Sales Link Australasia Pty Ltd v Mrs Peta Macourt
[2022] FWC 2255
•25 AUGUST 2022
| [2022] FWC 2255 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Sales Link Australasia Pty Ltd
v
Mrs Peta Macourt
(C2022/3835)
| DEPUTY PRESIDENT LAKE | BRISBANE, 25 AUGUST 2022 |
Variation of redundancy pay – alternative work offered – other employment found to be not acceptable – application denied.
Background
Sales Link Australasia Pty Ltd (the Applicant) has applied to the Fair Work Commission (the Commission) pursuant to s.120(2) of the Fair Work Act 2009 (Cth) (the Act) to have the redundancy entitlement of Ms Peta Macourt (the Respondent) reduced. The Applicant alleged that the Respondent refused an alternative offer of employment following a restructuring of the Applicant’s business.
The Applicant operates a grocery merchandising business that employs approximately 300 staff nationally. The Applicant has recently implemented a centralised help desk, which handles coordination of field operations including management of the team, rostering, communication, and training. As a result, Team Leader roles within the business were no longer required. All Team Leader roles nationally were subsequently made redundant. The majority of the Applicant’s Team Leaders were offered internal redeployment to another role.
The Respondent commenced working with the Applicant on 4 May 2015 as a full-time, permanent Team Leader on an annual salary of $95,000.00. She was responsible for supervising and training a small team of Sales Representatives. The terms and conditions of employment of the Respondent were, at all material times, covered by the Commercial Sales Award 2020 (the Award) and her employment agreement.
Following the national restructure, the Applicant asserts that two appropriate roles were identified to redeploy the Respondent to. One was located with a client business and the other was an internal position.
The Respondent refused the two offers and as a result, the Applicant is applying for a reduction in the redundancy payable to the Respondent. The Respondent had 7 years of service with the Respondent and would have been entitled to 13 weeks under the National Employment Standards (NES). The Applicant seeks a reduction of 4.9 weeks, which reflects the difference in salary between the Respondent’s pay prior to the changes and the role that was offered to her internally.
The Application
The application to vary the redundancy pay of the Respondent was on the basis that Applicant had provided her with acceptable alternative employment. The Respondent says neither of the alternatives were acceptable.
A hearing was scheduled for Tuesday, 16 August 2022. The Applicant was represented by a paid agent, Ms Brown of Suncoast HR.
The Respondent sought permission to be represented Ms Doyle, solicitor for Labour Law, at the hearing to assist the Commission and to ensure that the evidence and submissions were dealt with efficiently, taking into account that there were a number of factual disputes. Further, the Applicant sought to be represented by a solicitor as a matter of fairness, as the Applicant was represented by a paid agent.
Granting permission to be represented under s.596 requires the satisfaction of two elements.[1] The first pre-requisite: the presence of one of the criteria under s.596(2) does not immediately invoke the right to representation and establishing satisfaction ‘involves an evaluation of judgment akin to the exercise of discretion.’[2] Once that first step is satisfied, the second step ‘involves consideration as to whether in all of the circumstances the discretion should be exercised in favour of the party seeking the permission.’[3]
I exercised my discretion and granted permission pursuant to s.596(2) to the Respondent to be represented, as I was satisfied that it would be fair, and the matter would be dealt with more efficiently and effectively.
The issue for determination is whether Applicant provided other acceptable work to the Respondent and if so, whether the Commission should exercise its discretion to vary the redundancy. If answered in the affirmative, I would then need to determine to what extent the redundancy should be varied.
Relevant legislation
Section 119 and 120 of the Act provide:
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.
Section 121 of the Act provides:
121 Exclusions from obligation to pay redundancy pay
(1) Section 119 does not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1) (whichever happened first):
(a) the employee’s period of continuous service with the employer is less than 12 months; or
(b) the employer is a small business employer.
(2) A modern award may include a term specifying other situations in which section 119 does not apply to the termination of an employee’s employment.
(3) If a modern award that is in operation includes such a term (the award term), an enterprise agreement may:
(a) incorporate the award term by reference (and as in force from time to time) into the enterprise agreement; and
(b) provide that the incorporated term covers some or all of the employees who are also covered by the award term.
Section 120 confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise have been entitled under s.119 of the Act.
Section 120(1) states that the section applies if an employee is entitled to be paid an amount of redundancy pay under s.119, and the employer ‘obtains other acceptable employment’ for the employee. These are the jurisdictional facts that must be established before the Commission may exercise its discretion. Section 120(2) then states that the Commission ‘may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate’. If the Commission makes an order under s.120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination (see s.120(3)).
Respondent’s submissions and material
On 18 May 2022, Mr Dale Beaverson, Director of the Applicant, contacted the Respondent to discuss an opportunity with a client company, Beak & Johnson. Mr Beaverson called and enquired as to the Respondent’s experience prior to her current role with the Applicant then Mr Beaverson mentioned a proposed role however did not provide any specific information. The Applicant asserts that the role was an Independent Key Account Manager. The Respondent asserts that the role was to assist Ms Madi Burns, National Business Manager for Beak & Johnston, for 6-12 months in a maternity leave position and was not ongoing. The Respondent was advised that her salary and entitlements would remain identical, and she would be paid by the Applicant. The Respondent asserts that she did not have the requisite experience with national and state accounts and the role did not supervise any staff. Furthermore, the role would require her to commute twice a week to the office which was approximately 166 kilometres from her home.
Upon the insistence of the Applicant, the Respondent phoned Ms Burns on 23 May 2022. Ms Burns forwarded the position description to the Respondent two days later. The discussion with Ms Burns confirmed in the mind of the Respondent that she did not have the required experience. The Respondent refused the role.
On 2 June 2022, the Respondent received a call from her Line Manager, Mr Steve Fraser, to advise of an internal redeployment offer. The following day, Mr Fraser confirmed that the Respondent’s salary would remain the same if she accepted the internal redeployment. On 14 June 2022, the Respondent received a further call and an offer dated 10 June 2022 titled ‘Mutual Change of Position.’
Dear Peta,
The following changes were discussed with you and by mutual agreement will apply to your employment from 20th June 2022
Position: Sales Representative
Line Manager: Steve Fraser – National Operations Manager ‐ Independents
Effective Date: 20th June 2022
Hours of duty: Your core working hours will be 8.30am – 5:00pm, 5 days per week
Remuneration: $65,000.00 Gross Salary per annum (including Superannuation in accordance with applicable legislation)$15,000.00 Gross Car Allowance per annum (excluding Superannuation)
Fuel card will be provided in addition to the Car Allowance.
You will be paid on the 15th of each month into your nominated bank account.
Your salary also includes overtime and holiday loading.
The terms and conditions of employment set out in your original Employment Agreement will continue to apply to your ongoing position.
Should you wish to accept this offer, please sign and date where indicated below and return to me.
On 16 June 2022, the Respondent attended a phone meeting with Mr Beaverson and Ms Anika Banks, Financial Director of the Applicant, and was informed that she would be offered a redeployment to the role of Sales Representative. The Respondent was advised that if she did not accept the role, she would be paid a pro rata difference in the roles.
The Respondent refused the role on the basis that the role was a demotion with a significant salary reduction. The Respondent employment was terminated on 22 July 2022, and she remains unemployed.
Applicant’s submissions and material
The Applicant asserts that they expended considerable effort to redeploy the Respondent into an alternative role. They claim the role with Beak & Johnson was acceptable alternative work, in that it was similar work involving account management and that the products and customers were well known to the Respondent. The attendance requirements and travel distance were broadly similar to the requirements pre-COVID for their own organisation.
The Applicant says that the Respondent did not actively engage with the proposal and had to be encouraged strongly to contact the company to discuss the proposal. It is alleged that her response following the discussion between the Respondent and the company was ‘I do not want to be anyone’s bitch.’
Authorities – “other acceptable employment”
In Spotless Services Australia Limited t/as Alliance Catering [2016] FWC 4505 (‘Spotless’), Deputy President Sams usefully identified the authorities relevant to “other acceptable employment” and the task to be performed by the Commission:
[60] The question of what constitutes ‘other acceptable employment’ in the context of a redundancy situation, has been considered by the Commission and its predecessors in many and varied circumstances and industries over a number of years. In Derole Nominees, a Full Bench of the Australian Industrial Relations Commission (AIRC) said at pp 128-129:
‘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.
This approach to the test demonstrates that any alternative employment available to the eighteen former employees of the company cannot be regarded as “acceptable” merely because a number of other former employees took up employment at the new location. The relevant aspects of the job must be examined objectively to determine whether the employment is “acceptable”.
…
The exemption provision imports the notion that an effort of a sufficient kind by an outgoing employer may cause his obligation for redundancy pay to be reduced; a decision by an employee not to co-operate with the employer may well disentitle the employee to all or some of the payment.’ (my emphasis)
[61] In Oscar Oscar Group Services Pty Ltd v Lees [2012] FWC 3901 (‘Oscar Oscar’), Commissioner Asbury (as Her Honour then was), said at paras [18]-[19]:
‘[18] The question of whether alternative employment is acceptable, must be assessed on an objective basis. It is relevant to the assessment that redundancy payments are not made solely for the purpose of assisting employees to find alternative employment. Redundancy payments are intended to tide an employee over during the search for alternative employment, and to compensate the employee for loss of credits for sick leave, long service leave and other entitlements based on length of service. The question of whether previous service with the previous employer is recognised as service with the new employer, will also be relevant.
[19] Other considerations will be whether the alternative employment is of a like nature; a reasonable distance from the previous employment; whether pay and conditions are comparable; hours of work and job security in relation to the new position. The fact that an alternative position does not meet the personal preferences of an employee, may place the right to receive full redundancy pay at risk, where the employee refuses a position that is found to be acceptable on an objective basis.’ (my emphasis)
[62] Senior Deputy President Watson in Feltex said at a para [33] and [89]:
‘[33] The parties accept, as do I, that matters to be considered in assessing whether alternative acceptable employment has been obtained include matters such as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security, the location of work, continuity of service and accruals and the application of probationary periods. The relevant authorities also demonstrate that this listing of matters is not exhaustive and the question of whether an employment is acceptable alternative employment will be decided on the peculiar facts of a matter. Further, the authorities suggest that acceptable employment is not synonymous with identical employment, although the basis of the 2004 variation of the TCR test case provision suggests that, whilst not identical, terms and conditions should be substantially similar and no less favourable, overall, than the terms and conditions applicable to the employee at the time of the redundancy.
…
[89] I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.’
[63] In Vicstaff Pty Ltd (t/as Stratco) v May (2010) 204 IR 233 (‘Vicstaff’), Bissett C said at paras [29]-[30]:
‘[29] The determination of whether or not alternative employment is acceptable must be determined objectively and not subjectively from the perspective of the employer or employees. That the alternative employment may be rejected does not objectively make it unacceptable nor does the fact that the employment was offered make it, by virtue of the offer, acceptable. Further, that one of the persons out of a group may have accepted the employment does not make the employment acceptable for the others in the group. The reasons for the acceptance of alternative employment are many and varied and general conclusions should not be drawn from a particular circumstance.
[30] It is therefore incumbent upon the employer (Vicstaff) in this matter to demonstrate that the alternative employment is acceptable taking into account all matters relevant in such a consideration. Had the alternative work been considered acceptable to the individuals one imagines they would have accepted the work offered.’
[64] In DRW Investments t/as Wettenhalls v Timothy Richards & Others [2016] FWC 461, I said at para [183]:
‘[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:
- rate of pay;
- hours of work;
- work location;
- seniority;
- fringe benefits;
- workload;
- job security;
- continuity of service;
- accrual of benefits;
- probationary periods;
- carer’s responsibilities; and
- family circumstances.
This list is not exhaustive. There may be other relevant factors.’
[65] The above decisions have some common features, including:
·The test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.
·‘Acceptable employment’ is not identical employment, as no two jobs could be exactly the same.
·An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.
·An employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.
·The acceptance of alternative employment by one or more persons in a group of redundant employees, does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.
·There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment.
Meaning of ‘acceptable employment’
The question remains whether the offer by the Applicant to the Respondent was on terms and conditions no less favourable than the terms and conditions that the Respondent experienced prior to the restructure.
The proposed roles do not have to be identical, and in considering this, the Commission must determine the matter objectively weighing up aspects of the role including duties, conditions, pay level, and location.
Relevant to this point, in Derole Nominees[4], the Full Bench of the Australian Industrial Relations Commission (AIRC) found:
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.
A further explanation on this point was put forward by in Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 by Richards SDP, who adopted the principles in Derole Nominees and said at paras [27]-[27]:
“[26] In contrast, the objective test of acceptability appears to be that the alternative work bears a sufficient comparability to the original work and is not unreasonably removed from the employee’s original duties, skills set, qualifications, experience and other terms and conditions of employment. The test is not whether or not the employee is capable of carrying out the new employment as such, it is whether there is sufficient correlation between the relevant indicia of the current work and the alternative employment as proposed.”
Was the substance of the role the same?
With the above authorities in mind, I do not consider the two options given to the Respondent to have been acceptable alternative work. There were notable differences between the Respondent’s previous employment and the two options put to her. There were also significant detrimental alterations to the terms and conditions of her previous employment which rendered both options unacceptable.
The first option of working for a client company had key differences in the scope of the role. As Team Leader, the Respondent’s focus was on the leadership of the Sales Representatives, with little to do with national key accounts. She had no category of management experience, and little account experience. The Respondent asserted that the role was for maternity relief only, and thus had a limited time frame and left her with an uncertain future. Conversely, the Respondent was previously employed on a permanent basis. The Respondent was hesitant to engage with the proposal and notes that there was no formal offer. The lack of a formal offer is not defining, however, had the Respondent fully engaged with the opportunity, it may have been more concrete to her and the issues that she had concerns with may have been resolved. The role lacked leadership, especially when compared to her previous position as Team Leader. However, the experience in the new role may have assisted her in her chosen career. The Applicant states they were unaware that the role was a maternity coverage role. It appears the parties moved on from this opportunity without the role being fully fleshed out. Accordingly, the positives and negatives of this role are unclear.
Without the role with Beak & Johnson being fully made out, it is difficult to comprehensively assess whether it is acceptable alternative work. Clearly, the Applicant was a driving force in the role being offered, as the role was with a client of the Applicant. Without knowing the exact nature of how the role came about, it appears the Applicant was prepared to keep the Respondent on its books by continuing to pay her through their own pay system. Perhaps, the Applicant planned to bill back to the client organisation. In any event, the Applicant had some involvement in establishing the role as a viable opportunity, albeit without further details, just on face, with the limited details provided, the role is not comparable, the duties and the tenure clearly do not align with acceptable alternative employment.
The second alternative, a Sales Representative role, is clearly a demotion. It is detrimental, not only in terms of salary, but also in the type of work and seniority. Prior to the restructure, the Respondent supervised and led Sales Representatives. To be placed into a more junior role that she once supervised does not fit with the requirements of equal alternative work. Although she would have retained some of her previous conditions such as period of service and accrual for leave purposes, after an objective and overall review of the second position it was not acceptable alternative employment. I do not have to consider this alternative further.
My considered view is that the two employment options offered by the Applicant are not ‘acceptable other employment’ for the purpose of s.120(1)(b)(i) of the Act.
Conclusion
Considering all of the circumstances, I consider that I should not exercise my discretion to reduce the Respondent’s redundancy pay. I Order that the Respondent receives their full respective redundancy entitlements, within 14 days of this decision being issued.
DEPUTY PRESIDENT
[1] Wellparks Holdings Pty Ltd t/as ERGT Australia v Mr Kevin Govender[2021] FWCFB 268.
[2] Asciano Services Pty Ltd v Zak Hadfield[2015] FWCFB 2618, [19].
[3] Wellparks Holdings Pty Ltd t/as ERGT Australia v Mr Kevin Govender[2021] FWCFB 268, [48].
[4] (1990) 140 IR 123.
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