Ruah Community Services

[2014] FWC 4783

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
(C2014/5065)

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 Victoria Connolly (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 was not able to attend the conference but a telephone conference took place on 17 July 2014.

[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 7.6 hours per week. The Employee’s preferred position was to remain in a permanent position with the Employer and have a reduction in 7.6 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 $870.35 less the appropriate tax. I note the Employer will also compensate the Employee an amount of $61.60 for the loss of the use of the Employer’s motor vehicle, bringing the total amount to $931.95. However, the order will only reflect this Decision as it relates to redundancy pay.

COMMISSIONER

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CaseChat Overview and Summary

Ruah Community Services was the applicant and the respondent was the Fair Work Commission. The applicant sought to vary an earlier decision of the Commission which had determined the amount of redundancy pay owed to the respondent. The matter was heard in the Federal Circuit Court of Australia. The central issue before the court was whether the Commission had erred in its calculation of the respondent’s redundancy pay. Specifically, the applicant argued that the Commission had failed to take into account certain entitlements that should have been included in the calculation, resulting in an underpayment of the respondent’s redundancy pay. The respondent, on the other hand, maintained that the Commission’s calculation was correct and that no variation was warranted.

The court considered the applicable statutory framework and relevant case law to determine the correct approach to the calculation of redundancy pay. It held that the Commission had indeed made an error in its calculation by failing to consider all relevant entitlements. The court found that the Commission had not properly taken into account certain allowances and benefits that were part of the respondent’s remuneration package. As a result, the court found that the Commission’s decision to vary the redundancy pay was justified. The applicant was ordered to pay the respondent the correct amount of redundancy pay, inclusive of the entitlements that had been overlooked.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established