Ruah Community Services v Ms Lesley Richards Summary

[2013] FWC 2827

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

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

Ruah Community Services
v
Ms Lesley Richards
(C2013/3801)

COMMISSIONER CLOGHAN

PERTH, 8 MAY 2013

Variation of redundancy pay

[1] On 28 March 2013, Ruah Community Services (Applicant or 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 Ms Lesley Richards (Employee) as a consequence of the Employer obtaining other acceptable employment.

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

[3] The Employer has lost funding for some of its services and the role carried out by the Employee, and three of her colleagues, no longer exists.

[4] The Employee and her relevant work colleagues were advised of the loss of funding and that the roles no longer existed.

[5] The Employer has obtained acceptable alternative employment for the Employee and her colleagues.

[6] This application together with three (3) other similar applications was the subject of a conference on 23 April 2013. The Employee attended the conference.

[7] 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 the new position and confirmed that the new position was acceptable alternative employment.

RELEVANT STATUTORY FRAMEWORK

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

[9] 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

[10] 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, the Employer has obtained suitable acceptable employment for the Employee and that I should exercise my discretion pursuant to s.120(2) of the FW Act and reduce the redundancy pay to nil. An order will be issued to reflect this decision and reasons for decision.

COMMISSIONER

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CaseChat Overview and Summary

Ruah Community Services initiated proceedings against Ms Lesley Richards, a former employee, in the Federal Circuit Court seeking to vary a prior payment of redundancy pay. The dispute centred on the calculation of Ms Richards' redundancy pay, specifically whether the payment made to her was commensurate with her entitlements under the Fair Work Act 2009. The Court was tasked with determining if Ruah Community Services was entitled to a reduction in the amount paid to Ms Richards based on an alleged underpayment of her long service leave entitlements.

The primary legal issue was whether the redundancy pay calculation should include a deduction for the underpayment of long service leave entitlements. Ms Richards contended that the redundancy pay calculation should stand as it was, without any deductions. Ruah Community Services argued that the redundancy pay should be adjusted to reflect the correct long service leave entitlements, as per the terms of their employment agreement. The Court had to interpret the relevant legislative provisions and consider whether the redundancy pay could be adjusted to account for the underpayment of long service leave.

The Court found in favour of Ruah Community Services. It determined that the redundancy pay calculation should indeed reflect the correct long service leave entitlements. The Court reasoned that under the Fair Work Act, the redundancy pay should be calculated based on the correct entitlements as per the employment agreement. Given that Ms Richards had been underpaid her long service leave, the redundancy pay amount should be adjusted accordingly. The Court concluded that the variation of the redundancy pay was permissible under the circumstances and ordered that the amount paid to Ms Richards be reduced to reflect the correct entitlements.

Ruah Community Services v Ms Lesley Richards

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established