Quicklock Partitions Glass Doctor Australia Pty Ltd

[2018] FWC 7663

[2018] FWC 7663

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

Quicklock Partitions Glass Doctor Australia Pty Ltd

(C2018/4754)

Deputy President Binet PERTH, 20 DECEMBER 2018

Variation of redundancy pay – incapacity to pay – application dismissed.

1. Glass Doctor Australia Pty Ltd (Glass Doctor) trading as Quicklock Partitions has applied to the Fair Work Commission (FWC) for an order pursuant to section 120 of the Fair Work Act 2009 (Cth) (FW Act), that the amount of redundancy pay due to Mr David Skewes (Mr Skewes) be reduced from 4 weeks of Mr Skewes’ base rate of pay for his ordinary hours of work to zero (Order), on the grounds that Glass Doctor does not have the capacity to pay Mr Skewes his redundancy entitlements (Application).

1. Mr Skewes objects to the FWC making the Order sought by Glass Doctor.

1. Directions were issued to all parties (Directions) directing Glass Doctor to file in the FWC and serve on Mr Skewes an outline of submissions in support of the Application, any witness statements, authorities and copies of documents upon which it sought to rely for the Application.

1. The Directions also required Mr Skewes to file in the FWC and serve on Glass Doctor an outline of submissions in response to the Application, any witness statements, authorities and copies of documents upon which he sought to rely.

1. In accordance with the Directions, the parties filed an Agreed Statement of Facts which the parties were advised would be admitted into evidence and considered not in dispute.

1. The Directions contained an invitation for either party to make a request to be heard orally in relation to the Application. The parties were advised that, should neither party wish to make oral submissions, and subject to my review of the materials filed in accordance with the Directions, a conclusion about the Application may be made on the written materials filed.

1. No request to be heard orally was received from either party.

Relevant Statutory Provisions

1. Section 120 of the FW Act states that:

“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.”

Factual circumstances

1. In accordance with the Directions, Glass Doctor filed financial information setting out the financial position of Glass Doctor.

1. The Financial Statements for the year ending 30 June 2018 for Glass Doctor Australia Pty Ltd reveal that Glass Doctor recorded a loss before income tax of $93,202 in the 2017 financial year and a loss of $55,677 in the 2018 financial year.

1. The profit and loss statement for the current financial year indicates a net loss year to 13 September 2018 of $12,068.51.

1. Mr Skewes accepts that Glass Doctor was not financially viable and ceased operations on the date he was notified of his redundancy.  However Mr Skewes asserts that he was in fact employed by Quicklock Pty Ltd.

1. The relationship between Glass Doctor and Quicklock Pty Ltd is unclear from the materials filed by the parties.  It appears that both entities are operated by Mr Zach Du Preez.  Glass Doctor performs glazing and aluminium fabrication work and Quicklock Pty Ltd undertakes carpentry work.  From about May 2017 the work of Quicklock Pty Ltd was primarily performed by Mr Matt Steel and the work of Glass Doctor was primarily performed by Mr Skewes, but it is uncontested that from time to time, both gentlemen performed work for both entities. 

1. According to the Australian Securities and Investments Commission’s (ASIC) register, the ACN of Glass Doctor is 158 136 264 and the ABN is 43 158 136 264. 

1. Materials filed by the parties reveal that Mr Skewes was engaged by way of a letter of offer dated 27 February 2017.  The letter of offer states that:

“I am pleased to offer you employment in the position of Glazing Supervisor with us at Quicklock Pty Ltd/Glass Doctor (‘the employer’) on the terms and conditions set out in this letter.”

1. The letter of offer bears the logos of both Quicklock Pty Ltd and Glass Doctor. 

1. However, the acceptance of offer clause states as follows:

“I … have read and understood this letter and accept the offer of employment from Quicklock Pty Ltd.”

1. The PAYG payment summary issued to Mr Skewes for the financial years ended 2017 and 2018 identify his employer as Quicklock Pty Ltd.

1. Glass Doctor say that Quicklock Pty Ltd appears on Mr Skewes’ PAYG Payment summary because “payroll for Glass Doctor was processed through the Quicklock Pty Ltd payroll system.”  However the evidence before me is that both entities appear to have operated distinctly from each other in aspects of quoting, ordering and invoicing so it is not clear why payroll could not have been dealt with in the same way in the event that Mr Skewes was in fact an employee of Glass Doctor. 

1. An application for an order pursuant to section 120 of the FW Act can only be brought by the employer of the employee who is entitled to redundancy pay.

1. Mr Skewes’ letter of offer appears to contemplate him accepting employment with Quicklock Pty Ltd and Quicklock Pty Ltd is identified on Mr Skewes’ PAYG payment summaries as his employer.  Other than Mr Du Preez’s assertion that Glass Doctor was Mr Skewes’ employer there is no evidence before me that Glass Doctor was in fact Mr Skewes’ employer. I am not satisfied that Glass Doctor has standing to make the Application.

1. I therefore dismiss the Application.

1. An order to this effect (PR703247) will issue with this decision.

DEPUTY PRESIDENT

Final written submissions:

Applicant, 16 November 2018.
Respondent, 5 November 2018.

Printed by authority of the Commonwealth Government Printer

<PR703246>