SRG Global Integrated Services Pty Ltd T/A SRG Global Integrated Services Pty Ltd

[2024] FWC 2777

[2024] FWC 2777

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

SRG Global Integrated Services Pty Ltd T/A SRG Global Integrated Services Pty Ltd

(C2024/6551)

COMMISSIONER SCHNEIDER PERTH, 4 OCTOBER 2024

Application to vary redundancy pay for other employment or incapacity to pay

1. This decision concerns an application made by SRG Global Integrated Services Pty Ltd T (SRG) to reduce the amount of redundancy pay to which an employee, Mr Ross McCallum (Mr McCallum) is entitled under section 119 of the Fair Work Act 2009 (Cth) (the Act).

1. The parties have provided written materials outlining their respective positions. Having considered the evidence and submissions, I have determined that the Application will be granted, and there will be a reduction in the redundancy payment to which Mr McCallum is entitled to by 50%.

1. My reasons are as follows.

Background / Submissions

1. My Chambers emailed Mr McCallum on 24 September 2024 seeking his views and any submissions in relation to the application by SRG by 5pm (AWST) on 27 September 2024. Mr McCallum did not respond or provide any views in relation to the application.

1. Mr Chambers again emailed Mr McCallum on 1 October 2024 and provided with a further opportunity to provide his views in relation to the application before 5pm (AWST) on 2 October 2024. Mr McCallum did not respond again.

1. Ms Bourke of SRG confirmed via email that as Mr McCallum had not provided any views or submissions in relation to the application that SRG was content for the Commission to make a decision on the material provided to the Commission.

1. In the initial application SRG confirmed the following in relation to Mr McCallum’s employment:

·   Mr McCallum had been employed for more than 1 year but less than 2 years and was entitled to 4 years redundancy.

·   Mr McCallum was paid $2,687.02 per week in his previous position as

·   Mr McCallum commenced employment on 3 July 2023 as a Mechanical Supervisor (permanent full-time).

·   On 5 June 2024, Mr McCallum was advised that due to the closure of the Alcoa Kwinana Refinery his position would be made redundant.

·   SRG offered Mr McCallum a Mechanical Supervisor position at another operation around 5 minutes from his previous place of work, Mr McCallum declined this offer as it was a more hands on roll than his previous position.

·   SRG submitted that Mr McCallum advised that his preference was for FIFO work on shutdowns in the Northwest of WA.

·   SRG were able to offer Mr McCallum a position as a Rope Access Supervisor on a casual FIFO basis.

·   SRG confirmed that Mr McCallum accepted the position as a casual Rope Access Supervisor.

·   SRG provided the Commission with a copy of a letter sent to McCallum on 13 August 2024, which confirmed the differences between casual and permanent employment (including that his annual leave would be paid out and he would no longer receive paid personal leave). The letter also advised Mr McCallum that SRG would be making this application.

1. SRG provided the below comparison in relation to the terms and conditions on offer:

Mechanical Supervisor	Rope Access Supervisor
Full time	Casual
$139,725 PER ANNUM BASE SALARY $15,000 TOOLS OF TRADE	$88.58 per hour – day shift $94.76 per hour – night shift
Salary paid on a 167.67 hour month plus overtime where required.	Paid on days worked. 12-13 hour days when on site. Roster various from 2 weeks on 1 week off, 2 weeks on 2 weeks off or ad-hoc

Legislation

1. The relevant provision of the Act is set out below:

“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.”

Consideration

1. It has generally been accepted by the Commission that the following factors should be considered in relation to section 120(b)(i):

·   The nature of the work;

·   The comparability of the work with that performed in the current role;

·   Pay levels;

·   Hours of work;

·   Seniority;

·   Fringe benefits;

·   Workload and speed;

·   Job security;

·   Whether the employee will have continuity of service in the new role;

·   Location and/or the need to relocate;

·   Travel and/or the cost of travel that is additional to that relevant to the original

·   Employment;

·   carer’s responsibilities; and

·   family circumstances.[1]

1. In relation to the above, I consider that the below factors are of primary importance in this matter:

·   Job security;

·   Hours of work;

·   Remuneration; and

·   Travel / location work.

1. In relation to the primary items identified above, I make the following conclusions.

1. Mr McCallum’s new position as a Rope Access Supervisor has less job security than his previous position due to the casual nature of the engagement.

1. Mr McCallum was previously engaged on a standard 38-hour work week. In his new position as a casual employee the position is subject to various roster requirements including 2 weeks on 1 week off, 2 weeks on 2 weeks off and work being offered on an ad-hoc basis. This is also a significant change in the initial employment conditions accepted by Mr McCallum.

1. In relation to remuneration, Mr McCallum previously had a base salary of $139,725 per annum or an average weekly salary of $2,687.02. Mr McCallum’s earnings moving forward are harder to assess and cannot be guaranteed due to the casual nature of the employment engagement.

1. I accept that if Mr McCallum was to work night shift 13 hours per day on a 2 week on 1 week off roster his annual earnings could exceed $290,000. However, given the nature of shutdown FIFO work I do not believe this to be a realistic calculation.

1. Given the casual nature of the engagement a more realistic estimate of his earnings would be in the range of $1,107.25 per day (12.5 hours per day, working shift only) for approximately 182 days per annual (assuming a mixture of roster situations) totaling an estimate of $201,000.

1. I acknowledge that Mr McCallum was offered a similar position only 5 minutes from previous place of work and on the same remuneration, however Mr McCallum declined this opportunity and had a preference to commence FIFO work with SRG on the above terms. In coming to my decision below, I have factored in the ability for Mr McCallum to increase his earning capacity when compared to his previous position, however there is a increase risk given the casual nature of the employment engagement.

1. Having considered all of the factors outlined above and the submissions provided by the parties in relation to this application, I have determined that the position offered to Mr McCallum by SRG was acceptable employment for the purposes of section 120(1)(b)(i) of the Act.

1. I note that SRG was seeking the Commission to reduce the redundancy payment Mr McCallum is entitled to nil. I have considered the submissions and factors outlined above and I have determined that in this instanceord the redundancy payment payable to Mr McCallum will be reduced by 50%.

1. The application is granted and an Order to that effect will be issued.[2]

COMMISSIONER

[1] [2019] FWC 756, [24]; [2016] FWC 2880, [11].

[2] PR779980.

Printed by authority of the Commonwealth Government Printer

<PR779979>