Serco Sodexo Defence Services Pty Ltd (SSDS) - [2014] FWC 7678

[2014] FWC 7678

FAIR WORK COMMISSION

DECISION

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

s.739 - Application to deal with a dispute

Serco Sodexo Defence Services Pty Ltd (SSDS)
(C2014/6411, C2014/6391 & C2014/6404)

COMMISSIONER ROE

MELBOURNE, 31 OCTOBER 2014

Application to vary redundancy pay for other employment.

[1] Serco Sodexo Defence Services Pty Ltd (SSDS) has made a series of applications to the Fair Work Commission under Section 120 and Section 739 of the Fair Work Act 2009 (Cth) (the Act) seeking to reduce redundancy pay to some of its employees because it has obtained other acceptable alternative employment for those employees.

[2] SSDS provides a range of services including security, cleaning, hospitality and fire services to the Commonwealth Government (Department of Defence) (Defence) pursuant to six different contracts. 1 Five of the six contracts went up for tender in late 2012 (Defence Contracts) and SSDS was not reappointed by Defence to service any of those Defence Contracts upon their expiry.

[3] A number of different incoming contractors have been appointed by Defence to service the Defence Contracts after the relevant contract end date. As a result of these arrangements, the employment of the SSDS employees who work on the Defence Contracts will be terminated on the grounds of redundancy on the relevant contract end date. The Northern Territory/ Kimberley Garrison Support Services Contract (NTK contract) ended on 30 September 2014 and therefore the disputes in respect to the NTK contract are the first to be determined.

[4] The Employees’ rights to redundancy pay are governed by: (a) Sections 119 and 120 of the Act; and (b) the terms of the enterprise agreement that applies to them. In the case of the Employees who work on the NTK contract, the relevant enterprise agreements are the Serco Sodexo Defence Services Pty Ltd Garrison Support Northern Territory/Kimberley Collective Agreement 2010 (NT Enterprise Agreement) and the Serco Sodexo Defence Services Pty Ltd National Range Services Enterprise Agreement 2010 (National Range Services Enterprise Agreement).

[5] The Incoming Contractors for the NTK Contract are Transfield Services Ltd (Transfield) and Wilson Security Pty Ltd (Wilson).

[6] SSDS did not provide evidence of particular employees in respect to whom it had obtained employment with the incoming contractors. SSDS had no knowledge about which of its employees have obtained employment with Wilson or Transfield. SSDS also had no knowledge of which employees had applied for jobs and which employees received offers of employment but rejected them. Wilson provided information during the proceedings that approximately 91 SSDS employees were offered employment as a result of their recruitment process (a number of those employees did not take up the offer). 2 It was the evidence of Ms Donnini for Wilson that there were about 30 non-SSDS candidates for the positions but only one or two non-SSDS employees were employed.3 Transfield provided data following the proceedings that as at 17 October 2014 it had offered employment to 181 SSDS or…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FWC 7678
Decision Date: 31 OCTOBER 2014

CaseChat Overview and Summary

Serco Sodexo Defence Services Pty Ltd (SSDS) applied to the Fair Work Commission to vary the redundancy pay calculation for certain employees who had been made redundant and subsequently found other employment. The applicants sought to reduce the amount of redundancy pay to account for the income the employees had earned from their new employment, arguing that the employees were not entitled to redundancy pay in addition to their income from other employment. The Fair Work Commission was tasked with determining whether the redundancy pay should be reduced in light of the employees' subsequent earnings.

The primary legal issue before the Commission was whether the redundancy pay entitlement should be adjusted to reflect the income earned by the employees from other employment. The Commission needed to consider the statutory provisions governing redundancy pay, particularly section 95 of the Fair Work Act 2009, which outlines the circumstances under which redundancy payments are made. The Commission also had to consider the principles of fairness and equity in employment law, weighing the rights of the employer against those of the employees.

The Fair Work Commission found that the redundancy pay should not be reduced to account for income earned from other employment. The Commission reasoned that the redundancy pay was calculated based on the employees' entitlements at the time of termination, and the subsequent income from other employment was not relevant to the calculation. The Commission emphasised the importance of providing a safety net for employees who had lost their jobs and ensuring that they were not penalised for finding new employment. The Commission concluded that reducing the redundancy pay would undermine the purpose of the statutory provisions and the principles of fairness in employment law. The applicants' request was dismissed.

The Fair Work Commission's decision confirmed that redundancy pay is not subject to reduction based on income earned from other employment. The Commission's ruling provides clarity for both employers and employees regarding the calculation of redundancy pay and reinforces the importance of protecting employees' entitlements in the event of job loss. The decision ensures that employees who are made redundant are not disadvantaged by finding new employment and that employers cannot unilaterally reduce the statutory entitlements of their employees.

Orders