DECISION

Fair Work Act 2009
s.120–Redundancy pay

Print Logistics Unit Trust
(C2020/2331)

COMMISSIONER LEE

MELBOURNE, 19 JUNE 2020

Application to vary redundancy pay on the basis of cannot pay the amount - whether employer cannot pay redundancy payments – not satisfied employer cannot pay redundancy entitlements - application dismissed.

Background

[1] Print Logistics (Aust) Pty Ltd (the Applicant) has made an application to vary the redundancy pay otherwise due to one of its former employees Ms Sophida Karwa (the Respondent). The application was made on the basis that the Applicant does not have the financial capacity to make the redundancy payment and in that context seeks that the redundancy payments be reduced.

[2] The Respondent is entitled to a redundancy payment of eight weeks pay. She was paid $874.00 gross per week. Therefore, the entitlement to redundancy pay totals to $6,992.00. The Respondent is covered by the Graphic Arts, Printing and Publishing Award 2010. In the original application, the Applicant sought to have the amount of redundancy pay reduced to four weeks and that remained the situation at the Mention Hearing held on 17 April 2020. 1

[3] Following the Mention Hearing the Applicant filed materials in accordance with the directions in support of the application. In the materials filed on 22 April 2020 the Applicant had changed the application to request a reduction of 80% of the total amount of redundancy pay. This represents a reduction of $5,593.60 to $1,398.40.

[4] During the subsequent Hearing on 7 May 2020 Ms Aliye Ibrahim, of the Applicant, explained why the change was made to the quantum of the reduction sought:

“The position is that when we first initially put the application in we thought that we would be able to deal with the four weeks plus the four weeks’ notice, in total of eight weeks. But when I wrote the letter out, our business just went completely down. So at this moment we’ve put a hold on payments to our supplier just to ensure that we have cash flow for our payroll.” 2

“… just to be clear, then, your position is now that you want to reduce the amount of redundancy pay by 80 per cent. Right? -Yes. Only because in the last few weeks we’ve had nothing coming in. We’ve had no funds coming in, our debtors are climbing, our creditors are climbing, and we’re sort of a bit worried – or very worried at the moment. So we just put that in you see, you know, how we would go, because I don’t know what’s going to happen in the next month or so.” 3

[5] There is no dispute that the Respondent has been made redundant. The Applicant has more than 15 employees and therefore is not a small business within the meaning of the Act. 4

[6] The Respondent is represented by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the…

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.

Continue reading Print Logistics Unit Trust

Details

AGLC: Print Logistics Unit Trust [2020] FWC 3128
Case: [2020] FWC 3128
Decision Date: 19 JUNE 2020

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, Print Logistics Unit Trust sought to vary a prior determination that would reduce the amount of redundancy payments owed to an employee. The Trust argued that it could not afford to pay the full amount of the redundancy payment as determined previously, and therefore sought a variation of the payment terms. The court was required to determine whether the Trust had satisfied the requisite legal criteria to justify a reduction in the redundancy payments it owed.

The primary issue before the court was whether the Trust had demonstrated that it was unable to pay the full redundancy amount as determined previously. The Trust had to show that its inability to pay was not self-inflicted, and that it had taken all reasonable steps to avoid the financial hardship that would result from paying the full redundancy amount. The court considered the Trust's financial position, its efforts to secure funds to pay the redundancy amount, and the impact of paying the full amount on its ability to continue operating.

The court found that the Trust had not satisfied the criteria necessary for a variation of the redundancy payment amount. The Trust had not demonstrated that its financial difficulties were beyond its control or that it had taken all reasonable steps to avoid the situation. The court emphasised that employers must meet a high threshold to justify a reduction in redundancy payments, and that the Trust had not met this threshold. Consequently, the application to vary the redundancy payment was dismissed.

The court made no orders regarding the variation of the redundancy payment amount and confirmed that the original determination remained in effect. The Trust was required to pay the full redundancy amount as previously determined.

Orders