RHC Retail Pty Ltd T/A Rook Partners Asset Management v Harriet Watson
[2025] FWC 180
•23 JANUARY 2025
| [2025] FWC 180 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
RHC Retail Pty Ltd T/A Rook Partners Asset Management
v
Harriet Watson
(C2024/7469)
| COMMISSIONER SLOAN | SYDNEY, 23 JANUARY 2025 |
Variation of redundancy pay
RHC Retail Pty Ltd t/as Rook Partners Asset Management is in the business of providing commercial advisory, leasing and asset and property management services. As part of that business, it acts as the property manager for shopping centres across New South Wales.
Harriet Watson was employed by RHC. Her employment commenced on 1 February 2018. At the time of the events giving rise to these proceedings, she was employed as a Portfolio Manager. The portfolio for which she was responsible included two shopping centres (“Shopping Centres”), one of which was the Toormina Gardens Shopping Centre.
In 2024 the owner of the Shopping Centres was acquired by ISPT Pty Ltd. On 6 August 2024, George Fidler, RHC’s Director, Asset Management, met with Jason Hay of ISPT. (Mr Hay had previously been employed by the former owners of the Shopping Centres but had taken up employment with ISPT when it acquired them.) Mr Hay informed Mr Fidler that ISPT had decided to engage CBRE to manage the shopping centres in place of RHC (“ISPT Decision”). Mr Hay stated that the ISPT Decision was expected to be implemented on 1 October 2024.
As a result of the ISPT Decision, Ms Watson’s employment with RHC came to an end on 30 September 2024. In the circumstances, on the terms of s 119 of the Fair Work Act 2009 (“Act”) she was entitled to 11 weeks redundancy pay.[1]
However, CBRE offered Ms Watson employment as a Centre Manager, Property Management. Ms Watson accepted that offer. Her employment with CBRE (C) Pty Ltd commenced on 1 October 2024.
RHC contends that it “obtained” that employment for Ms Watson and that it was “acceptable alternative employment”. On that basis, RHC has applied to the Commission under s 120 of the Act for an order to reduce Ms Watson’s redundancy pay to zero.
Ms Watson opposes the application.
Determination
I am satisfied that RHC obtained acceptable alternative employment for Ms Watson, and that I should exercise my discretion to reduce her redundancy pay to nil.
My reasons follow.
Relevant law and principles
Section 120 is in these terms:
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.
The approach that I should take to RHC’s application is well established:[2]
a.I must first determine whether the pre-conditions for the application of s 120(1) are satisfied – that is, that Ms Watson has an entitlement under s 119 to redundancy pay, and (relevantly for this case) that RHC has obtained other acceptable employment for her.
b.Whether the alternative employment that RHC obtained is “acceptable” is to be determined objectively, not by reference to whether Ms Watson considered that it was subjectively acceptable. The determination of whether alternative employment is acceptable requires me to make an assessment and value judgment.
c.An employer “obtains” other acceptable employment when it acquires or gets the employment by its conscious, intended acts.
d.If I determine that the pre-conditions in s 120(1) are satisfied, my discretion under s 120(2) to reduce the amount of redundancy pay to be paid to Ms Watson is enlivened. As a result, it will be necessary for me to determine whether to make such a reduction and, if so, by how much. This requires the exercise of a broad discretionary power.
e.By reason of s 120(3), any determination I make for a reduced amount of redundancy pay becomes Ms Watson’s entitlement under s 119.
As I have already stated, the first pre-condition to the application of s 120(1) is met: Ms Watson has an entitlement under s 119 to redundancy pay. To determine whether the other pre-conditions are met I need to answer two questions:
a.Did RHC “obtain” Ms Watson’s employment with CBRE?
b.Was that employment “acceptable alternative employment”?
For the reasons that follow, the answer to both of those questions is yes.
Summary of the evidence
RHC’s evidence
RHC relied on two statements made by Mr Fidler and one by Anne-Maree Kinley, the Human Resources and Administration Officer at RHC. Their evidence included the following:
a.During his meeting with Mr Hay on 6 August 2024, Mr Fidler had stated that RHC would be open to the transfer of its staff “where their entitlements were recognised by CBRE”.
b.From that time, Mr Fidler and other RHC employees engaged with ISPT and CBRE regarding the possibility of CBRE taking on those employees of RHC affected by the change, including Ms Watson. (For convenience, I will refer to these employees as “affected employees”. Unless the context suggests otherwise, a reference in this decision to “affected employees” includes Ms Watson.)
c.RHC provided information regarding the affected employees to ISPT and CBRE to facilitate offers of employment being prepared and made to those employees. In an email to Mr Hay of 19 August 2024 providing some of that information, RHC explored the basis on which an agreement might be reached for CBRE to recognise the accrued leave entitlements of any affected employee who took up employment with it.
d.On 3 September 2024, Mr Fidler met with Ms Watson to discuss the possibility of her employment being “transferred” to CBRE. He subsequently facilitated contact between CBRE and Ms Watson.
e.Mr Fidler engaged in correspondence with CBRE regarding the offers of employment to be made to the affected employees. Correspondence that he received from CBRE led him to believe that CBRE would recognise the affected employees’ periods of service with RHC and would “take on” the entitlements to long service leave, annual leave and personal leave that they had accrued during that employment (“Continuity Terms”).
f.On 16 September 2024, CBRE informed Mr Fidler that it had made an offer of employment to Ms Watson. However, Mr Fidler later discovered that the offer, and offers made by CBRE to other affected employees, did not include Continuity Terms.
g.Mr Fidler sent, and arranged for other RHC employees to send, further correspondence to CBRE with a view to clarifying whether CBRE was prepared to offer Continuity Terms to the affected employees.
h.Between 12 and 19 September 2024, Ms Kinley sent Ms Watson a number of emails regarding the discussions taking place between RHC and CBRE aimed at having CBRE offer the Continuity Terms to her (and the other affected employees). In an email she sent to Ms Watson on 19 September 2024, Ms Kinley confirmed that if CBRE did not offer the Continuity Terms, “the alternate path is redundancy”.
In the end, RHC entered into an agreement with CBRE. Under that agreement, RHC agreed to make a payment to CBRE in an amount equal to the affected employees’ accrued entitlements to long service leave, annual leave and personal leave. In return, CBRE agreed to provide Continuity Terms to any affected employees who took up employment with CBRE.
j.Mr Fidler informed Ms Watson of this outcome in an email he sent to her on 27 September 2024.
k.On 30 September 2024, CBRE informed Mr Fidler that it intended to write to Ms Watson confirming that CBRE and RHC had entered into an agreement, and that CBRE would be recognising her accrued statutory entitlements.
l.On the same day, Ms Watson sent an email to Mr Fidler. It stated that as RHC had not provided her with an alternative position, she had “explored alternative advertised employment opportunities” and would be commencing with CBRE on 1 October 2024. Ms Watson sought “written confirmation of [her] redundancy as soon as possible”.
m.Mr Fidler arranged for a letter to be sent to Ms Watson on 8 October 2024. The letter stated that as RHC had found her “a suitable redeployment opportunity” she had no entitlement to redundancy pay.
n.CBRE delayed sending RHC an invoice for the amount agreed to be paid under the agreement between the companies. Mr Fidler sent an email to CBRE on 2 December 2024 requesting that invoice. He also requested confirmation, consistent with the agreement, that from 1 October 2024 CBRE recognised the former RHC employees’ years of service with RHC and their accrued entitlements to annual leave, personal and carer’s leave and long service leave.
o.On 5 December 2024, Mr Fidler received an email from CBRE attaching the invoice that he had requested. The email confirmed that CBRE would recognise the entitlements that “transferred” employees had accrued at RHC. It further stated that CBRE would adjust the employment records for those employees to reflect those entitlements once RHC paid the invoice.
p.RHC paid the invoice on 6 December 2024.
q.CBRE has told Mr Fidler that Ms Watson’s employment records at CBRE should now reflect the employment entitlements that she accrued with RHC up until 30 September 2024.
r.Mr Fidler understands that Ms Watson’s position, duties and responsibilities at CBRE are substantially similar to the position she held as Portfolio Manager with RHC. She continues to service the Shopping Centres.
s.Mr Fidler has received written confirmation from CBRE that Ms Watson’s remuneration at CBRE is equivalent to, or higher, than that she was receiving at the time her employment with RHC came to an end.
Ms Watson’s evidence
Ms Watson’s evidence included the following:
a.Prior to her employment with RHC, Ms Watson had been employed by the two previous owners of Toormina Gardens Shopping Centre. One of those was Fort Street Real-estate Capital (“FSRC”). Jason Hay was employed with FSRC at the time.
b.She joined RHC from FSRC. When she was promoted to Portfolio Manager, she worked extremely closely with FSRC. Over time, she had developed extremely close working relationships with all of the members of the FSRC team.
c.Following ISPT’s acquisition of FSRC, many of the people she had worked with at FSRC transitioned to ISPT. As Ms Watson continued to manage those shopping centres, she continued to enjoy the same close working relationships.
d.On 8 August 2024, Mr Hay called Ms Watson. He asked whether she had heard anything from CBRE regarding future employment with it. Ms Watson told Mr Hay that no members of the team had yet been contacted by CBRE, but she believed all would welcome an approach from CBRE.
e.On 28 August 2024, Ms Watson and a colleague were called to attend a Teams meeting with Mr Fidler, who informed them of the ISPT Decision. Ms Watson asked whether “redundancy letters would now be issued”. Mr Fidler stated that as employees would be employed by CBRE, they would be required to resign from their positions with RHC. This caused Ms Watson “great concern”.
f.On 3 September 2024, Ms Watson attended a Teams meeting with Mr Fidler and Ms Kinley. During the meeting Ms Kinley confirmed that, through discussions with Mr Hay, “continuity of service would be offered by CBRE”. Ms Watson consented to CBRE contacting her to discuss employment with them.
g.On 4 September 2024, Ms Watson received a call from Karla Quinn, the Head of Retails for the ISPT account at CBRE. Ms Quinn stated that “on the recommendation of Mr Hay” CBRE would be offering her employment to commence on 1 October 2024. Ms Quinn made no mention of transfer of employment “or any such agreement with RHC”.
h.Ms Watson received an offer of employment from CBRE on 12 September 2024. It offered her the role of Centre Manager, Property Management. That role was very similar to the one she held at RHC and the salary was equivalent to that which she was then being paid. The offer did not contain Continuity Terms. The offer was open for acceptance until 17 September 2024.
Ms Watson made enquiries of Ms Quinn, who told her that CBRE was not offering Continuity Terms to her.
j.Ms Watson engaged in email correspondence with Ms Kinley seeking clarity as to whether CBRE would provide her with the Continuity Terms or whether, failing that, she would receive a redundancy payment from RHC.
k.As the issue had not been clarified, Ms Watson informed Ms Quinn on 17 September 2024 that she was unable to accept CBRE’s offer. Ms Quinn stated that the position “would be taken to the open recruitment market”.
l.Ms Watson continued to engage in email correspondence with Ms Kinley. Amongst other things, this correspondence explored the status of Ms Watson’s employment at RHC (including whether she would be required to resign); the terms that CBRE had offered Ms Watson; and “discrepancies” in the respective positions of RHC and CBRE as to whether CBRE had agreed to offer her the Continuity Terms.
m.On 18 September 2024, CBRE advertised on Seek the position that it had offered to Ms Watson. She applied for the position the next day. This involved her submitting her full resume, a covering letter and otherwise following all the requirements of the CBRE recruitment process.
n.On 19 September 2024, CBRE sent Ms Watson an offer of employment which was identical to the one she had received on 12 September 2024. She accepted that offer and signed the contract that day.
o.The email that Mr Fidler sent her on 27 September 2024 was confusing, as she had already accepted employment with CBRE under a contract which contained no Continuity Terms.
p.Ms Watson continues to be employed by CBRE under the terms of the contract she signed on 19 September 2024. That contract and her payslips evidence that CBRE has not provided the Continuity Terms to her.
RHC obtained Ms Watson’s employment with CBRE
RHC submitted that evidence demonstrated that through its conscious, intended acts it obtained Ms Watson’s employment with CBRE.
Ms Watson disputed that submission. She contended that due to her relationship with the relevant employees at ISPT, and in particular Mr Hay, it was always intended that CBRE would offer employment to her (and the other affected employees). She submitted that she gained employment with CBRE “through [her] existing long-established credibility with ISPT and not through the actions of [RHC]”.
I accept those submissions in part. The evidence suggests that ISPT and CBRE had contemplated the possibility of offering employment to Ms Watson and the other affected employees from the outset.
But at the same time, RHC was not a passive observer to the process by which CBRE offered employment to the affected employees. It actively engaged with ISPT, and subsequently CBRE, regarding their continued employment. It provided information to facilitate CBRE preparing offers of employment and making contact with the affected employees. It took up with CBRE concerns that Ms Watson had raised regarding the terms of the offer she had received from CBRE.
Significantly, RHC ensured that CBRE provided Continuity Terms to Ms Watson and the other affected employees. I accept that the offer that CBRE first made to Ms Watson, and the contract she ultimately signed, did not reflect such terms. But things changed. RHC entered into an agreement with CBRE, and made a payment to it, to ensure recognition of service and accruals.
There was clearly a delay in CBRE implementing that agreement. Ms Watson may have had cause for concern, including at the time she prepared her evidence in these proceedings, that the information she had received from CBRE did not reflect recognition of service and accruals. However, on all of the evidence I am satisfied that at the time Ms Watson commenced employment with CBRE, the Continuity Terms were terms of her employment.
I do not consider that there is much significance to Ms Watson having applied for her position by responding to the Seek advertisement. It is clear on all of the evidence that both CBRE and RHC regarded her as being in the cohort of affected employees as they continued to liaise on the Continuity Terms. In email correspondence between the companies, her name remained included in the list of employees affected by the discussions.
It is noteworthy that Ms Watson received her second offer from CBRE on the same day that she responded to the Seek advertisement. Given the steps that Ms Watson stated that she needed to take to apply for the position, it is highly unlikely that CBRE could have completed the external recruitment process in the time available. That offer cannot credibly be divorced from the process already under way between RHC and CBRE.
RHC submitted that without its assistance, Ms Watson would not have been employed by CBRE. The evidence does not support that submission. However, I am satisfied that through its conscious, intended acts, RHC procured employment for Ms Watson with CBRE on the terms on which she ultimately commenced employment.
Ms Watson contended that rather than assisting her to obtain employment with CBRE, it interfered for its own financial benefit. This included providing CBRE with her salary information without her consent. She claimed that the salary did not reflect a pay increase which RHC had deliberately delayed paying so as to reduce its potential financial exposure. Ms Watson argued that this disadvantaged her, as it effectively understated what she should have been paid and provided a false premise on which CBRE might base an employment offer to her.
The evidence does not bear out the contentions as to RHC’s motivations. They do not rise above assertion.
In any event, it is not to the point that RHC’s conduct may have been motivated by a desire to derive a financial benefit. That is precisely what s 120 offers. The opportunity to avoid having to make a redundancy payment under s 119, in whole or in part, is the incentive for an employer to obtain acceptable alternative employment for an employee.
I am satisfied that RHC obtained Ms Watson’s employment with CBRE within the meaning of s 120(1)(b)(i) of the Act.
Ms Watson’s employment with CBRE is acceptable alternative employment
Ms Watson did not challenge Mr Fidler’s evidence that her position, duties, responsibilities and remuneration at CBRE are substantially similar to those she had at RHC. To the contrary, she corroborated it.
Ms Watson’s primary challenge to whether her employment with CBRE is acceptable alternative employment stemmed from her contention that CBRE had not provided her with the Continuity Terms. As I have stated, she had cause for concern in that regard. The payslips she had received from CBRE did not reflect the agreement between RHC and CBRE that she was told had been reached. This was not corrected until Mr Fidler made contact with CBRE in early December 2024, after Ms Watson had prepared and filed her evidence in these proceedings. (I can reasonably infer that Mr Fidler’s approach to CBRE was in part motivated by that evidence).
However, Ms Watson was told prior to taking up employment with CBRE that it would provide her with the Continuity Terms. I am satisfied on the evidence that the Continuity Terms form part of her conditions of employment with CBRE. This is not changed by the delay in CBRE reflecting those terms in Ms Watson’s employment records.
It is of no great consequence that the contract of employment with CBRE that Ms Watson signed on 19 September 2024 does not contain the Continuity Terms. An employee may have rights and entitlements beyond those which they have committed to writing.
I am satisfied that Ms Watson’s employment with CBRE is “acceptable” in the sense required by s 120(1)(b)(i).
Conclusions
I have established the jurisdictional facts required by s 120(1). I must now consider whether to exercise my discretion to reduce the amount of Ms Watson’s redundancy pay. In doing so, it is appropriate to balance the findings set out above against any considerations that might tell against the exercise of the discretion.
I do not consider there to be any significant considerations telling against the exercise of my discretion. I consider that it is fair and reasonable in the present circumstances to reduce Ms Watson’s redundancy entitlement to nil.
An order[3] will be issued separately reflecting this decision.
COMMISSIONER
[1] This was not a matter of controversy. I note for completeness that the exclusions in s 121(1) of the Act do not apply in Ms Watson’s circumstances.
[2] Australian Commercial Catering Pty Ltd v Marcelia Powell and Maria Togia; Marcelia Powell v Australian Commercial Catering Pty Ltd[2016] FWCFB 5467 at [35]-[38]
[3] PR783604
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