Ruah Community Services v Leonie Pickett

[2016] FWC 2094

[2016] FWC 2094

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Ruah Community Services
v
Leonie Pickett
(C2016/2460)

COMMISSIONER WILLIAMS PERTH, 4 APRIL 2016

Variation of redundancy pay.

[1] This decision concerns an application made under section 120 of the Fair Work Act 2009 (the Act) by Ruah Community Services (Ruah). The respondent is Ms Leonie Pickett (Ms Pickett or the respondent).

The application says Ruah seek a determination that the redundancy payment required to be paid to Ms Pickett be reduced to nil. Ms Pickett opposes this and seeks a determination that the full payment she is entitled to for redundancy be paid.

[2] Both parties have provided written materials and submissions regarding the application.

Factual background

[3] Ms Pickett was first engaged by Ruah in 2013 in a full-time permanent role as a Team Senior with the Women’s Support Service.

[4] In July 2014 Ms Pickett was offered and accepted the position of Team Leader for Ruah’s Inside/Out West Perth Program.

[5] In November 2014 Ruah made Ms Pickett an offer which she accepted for her to be employed on secondment in the position of full-time Chief Executive Officer with the Wadjuk Boodja Gateway Aboriginal Corporation (WBGAC). The letter of appointment which was provided advised the employment would be until 1 March 2015 when her position would be reviewed.

[6] The letter of appointment states that “Your substantive position remains as on-going full-time Team Leader with Ruah Inside Out, unless the new position is mutually agreed to become permanent.”

[7] The letter also states that the role comes under the Social, Community, Home Care and Disability Services Industry Award 2010 [MA000100](the Award).

[8] In the CEO position Ms Pickett received a salary of $95,000 per annum. The Team Leader position was classified as a Level 7.2 under the Award and at the time she first took the CEO position the salary for this was $68,223 per annum.

[9] A number of extensions to the respondent’s contract as CEO of WBGAC occurred. Relevantly on 15 December 2015 a further contract extension was offered and accepted by Ms Pickett through to 1 February 2016.

[10] On 15 January 2016 Ms Pickett was advised that the substantive role of Team Leader was to be made redundant. She was provided with a consultation letter and an estimate of redundancy pay that would apply to that position. This calculation indicated that she was entitled to 6 weeks’ redundancy pay estimated at $8,394.96.

[11] The consultation letter dated 15 January 2016 advised that the redundancy of the Team Leader position would be effective 1 February 2016.

[12] By letter dated 29 January 2016 Ruah offered a further contract extension to Ms Pickett in the position as CEO of WBGAC. That offer was for the position to continue until 30 June 2016. The letter of offer indicated that any further contract will be subject to continuation of funding and fulfilment of KPIs.

[13] In her submissions Ms Pickett states that she was informed she could only accept one of the two offers; being to either accept the offer of redundancy of her substantive position as Team Leader or accept the offer of fixed term contract as CEO of WBGAC through to 30 June 2016.

[14] Ms Pickett signed the letter offering the contract extension on 29 January 2016.

[15] Ms Pickett’s employment has not been terminated and she continues to be employed as the CEO of WBGAC.

Consideration

[16] I accept that the Award applies to the respondent’s substantive position and also to the CEO of WBGAC position as expressly stated in the offer of employment.

[17] Considering the terms of the Award that are relevant, clause 12.1 deals with redundancy as follows:

“12.1 Redundancy pay is provided for in the NES.”

[18] The National Employment Standards are set out in Part 2- 2 of the Act.

[19] Sections 119 and 120 of the Act deal with the entitlement to redundancy pay and the variation of redundancy pay in some circumstances. The sections are set out below.

“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

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.”

[20] In this matter Ruah are making an application under section 120 of the Act for a variation of the redundancy pay they believe is owing to Ms Pickett.

[21] As can be seen section 120 only applies if “...an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119...”

[22] Further section 119 (1) of the Act states:

“An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated...”

[23] Ms Pickett’s employment has not been terminated. Whilst her substantive position which she occupied before accepting the secondment to the CEO role may well have been made redundant this is had no impact immediately upon her employment. Ms Pickett continues to be employed in the CEO role. Therefore at this point Ms Pickett is not entitled to be paid redundancy under section 119 of the Act. As a consequence of this Ruah is not able to make an application under section 120 of the Act because the precondition for such an application prescribed in section 120(1)(a), that the employee is entitled to be paid redundancy pay by the employer because of section 119, is absent.

[24] Consequently the Commission has no jurisdiction to determine this application. Accordingly this application must now be dismissed and an order will be issued to that effect.

COMMISSIONER

Final written submissions:

Applicant, 10 March 2016.

Respondent, 30 March 2016.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR578667>