August 2019:

A. Ripples sent letters to each of the Affected Employees confirming that the transfer of management of Ripples to Council was anticipated to come into effect on 26 August 2019 and advising that an offer of alternative employment would be made. 12

B. Council sent offers of alternative employment to each of the Affected Employees. The offers afforded the Affected Employees continuity of service and recognised all accrued leave balances that were not paid out to the Affected Employees by Ripples. 13

j) Council recognised accrued sick leave balances and start dates with Ripples for the purposes of long service leave entitlements and to any future entitlement to redundancy pay. 14

Matters C2020/108 – C2020/125

[15] In respect of the 18 non-contested matters C2020/108 – C2020/125 I make the following additional findings of fact:

a) In negotiating the Return of Assets, Ripples took proactive steps to provide acceptable alternative employment to the respondents in matters (C2020/108 – C2020/125).

b) From 7 August 2019 to 1 September 2019 the respondents in matters C2020/108 – C2020/125 accepted the positions offered to them and commenced employment with Council on 26 August 2019.

Conclusion in relation matters C2020/108 – C2020/125

[16] Having regard to the factual findings above and in applying the operation of s.120 of the FW Act, I have decided to exercise my discretion to determine that the amount of redundancy pay to which the Respondents in matters C2020/108 – C2020/125 are entitled to be paid because of s.119 of the FW Act is reduced to 0% of their respective redundancy entitlements (i.e. their respective redundancy entitlements are reduced by 100%).

[17] Orders [PR717461 – PR717479] to that effect will be issued in due course.

Matter C2020/126 – Regarding Ms Emma Gallagher

[18] I make the following factual findings in relation to Ms Gallagher:

a) Ms Gallagher commenced employment with Ripples on 16 April 2018.

b) She was employed as a permanent part-time gym instructor.

c) Her usual hours were 20 hours per week.

d) Her base rate of pay was $26,915.20 per annum (approximately EFT rate $51,138.88)

e) On 23 August 2019 Council wrote to Ms Gallagher making her an offer of employment is a permanent part-time gym instructor effective from 26 August 2019. 15

f) Specifically, the offer indicated that,

“You will be employed as a permanent part-time gym instructor in Grade B Step 1 of Council’s Salary Administration System (38 hour classification). Positions that are evaluated at Grade B … Currently have a gross annual salary range (full-time equivalent) of $51,900-$60,076, which is adjusted according to Award increases…

Your gross rate of pay commencement is $26.26 per hour plus compulsory employer superannuation contributions in accordance with Commonwealth superannuation guarantee legislation and/or the Award

…

As this is a part-time position, you will be required to work Mon 5 hrs, Tues 5 hrs for a total of 10 hours per week. Your hours and pattern of tendons may change in the future (after consultation with you) to meet the needs of the organisation. Furthermore, any agreed additional hours worked on an ad hoc basis will be paid at the ordinary hourly rate, up to a maximum of 38 ordinary hours per week.

“You will be employed to work across Ripples St Marys, Hydrotherapy and Penrith Operations.

…

To accept the offer of employment, you will be required to read and agree to each of the offer documents and click “I accept”.”

g) At 8:44 pm on Friday, 23 August 2019 Ms Gallagher accepted the offer of employment as a gym instructor. Her start date was 26 August 2019.

h) At the time of the transfer of her employment Ms Gallagher was on leave undertaking a teaching practicum.

i) Ms Gallagher’s employment transferred to Council on 26 August 2019, however, she did not commence work until 9 September 2019. She did so as a permanent part-time gym instructor working 10 hours per week.

j) Approximately 2 weeks after the transfer Ms Gallagher moved internally within Council to a different position.

k) Between 16 April 2018 and 26 August 2019 is a period of 1 year, but less than 2 years.

l) Under the Agreement Ms Gallagher was entitled to 5 weeks’ severance pay.

[19] The Applicant submitted that:

“Submissions in respect to “obtain”

13 The Applicant submits they took pro-active steps to obtain alternative employment for the redundant Respondents and was a ‘strong moving force’ towards the creation of alternative employment opportunities for the Respondents.

14 In Australian Chamber of Manufactures v Derole Nominees Pty Ltd 16(Derole) at 123 it was held,

“the test to be applied to determine whether employment is acceptable within the meaning of the clause is an objective one.”

15 To determine whether the employment has been obtained on the employees’ behalf, consideration must be had to the Applicant’s actions: Derole 17 (at 127):

“The word “obtains” does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate.

It follows that “obtain” must be given some lesser meaning. The Shorter Oxford Dictionary (3rd ed, revised) provides as its relevant meaning, the definition of “obtain” as “to procure or gain, as the result of purpose and effort”. It seems to us that meaning is of assistance here; that is, the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind.”

Further 18, (at 127):

“it will be seen that the intention is not to impose an absolute test on the employer’s ability to “obtain” alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.”

16 In Datacom Systems Vic Pty Ltd v Khan 19, at paragraph [12], Vice President Lawler expressed the view that the word “obtains” in the context of section 120 should be given a very broad interpretation.

17 In Allman v Teletech International Pty Ltd, 20 at [419]:

“The encouragement and facilitation of a process is not the same as doing everything possible to ensure a result. Arranging alternative employment means bringing about that employment should the employee choose to accept it.”

18 In Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd, 21 (FBIS) the Commission found that the employer had not done enough to invoke the application of section 120, as providing the new employer with two lists of employees and their contact details at paragraph [49]:

“simply facilitated an invitation by ACG to [FBIS’s] employees to apply for a position and undertake an interview” and “did no more than to secure the employees an opportunity to enter the recruitment process of ACG which may or may not have resulted in an offer of employment”.

19 Serco Sodexo Defence Services Pty Ltd (SSDS), 22 which was in line with FBIS, confirmed that the test is whether the actions of the employer are a “strong moving force” towards the job offer being made, and Commissioner Roe stated at paragraph 9 there must be a:

“causal connection between the purpose and effort of the employer and the gaining of employment or an offer of employment, by the employee. The actions required to establish the necessary degree of causation will vary depending on the circumstances.”

20 Applying these principles to the present case, the Applicant submits they were ‘a strong moving force’ and took pro-active steps to provide alternative employment to the Respondents. Prior to the transfer of management, the positive steps taken by the Applicant included:

(a) advocating to the Council that the Respondents were, having regard to past performance, a suitable pool of candidates from which to fill the positions created as a result of the Return of Assets;

(b) providing information to the Council and cooperating with the Council to facilitate its decision-making process regarding the offer of employment made to the Respondents;

(c) affording the Respondents the opportunity during paid work hours to meet with the Council in order to discuss available employment offers;

(d) meeting with the Respondents to provide information and discuss the transition of management;

(e) affording continuity of service and recognising all accrued leave balances which are not paid out on the cessation of employment with the Applicant; and

(f) reaching an agreement with Council that a key consideration of the Return of the Assets was a willingness of the Council to offer employment to the Employees.

21 Between 7 August 2019 – 22 August 2019, the Applicant sent letters signed by Wayne Mitchell (Acting Chair Person Board of Directors of the Applicant) to each Respondent confirming that the transfer of management of the Applicant to Council was anticipated to come into effect on 26 August 2019 and advising an offer of alternative employment would be made (Transfer of Management letter) A copy of the Transfer of Management letter forms part of Annexure C to the Application.

22 The Applicant submits that employment with Council was obtained prior to the Respondents’ redundancy taking effect. From 7 August 2019 – 23 August 2019, an offer of alternative employment letter was sent to each of the Respondents. The offers afforded the Respondents continuity of service and recognised all accrued leave balances that were not paid out to Respondents by the Applicant.

23 The suitable alternative roles were based on the Respondents current role type, duties and responsibilities and with a full-time equivalent salary. A copy of the alternative employment letters is annexed to the Statement of Peta Basso.

Acceptable employment

24 The Applicant submits that they obtained acceptable alternative employment for each of the Respondents. These matters are canvassed in Annexure A and Annexure B of the Application. The Applicant submits that the alternative employment was accepted by all of the Respondents.

25 In Clothing and Allied Trade Unions of Australia v Hot Tuna Pty Ltd 23 (Hot Tuna) the Full Bench stated that at 230 - 231:

“…the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters.”

26 Similarly, in National Union of Workers v Linfox Australia Pty Ltd, 24 Vice President Watson considered the following criteria:

(a) the employee’s skills, experience and physical capacity;

(b) the rates of pay, hours of work, duties and conditions of employment associated with the proposed job;

(c) whether or not continuity of employment is provided to the employee;

(d) the extent of any additional travel distances from home to the new place of work and whether the employee has to substantially alter their method of travelling to and from work in order to attend to duty; and

(e) the level of any compensation.

27 The question of what constitutes ‘other acceptable employment’ in the context of section 120(1)(b) of the FW Act was summarised by Deputy President Sams’ in Spotless Services Australia Ltd 25 at [65]as follows:

(a) The test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.

(b) Acceptable employment’ is not identical employment, as no two jobs could be exactly the same.

(c) An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.

(d) An employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’

28 Consideration should be given to the decision of Datamars (Australia) Pty Ltd T/A Datamars, 26 at 52:

“[t]here is no requirement that an alternative position in order to be acceptable must slavishly replicate every term and condition of the prior position...[s]ome features of the alternative position may well be inferior to the prior position, with the alternative position manifesting some compensating or offsetting benefits of another kind”.

29 At paragraph [25] in Derole 27it was stated:

“An acceptable alternative role does not mean the same employment, clearly. But equally, on an objective assessment, the position must be within a range of tolerance as well.”

30 In applying the test set out above in Hot Tuna 28,the totality of the circumstances affecting the Respondents indicate that (except for two Respondents) these offered positions stipulate similar pay levels, hours of work, seniority, workload and job security.

31 The two exceptions are:

(a) the position offered to Emma Gallagher, which involves a reduction in hours at the request of Ms Gallagher, and

(b) the offer made to Lynette Wooden shows a 5-hour reduction in hours to accommodate Ms Wooden’s request not to work weekends.

32 As explained by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 29 at [89]:

“...acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.”

33 The list of relevant matters is not exhaustive, the subsequent Full Bench in Australian Chamber of Manufactures v Derole Nominees Pty Ltd 30added “location” to this list of relevant considerations. The acceptable employment remains within the Assets, that is, at the same work location as the employment with the Applicant.

34 The Applicant further submits, that similarities can be drawn between the present case and The ORS Group Pty Ltd T/A The ORS Group [2018] FWC 4809, where Ms Zhang, employed as an Employment Consultant by ORS and offered an alternative role with APM with the same position and title. The Commission held that on balance it was satisfied that the offer of employment was "acceptable":

[37] The other employment at APM was a similar role to Ms Zhang's previous position with ORS. She would continue to be employed as an Employment Consultant however her client caseload rather than being only DMS (Disability Management Services) would be both DMS and ESS (Employment Support Services). The location where she would work was the same. The annual salary she would be paid was the same. Both positions were full-time. There would be no loss of leave accruals, these would be carried over to APM and honoured by her new employer. Her length of service with ORS was to be honoured by APM.

[38] Ms Zhang in her submission identified a number of differences between ORS and APM. I accept there will certainly be some differences between the two employers operations and there will be some differences between the two roles and some employment entitlements.

[39] The question for the Commission however is to consider objectively whether the position obtained for her at APM was other acceptable employment. The fact that Ms Zhang's redundant position and the other employment obtained for her at APM are not identical does not prevent the other employment from being other acceptable employment.

[40] In the circumstances of this case I accept there were some differences between Ms Zhang's former position and the other employment ORS had obtained for her. I also accept some of these differences would have involved some detriment to her however this was relatively limited. [our underline added]

35 The Applicant submits that the Respondents employment conditions have remained in line with the previous entitlements and in several instances have improved in circumstances where there were previously no provisions for access to certain type of leave which are afforded under the Local Government (State) Award 2017, being the industrial instrument which now covers the Respondents.

36 The Applicant submits each of the Respondents accepted the positions offered and commenced the acceptable employment on or around 26 August 2019. As at the date of making these submissions, each of the Respondents remains employed with Council (with the exception of Robert Aston-Brienwhose employment with Council terminated on 21 October 2019 by way of resignation).

37 Emma Gallagher remains an employee of Council, however, has resigned from her permanent part-time position and has elected to continue working for Council as a casual employee as she was successful in securing another role aligned to the study she is currently undertaking

38 In closing, applying the criterion set out in s 120 of the FW Act and the above-mentioned authorities, the Applicant submits:

(a) they took pro-active steps to obtain alternative employment for the redundant Respondents and were a ‘strong moving force’ towards the creation of alternative employment opportunities for the Respondents;

(b) the alternative employment constitutes ‘other acceptable employment’ in stipulating similar pay levels, hours of work, seniority, fringe benefits, workload and speed and job security; and

(c) the alternative employment was obtained prior the Respondents redundancy taking effect.”

[20] Ms Gallagher’s submissions (email of 31 January 2020) 31

“I am writing to contest my redundancy being reduced to nil. While there are a few sections from the Applicants Outline of Argument that I do not feel has been honoured, regarding my individual situation, I have only selected one section:

Further, (at 127):

“it will be seen that the intention is not to impose an absolute test on the employer’s ability to “obtain” alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.” 

Also, from a letter regarding myself:

I do not agree with the statement that I was offered hours that I was available for. I was not even given the hours that I said I was available for from the hours that were first proposed. The first hours proposed equated to more than 15 hours, which I had applied for as my minimum, but less than 20 hours total per week.

I have copied an email sent recently to [name redacted] in HR who I have been able to speak with safely and confidently just recently as, prior to council’s take over and following, I was experiencing highly stressful conditions at my place of work and did not have anyone in the position above me to reach out to. I have only just recently found myself able to communicate this properly as I had not realised how much I had been crippled mentally and emotionally and was not able to gather myself long enough to communicate the circumstances. Please see my email below dated 10 January 2020 which outlines why I am contesting:

Hi [name redacted]

Thank you for your time on the phone yesterday. 

As requested during our conversation, I have tried to summarise my experience during the transition to PCC during August/September 2019:

When applying for advertised positions, I had intended to apply for one with customer service as well as in the gym because I wanted to try and remove myself from the environment I was experiencing under the control of [name redacted] since she started as Supervisor. During a conversation with [name redacted], he suggested that because of the demand for employees in the gym department I could put in the hours that I preferred and pretty much be assured of getting them in the transition. This appealed to me as I was still studying uni full time and I didn't have much flexibility between work / life / study balance and other commitments; I put my availability as Mon, Tue, Wed 5hour shifts from open to equate to my 15 hours min permanent part time to match that of my previous position. When the transition took place I was away on leave doing a teaching prac block and had not received any communication or updates regarding my position with council. I had learnt about a casual position being made available to support Group Fitness Instructor and PT positions through a messenger chat which I was grateful for otherwise I would not have had information to be able to apply for this in time before the closing date. 

The Thursday night, 5 September, before I was due to return to work following my prac and PCC changeover, I was contacted by phone by [name redacted] where she told me what shifts she would be offering me. These equated to more than the min 15 hours in total and included 5 hour shifts from open on the Mon and Tue, a Wed shift from 9.30am to 12pm (I think) and a Sunday shift from open. I explained to [name redacted] that due to other commitments, as per my previous work arrangements and due to full-time uni commitments with balancing family commitments I didn’t work weekends even though I would help out if needed when I was able to. She advised me that I had to accept all of them or nothing, I asked for her to email these details to me for which she sent me a brief text message. This was yet another example of manipulation and control of this supervisor and needless to say it left me feeling helpless and unsupported as for so long we had know one to reach out to past this person in our department. Because we were now under PCC, I forwarded the text information to myself via email and then emailed it to [name redacted] to state that I could commit to the Mon, Tue, Wed shifts (even though this would be less than the min 15 hours) but also said that I could do a Thur open shift instead to make up the 15 hours; I included Sarah Coleman in this correspondence who I also called and spoke to her early Friday morning before school started (as it was my last day of prac) as I was quite distressed. She suggested that she couldn't see a problem with me only being able to commit to the Monday Tuesday Wednesday shifts and she would talk to [name redacted]. MA replied back saying no I could only have the Monday Tuesday which would be 10 hours minimum. The stress levels I had been experiencing prior to leaving on prac had already returned, I couldn’t keep pushing feeling that I had no other support and accepted the hours for the new position. 

Upon returning to Ripples Gym Floor on Monday 9 September for my first shift under PCC at 5.15am to 10.15am, [name redacted] was there from 5.20am and the manipulation and controlling situation escalated. My stress levels were so bad I was nauseous and on the verge of crying. It had gotten so bad that I reached out and confided in Tanya as emotionally I had already been pushed so far. Tanya encouraged me to start a formal complaint and approach HR, which I considered but, realising that this would not have a quick fix and could be ongoing for quite some time where I would be placed in even more stressful contexts with [name redacted], I was not in a position to be able to take much more - I was already having trouble concentrating on others things outside of work such as my family and uni work and would be feeling nauseous just coming in to Ripples to undertake my other position in GF. So after only 2 weeks in the Gym Instructor position, when I reached out to seek other employment and was offered an opportunity to go to a school I accepted. I resigned from my gym position and took work at the school so that I could look after my health and remove myself from the position under [name redacted]'s control. The stress and anxiety I had been experiencing changed so much for which I was grateful so that I could again enjoy my Group Fitness/PT position at Ripples.

Since I did not have reasonable provision made to accommodate the transition of my existing permanent part time position from Ripples to changing over to PCC, nor was I in that position for more than two weeks am I still eligible for the redundancy package?

Kind regards

Emma Gallagher

Thank you for your consideration of my inquiry. I look forward to receiving your response.”

[21] In Reply the Applicant submitted that:

1 Ms Gallagher commenced employment with the Applicant on 16 April 2018. Prior to the transfer of management, Ms Gallagher held the role of a permanent part-time Gym Instructor working approximately 20 hours per week.

2 The Applicant submits they took pro-active steps to obtain alternative employment for Ms Gallagher and was a ‘strong moving force’ towards the creation of alternative employment opportunities for Ms Gallagher for the reasons outlined in their original submissions.

3 The Applicant notes when the transition of management took place, Ms Gallagher was away on leave doing a teaching prac block. On 22 August 2019, the Applicant sent a Transfer of Management letter to Ms Gallagher confirming that the transfer of management of the Applicant to Council was anticipated to come into effect on 26 August 2019 and advising an offer of alternative employment would be made.

4 The parties exchanged communication in relation to Ms Gallagher’s available hours, including Ms Gallagher’s inability to work on the weekend and rostering arrangements already confirmed with other employees.

5 On 23 August 2019, a letter of offer was sent to Ms Gallagher. The offer of employment was for the same role a permanent part-time Gym Instructor, effective from 26 August 2019. The letter of offer also advised:

(a) Employment is subject to regulation by the Local Government (State) Award 2017 (Award),

(b) Gross rate of pay on commencement is $26.26 per hour plus compulsory employer superannuation contributions in accordance with Commonwealth superannuation guarantee legislation and/or the Award, and

(c) Ms Gallagher will be required to work Monday 5 hours and Tuesday 5 hours for a total of 10 hours per week.

6 On 23 August 2019, Ms Gallagher accepted this offer of employment.

7 In Clothing and Allied Trade Unions of Australia v Hot Tuna Pty Ltd 32 (Hot Tuna) the Full Bench stated that at 230 - 231:

“…the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters.”

8 In applying the test set out above in Hot Tuna 33,the totality of the circumstances affecting Ms Gallagher indicate that the offer of employment stipulates; similar pay levels, seniority, workload and job security. Ripples acknowledges the hours offered to Ms Gallagher were not identical to those worked prior to the Transfer of Management.

9 As explained by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 34 at [89]:

“...acceptable alternative employment is not necessarily identical employment.”

10 The Applicant acknowledges Ms Gallagher concerns and stress raised in her evidence regarding the transfer of management process, in particular the issues in relation to the reduction of hours and grievances with her supervisor. The Applicant submits, it was only recently made aware of these issues after the transfer of management process (through telephone communication with Ms Gallagher on 9 January 2020 and via email correspondence on 10 January 2020).

11 The Applicant submits that Ms Gallagher resigned from her permanent part-time Gym Instructor role in or around mid-September 2019, however, remains employed by Council as a casual Group Fitness Instructor working on a rotational roster.

12 The Applicant acknowledges Ms Gallagher’s query regarding whether she is still entitled to redundancy.

13 In the event Ms Gallagher’s role was made redundant, Ms Gallagher would be entitled to redundancy pay in accordance with section 119 of the Fair Work Act and the provisions of the Local Government (State) Award (the Award); the Applicant notes the redundancy provisions of the Award are more beneficial than the minimum provisions contained in the FW Act.

[22] Ms Gallagher’s final submission (email 20 February 2020)

“I would prefer to be paid the redundancy amount as my new position was not the same, or close to the same, as previous. There were more hours that required filling than there were people to fill them following the change-over. [T]here was one weekend shift discussed that I could not commit to which was previously understood and a third shift that offered but taken away once I advised that I could not commit to the weekend thus leaving only 10 hours. This would seem to imply that all reasonable allowances were not observed in seeking to transition to similar arrangements.”

Consideration

[23] The FBIS Decision must be applied in this matter because the Agreement includes a redundancy clause which is in different terms to the redundancy provisions of the NES. It is to be noted that the FW Act uses the language of “other acceptable employment” whereas the Agreement uses the phrase “another position comparable in status and remuneration to their position”.

Was Ms Gallagher “entitled to be paid an amount of redundancy” (s.120(1)(a))?

[24] It is common ground between the parties that Ms Gallagher’s employment with Ripples came to an end because her position was made redundant.

[25] Consequently, the Commission, as presently constituted, is satisfied that Ms Gallagher is entitled to be paid an amount of redundancy pay by Ripples because of s.119 of the FW Act. Section 120(1)(a) of the FW Act has been established.

Did Ripples “obtain” other employment for Ms Gallagher (s.120(1)(b)(i))?

[26] It is common ground between the parties that Ripples “obtained” for Ms Gallagher the Gym Instructor position with Penrith City Council (Council).

[27] Consequently, the Commission, as presently constituted, is satisfied that in so far as s.120(b)(i) requires an employer to “obtain” other employment, Ripples did so for Ms Gallagher. Therefore, part of s.120(1)(b) of the FW Act has been established.

Was the employment “acceptable” (s.120(1)(b)(i))?

[28] It is quite clear that the offer of employment made to Ms Gallagher, while accepted by her, is not considered by her to be “acceptable” for the purposes of the FW Act. However, that is not the test to be applied. It is not relevant whether an employee accepts or rejects other employment for the purpose of deciding if it is “acceptable” under s.120(1)(b)(i) of the FW Act. An objective test must be applied.

[29] Nor is it necessary that the redundant role (Gym Instructor with Ripples) and the offered role (Gym Instructor with Council) be identical in order for the latter role to “acceptable”.

[30] Having considered the material in this matter I am satisfied that whilst the redundant role (Gym Instructor with Ripples) and the offered role (Gym Instructor with Council) were not identical there were very many similarities. The table below reflects my findings:

Consideration	Finding
Rate of pay	Better hourly rate
Classification	Same
Hours of work	From 20 hours to 10 hours
Work location	Same
Job security	Same
Continuity of service	Maintain
Accrued entitlements	Carried over
Seniority	Same
Qualifications	Same
Skills and experience	Same

[31] Having regard to the above, Ms Gallagher was entitled to be dissatisfied with the hours given to her. She had regularly worked 20 hours per week. She was now to be given 10 (or more if she worked weekends – something she had not done previously on a regular basis). The evidence of Ms Gallagher does not support a finding that it was she her made herself unavailable for additional hours.

[32] It is my decision that the role of Gym Instructor with Council at 10 hour per week was not “other acceptable employment” which had been obtained for Ms Gallagher by Ripples. The offer of Gym Instructor with Council only went half way in meeting the position that Ms Gallagher had prior to the transfer of her employment. In offering her only 10 hours Ms Gallagher lost ½ her pre-transfer job.

Should the amount of redundancy pay be reduced (s.120(2))?

[33] Section 120(2) of the FW Act invests the Commission with discretion to reduce the amount of redundancy pay by a specified amount. It does not automatically follow that a finding that the other employment was not entirely acceptable will result in the redundancy pay being awarded at 100%.

[34] I have identified in the table above that that there were significant differences in hours between the:

a) redundant role of Gym Instructor with Ripples; and,

b) new role of Gym Instructor with Council.

[35] Consequently I have decided to exercise my discretion to determine that the amount of redundancy pay to which Ms Gallagher is entitled to be paid because of section 119 of the Act is reduced to 50% of her redundancy entitlement under the Agreement (i.e. it is reduced by 50%).

[36] An order [PR717480] to that effect will be issued in due course.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR717460>

 1   [2014] FWCFB 6737.

 2   [2014] FWCFB 6737, para [20], referring to s.120(1)(a) of the Fair Work Act 2009 (Cth).

 3   [2016] FWC 4505.

 4   [2019] FWC 65.

 5   Peta Basso Statement para 5.

 6   Peta Basso Statement para 7.

 7   Peta Basso Statement para 8.

 8   Peta Basso Statement para 8.

 9   Peta Basso Statement para 12.

 10   Peta Basso Statement para 13.

 11   Peta Basso Statement para 14.

 12   Peta Basso Statement para 15.

 13   Peta Basso Statement para 19.

 14   Peta Basso Statement para 18.

 15   Peta Basso Statement Annexure “PB-8”.

 16 (1990) 140 IR 123.

 17 (1990) 140 IR 123.

 18 (1990) 140 IR 123.

 19   [2013] FWC 1327.

 20 (2008) 178 IR 415.

 21   [2014] FWCFB 6737.

 22   [2015] FWC 641.

 23 (1988) 27 IR 226.

 24   [2008] AIRC 647.

 25   [2016] FWC 4505.

 26   [2015] FWC 1269.

 27   [2005] ALMD 6441.

 28 (1988) 27 IR 226.

 29 158 IR 428, 59 AILR 100-589, [2007] ALMD 3653.

 30 (1990) 140 IR 123.

 31   I have redacted the names of the people referred to by Ms Gallagher because they are not relevant to the matters I have to consider.

 32 (1988) 27 IR 226.

 33 (1988) 27 IR 226.

 34 158 IR 428, 59 AILR 100-589, [2007] ALMD 3653.