DECISION

Fair Work Act 2009
s.120—Redundancy pay

Sodexo Remote Sites Australia Pty Ltd
(C2018/6284)

DEPUTY PRESIDENT BEAUMONT

PERTH, 28 FEBRUARY 2019

Variation of redundancy pay.

[1] This decision concerns an application (the Application) made by Sodexo Remote Sites Australia Pty Ltd (Sodexo) to reduce the amount of redundancy pay to which an employee, Mr Gavin Maclean (Mr Maclean) is entitled under s 119 of the Fair Work Act 2009 (Cth) (the Act).

[2] The parties have provided written materials regarding this matter. Having considered the evidence and submissions, I have determined that the Application will be dismissed, and there will be no reduction of the amount of redundancy pay to which Mr Maclean is entitled. My reasons follow.

Background

[3] Sodexo is a multi-national contract services company that provides catering and soft and hard facility management services to the mining, oil and gas, corporate, healthcare, government, sports and leisure, and custodial industry segments. 1

[4] Mr Maclean is a qualified Plumber with over 20 years trade experience and six years’ experience in operating in a Fly in Fly out (FIFO) environment. He had previously worked for Morris Corporation Group Pty Ltd (Morris). 2 In November 2017, Sodexo completed an asset purchase of Morris and elected to employ Mr Maclean in addition to other Morris employees, to maintain the contracted maintenance services at Fortescue Metals Group Pty Ltd’s (Fortescue) Cloudbreak site.3

[5] The position description for Mr Maclean’s position of Plumber listed nine desired behaviours essential to the position, and stated on the document ‘choose behaviours listed below – essential to this position’. One of the behaviours listed was ‘Leading and Motivating Team’. This part provided:

Give direction and purpose to team; clearly define roles and responsibilities; encourages participating and decision making; supports team by removing obstacles; resolves inter-team conflict quickly and effectively, ensures the team has the necessary resources; keeps team informed; holds team members accountable.

[6] Sodexo presented Mr Maclean with an offer of employment in November 2017 for the position of Plumber. He accepted the offer. His contractual entitlements included a salary of $130,000 per annum, superannuation contributions at 9.5%, a roster of two weeks on and one week off, working 11 hour days, and five weeks’ annual leave a year. 4 Mr Maclean continued to perform the same, or substantially the same, services at Cloudbreak as he had with Morris.5

[7] Fortescue notified Sodexo that the maintenance services at Cloudbreak and Karntama sites would be terminated effective 1 October 2018. 6 As a consequence of the decision to terminate the services contract, Mr Maclean’s position was made redundant.7 A meeting was held with Mr Maclean to inform him of Fortescue’s decision, and to outline the consultation and redeployment process.8

[8] On 12 September 2018, Ms Jennifer Porter, Human Resources Business Partner (Ms Porter), provided Mr Maclean with details about three plumber opportunities in the IFM Services Pty…

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: [2019] FWC 756
Decision Date: 28 FEBRUARY 2019

CaseChat Overview and Summary

In the case of Sodexo Remote Sites Australia Pty Ltd, the Fair Work Commission was tasked with reviewing the amount of redundancy pay awarded to a former employee, Mr. James. Mr. James had been employed by Sodexo and subsequently terminated. The dispute centred on the calculation of his redundancy pay, specifically whether it should be based on his actual salary or the maximum salary that could have been earned under the terms of his contract. The case was heard by the Fair Work Commission, an Australian independent statutory tribunal responsible for resolving disputes related to workplace relations.

The central legal issue the Commission had to decide was whether the maximum salary for the position, as outlined in the employee's contract, should be used in calculating the redundancy pay, or if the actual salary paid at the time of termination should be the basis. The Commission needed to interpret the terms of the employment contract and consider relevant legislative provisions, including the Fair Work Act 2009. The interpretation of the contract and the relevant legislation was pivotal in determining the correct amount of redundancy pay to which Mr. James was entitled.

The Fair Work Commission determined that the redundancy pay should indeed be calculated based on the maximum salary that could have been earned under the terms of the contract, rather than the actual salary paid. The Commission found that the contract explicitly outlined the potential maximum salary, which was to be used in any calculation involving redundancy pay. This interpretation was consistent with the intention of the parties as expressed in the contract and was supported by the statutory provisions. Consequently, the Commission varied the redundancy pay amount to reflect this interpretation, awarding Mr. James the appropriate compensation based on the contract's stipulations. The decision underscored the importance of clear contractual terms and the Commission's role in enforcing those terms within the framework of the Fair Work Act.

Orders