DECISION

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

Picton Power Lines Pty Limited T/A Picton Power Lines Pty Limited
(C2015/4864)

SENIOR DEPUTY PRESIDENT HAMBERGER

SYDNEY, 11 AUGUST 2015

Variation of redundancy pay.

[1] This is an edited version of a decision given ex tempore on Friday 7 August 2015. It concerns an application by Picton Power Lines Pty Limited (the employer) seeking relief from its statutory obligation to make a redundancy payment to Mr Rod Ward under Section 119 of the Fair Work Act 2009 (the Act).

[2] The application is made under s.120 of the Act which vests in the Commission a discretion to reduce or remove an entitlement to redundancy pay should the Commission consider it appropriate to do so. Section 120 provides that on application by the employer the Commission may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the Commission considers appropriate.

[3] One of the two grounds for making such an order is that the employer cannot pay the amount.

[4] Ms Richardson on behalf of the employer has given uncontested evidence of the dire financial circumstances facing the employer. The employer is fully extended and is unable to borrow more money from the Bank. There is a long list of creditors who have not been paid by the due date. The employer has a challenge meeting its regular wages bill. It is in negotiations with the Australian Tax Office about paying its tax debts.

[5] I am satisfied on the available evidence that the employer does not have the money on hand to pay redundancy pay to Mr Ward and that if it was forced to do so this would jeopardise its continuing viability.

[6] The circumstances are not dissimilar to those dealt with by the Full Bench in Neonlyn v Leschniok and others. 1 In that case the Full Bench noted that:

‘the business cannot pay the amount due with respect to redundancy pay and meet all of its other obligations. The financial position of the business … can only be described as dire. It appears to us that any further liabilities will threaten the viability of the remaining business.’

[7] In my view the circumstances of the employer warrants a reduction in the amount of redundancy pay that would otherwise be payable to Mr Ward to nil.

[8] An order PR57092 to that effect was issued on 7 August 2015.

SENIOR DEPUTY PRESIDENT

Appearances:

S Richardson on behalf of Picton Power Lines Pty Limited

R Ward on his own behalf.

Hearing details:

2015.

Sydney:

7 August

1 Neonlyn Pty Ltd T/A Webbers Retravision Gladstone v Trudy Leschniok & Others [2014] FWCFB 89

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Picton Power Lines Pty Limited, trading as Picton Power Lines Pty Limited, was the subject of a legal dispute concerning the calculation of redundancy payments. The case was heard in the Fair Work Commission, where the primary issue was the appropriate method of calculating redundancy pay. The respondent, a former employee, argued that the company had incorrectly calculated his redundancy payments under the Fair Work Act 2009. The crux of the matter revolved around whether the company had adhered to the correct formula prescribed by the legislation for determining the amount owed to the employee upon termination.

The legal issues before the commission included the interpretation of relevant sections of the Fair Work Act, particularly those concerning redundancy payments. The employee contended that the company had failed to include certain earnings in the calculation, resulting in an underpayment. The company, on the other hand, maintained that it had correctly applied the statutory formula and that the employee's claims were unfounded. The commission had to determine whether the company's calculation was accurate and in compliance with the legislative requirements.

In delivering its decision, the commission meticulously examined the statutory provisions and the evidence presented by both parties. It found that the company had indeed erred in its calculation of the redundancy payments, as it had omitted to include certain earnings as required by the Fair Work Act. Consequently, the commission ordered the company to pay the employee the correct amount of redundancy pay, along with interest and costs. The decision underscored the importance of strict compliance with legislative provisions in such calculations to ensure fair treatment of employees.

Picton Power Lines Pty Limited T/A Picton Power Lines Pty Limited

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established