Real Property WA Pty Ltd ATF Real Property WA Trading Trust T/A Real Property WA

[2020] FWC 2013

[2020] FWC 2013

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Real Property WA Pty Ltd ATF Real Property WA Trading Trust T/A Real Property WA
(C2020/1041)

DEPUTY PRESIDENT BINET PERTH, 24 JUNE 2020

Variation of redundancy pay.

[1] Real Property WA Pty Ltd atf Real Property WA Trading Trust (Real Property) has applied to the Fair Work Commission (FWC) for an order pursuant to section 120 of the Fair Work Act 2009 (Cth) (FW Act) to vary the amount of redundancy pay to be paid to Ms Geraldine Lau (Lau).

[2] Real Property have sought an Order that the amount of redundancy pay be reduced from 6 weeks of Ms Lau’s base rate of pay for her ordinary hours of work to two weeks (Order) on the grounds that Real Property have found other acceptable employment for Ms Lau (Application).

[3] Directions were issued for the filing of materials to enable the Application to be determined (Directions).

[4] In accordance with the Directions the parties filed a jointly prepared Agreed Statement of Facts, which the parties were advised would be admitted into evidence and considered not in dispute.

[5] Neither party sought to be represented and both parties agreed that the Application should be determined ‘on the papers’.

[6] The following witnesses provided written evidence on behalf of Real Property:

a. Ms June Chan – Real Property employee currently on maternity leave (Chan)

b. Ms Valerie Chua – Real Property Trust Account Manager (Chua)

c. Ms Danica Dzapasi – Real Property Team Leader (Dzapasi)

e. Ms Juliana Miloseski – Real Property Director and Licensee (Miloseski)

[7] Mr Terence Foster – Director of Tebter Property Australia Pty Ltd (Foster) provided written evidence on behalf of Ms Lau. Ms Lau also provided written evidence on her own behalf.

Factual circumstances

[8] Ms Lau commenced employment with Real Property on 1 April 2019 in the capacity of Operations Manager. She obtained employment with Real Property following a transfer of business from Tebter Property Australia Pty Ltd (TPA) to Real Property. At the time of the transfer of business from TPA to Real Property, Ms Lau was employed by TPA in the capacity of State Operations Manager. Ms Lau commenced employment with TPA in September 2017 after a transfer of business from Tebter Pty Ltd (Tebter) to TPA. She initially commenced employment with Tebter on 29 May 2017. 1

[9] Ms Lau’s witness, Mr Foster, is a director of TPA, and like Ms Lau had been an employee of Tebter. Real Properties employee witnesses (Ms Chau, Ms Chan and Ms Dzapasi) also all worked at TPA before it was acquired by Real Property.

[10] On 14 February 2020 Ms Lau was advised that her full time role as Operations Manager was being made redundant as a result of a restructure. 2 Ms Miloseski explained that the restructure occurred because of3:

a. A decrease in revenue caused by a loss of existing customers.

b. A decrease in potential revenue due to the resignation of the Business Manager responsible for growing the business.

c. Ms Miloseski taking a more proactive role in the business and performing tasks that Ms Lau previously performed for a less ‘hands on’ business owner.

[11] At the time the position was made redundant Ms Lau’s salary was $75,000 per annum. Her contract of employment also provided for a travel allowance of $2,000 per annum. 4

[12] Ms Lau was offered redeployment in the role of Administration Officer at the same location with the same hours of work but at a reduced salary of $50,000 per annum. The proposed new contract of employment required her to successfully complete a three month probationary period. 5

[13] Ms Miloseski says that she explained to Ms Lau that she was unable to offer Ms Lau any other position in the business because Ms Lau did not hold the necessary real estate qualifications or experience and was therefore unsuitable for any role in the business other than role of Administration Officer. 6

[14] Ms Lau declined the offer of alternative employment without seeking to negotiate its terms. Ms Lau gave no reasons for declining the offer of alternative employment. 7

[15] Real Property have applied to reduce the redundancy pay otherwise payable to Ms Lau by an amount equal to the difference in pay between her redundant position of Operations Manager and the alternative employment she was offered as Administration Officer.

Relevant Statutory Provisions

[16] 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.”

[17] Section 119 of the FW Act states that:

“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

Consideration

[18] Ms Lau’s contract of employment provides that her employment is covered by the Real Estate Industry Award 2010. After she was informed that her position was redundant Ms Lau indicated to Ms Miloseski that she believed that her employment was in fact covered by the Clerks – Private Sector Award 2010. Both Awards provide that redundancy pay shall be as provided for in the National Employment Standards. It was not contested and I am satisfied that any entitlement of Ms Lau to redundancy pay arises by virtue of section 119 of the FW Act.

[19] Section 120 of the FW Act provides a mechanism for an employer to apply to the FWC to vary an obligation the employer would otherwise have pursuant to section 119 of the FW Act to pay an employee redundancy pay. Section 120 provides that the FWC ‘may’ determine to reduce the redundancy pay by any amount up to an amount which would result in the employee receiving no redundancy pay. The decision to vary the redundancy pay is therefore a discretionary one and is not limited to granting only complete or no relief from the obligation to pay redundancy pay. 8

[20] The employer bears the onus of establishing that there are grounds justifying the exercise of the discretion. 9

[21] Real Property submits that it obtained “other acceptable employment” within the contemplation of section 120(1)(b)(i) of the FW Act by offering Ms Lau the role of Administration Officer.

[22] In order to satisfy the requirement to ‘obtain’ other acceptable employment the employer must have caused the alternative employment to become available to the redundant employee. This requires the employer to have procured an offer of employment whether or not it is accepted by the employee. I am satisfied that the position that Ms Lau was offered as Administration Officer was ‘obtained’ by Real Property for the purposes of section 120(1)(b)(i) of the FW Act.

[23] 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 10 as follows:

“…

•  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’.”

[24] The test of acceptability of the alternative employment involves consideration of matters such as the nature of the work, necessary skills and relevant duties, work load, pay levels, hours of work, job location, seniority, fringe benefits, loss of entitlements/accruals and job security. 11

[25] Regard must be had to the totality of the circumstances. No one factor will be determinative for the purposes of the discretionary judgement as to whether or not the alternative employment is acceptable. 12

[26] It is agreed by the parties that the position Ms Lau was offered as an Administrative Officer was at the same location as the role she previously held. As with her previous role the role she was offered was a full time permanent position. It appears that the parties intended that her prior service would be recognised so that there would no loss of entitlements or accruals. Certainly, Ms Lau didn’t raise this as an issue in the evidence or submissions before the FWC. The parties agree that the vast majority of duties contained in the position description for the role of Administrative Officer were duties that Ms Lau was already performing in her role as Operations Manager. 13

[27] Ms Lau says that she did not accept the appointment to the role of Administrative Officer because the salary was lower, the duties were more suited to someone with less experience and the role was without managerial responsibilities which she had previously performed. 14 I note also that a probationary period of three months applied to the alternative role.

[28] The fact that the proposed role was not ‘acceptable’ to Ms Lau nor that it was not identical to her previous role does not make the proposed role not ‘acceptable’ for the purposes of section 120 of the FW Act. Nor does a proposed role cease to be acceptable merely because it is on terms that are less advantageous. 15

[29] As was explained by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia at [89]: 16

“…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.”

[30] In support of her submission that the role was not acceptable alternative employment Ms Lau gave evidence that her duties before she commenced employment with Real Property including looking after:

a. all operational matters including administration, compliance, internal and external audits;
b. HR related matters;
c. ‘boarding’ of new clients;
d. Managing an administration team;
e. Collating reports from Property Managers and reporting the information to management.

Ms Lau says that in preparation for the business transfer she was identified as part of the management team and involved in preparations for the takeover. 17

[31] I note that her evidence relates to her previous employment with TPA and not her redundant role with Real Property. Her evidence is not inconsistent with her position description for her previous role as State Operations Manager of TPA. However, the evidence of the Real Property witnesses is that notwithstanding her job description Ms Lau did not in fact perform these duties while she was State Operations Manager for TPA. For example Ms Dzapasi says that during this period she was in fact responsible for conducting performance reviews and that Ms Lau’s involvement was limited to diarising or observing reviews. 18 Ms Chan and Ms Chau say that during this period they was responsible for trust account management and internal and external audits and Ms Lau’s responsibilities were limited to diarising appointments with the auditors.19

[32] Real Property say that there were number of the key aspects of the job description for the role of State Operations Manager of TPA which Ms Lau was not qualified and/or licensed to perform. Furthermore Real Property say that as a consequence of Ms Miloseski taking a more proactive role in the business she took responsibility for performing many tasks that Ms Lau previously performed for the less ‘hands on’ business owner of TPA. 20 For these reasons Real Property say that since her appointment as Operations Manager with Real Property Ms Lau did not perform the majority of the more complex and more senior duties contained in the position description created for her role with TPA.

[33] Ms Lau’s own witness statement did not contain evidence to contradict this. Ms Lau filed a witness statement from Mr Foster the Director of TPA in which he asserts that the position description for Ms Lau’s role as State Operations Manager of TPA did reflect her actual duties at TPA and that it was intended her role and duties would continue after the takeover. 21 However, I note that his evidence is that this was the intention of the parties rather than what factually occurred. Given that there were three Real Property witnesses who gave evidence to the contrary I am inclined to the view that Ms Lau’s actual duties while at TPA were not as senior as her position description and Mr Foster’s evidence might suggest. Whatever the true position, I am satisfied that her actual duties in the position from which she was made redundant were less extensive and senior than the job description for the role of State Operations Manager would suggest.

[34] Based on all the evidence before me it appears that duties Ms Lau would have been called upon to perform as Administrative Officer were duties she was already performing. The main difference between the roles appears to be that in her redundant role Ms Lau could have contractually been called upon to perform some duties with higher responsibilities however due to her lack of relevant qualifications and the business practices of Ms Miloseski this didn’t happen and was unlikely to happen, hence the decision to make her role redundant.

[35] There are however some considerable differences between the redundant role and the alternative employment offered to Ms Lau as Administration Officer. Most relevantly the reduction in salary from $75,000 per annum to $50,000 per annum in circumstances in which Ms Lau was required to perform the same hours of work and perform duties she was already performing. It is also significant that had she accepted the alternative employment Ms Lau would be placed on a period of probation placing her employment security at risk.

[36] There are circumstances where the FWC has found that notwithstanding a reduction in salary that an alternative role is acceptable. For example in RE Southern Cross Ceramics Pty Ltd [2013] FWC 1347 Gooley C reduced the redundancy pay obligation by 40% reflecting a reduction in hours of work for two employees by 40% on the same pay and conditions on a pro rata basis. Similarly, in Royal Society for Prevention of Cruelty to Animals in Western Australia Inc [2019] FWC 8662 Deputy President Bull also reduced a redundancy pay obligation where a reduction in annual income was accompanied by a reduction in hours of work. I note that in that case the employee did not oppose the application and that the new role had a slightly higher hourly rate of pay. In both these cases the reduction in salary was matched by a reduction in hours of work so in effect the employee was working for a similar rate of pay.

[37] However, where the reduction in salary has not been matched by a decrease in hours of work the FWC has found that the proposed position was not acceptable employment. See for example: Stabler & Howlett Veterinary Surgeons Pty Ltd t/a Stabler & Howlett Veterinary Surgeons [2019] FWC 1208 and Triforce Staffing Pty Ltd t/a Triforce v David Hill, Casey Freeman [2018] FWC 7393.

[38] In this case Ms Lau was expected to work the same hours of work performing duties she had previously performed for a salary much lower than what she had previously been paid to perform those duties. The reduction in salary would also have had a consequential adverse impact on other benefits such as her accumulation of superannuation savings. Her job security until she completed her probationary period was less secure. The scope of duties which she could be required to perform was reduced. Her position title was changed to one which suggested lesser seniority.

[39] In all of the circumstances I am not satisfied that the position which was offered to Ms Lau was acceptable employment. Given I am not satisfied that the position she was offered constituted acceptable employment for the purposes of section 120(1)(b)(i) the discretion to reduce the amount of redundancy pay payable to her is not available to me.

[40] The application is therefore dismissed.

[41] An order to this effect will issue with this decision

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR718352>

 1   Statement of Agreed Facts dated 11 May 2020.

 2   Ibid.

 3   Witness Statement of Ms Miloseski dated 14 April 2020.

 4   Contract of employment signed 1 April 2019.

 5   Letter of Offer dated 14 February 2020.

 6   Witness Statement of Ms Miloseski dated 14 April 2020.

 7   Statement of Agreed Facts dated 11 May 2020.

 8   Stabler & Howlett Veterinary Surgeons Pty Ltd t/a Stabler & Howlett Veterinary Surgeons[2019] FWC 1208 at [5]

 9   Ibid.

 10   Spotless Services Australia Limited t/as Alliance Catering [2016] FWC 4505

 11 Clothing and Allied Trade Unions of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226 at 230; Australian Chamber of Manufacturers v Derole Nominees Pty Ltd (1990) 140 IR 123; Vicstaff Pty Ltd v May [2010) FWA 3141; Central Norseman Gold Corporation Ltd v Kempton [2010) FWA 5316; UXC Connect v Moore [2012) FWA 4296; Australian Commercial Catering Pty Ltd v Powell and Togia, Powell v Australian Commercial Catering Pty Ltd [2016) FWCFB 5467; DRW Investments Pty Ltd t/a Wettenhalls v Richards & Others [2016) FWC 461; Children's Services Support Unit (CSSU) Inc [2014) FWC 7503; Forster Tuncurry Golf Club Ltd t/a Forster Golf Club v Crew [2016) FWC 170; P&R Electrical Wholesalers Pty Ltd (2016) FWC 1730; Smith v Onesteel Ltd [2013] NSWDC 18; Spotless Services Australia Ltd [2013] FWC 4484 and Sodexo Australia Pty Ltd T/A Sodexo [2016] FWC 4012.

 12   Datamars (Australia) Pty Ltd T/A Datamars [2015] FWC 1269 at [28].

 13   Statement of Agreed Facts dated 11 May 2020.

 14   Respondents First Outline of Submissions dated 8 April 2020.

 15   Datacom Systems Vic Pty Ltd v Raisa Khan[2013] FWC 1327 at [9].

 16   Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia[2006] AIRC 737.

 17   Ms Lau’s First Witness Statement dated 8 April 2020.

 18   Witness Statement of Danica Lee Dzapasi dated 11 May 2020.

 19   Witness Statement of June Wing Pui Chan dated 11 May 2020 and Witness Statement of Ms Valerie Jia Lin Chau dated 11 May 2020.

 20   Applicant’s Outline of Submissions and Witness Statement of Miloseski dated 14 April 2020

 21   Witness Statement of Terrence William Foster dated 25 May 2020.