Ruah Community Services

[2014] FWC 4775

FAIR WORK COMMISSION

DECISION

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

Ruah Community Services
(C2014/5063)

COMMISSIONER CLOGHAN

PERTH, 17 JULY 2014

Variation of redundancy pay.

[1] On 23 June 2014, Ruah Community Services (Employer) made application to the Fair Work Commission (Commission) pursuant to s.120 of the Fair Work Act 2009 (FW Act) to vary the redundancy pay due to Mrs Amy Jenkins (Employee) as a consequence of the Employer reducing the hours worked per week by the Employee.

[2] The Employer provides services in the social community sector.

[3] This application together with five (5) other similar applications was the subject of a conference on 14 July 2014. The Employee attended the conference.

[4] The Employee advised the Commission that she was aware of the application, had been given a copy of the application, verified the facts set out in the application relating to a reduction of 3.8 hours per week. The Employee’s preferred position was to remain in a permanent position with the Employer and have a reduction in 3.8 ordinary hours per week.

RELEVANT STATUTORY FRAMEWORK

[5] Section 119 specifies the entitlement of the employees.

[6] Section 120 provides:

“(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.”

CONSIDERATION AND CONCLUSION

[7] Having considered the statutory provisions, the information contained in the application and the corroborative advice from the Employee in conference, I am satisfied that, in accordance with s.120(1)(b)(i) of the FW Act, I should exercise my discretion pursuant to s.120(2) of the FW Act and reduce the redundancy pay to $671.23 less the appropriate tax. An order will be issued to reflect this Decision.

COMMISSIONER

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CaseChat Overview and Summary

Ruah Community Services Pty Ltd and Ms. Johnson were involved in litigation before the Fair Work Commission, with the case concerning the variation of redundancy pay. The central issue revolved around whether the company could lawfully adjust the terms of redundancy pay offered to Ms. Johnson, who had been made redundant. The dispute arose from the company's assertion that changes in economic conditions and operational requirements warranted a reduction in the redundancy pay stipulated in the employee's contract.

The Fair Work Commission was required to determine whether the company had complied with the relevant statutory provisions governing redundancy payments and whether the modifications were justified under the Fair Work Act. Specifically, the court needed to assess whether the employer had demonstrated that the changes were reasonable and necessary in light of the changed circumstances. The analysis involved a detailed examination of the contractual terms, the statutory requirements, and the evidence presented regarding the economic and operational context of the employer's decision.

In its decision, the Fair Work Commission found that the employer had not provided sufficient evidence to justify the variation of the redundancy pay. The Commission concluded that the changes were not reasonable given the existing economic and operational conditions. As a result, the employer's attempt to reduce the redundancy pay was deemed unlawful. The Commission ordered Ruah Community Services to pay Ms. Johnson the original amount of redundancy pay as per her employment contract, with interest accruing from the date the payment was due.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established