Richards Mining Services Pty Ltd v Zoe Dunkerley
[2013] FWC 4022
•26 JUNE 2013
[2013] FWC 4022 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120—Redundancy pay
Richards Mining Services Pty Ltd
v
Zoe Dunkerley
(C2013/3933)
COMMISSIONER WILLIAMS | PERTH, 26 JUNE 2013 |
Variation of redundancy pay.
[1] This decision will determine an application made by Richards Mining Services Pty Ltd (RMS or the applicant), pursuant to section 120 of the Fair Work Act 2009 (the Act). RMS seeks to vary the redundancy payments which are otherwise payable to Ms Zoe Dunkerley (Ms Dunkerley or the respondent) following her termination of employment on 5 April 2013.
Findings
[2] From the evidence in this matter I find that Ms Dunkerley was employed by RMS from 2 September 2010 initially as a Receptionist at the Franklin Lane office in Joondalup and promoted internally in different roles to the position of Trainee Recruitment Consultant based at the Clarke Crescent, Joondalup office.
[3] At dismissal Ms Dunkerley was receiving a salary of $47 000 gross plus 9% superannuation with eligibility for participation in the RMS Recruitment Commission Structure.
[4] Since November 2012 RMS has undergone significant organisational structural changes as a result of a downturn in company revenue and demand for services, which has resulted in a number of redundancies across the business. All employees were consulted about the possibility of redundancy from November 2012 in particular; the reasons for the anticipated redundancies, alternatives to redundancies and measures to help minimise the effects of redundancies have been discussed.
[5] A meeting was held on 7 March 2013 attended by Ms Dunkerley, Richard Bayliss (HR Manager) and Tony Penna (General Manager) where it was communicated to Ms Dunkerley that her position of Trainee Recruitment Consultant based at Clarke Crescent, Joondalup was redundant due to the closure of the RMS Recruitment Division. It was made clear that this decision was not a reflection on Ms Dunkerley’s performance.
[6] RMS offered Ms Dunkerley the role of Sales Administrator based at the Franklin Lane office in Joondalup with the following details communicated to her during the meeting. The duties would as per the Job Description 1. The base salary would be $45 000 plus 9% superannuation, plus eligibility for the RMS Sale Bonus System. There would be the opportunity for paid overtime particularly on Saturdays.
[7] On the same afternoon Ms Dunkerley sent an email outlining that she wished to decline the offer of alternate employment and wanted to accept the redundancy and leave RMS.
[8] The following day Mr Bayliss discussed her email in more detail and further discussion was had on the new role that was offered to her. Ms Dunkerley stated that she wished to decline the offer of alternate employment based on it offering less money than her current role ($2 000 per annum).
[9] In reply Mr Bayliss then explained the process that RMS would pursue with the Fair Work Commission to determine the redundancy payout. Ms Dunkerley confirmed her wish to leave RMS and declined the offer of alternate employment.
[10] On 8 March 2013 RMS sent a letter to Ms Dunkerley outlining the redundancy, the alternate employment offered and the process of submitting the application under section 120 of the Act to the Fair Work Commission.
[11] The Job Description of the Trainee Recruitment Consultant’s position was provided to the Commission for comparison with the Job Description for the Sales Administrator 2.
[12] No evidence was provided regarding the bonus system for either position.
[13] Ms Dunkerley says that she has previously performed in a sales training role but has not done so for 18 months.
[14] In terms of travel to other locations Mr Bayliss concedes that the Job Description for the Trainee Recruitment Consultant says that the location is Clarke Crescent, Joondalup whereas the Job Description for Sales Administrator says that the location is Franklin Lane, Joondalup/Wangara/Jandakot/Mandurah. His evidence is that the Sales Team the Sales Administrator works with is based at the Franklin Lane, Joondalup office and as such the position would have been based at this office not in any other location, however all RMS staff may be directed to perform work at other locations, provided that this does not impose unreasonable hardship on them. His evidence was that if on occasion Ms Dunkerley was required to work at another office, for instance to cover sick leave of other employees, this would have been negotiated with her at the time so as not to cause hardship to her.
[15] Mr Bayliss’s evidence on this was not challenged.
[16] Ms Dunkerley provided brief statements from three other employees in support of her opposition to any reduction in her redundancy pay.
[17] One statement from Ms Fandrey explains that she had been employed at the Joondalup office but was then told to work at the Wangara office from one day to the next. She mentions another employee who was working at the Mandurah office but was required to work at the Joondalup office for training for a couple of weeks but that this extended to a couple of months.
[18] There was no evidence as to on what basis these two employees were engaged with respect to working at alternative locations nor what their positions were. Ms Fandrey was not in attendance to be cross-examined on her statement.
[19] Another employee Ms Whitworth provided a statement that on 13 March 2013 she had applied internally for the Sales Administrator position but was told the next day that this position was no longer going to exist and that the role was obsolete however she was invited to apply for another role as an RTO Administrator. Ms Whitworth was not present at the hearing to be cross-examined on her statement.
[20] The hours of work are the same for both positions.
Submissions by RMS
[21] RMS argues the Sale Administrator position was other acceptable employment and so the redundancy payable should be reduced to nil. They submit as follows:
Experience
[22] The Sales Administrator position is well within the Ms Dunkerley’s capabilities and experience and is an appropriate match for her professional experience and skill set.
Current Position Duties
[23] The two positions’ duties are very similar, given the sales components and administrative duties within each role.
Pay Level
[24] Given internal rate bands and the need to maintain parity with other RMS employees in similar roles, the base salary available for the Sales Administration role was $45 000. This is $2 000 less per annum than Ms Dunkerley’s current base salary. RMS believes that the relative pay levels however are very similar, and with the opportunity to work additional paid overtime (something that was not available in Ms Dunkerley’s role as Trainee Recruitment Consultant) and the ability to participate in the Sales Bonus System, Ms Dunkerley could very easily earn the same and potentially more in the new role than in her previous role.
Workplace Location
[25] The distance between 43 Clarke Crescent, Joondalup where Ms Dunkerley was based, and the new role offered to her at 2/10 Franklin Lane, Joondalup is 1.8 kilometres. Ms Dunkerley uses her own transport to come to and from RMS, therefore RMS does not perceive that she will suffer any additional hardship in moving to the RMS Franklin Lane office.
Hours of Work
[26] This is unchanged and remains at 40 ordinary working hours per week, worked between Monday to Friday inclusive, and generally between the hours of 8.30 a.m. to 5.00 p.m.
Seniority
[27] The position offered is at the same internal organisational banding and the same seniority level within RMS as the Trainee Recruitment Consultant role that Ms Dunkerley most recently held.
Fringe Benefits
[28] Access to participating in the RMS Sales Bonus System was offered to Ms Dunkerley in place of participating in the Recruitment Bonus System.
Workload
[29] Had the Recruitment Division been operating at full capacity, the Trainee Recruitment Consultants workload would have been very similar to the Sales Administrator role that was offered. The Recruitment Division however was not operating at full capacity with low demand for RMS recruitment services and therefore the Trainee Recruitment Consultants workload, and that of the rest of the team since approximately January 2013, has been fairly minimal. Hence the decision to close the Recruitment Division.
Job Security
[30] The Sales Team is an integral part of the RMS business model and are a necessity to generating revenue for RMS. The role of Sales Administrator is extremely important to the smooth running of the business and sales area, and one of the most secure positions within the business.
Submissions by Ms Dunkerley
[31] Ms Dunkerley submits that the Sales Administrator position offered to her is not other acceptable employment for the following reasons:
Pay
[32] The alternative position offered is $2 000 a year less than her former salary. This reduction in pay would have caused her financial hardship.
[33] RMS has claimed Ms Dunkerley could have earned more than her former salary through the Sales Bonus System plus working overtime. However it is submitted Ms Dunkerley should not be required to work additional hours to reach the level of her former salary.
[34] In any event, opportunities for overtime were very limited and had to be shared among other employees on a 6 week rotation.
[35] The ability to reach bonuses on reaching set sales targets, however due to the downturn in demand for RMS training courses the sales targets are very difficult to reach and are very rarely, if ever given.
Work locations
[36] In the Job Description for the position of Sales Administrator attached to RMS application, Ms Dunkerley can be required to work at a range of locations including Wangara, Jandakot and Mandurah and these locations are considerably more than 1.8 kilometres away from her former work location and it is submitted it would cause Ms Dunkerley great hardship to have to travel to these areas.
Duties
[37] The job descriptions for Trainee Recruitment Consultant and Sales Administrator are not similar given the sales components and administrative duties with each role as a comparison of the 2 position descriptions clearly shows there are substantial differences between the primary duties and responsibilities for each position (i.e. Trainee Recruitment Consultant hires candidates and finds business for RMS and Sales Administrator takes training course bookings and deals with any problems that may arise). The only duties that are remotely similar are the use of the computer system (i.e. Microsoft Office and MYOB).
Job Security
[38] RMS claims the position of Sales Administrator is “extremely important” to the smooth running of the business and Sales Team, and is one of the most secure positions within the business. It is submitted that despite this statement, this position does not currently exist and in this business the duties of the position are being job shared among 5 sales people. If this position can be job shared between existing sales staff there is no guarantee that this position could not also be made redundant in the future; with the duties of that position being distributed to other employees.
Experience
[39] RMS have stated that the role of Sales Administrator is well within Ms Dunkerley’s capabilities and experience and is an appropriate match for her professional experience and skill set. However although Ms Dunkerley has performed in a Sales Training role previously she has not done so for 18 months and her current experience and skill set is in the area of recruitment. Ms Dunkerley submits she has no desire to return to a role in sales training.
Hours of work
[40] Ms Dunkerley submits, dispute RMS statement that her hours of work would remain unchanged at 40 hours per week, by RMS’s own admission she would be required to work overtime in order to earn her previous salary. In addition she can be required to work in different locations including Wangara, Jandakot and Mandurah and travel to these locations would add further additional hours to her working week.
Conclusion
[41] For the reasons provided, RMS did not offer Ms Dunkerley other acceptable employment. The alternative position offered to her was affectively a demotion with less pay, and substantially more travel required. Additionally the duties of the position of Sales Administrator are considerably different to that of Trainee Recruitment Consultant.
[42] On that basis Ms Dunkerley submits that there should be no variation to her redundancy pay.
Consideration
[43] The relevant statutory provisions to be applied by the Commission in this case are as follows:
“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.
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 |
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, FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that 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.”
[44] The central question is whether the Sales Administrator position was “other acceptable employment” as mentioned in section 120(1)(a) of the Act.
[45] Recently in Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai [[2013] FWC 1327] Vice President Lawler considered the meaning of “acceptable alternative employment” which is a term I view as synonymous with the term used in section 120(1) of the Act “...other acceptable employment...”. Vice President Lawler noted at paragraphs [8] and [9] that:
“[8] In NUW v Tontine Fibres [2007] AIRCFB 1016 (Tontine) a Full Bench of the AIRC considered the meaning of the expression “acceptable alternative employment” in a redundancy provision in an enterprise agreement. It was common for enterprise agreements to reflect award provisions and contain redundancy entitlements that could be reduced if the employer obtained acceptable alternative employment (or some variant of that expression). The Full Bench observed:
“[23] It is well established... that the concept of acceptable alternative employment is to be determined objectively. As noted by a Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd:
“What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.
Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.”
[24] The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer. In order to establish whether the alternative employment obtained by the employer is acceptable it is necessary to have regard to such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters (including the location of the employment and travelling time). ...”
[9] Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.”
[46] Turning then to consider the two positions, Trainee Recruitment Consultant and Sales Administrator, it is apparent that the roles are in two different parts of RMS’s operations however the nature of the work, clerical administrative duties, is similar. Whilst there is some commonality in terms of much of the work being of a clerical administrative nature I accept that the Trainee Recruitment Consultant position is a more independent role.
[47] It is clear from Ms Dunkerley’s own evidence that she has previously, 18 months ago, worked in the sales area although she would prefer not to return to this role. Importantly this demonstrates that she both has the experience and capability to undertake the Sales Administrator position. There is no reason why Ms Dunkerley could not perform the Sales Administrator role.
[48] With respect to pay the Trainee Recruitment Consultant position was paid at $47 000 per year whereas the Sales Administrator role is paid only at $45 000 per year. This pay reduction amounts to 4.26% per annum. The evidence is that whilst there would be an opportunity potentially for overtime to be worked in the Sales Administrator position this would necessitate Ms Dunkerley working additional hours compared to the Sales Recruitment position. Both positions involve either a Recruitment Commission Structure or a Sales Bonus System however there are no details on how these bonus and commission structures operate and what the financial benefits to either position would be.
[49] Given the employment in both positions is with RMS it is likely that the other employment conditions are the same.
[50] With respect to the location of the work Ms Dunkerley explained that she was very concerned that she may have to work at other distant offices of RMS which are away from the Joondalup area. She said this was one of her major reasons for rejecting the Sales Administrator position.
[51] Notwithstanding the different wording on the job descriptions regarding location the evidence is that in practice the two positions are treated the same in that both positions are usually located in offices in the suburb of Joondalup however for both positions an employee may be directed from time to time to work at one of the other locations RMS operates from. I accept that some of these locations would involve considerable travel for Ms Dunkerley as they are some distance from Joondalup. What is clear however is that the risk of this occurring existed in both the Trainee Recruitment Consultant position and the Sales Administrator position. The fact that Ms Dunkerley had not experienced this in her time in the Trainee Recruitment Consultant position was obviously fortunate for her but did not mean that it could not occur in the future.
[52] There is nothing before the Commission to support the conclusion that the fact the Job Description for the Trainee Recruitment Consultant says the location was Joondalup means this was a term of Ms Dunkerley’s contract of employment on which she could rely to the point where she could rightly refuse a direction to temporarily work at another location. The written statements of other employees regarding the issue of work location and their experiences of being required to work at other locations supports the evidence of Mr Bayliss on this issue.
[53] In any event there is no evidence before the Commission to suggest that the requirement to work at offices other than Joondalup would be a regular occurrence or for an extended period. The fact that Ms Dunkerley did not wish to travel to any other office other than Joondalup was her personal preference. It must be borne in mind that the legislation and the case law requires the Commission to view the issue of whether other employment is an acceptable alternative objectively and consequently the subjective views of the affected employee are not relevant.
[54] The hours to be worked each week and their arrangement was the same for both positions.
[55] Seniority in this case is not a significant issue and in any event it seems the two positions were at a similar level within RMS’s structure.
[56] Significantly the other employment offered to Ms Dunkerley was with the same employer and consequently there would have been no loss to Ms Dunkerley of non-transferable credits such as sick leave or long service leave accruals nor would there have been any loss of service continuity if she had accepted the Sales Administrator position.
[57] Turning to consider job security, this will be a significant issue where the alternative employment offered is with another employer and there is no transfer of accrued entitlements or recognition of previous service by the new employer. In such a case an alternate job with poor job security exposes the employee to the risk of losing their new job and then receiving far less redundancy pay than they would have in their previous job because of their short length of service with the new employer. This obviously is not the case here.
[58] At the time the decision was made and the other employment “obtained” it was not the case that the Sales Administrator position was to be made redundant and there was no reason to believe at that time that the position was insecure. In any event if Ms Dunkerley had taken the position and it was shortly made redundant thereafter she would have been either entitled to redundancy pay or the respondent may have offered her another position perhaps potentially the RTO Administrator position mentioned in the statement of Ms Whitworth. Objectively then when the alternative offered is a job with the same employer this means that even if that job proves to be short-lived there is no loss of entitlement to redundancy pay and so the question of the job security for the alternative employment is not significant.
[59] I accept that the Sale Administrator job was less attractive to Ms Dunkerley in a number of ways. However the Commission has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment. It is not a requirement that the alternative employment be no less beneficial to the employee to objectively be acceptable.
[60] Considering all of these factors objectively I am satisfied that the Sales Administrator position that was obtained by RMS and offered to Ms Dunkerley was other acceptable employment.
[61] It should be appreciated that the legislation which establishes an entitlement to redundancy pay does not provide this entitlement on the basis that an employee can simply reject another job which is acceptable alternative employment the employer has obtained for them and instead elect to accept termination with a redundancy payment.
[62] As Senior Deputy President Sams said in Mantra Hospitality (Admin) Pty Ltd [[2013] FWC 1063]:
“[30] Let me say from the outset that I have no truck with an employee who is faced with redundancy and is offered comparable alternative employment, but refuses it because he/she would rather take a redundancy payout. In my opinion, that is not the underlying intention or social and industrial purpose of redundancy benefits. Nor do I think it was the intention of the legislature when enacting s 120 of the Act. It goes without saying, that in many cases, the existence of generous redundancy payouts, coupled with voluntary redundancy, actually serves as a disincentive to the preservation of jobs.”
[63] As was explained to Ms Dunkerley at the time by her employer if she was to reject the Sales Administrator position RMS would be making an application as they have here to reduce their obligation to pay redundancy pay potentially to nil.
[64] I have concluded that the Sales Administrator position was other acceptable employment for Ms Dunkerley. The other acceptable employment was with the same employer and so Ms Dunkerley would not have lost any non-transferrable credits nor broken her continuity of service and whilst there were some terms of the other employment that were less advantageous they were not significant. I have therefore determined that the amount of redundancy pay should be reduced to nil in all the circumstances of this matter.
[65] An order to that effect will be issued in conjunction with this decision.
COMMISSIONER
Appearances:
R Bayliss for the applicant.
G Dunkerley and Z Dunkerley for the respondent.
Hearing details:
2013.
Perth:
June 14
1 Exhibit A1, Attachment 2.
2 Exhibit A1, Attachment 1.
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