Shemlex Payroll Services Pty Ltd T/A Buggles Early Learning

[2014] FWC 7954

[2014] FWC 7954

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Shemlex Payroll Services Pty Ltd T/A Buggles Early Learning
(C2014/1816)

COMMISSIONER WILLIAMS PERTH, 12 NOVEMBER 2014

Variation of redundancy pay.

[1] This is an application made pursuant to s.120 of the Fair Work Act 2009 (the Act) by Shemlex Payroll Services Pty Ltd T/A Buggles Early Learning (Buggles). The respondent is Ms Amanda James (Ms James).

[2] The facts of the matter as the parties have advised the Commission are thatMs James was employed by Buggles until her position was made redundant on 31 October 2014. She had been employed with Buggles for six years. The redundancy came about as a result of G8 Education Limited (G8) purchasing the Buggles Early Learning centres. Consequently subject to s.120 of the Act Ms James is entitled to redundancy pay under s.119 of the Act.

[3] G8 were not able to offer Ms James an identical position to that she held at Buggles however have offered her other employment. Section 119 and 120 of the Act are relevant and are set out below.

“Subdivision B—Redundancy pay

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.”

The Buggles’ job

[4] At Buggles Ms James was employed as the Internal Compliance and Care Manager reporting to the General Manager.

[5] The purpose of the job was to provide leadership and support in the implementation of Internal Quality Assurance systems across Buggles’ centres.

[6] The salary was $80 000 per annum.

[7] Non monetary benefits included a company car, laptop and mobile phone.

The G8 job

[8] At G8 Ms James will be employed as the Operations Manager reporting to the Senior Operations Manager.

[9] The position objective is to be responsible for the operational, business and quality functions of G8’s centres.

[10] The salary is $70 000 per annum. There is also potential to earn an additional $15 000 per annum under an incentive program.

[11] A car allowance of $10 000 per annum is paid.

[12] Non monetary benefits included a laptop, iPad, internet and iPhone.

[13] This position is offered for a specified period of 6 months.

The issue - Other acceptable employment

[14] The issue to be determined by the Commission is whether the offer of alternative employment amounted to “other acceptable employment” within the terms of s.120 of the Act for Ms James and if it was whether the amount of redundancy pay payable should be reduced and by what amount.

[15] I accept that the other employment was obtained for Ms James by Buggles.

[16] As noted by the Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 1at 124:

“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 provisions 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 elections 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.”

[17] The determination of whether the position offered was other acceptable employment must be determined objectively and not subjectively from the perspective of the employer or the employee.

[18] As was explained by Watson SDP in Feltex Australia Enterprise Agreement 2004 2 at [89]

“...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.”

[19] That the other employment may be rejected by employees does not objectively make it unacceptable.

[20] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 3 a Full Bench of the Commission found that the determination of whether alternative employment is acceptable will involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters including the location of the employment and travelling time.

[21] In National Union of Workers v Linfox Australia Pty Ltd 4 Vice President Watson considered the following criteria:

(a) the employee's skills, experience and physical capacity;

(b) the rates of pay, hours of work, duties and conditions of employment associated with the proposed job;

(c) whether or not continuity of employment is provided to the employee;

(d) the extent of any additional travel distances from home to the new place of work and whether the employee has to substantially alter their method of travelling to and from work in order to attend to duty; and

(e) the level of any compensation.

[22] In my view the term “acceptable alternative employment” considered in this case law is the same as the term “other acceptable employment” used in s.120 of the Act and hence the case law is directly applicable in this matter.

Consideration

[23] In this instance when one objectively considers the criteria mentioned in the case law and applies these to the facts of this case it is apparent that the other employment with G8 involves a number of significant changes. The question is whether these either individually or collectively lead to a conclusion that the other employment was or was not acceptable employment.

[24] Considering firstly the nature of each position it is apparent that the other employment, as Operations Manager, has a greater breadth of responsibility involving operational, business and quality functions not just quality assurance.

[25] Secondly the contract offered for the other employment is of a specified duration of 6 months only whereas the redundant position had been an ongoing role Ms James had worked in for a number of years.

[26] These two matters above count against finding the other employment is acceptable.

[27] In terms of salary, the other employment offers a salary that is $10 000 a year less than the redundant position but with the possibility, subject to satisfying unspecified KPI’s of a further $15 000 which if achieved amounts to a total payment $5 000 more than the redundant position. So there is a risk Ms James earns 12.5% less than she had in the redundant position but also a possibility to earn 6.25 % more than in the redundant position. On balance this counts against the other employment being judged as acceptable.

[28] With respect to the car allowance, without further evidence as to Ms James freedom or not to use the company car in the redundant position for personal use it or not possible to weigh these factors against each other.

[29] Finally the remaining non monetary items are sufficiently similar in my view to be neutral in this consideration.

Conclusion

[30] Considering the differences between the redundant position and the other employment as Operations Manager there are a number of negative aspects for Ms James in the other employment when compared to her redundant position. Consequently I do not accept that the Operations Manager with G8 is other acceptable employment for the purposes of s.120 of the Act. Accordingly this application is hereby dismissed.

[31] Ms James is entitled to the full benefits of redundancy pay as provided for in s.119 of the Act.

COMMISSIONER

 1 (1990) 140 IR 123

 2   PR974699

 3 27 IR 226

 4   [2008] AIRC 647

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