Sonic HealthPlus Pty Ltd T/A Sonic HealthPlus v Miss Jariya Willmott

[2016] FWC 4789

[2016] FWC 4789

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Sonic HealthPlus Pty Ltd T/A Sonic HealthPlus
v
Miss Jariya Willmott
(C2016/4237)

COMMISSIONER WILLIAMS PERTH, 18 JULY 2016

Variation of redundancy pay.

[1] This decision concerns an application made by Sonic HealthPlus Pty Ltd T/A Sonic HealthPlus (Sonic HealthPlus or the applicant) to vary the redundancy pay of an employee, Miss Jariya Willmott (Miss Willmott).

Background

[2] The application says that the basis the employer may reduce the redundancy pay is under the applicable agreement which is the Sonic HealthPlus Pty Ltd National Enterprise Agreement 2013 – 2016 [AE408672] (the Agreement).

[3] The Agreement includes clause 27−Redundancy and relevantly subclause 27.3−Severance Pay which reads as follows:

“An employee whose employment is terminated by reason of redundancy is entitled to the following amount of severance pay in respect of a period of continuous service in addition to the period of notice given by Sonic HealthPlus in accordance with subclause 26.1 of clause 26 – termination, and as in accordance with the NES” (Underlining added)

[4] Set out below this subclause is a scale of severance pay based on periods of continuous service.

[5] Further the clause includes subclause 27.5−Alternative Employment which reads as follows:

“27.5.1 Where possible, Sonic HealthPlus will endeavour to find suitable alternative internal employment for an employee whose position is made redundant. Should the company obtain suitable alternative employment for the employee, the employer may apply to the FWC to have the amount of redundancy pay reduced to a specific amount.”

[6] The application explains that Miss Willmott’s position as a 2IC has been made redundant and she has been offered a new role titled Occupational Health Technician/Admin.

Consideration

[7] It seems the applicant wishes to rely on subclause 27.5.1 of the Agreement to have the amount of “…redundancy pay...”, as it is referred to in that subclause, reduced to a specific amount because the company has obtained suitable alternative employment for Miss Willmott. There are a number of difficulties with this.

[8] Firstly I note 27.5.1 of the Agreement refers to “redundancy pay” but the only payments that could be payable by reason of redundancy are identified in subclause 27.3 of the Agreement as “severance pay”. I will assume for the purposes of this decision that the redundancy pay mentioned in subclause 27.5.1 is in fact severance pay provided for in subclause 27.3.

[9] Subclause 27.3 of the Agreement, as is usual for a severance pay provision, provides that the entitlement to be paid an amount of severance pay applies to an employee “… whose employment is terminated by reason of redundancy…”.

[10] Sonic HealthPlus have advised the Commission that the employee in question Miss Willmott has not been terminated but has been offered an alternative role. Consequently Miss Willmott is not entitled to be paid any severance pay under subclause 27.3 of the Agreement because her employment has not been terminated. As a consequence there is no basis for this application under the Agreement.

[11] Subclause 27.5.1 of the Agreement would have application where an employee’s position has been made redundant and Sonic HealthPlus have obtained suitable alternative internal employment for the employee but the employee has refused to take up the suitable alternative employment and consequently is terminated by Sonic HealthPlus by reason of redundancy. In those circumstances Sonic HealthPlus could then apply under 27.5.1 to have the amount of redundancy/severance pay that would otherwise be owing to that employee reduced to a specific amount. That is not the situation in this instance. The application in these circumstances is misconceived because there is no severance pay owing to Miss Willmott that can be reduced.

[12] Consequently this application must be dismissed and an order to that effect will be issued in conjunction with this decision.

COMMISSIONER

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