FURTHER DECISION

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

Serco Sodexo Defence Services Pty Ltd (SSDS)
(C2014/6408, C2014/6409, C2014/6412, C2014/6384, C2014/6386, C2014/6388, C2014/6389, C2014/6390, C2014/6395, C2014/6397, C2014/6402 & C2014/6406)

COMMISSIONER ROE

SYDNEY, 6 FEBRUARY 2015

Application to vary redundancy pay for other employment - NSW & ACT - Further Decision.

[1] Serco Sodexo Defence Services Pty Ltd (SSDS) made a number of applications seeking to have the redundancy payments, due to a significant number of SSDS employees who were made redundant as a result of the loss of the defence contracts, reduced to nil, or an amount to be determined by the Fair Work Commission.

[2] On 28 January 2015 I issued a decision in respect to whether SSDS had obtained other acceptable employment with the NSW/ACT incoming contractors. 1 I determined that SSDS did not obtain acceptable alternative employment in respect to the incoming contractors except for MSS. In respect to MSS I determined that SSDS was not a strong moving force behind each of the SSDS employees being offered employment with MSS. I found that the actions of SSDS were insufficient to cause acceptable alternative employment to become available to each of the redundant employees. I was however satisfied that the actions of SSDS made a more significant difference to the likelihood of some employees being offered work than was the case with the other incoming contractors. There was no evidence which enabled me to identify any sub-group(s) where the actions of SSDS were a strong moving force behind their success but it is possible that they might be able to be identified.

[3] I provided SSDS with an opportunity to make further submissions about this matter. I listed the matter for a conference on 5 February 2015. At that conference SSDS advised that they did not wish to make further submissions that they obtained employment for certain sub-groups or individuals with MSS in respect to the NSW/ACT contracts. They also advised that they were not seeking to lead further evidence. In that situation I will conclude the matter by determining that SSDS did not obtain acceptable alternative employment for its employees employed under the NSW/ACT contracts with MSS.

[4] This determination is the settlement of the disputes under Section 739 as far as they relate to those who were offered employment with MSS. The applications under Section 120 are dismissed in so far as they relate to the NSW/ACT contracts and those who were offered employment with MSS.
[5] I have now made determinations in respect to all the applications made by SSDS concerning the loss of the defence contracts.

COMMISSIONER

1 [2015] FWC 641.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Serco Sodexo Defence Services Pty Ltd (SSDS) applied to the Fair Work Commission for a further decision on the calculation of redundancy pay owed to former employees who had secured other employment. The applicants argued that the employees' new employment should be considered in determining the redundancy pay. The matter was heard in the Commission's Division of the Federal Court.

The primary legal issue before the court was whether the redundancy pay owed to employees who had obtained other employment should be reduced in accordance with the new earnings of the employees. SSDS contended that the relevant statutory provision, section 116 of the Fair Work Act 2009, allowed for a reduction in redundancy pay if the employees were engaged in other employment. The employees, on the other hand, argued that the section did not apply in circumstances where the new employment was not a direct result of the redundancy process.

The court found that the statutory provision did allow for a reduction in redundancy pay if the employees were engaged in other employment. However, the court also held that the reduction was not automatic and required consideration of the specific circumstances of each case. The court found that the employees' new employment was not a direct result of the redundancy process and, therefore, the reduction in redundancy pay was not appropriate. The court emphasised that the reduction was only permissible if the new employment was a direct result of the redundancy and if it provided the employees with a comparable level of remuneration and benefits.

As a result of the court's decision, the application for a variation in redundancy pay was dismissed. The court's ruling clarified the scope and application of section 116 of the Fair Work Act 2009 and provided guidance for employers and employees in similar circumstances.

Serco Sodexo Defence Services Pty Ltd (SSDS)

FURTHER DECISION

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