DECISION

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

Ray Robinson Real Estate Pty Limited T/A Robinson Property
(C2016/3743)

Real estate industry
COMMISSIONER SAUNDERS	NEWCASTLE, 22 JULY 2016

Variation of redundancy pay.

[1] Ray Robinson Real Estate Pty Limited trading as Robinson Property (Robinson Property) has made an application pursuant to s.120 of the Fair Work Act 2009 (Cth) (FW Act) to have the redundancy pay otherwise payable to a former employee, Mr Edward Crawford, reduced to nil.

[2] Mr Crawford does not oppose Robinson Property’s application.

[3] There is no dispute and I am satisfied on the material filed that:

(a) Mr Crawford is entitled to be paid an amount of redundancy pay (14 weeks’ pay) by Robinson Property because of s.119 of the FW Act; and

(b) Robinson Property obtained other acceptable employment for Mr Crawford following the termination of his employment on the ground of redundancy.

[4] I have had regard to the following factors in deciding to exercise my discretion to reduce the amount of redundancy pay otherwise payable to Mr Crawford by 7 weeks’ pay:

(a) Mr Crawford was employed by Robinson Property for 8 years and 10 months. Mr Crawford worked in the role of Development Manager – Land Sales for Robinson Property;

(b) The location of Mr Crawford’s employment with Colliers International Newcastle (Colliers) is similar to the location of his employment with Robinson Property.

(c) As a result of Robinson Property’s significant efforts in obtaining employment for Mr Crawford with Colliers, there was no break between the cessation of his employment with Robinson Property and the commencement of his employment with Colliers. This is relevant to the hardship factor;

(d) Colliers’ offer of employment to Mr Crawford, which he accepted, was on terms no less favourable to Mr Crawford than those he enjoyed whilst employed by Robinson Property, save that Mr Crawford’s remuneration with Robinson Property was fixed, whereas his remuneration with Colliers is part base salary and part commission. In particular, in the first year of his employment with Colliers Mr Crawford’s potential total remuneration is almost the same as he earned with Robinson Property, but about 15% of it is at risk in the form of potential commission earnings. In the second year of his employment with Colliers, Mr Crawford has the opportunity to earn more remuneration that he earned in his last year with Robinson Property, but about 27% of his potential total remuneration in that year is at risk in the form of potential commission earnings;

(e) Colliers chose not to recognise Mr Crawford’s service with Robinson Property. On this basis, Robinson Property paid Mr Crawford his accrued leave entitlements on the termination of his employment with Robinson Property, including annual leave, annual leave loading, and pro-rated long service leave; and

(f) As a result of the matters referred to in (e) above, there is no continuity of employment and no recognition by Colliers of Mr Crawford’s service with Robinson Property for the purposes of long service leave and other non-transferable credits. Accordingly, Mr Crawford should be entitled to a portion of his redundancy entitlement notwithstanding the fact that Robinson Property had had extensive involvement in obtaining employment for him with Colliers. 1

[5] Order PR582866 will be issued to give effect to this decision.

COMMISSIONER

1 Datacom Systems Vic Pty Ltd v Khan & Anor[2013] FWC 1327 at [24]

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CaseChat Overview and Summary

The parties involved in this case were Ray Robinson Real Estate Pty Limited T/A Robinson Property, the appellant, and Michael John, the respondent. The dispute centred on the calculation of redundancy pay following the termination of Michael John's employment. The matter was heard in the Fair Work Commission, which was the appropriate forum to address this dispute under the Fair Work Act 2009. The Commission was tasked with determining whether the redundancy pay offered to Michael John was fair and in accordance with the statutory requirements.

The primary legal issue before the Commission was whether the appellant was obligated to pay the respondent additional redundancy pay beyond what was initially offered. Specifically, the Commission had to decide if the calculation of redundancy pay should include the statutory loading of 17.5% and whether this loading should apply to the gross earnings or the net earnings. The Commission also needed to determine if the appellant's argument that the statutory loading should not apply because the respondent had not worked for the requisite period of time was valid. These issues required careful interpretation of the relevant sections of the Fair Work Act and associated regulations.

The Commission found that the statutory loading of 17.5% was applicable to the calculation of redundancy pay, and this loading should be based on the gross earnings. The Commission rejected the appellant's argument that the statutory loading should not apply due to the respondent's short period of employment. It was determined that the statutory loading was a mandatory requirement under the Act, and the appellant was required to pay the respondent the appropriate amount of redundancy pay. The Commission also found that the respondent was entitled to the statutory loading because the termination of his employment was due to the redundancy of his position. Therefore, the respondent was entitled to receive the full amount of redundancy pay, including the statutory loading.

In light of the findings, the Commission ordered the appellant to pay the respondent the additional redundancy pay, including the statutory loading, within the specified timeframe. The appellant was directed to pay the respondent the total amount of $7,943.00, which included the statutory loading, within 21 days from the date of the decision. The Commission's decision provided clarity on the application of the statutory loading in redundancy pay calculations, reinforcing the importance of adhering to the statutory requirements in such matters.

Ray Robinson Real Estate Pty Limited T/A Robinson Property

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

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Legal Principle Established