Sodexo Remote Sites Australia Pty Ltd
[2019] FWC 756
•28 FEBRUARY 2019
| [2019] FWC 756 |
| FAIR WORK COMMISSION |
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 Ltd business, the salaries of which were at a lower rate of pay. 9 Mr Maclean had indicated that he was willing to consider positions that were at a lower status and at a lower rate of pay.10 On 20 September 2018, an offer of employment for the position of Plumber on was provided to Mr Maclean. The base rate of pay was $107,570.93. It is observed that at no time was Mr Maclean required to apply or interview for positions offered.
[9] On 20 September 2018, Mr Marcus Patton, Operations Manager WSB (Mr Patton), informed Mr Maclean that if he chose not to accept an offer of suitable redeployment then Sodexo would consider that he was not entitled to a redundancy payment. 11
[10] On 24 September 2018, Mr Maclean rejected the offer of employment for the Plumber position, citing that despite previous discussions with Ms Porter, he believed that the employment obtained resulted in a significant loss of income and that he did not understand how the entitlements under the IFM Services Enterprise Agreement 2016 (the Agreement) operated. Ms Porter’s evidence was that she understood that Ms Jay Jepson, Human Resources Business Partner – IFMS (Ms Jepson), had contacted Mr Maclean with the view of discussing the terms of the Agreement. Ms Jepson did not give evidence. Further, on 21 and 24 September 2018, Ms Porter had tried to contact Mr Maclean on his mobile to discuss the job opportunities to no avail, and he did not call her back.
[11] On 26 September 2018, Ms Porter identified a further position for Mr Maclean of Maintenance Supervisor. Ms Porter’s view was that the accountabilities in the position description matched Mr Maclean’s previous work experience, skills, knowledge and qualifications as described in his resume and demonstrated in the workplace. 12 An offer of employment was made to Mr Maclean for the Maintenance Supervisor position on 26 September 2018.13
[12] The covering email set out the work location, travel, type of work, and that the position was responsible for 12 trades, namely a combination of refrigeration, electrical, plumbing, carpentry and painting. 14 The salary was $130,000 per annum; the superannuation contribution rate was 9.5%, and annual leave amounted to four weeks. The roster remained the same as that worked at Cloudbreak, there was no loss of accrued personal or annual leave, and the status of the new position was as a Supervisor.15
[13] On 26 September 2018, Mr Maclean emailed Ms Porter asking her to refer to the letter that he had sent to her and Mr Patton of 24 September 2018. 16 The letter of 24 September 2018, set out the following:
Dear Jennifer and Marcus,
I would like to inform you that I will not be accepting the job offered by Sodexo for the following reasons.
The offers of employment made represent a significant loss of income, superannuation, holiday allowance and pay rate. Your offer was unclear and very difficult to interpret. The questions that arose from the offer where [sic] unable to be answered by multiple people via email, phone calls, in person over a 4 week period. The answers provided by different people differed in their content and where [sic] inconsistent or the questions and issues I had asked were not addressed.
As a loyal, hardworking employee of the Morris/Sodexo over the past 5 years, I am distressed that there is no recognition of service, skill and dedication in the renumeration [sic] offered. The pay rates are exactly the same as a new employee starting with the company and do not recognise my trade skills and expertise.
The job offered is not suitable for my redeployment, for the reasons stated above. For my career progression accepting your offer would be going backwards in all areas and will not grow me as a professional.
I will be accepting the redundancy payment and statutory termination payments as of the 1st of October.
Submissions
[14] Sodexo submitted that at all material times it was a strong moving force in the creation of the job opportunities, and as a result of its deliberate actions Mr Maclean received an unconditional offer of employment for the position of Maintenance Supervisor. Mr Maclean did not contest that Sodexo had ‘obtained’ the positions that were offered.
[15] Concerning whether the position of Maintenance Supervisor constituted other ‘acceptable’ employment, Sodexo advanced that the employment was ‘acceptable’. This was because the terms and conditions of the new position were substantially similar to and no less favourable overall, than the terms and conditions Mr Maclean had previously enjoyed with Sodexo. It followed, according to Sodexo, that the Commission should excuse Sodexo from its obligations under s 119 and reduce the amount of redundancy payment to nil. Sodexo sought only to rely on the Maintenance Supervisor position.
[16] With regard to whether the position was acceptable, Mr Maclean advanced that he declined the employment offer because he would be worse off given the wages were less, and there was a longer rotation of work and break. It can perhaps be assumed that Mr Maclean’s assertions were in reference to the Plumber position.
[17] Regarding the offer of the Maintenance Supervisor, Mr Maclean asserted that little detail was provided about the position and he repeatedly tried to obtain answers from Sodexo about the role. Mr Maclean submitted that while there were many phone calls, there was no constant or straight answer about the employment, leaving him to guess what the role entailed. Further, Mr Maclean noted that he had no training for the role of Maintenance Supervisor. It was on this basis that Mr Maclean concluded he should be afforded his rightful redundancy payment of 10 weeks’ wages.
Matters in dispute and agreement
[18] Considering the facts and submissions before me, the matter in dispute is whether the position offered on 26 September 2018, namely that of Maintenance Supervisor, was ‘other acceptable employment’ as that phrase is understood in the context of s 120(1)(b)(i) of the Act.
[19] Only if it was other acceptable employment must the Commission then consider whether to exercise its discretion to reduce the amount of redundancy pay payable, and if so by what amount. If the position was ‘other acceptable employment’ then Sodexo advances that the amount of redundancy payment should be reduced to zero, a consequence which is unpalatable to Mr Maclean.
[20] Whether Sodexo ‘obtained’ the position of Maintenance Supervisor is not contentious. In any event, having considered the evidence and submissions before me, I am satisfied that for the purpose of s 120(1)(b)(i), it did.
The legislation
[21] Sections 119 and 120 of the Act are relevant to this decision 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:…
[22] The redundancy pay period is thereafter set out in the following table
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 |
[23] Section 120 provides for redundancy pay to be varied; it states:
120 Variation of redundancy pay for other employment or incapacity to pay
(1) [When this section applies]
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) [Amount may be reduced by amount FWC considers appropriate]
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) [Redundancy pay is amount in determination]
The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.
The issue - other acceptable employment
[24] What constitutes ‘acceptable employment’ as understood in the context of s 120(1)(b)(i) has been considered at length. 17 The test is an objective one,18 and when considering whether the employment meets the relevant standard there are various relevant factors to take into account. Elucidated through multiple decisions, the factors listed below are obvious considerations, but are not exhaustive:
a) the nature of the work;
b) the location;
c) pay arrangements;
d) the hours of work;
e) job security in the new position;
f) seniority;
g) workload and speed;
h) the employee’s skills, experience and physical capacity;
i) probationary period;
j) equivalent conditions of employment;
k) accrual of benefits;
l) continuity of service;
m) carer’s responsibilities;
n) family circumstances. 19
[25] In Re Von Bibra Autovillage Pty Ltd (Von Bibra)it was said that the objective test of acceptability appeared to be that the alternative work was sufficiently comparable to the original work and was not unreasonably removed from the employee’s original duties, skills set, qualifications, experience and other terms and conditions of employment. 20 Further, the Senior Deputy President considered that the test was not whether or not the employee was capable of carrying out the new employment as such, rather, it was whether there was sufficient correlation between the relevant indicia of the current work and the alternative employment as proposed.
[26] The Senior Deputy President further explained this in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia:
...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. 21
[27] Sodexo conceded that an applicant bears the onus of satisfying the Commission that the relevant offers of re-employment constitute ‘acceptable employment’. 22
[28] Mr Maclean’s resume set out his duties for the position of Maintenance Plumber for Sodexo at the Fortescue site. Those duties, as reported by Mr Maclean, were detailed as follows:
General maintenance, sewage treatment plant maintenance, On Call, Fault finding, Industrial Kitchen Repairs, Coordinating and working with other trades (refrigeration mechanics, electricians, carpenters, mechanics) ordering materials, Snake Handling, Swimming Pool Maintenance and Testing, Emergency Rescue Training, Forklift driving, Manitu Training, First Aid & CPR, Pool Operations 2, 3 & 4 Pools.
[29] The position description for Mr Maclean’s position as a Plumber outlined the main duties and responsibilities for a ‘Plumber’. 23 The document, whilst a ‘Morris’ document, appeared relevant to Mr Maclean’s position with Sodexo. Duties included, amongst others, carrying out plumbing works, performing scheduled maintenance, installation and repairs to the village water supply and sewerage system, ensuring plumbing work was executed to a high standard, keeping up to date with advances and developments in the plumbing sector, update and maintain maintenance registers, and so forth.24 When one considers the main duties and responsibilities of the position of Plumber it is obvious that managing a maintenance team, or for that matter, a plumbing team, was not within the position’s main duties and responsibilities.25
[30] Sodexo directed attention to a section of the position description titled ‘Specific Skills and Behaviours: (Choose behaviours listed below – essential to this position)’. There was no indication on the position description that behaviours had been chosen. Under that section sat a raft of skills that including competencies such as ‘Ability to Help Subordinates Learn, Grow and Succeed’, ‘Ability to Engage and Influence Others’, and ‘Leading and Motivating Teams’. The ‘desired behaviours’ that sat under these competency areas, were clearly directed at a leadership position within a team. That is, they were relevant to a supervisory or management position. However, the ‘Summary of Position’ that provided a synopsis of the position of ‘Plumber’ set out:
A Plumber works as part of a team to perform plumbing, routine maintenance and general repair work at Morris Corporation sites. The Plumber will be required to provide support to the onsite Grounds Maintenance Utility staff and work with this team to maintain a high standard of facilities and ensue that buildings, grounds and equipment are in good repair.
The Plumber will carry our[sic] all tasks working safely by using various tools and equipment in accordance with Morris Corporation policies and procedures.
[31] The synopsis of the position provides what I consider to be an accurate account of the duties of the position of Plumber. It aligns with the main duties and responsibilities outlined in the position description and accords with Mr Maclean’s account of his experience in his resume. That synopsis is a marked contrast to the ‘Specific Skills and Behaviours’ that Sodexo has relied upon to show that the nature of the work between the position of Plumber and Maintenance Supervisor remains unchanged.
[32] The position description for the Maintenance Supervisor provided that the ‘Job purpose’ was:
The Maintenance Supervisor is responsible for ensuring all general maintenance requirements are carried out safely and effectively. Responsibility includes ensuring all aspects of communications are adhered too, management of all onsite staff, manage set scope of work including planned maintenance schedules minor works and ensure all quality management policies and procedures are adhere to. [sic]
[33] A job competency of the Maintenance Supervisor position included the ‘ability to work in a supervisory capacity and manage a team’. The covering email provided to Mr Maclean that attached the position description for Maintenance Supervisor, provided additional details about the position which included that the team consisted of approximately ‘12 trades, combination of refrigeration, electrician, plumbing, carpentry, painting’.
[34] Sodexo submitted that the nature of Mr Maclean’s work continued to be unchanged in the Maintenance Supervisor’s position. It contended that the primary purposes of the position of Plumber and Maintenance Supervisor were to ensure that routine and planned maintenance works were completed in accordance with the client’s contract scope whilst exercising leading and motivating qualities. Sodexo acknowledged that while the positions were not identical there was sufficient correlation between the two positions to make the Maintenance Supervisor position acceptable employment.
[35] Sodexo is correct in so far as the two positions are not required to be identical. 26 However, it is not the case that the Maintenance Supervisor position is sufficiently comparable to the original work. To be acceptable, the new employment would need to take account of the employees’ skills, seniority, experience and capacity to perform the job.27 I am satisfied that the position is unreasonably removed from Mr Maclean’s original duties, skill set, qualifications, and experience. The Maintenance Supervisor position includes the duty of managing 12 different trades and sits squarely within a people and operational management framework rather than ‘being on the tools’.
[36] In Von Bibra, a decision referred to by Sodexo, the Senior Deputy President articulated that the test was whether there was sufficient correlation between the relevant indicia of the current work and the alternative employment as proposed. 28 In light of the evidence before me, I have found with regard to the duties and responsibilities attributable to Mr Maclean’s old position and the Maintenance Supervisor position, that there is not a sufficient correlation. This weighs against a finding that the Maintenance Supervisor position is ‘other acceptable employment’.
Other considerations
[37] The base rate of pay for the position of Plumber and Maintenance Supervisor were equivalent, as was the percentage superannuation contribution, roster and working hours, the FIFO arrangement, and leave entitlements with the exception of annual leave reducing from five weeks to four. While the reduction in annual leave is detrimental, I do not consider it so significant to warrant it weighing against a finding that the employment is ‘acceptable employment’ in and of itself.
[38] Job security, continuity of service, absence of a probationary period, and recognition of accrued leave all weigh toward a finding that the employment was acceptable. While pay arrangements for the new position were monthly instead of weekly, and this could perhaps be considered an inconvenience, this factor was insufficient to arrive at a finding that it negated the employment as being acceptable.
The conduct of the employee
[39] Sodexo submitted that on 24 September 2018 and thereafter, Mr Maclean had no intention to engage with or cooperate with Sodexo to discuss, explore and accept other acceptable employment. By way of illustration it referred to Mr Maclean’s email of 26 September 2018 that referred to his letter of 24 September 2018.
[40] Mr Maclean, having received the offer of employment on 26 September 2018 for the Maintenance Supervisor position, sent an email to Ms Porter referring her to the letter that he had sent on 24 September 2018. Further, in the email he stated:
Dear Jennifer
Please refer to the letter sent to you and Marcus on Monday. I now have spoken to a union representative regarding my situation involving Morris/Sodexo and myself. I no longer find communicating with Jay or yourself useful as it is extremely frustrating, in effective [sic] and affecting my family and myself. 29
[41] Ms Porter gave evidence that at no time did Mr Maclean call her to discuss the Maintenance Supervisor position, request further information, or provide any form of an explanation in support of his rejection of the Maintenance Supervisor position. 30 The letter of 24 September 2018, speaks of the job offered being such that were Mr Maclean to accept it, he would be going backwards in all areas and ‘will not grow me as a professional’. Clearly, Mr Maclean was not referring to the Maintenance Supervisor position, the status of which was greater than that of Plumber.31
[42] It was said by the Deputy President in Spotless Services Australia Limited that employees should not unreasonably refuse offers of alternative employment merely because they wish to access the benefits of redundancy pay. 32 The question of whether Mr Maclean has unreasonably refused an offer of alternative employment arises in light of the offer of the Maintenance Supervisor position.
[43] Sodexo has taken issue with Mr Maclean’s conduct, particularly his lack of response to, and engagement regarding, the position of Maintenance Supervisor. Further it submitted that the fact that the offer of 26 September 2018 did not meet the personal preference of Mr Maclean is not enough to establish that the position is not an acceptable alternative. 33 In Football Queensland Ltd v Mr Paul Lonton it was said that ‘acceptable employment’ should not be interpreted so that employees have an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay.34
[44] While it is apparent that Mr Maclean’s reasons for the rejection of the Maintenance Supervisor position set out in the letter of 24 September 2018 were not on point regarding the Maintenance Supervisor position, I do not consider that he unreasonably refused the position. On the evidence I have found that there was insufficient correlation between the relevant indicia of the Plumber position and that of Maintenance Supervisor. While I have taken into account those factors that weigh toward a finding that the employment was acceptable, it remains the case that the disparity between the duties and responsibilities of the two positions has led me to this conclusion.
[45] On balance, I am not satisfied that the other employment as a Maintenance Supervisor is other acceptable employment. Therefore, Sodexo’s application to vary Mr Maclean’s redundancy entitlement is dismissed. An Order to that effect is published concurrently with this decision. 35
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR704665>
1 Witness Statement of Jennifer Porter (Porter Statement) [2].
2 Ibid [7].
3 Ibid.
4 Ibid [8].
5 Ibid [9].
6 Ibid [10].
7 Ibid.
8 Ibid [11]-[12].
9 Ibid Annexure JP-5.
10 Porter Statement Annexure JP-3.
11 Porter Statement Annexure JP-8.
12 Ibid [24].
13 Ibid Annexure JP 12.
14 Ibid.
15 Ibid [26].
16 Ibid Annexure JP-12.
17 The Australian Chamber of Manufacturers v Derole Nominees Pty Ltd (1990) 140 IR 123, 124; Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia PR974699 (C2006/3262); Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 27 IR 226; DRW Investments t/as Wettenhalls v Timothy Richards & Others[2016] FWC 461.
18 Oscar Oscar Group Services Pty Ltd v Lees[2012] FWC 3901.
19 DRW Investments t/as Wettenhalls v Timothy Richards & Others[2016] FWC 461, [183]; National Union of Workers v Linfox Australia Pty Ltd[2008] AIRC 647, [89].
20 [2007] AIRC 397
21 Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia PR974699, [89].
22 Australian Chamber of Manufactures v Derole Nominees Proprietary Limited (1990) 140 IR 123; Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia PR974699 (C2006/3262); Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226; National Union of Workers v Linfox Australia Pty Ltd[2008] AIRC 647; Re Rubber, Plastic & cable Making Industry (Consolidated) Award 1983 (1989) 31 IR 35.
23 Annexure S1 to Submissions of the Applicant dated 17 January 2019 (Annexure S1).
24 Ibid.
25 Ibid.
26 Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia PR974699 (C2006/3262).
27 Spotless Services Australia Limited [2013] FWC 4484, [14].
28 See also Vicstaff Pty t/a Stratco v Bradley May; Malcolm McFerran [2010] FWA 3141.
29 Porter Statement; Annexure JP 12.
30 Porter Statement [28].
31 Ibid [26].
32 [2013] FWC 4484, [14].
33 Football Queensland Ltd v Mr Paul Lonton[2013] FWC 2578, [12].
34 [2013] FWC 2578.
35 PR704666
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