SKM Contracting Pty Ltd v Shayne Owen

[2019] FWC 8075

[2019] FWC 8075

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

SKM Contracting Pty Ltd
v
Shayne Owen
(C2019/6836)

DEPUTY PRESIDENT MASSON MELBOURNE, 2 DECEMBER 2019

Variation of redundancy pay. Small business exclusion. Application dismissed for want of jurisdiction.

[1] This matter involves an application made pursuant to s 120 of the Fair Work Act2009 (the Act) for variation of the obligation to pay redundancy pay pursuant to s 119 of the Act. The application is made by the SKM Contracting Pty Ltd (the Applicant), in relation to a former employee, Mr Shayne Owen, who was made redundant on 4 November 2019.

[2] The matter was listed for a Mention Hearing on 25 November 2019. The Applicant, represented by its Director Mr Simon McConachy, and Mr Owen were both notified of the listing by email and attended the hearing by telephone.

[3] An application under s 120 of the Act for variation of redundancy pay for reasons of alternate employment having been secured or incapacity to pay, applies if an employee is entitled to be paid an amount of redundancy pay by the employer because s 119 of the Act applies.

[4] However, s 121(1)(b) of the Act provides that s 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 s 117(1), the employer is a small business employer.

[5] Section 23(1) of the Act sets out the meaning of small business employer as follows:

“23 Meaning of small business employer

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and

(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.”

[6] If the Applicant in this matter was a small business employer at the relevant time as defined in s 23 of the Act, then by virtue of the operation of s 121 of the Act, the Applicant is excluded from an obligation to pay redundancy pay pursuant to s 119 of the Act. Consequently, the threshold question to be firstly determined in the application before the Commission is whether the Applicant was a small business employer at the relevant time.

[7] At the listed Mention Hearing on 25 November 2019 I heard brief submissions from the Applicant to the effect that it was a small business, that there were only six employees at the time of Mr Owen’s dismissal and that there were no associated entities.

[8] In order that Mr Owen had an opportunity to be heard on the question of whether the Applicant was in fact a small business employer at the time of his dismissal, I issued Directions subsequent to the Mention Hearing for the filing of materials by the Applicant. I also provided an opportunity for Mr Owen to provide submissions in response as to whether the Applicant was a small business employer at the relevant time.

Applicant’s submissions

[9] The Applicant provided an email attaching a letter from the employer’s accountant dated 25 November 2019, which indicated that at the time of Mr Owen’s dismissal (and immediately prior), there were six employees of the Applicant. Mr McConachy also confirmed that there no associated entities.

Submissions of affected employees

[10] Mr Owen did not provide the Commission with submissions or material in reply within the required timeframe.

Consideration and Conclusion

[11] It is clear, on the basis of the material received which I accept, that the Applicant was a small business employer at the relevant time. Following from my reasoning above, by virtue of the operation of s 121 of the Act, the Applicant is excluded from an obligation to pay redundancy pay pursuant to s 119 of the Act.

[12] The Applicant’s application to vary the redundancy pay pursuant to s. 119 of the Act is moot and cannot enliven the Commission’s jurisdiction as the section only applies if an employee is entitled to be paid an amount of redundancy pay by the employer.

[13] For the above reasons, I dismiss the application for want of jurisdiction.

DEPUTY PRESIDENT

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