Stratacrete Pty Ltd
[2016] FWC 2880
•9 MAY 2016
| [2016] FWC 2880 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Stratacrete Pty Ltd
(C2015/6485)
DEPUTY PRESIDENT ASBURY | BRISBANE, 9 MAY 2016 |
Application to vary redundancy pay – Approach to deciding if other acceptable employment obtained by employer – Effect of contractual terms about transfer or relocation – Employer has not met onus of establishing other employment is acceptable – Application dismissed.
1. BACKGROUND
[1] StrataCrete Pty Ltd (StrataCrete) applies pursuant to s.120(2) of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to Order that redundancy payments to which Mr Mathew Folpp is entitled, be reduced by 75%. The application is made on the ground in s. 120(1)(b)(i) of the Act on the basis that StrataCrete contends that Mr Folpp refused acceptable alternative employment, which the Company offered him. Submissions and witness statements were filed by the parties and as there were disputed facts the application was listed for hearing.
[2] The submissions filed by StrataCrete in support of the s.120 application,contained a number of inconsistent assertions. It was asserted in those submissions that Mr Folpp’s employment was not terminated by StrataCrete, but that he terminated his own employment when he rejected the offer of alternative employment. It was also asserted that if Mr Folpp was dismissed he was not entitled to severance payments on the basis that the dismissal was due to ordinary and customary turnover of labour as provided in s.s.119(1)(a) of the Act.
[3] Reference was also made in the submissions to s.122(3) of the Act which provides that an employee is not entitled to redundancy pay if the employee rejects an offer of employment with another employer on terms substantially similar and no less favourable overall, and where the employee’s service will be recognised by that other employer. Reference was also made to the definition of genuine redundancy in s.389 of the Act as a relevant matter in the determination of the application under s.120 of the Act.
[4] An application made under s.120 of the Act is predicated on the employee having been dismissed and having an entitlement to redundancy payments under s. 119 of the Act. Section 122 has no relevance in the present case because the alternative position upon which StrataCrete bases its application under s.120 of the Act was with StrataCrete and not with another employer. The definition of genuine redundancy has no relevance because Mr Folpp has not made an application for an unfair dismissal remedy. The matter of whether Mr Folpp has no entitlement to redundancy pay because his dismissal is due to the ordinary and customary turnover of labour, is not a matter for the Commission to determine.
[5] At the hearing, StrataCrete was given permission under s.596 of the Act to be legally represented. As Mr Folpp was represented by an advocate from the Australian Workers’ Union no issue of fairness arose. I was also of the view, that given the inconsistencies in the submissions filed on behalf of StrataCrete, it would enable the hearing to be conducted more efficiently if StrataCrete was represented by a lawyer.
[6] After some discussion at the commencement of the hearing, where I pointed out the apparent inconsistencies in StrataCrete’s written submissions, some aspects of those submissions were abandoned and it was conceded that Mr Folpp’s employment was terminated due to redundancy on 28 October 2015 and that Mr Folpp was entitled to be paid an amount of redundancy payments under s. 119 of the Act. It is not in issue that Stratecrete obtained alternative employment for Mr Folpp on the basis that he was offered an alternative position. It is also not in dispute that Mr Folpp refused the position. What is in dispute is whether the alternative employment obtained for Mr Folpp was acceptable.
[7] StrataCrete is not a small business employer for the purposes of exclusions to redundancy pay, and Mr Folpp was not otherwise an employee excluded from the redundancy pay provisions of the National Employment Standards (NES). 1
2. LEGISLATION AND APPROACH TO CONSIDERING WHETHER OTHER EMPLOYMENT IS ACCEPTABLE
[8] Section 120(1)(b)(i) of the Act provides as follows:
“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.”
[9] As previously noted, the issue of whether StrataCrete obtained alternative employment for Mr Folpp does not arise in this case. The question for determination is whether the other employment obtained for Mr Folpp by StrataCrete was acceptable. For the purpose of s.120(1)(b)(i), what constitutes “other acceptable employment” is to be determined on an objective basis and in light of the circumstances of the individual employee concerned. The term does not mean employment acceptable to the employee or employment accepted by the employee so that the employee is given an unreasonable or uncontrollable opportunity to reject other employment in order to receive redundancy pay 2 and employees should not unreasonably refuse alternative employment merely.3 Conversely, the use of the term “acceptable” means that it is not any employment which complies, but rather employment that meets the standard so that it is acceptable.4
[10] The test is not whether the employee can undertake the other role, but whether the work is of a like nature and there is sufficient correlation between the relevant indicia of the current work and the other employment. 5 However, other acceptable employment is not necessarily identical employment and employment may be found to be acceptable notwithstanding some inconvenience to the employee or detrimental alteration of the terms and conditions of employment.6 Even where the Commission finds that other acceptable employment was offered, the level of relief, if any, is discretionary and whether redundancy pay will be reduced is to be determined as an exercise of discretion in the circumstances of the case.
[11] The Commission must be satisfied that the other employment is acceptable before deciding whether to exercise the discretion to make an Order to reduce the redundancy payments to which an employee is entitled under s.119 of the Act. The alternative employment is either acceptable or it is not. The Commission cannot engage in an exercise of discounting redundancy pay to the degree that it determines that an offer of other employment approaches acceptability. 7 The onus lies on the employer making the application for a reduction in redundancy pay to prove that the other employment obtained for the employee is acceptable on the basis of factors such as:
● 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; and
● Travel and/or the cost of travel that is additional to that relevant to the original employment. 8
[12] Contractual terms relating to the original employment may also be relevant. Where a contract either expressly or by implication provides that an employee agrees that he or she may be transferred to another location, then other employment at a different location may be found to be acceptable, notwithstanding the need for the employee to relocate or to undertake additional travel to and from work. 9
3. EVIDENCE
[13] Evidence in support of the application was given on behalf of StrataCrete by:
● Mr Albert Loncaric, Managing Director of StrataCrete; 10
● Mr Kevin Dickie, Supervisor of StrataCrete at the Cadia Valley Mine site; 11 and
●Ms Stephanie Narelle Fletcher, Consultant, Kalgoorlie Consulting Services Pty Ltd who provided industrial relations advice, guidance and support to StrataCrete. 12
“[StrataCrete] is pleased to confirm your employment in the position of Diesel Fitter on the terms set out in this document.
Although some of the terms of your employment may be changed by this document, your continuity of service for the purposes of calculating your entitlements is not affected.”
[15] The “Commencement Date” in clause 2 of the contract is 11 July 2013 and it states that Mr Folpp’s employment will continue until terminated in accordance with the contract. Clause 3 of the contract is headed “Place of work” and states:
“3.1 Your Workplace is set out in Schedule 1.
3.2 You may be required to work at and travel to places other than your Workplace (including intrastate, interstate and overseas) in the course of performing your duties.
3.3 You may be required to transfer to a location other than your Workplace, either permanently or temporarily.”
[16] Schedule 1 provides that the workplace as “Cadia Valley mine, Orange, NSW”. Clause 5 of the Offer prescribes that StrataCrete and Mr Folpp are “bound” by the NES contained in the Act. The duties that Mr Folpp was engaged to perform under the terms of the Offer are prescribed by clause 7.1 as follows:
“(a) those set out in the Position Description in Schedule 2; and
(b) any other duties nominated by us from time to time.”
[17] Schedule 2 describes the “Position” as “Diesel Fitter” and that the “Position” reports to “Kevin Dickie, Project Manager and Craig Delany, Operations Manager”. The annual salary applicable to the position as set out in the contract is $116,000.00, which I note accords with other evidence about Mr Folpp’s salary while employed in the position at Cadia.
[18] The contract deals with redundancy in clause 16 as follows:
“16.1 Redundancy means a situation where an employee’s employment is terminated by StrataCrete, the termination being attributable, wholly or mainly, to the fact that the position filled by the employee is, or will become, superfluous to the needs of StrataCrete.
16.2 StrataCrete may implement redundancies for genuine business reasons. If redundancies are required, StrataCrete reserves the right to select employees for redundancy on the basis that is retains employees who by reason of skills and attributes are, in StrataCrete’s opinion, necessary for continuing operations.
16.3 In the event a role is declared redundant the Employee will be given notice of the termination of their employment in accordance with the notice provisions contained in this Enterprise Agreement, or payment in lieu of such notice at the election of StrataCrete. StrataCrete will not make redundancy payments if it is considered a small business as defined by the Act.
16.4 If it is considered a big business as defined by the Act the following redundancy pay amounts will apply:
...[NES provisions for redundancy pay]
16.5 An employee has no entitlement to severance pay by reason of the transfer of the whole or part of the business where the person acquiring the business offers the employee employment in a similar capacity, or in a capacity they are willing to accept, on terms and conditions of employment that are no less beneficial, and agrees to treat the employee’s service as being continuous. The same applies if StrataCrete offers the employee employment in a substantially similar position in StrataCrete or in an associate Company...”
[19] Mr Loncaric states that StrataCrete was engaged to provide services to its clients at the Cadia Valley Mine Site, operated by Newcrest Mining Limited (Newcrest). In late 2014 or early 2015, the construction phase of the Cadia Valley Mine ended. As a result, StrataCrete’s engagement at that site came to a staggered end. A number of employees of StrataCrete were made redundant in April 2015 and further redundancies were foreshadowed. Employees were also informed prior to the April redundancies that StrataCrete was considering options for alternative employment which may include employment with Newcrest Mining or “fly in fly out” (FIFO) or “drive in drive out” (DIDO) positions on projects for which StrataCrete was then tendering, or opportunities within other divisions of StrataCrete either in Australia or overseas. Reference was also made to the possibility of StrataCrete making an application to the Fair Work Commission for a reduction in redundancy payments in the event that alternative employment was offered.
[20] In a letter dated 22 September 2015, Mr Loncaric informed employees engaged as fitters – including Mr Folpp – that StrateCrete’s contract at the Cadia Valley site would end in October 2015. The letter also stated that StrataCrete had opportunities for alternative employment in its Orange workshop for two of the four fitters, and requested a response to the following options by 18 September 2015.
“A. I would like to be considered for alternative positions based at the Orange Workshop;
B. I would like to be considered for alternative positions located within the StrataCrete Group regardless of the location;
C. I would like to be considered for either A or B;
D. I do not want to be considered for any alternative position.”
[21] There is obviously a typographical error with respect to the date of the letter or the date by which the response was required, which is not material to the issue for determination. The letter also stated that there was a potential that StrataCrete would apply to the Fair Work Commission to vary the entitlements of employees to redundancy pay based on offers of alternative employment.
[22] Three employees, including Mr Folpp, expressed their interest in continuing employment with StrataCrete in the two available positions at the Orange Workshop. Two further positions were available at the North Parkes Mine Site. Mr Loncaric said that he considered that there were two other employees more suitable than Mr Folpp for positions in the Orange Workshop, for reasons which were set out in a letter to Mr Folpp dated 8 October 2015 as follows:
● Willingness and availability to travel to other sites and stay when required to perform the maintenance through Australia;
● Previous experience in the coal industry as StrataCrete has recently been successful in gaining contracts in this industry;
● Boilermaking/Welding qualifications of others as StrataCrete is also expanding in the fabrication/manufacturing areas and this skill will be beneficial to the business.
[23] The letter of 8 October 2015 also set out an offer of alternative employment to Mr Folpp the relevant terms of which can be summarised as follows:
● Full time permanent position at North Parkes Mine as a Supervisor/Fitter;
● Minimum ordinary hours of 152 in four weeks plus overtime;
● 5 days on two days off;
● All hours to be worked on day shift Monday to Friday; and
● Travel to and from Orange to North Parkes required but will be paid for on the basis of three hours per day.
[24] The letter goes on to state that the remuneration offered is “equivalent” to the $116,000.00 per annum salary that Mr Folpp earns in his position at Cadia and that when paid travel of approximately three hours per day, or 55 hours per week is considered, the hourly rate of the new position is $40.56, compared to Mr Folpp’s existing hourly rate of $53.11. This reduction is said to be consistent with the reduction in wages and rates in the mining industry and also to reflect the fact that Mr Folpp will not be required to work night shifts and weekends.
[25] Further, the letter sets out the basis upon which it is asserted that the position at North Parkes is acceptable alternative employment, the relevant aspects of which can be summarised as follows:
● Mr Folpp’s current roster requires him to work a cycle of seven day shifts followed by seven days off and then seven night shifts, with a shift length of twelve hours;
● The Cadia site is located thirty minutes from Orange requiring one hour of travel to and from site each day which is unpaid;
● Work and travel required for the position at Cadia equates to 182 hours per month with 14 hours of travelling time being unpaid;
● The proposed position at North Parkes is a full time permanent position offering job security;
● Leave balances will be maintained and transferred and Mr Folpp will have continuity of service for the entire period of his employment with StrataCrete;
● As an acknowledgement of the reduction in Mr Folpp’s hourly rate and his accrued leave balances, StrateCrete will honour the payment of 298 hours of long service leave and Mr Folpp’s annual leave balance of 293 hours at the Cadia rate with new accruals being paid at the North Parkes rate.
[26] On 9 October 2015 Mr Folpp responded to the offer of 7 October 2015, by email, as follows:
“Thank you for your offer of employment. Although I am dissapointed (sic) you could not find a similar suitable position locally in Orange for me, I would still be willing to work for StrataCrete (sic) if the conditions were acceptable. What you have offered unfortunately isn’t. It is 2 hours from orange (sic) to [North Parkes Mine] which would equate to me doing 60 hours per week compared to the 42hr week I currently work. (and still have the ½hr unpaid travel from there to home) For the same annual salary that is essentially dropping my pay rate from $53.11 to $37.18 p/h. More importantly I would also be dropping valuable family time from 7 days per fortnight at home to 4 days. I am more than happy to discuss a more suitable arrangement if you are serious about this offer but it would have to be more along the lines of an even time roster or my salary increased to reflect the extra hours worked. There is also no mention of how I would be commuting to [North Parkes Mine]. Obviously driving my own vehicle would not be viable.
If you are willing to negotiate these things please call me to discuss further. If not can you please send me a breakdown of what my redundancy would be from my current contract.”
[27] After considering Mr Folpp’s response, Mr Loncaric made a number of amendments to the written offer of alternative employment and forwarded those amendments to Mr Folpp by letter dated 19 October 2015. Relevantly, that letter set out the amendments to the offer in the following terms:
● 4 days on 3 off all day shift per week (Exact days to be confirmed, anticipated Monday to Thursday or Tuesday to Friday, however subject to agreement it could be Monday, Tuesday and Thursday, Friday if that was your preference)
● Travel from Orange to North Parkes Mine will be required. Hours on site are 8 hours per day plus paid travel to and from site in a vehicle provided by StrataCrete. Travel from Orange to North Parkes Mine according to Google Maps is 141 km each way. I had allowed 3 hours per day, you believe it is 4 hours per day. As a result I believe 3.5 hours per day is a reasonable compromise.
● Your hours would consisted of 76 ordinary hours and 16 agreed and reasonable overtime hours, being 92 hours per fortnight or 11.5 hours per day.
● When considering the remuneration offered it is equivalent to the $116,000.00 per annum that is guaranteed per annum for the required hours that consist of an average of 38 ordinary hours and overtime hours as you will not be required to work night shift or weekends.
● The rate offered for the position is $43.90 per hour, plus use of the StrataCrete vehicle to and from your home to the site on work days only. The vehicle would be required to be returned to the Orange workshop during any leave periods and on your off day so that it can be utilised by other employees if they are required to travel to site. Any alternative arrangements would require my approval.
● Based on the rate of $43.90, this is the equivalent to approximately $105,000 per annum for the hours anticipated.
[28] Mr Loncaric said that it is his belief that the alternative employment at North Parkes was comparable and Mr Folpp refused it partly on the basis that he was seeking a redundancy payment. Under cross-examination, Mr Loncaric accepted that the distance from Blayney (where Mr Folpp resides) and North Parkes is 179 km according to Google Maps. Mr Loncaric also said that he had calculated travelling time for Mr Folpp from Orange rather than Blayney and that his understanding of the reason that Mr Folpp did not accept the position at North Parkes was that Mr Folpp was concerned about excessive travel. Mr Loncaric agreed that Mr Folpp travelling from Blayney to North Parkes would add an additional 25 km per day of travelling time above that which would be required if travel commenced at Orange. Mr Loncaric disagreed with the proposition that 179 km each way per day is an unreasonable distance, with an estimated two hours and twenty-six minutes of travel each way, for Mr Folpp to be required to travel to and from work. Mr Loncaric also disagreed with the estimated travel time of five hours per day which Mr Folpp maintained would be required.
[29] In relation to working hours, Mr Loncaric maintained that Mr Folpp’s entire working day in the North Parkes role, including travel, would be 13 hours. Mr Loncaric also maintained that this was identical to the hours worked by Mr Folpp in the Cadia role including working time at the site and travel to and from the site each day notwithstanding the additional travel that would be required to be undertaken by Mr Folpp. It was put to Mr Loncaric that Mr Folpp was working 42 hours per week at the Cadia Mine and that the alternative role at North Parkes would require Mr Folpp to work 52 hours per week. Mr Loncaric maintained that these hours of work are comparable. Mr Loncaric also said that the 52 hour total was calculated by StrataCrete on the basis that Mr Folpp would be at site for eight hours (including a half hour unpaid meal break) and would travel for one hour and thirty-five minutes each way from Orange to the site.
[30] In relation to rosters, Mr Loncaric agreed that while working in the position at Cadia, Mr Folpp worked a 24 hour seven day rotating roster whereby he worked seven night shifts, had seven days off and then worked seven day shifts. The roster for the proposed North Parkes position would have required Mr Loncaric to work four days and have three days off. Mr Folpp would have been able to choose the week day that he had off and would not have been required to work on weekends. In addition to paid working time, Mr Folpp would have been paid for 3.5 hours per day of travel time. Mr Loncaric also said that Mr Folpp would have been permitted to start work at 10.00 am on site each day and finish at 6.00 pm.
[31] Mr Loncaric agreed that Mr Folpp was earning the amount of $116,000.00 per annum for working his ordinary hours at Cadia and that the salary for ordinary hours in the proposed role at North Parkes was $94,637.00. Mr Loncaric maintained that the salaries are comparable “when everything is considered”. The salary offered for the North Parkes role was increased to $105,000.00 per annum when the revised offer was given to Mr Folpp. Mr Loncaric agreed with the proposition that the application to reduce Mr Folpp’s redundancy payments by 75% indicated an acceptance that there is a degree of difference between the roles of 25%. Mr Loncaric said that the dissimilarities between the two roles are that Mr Folpp would be required to undertake additional travel and that the North Parkes role was a dual role involving supervision.
[32] In relation to the basis upon which Mr Loncaric decided that Mr Folpp was not suitable for the positions in the Orange workshop, Mr Loncaric said that employees in those positions were required to work more overtime and to be away from home for seven days in every month, working on mine sites at Mackay, Kalgoorlie or Broken Hill. The seven days away could extend to nine in some cases. In this regard, Mr Loncaric said:
“Over the seven years that Mat has worked for us, I've seen that Mat has done trips away for us. Mat is not a fan of it. He is a family man, he likes to be home every night and I respect that. That's why I believe it wasn't suitable.” 13
[33] Mr Loncaric said that he decided that the position was not suitable for Mr Folpp without having a discussion with Mr Folpp in relation to the reasons for this conclusion. Mr Dickie confirmed the evidence given by Mr Loncaric. In his oral evidence Mr Dickie said that Mr Folpp would have been capable of undertaking the position at the North Parkes Mine and that Mr Folpp is a very capable man. Under cross-examination, Mr Dickie agreed that Mr Folpp’s evidence about his duties as a diesel fitter was correct and confirmed that Mr Folpp had acted in a supervisory position at Ridgeway during his employment and had supervised other diesel fitters. Mr Dickie also agreed that Mr Folpp had not continued in that role because the client preferred another employee. Mr Dickie said that there are no full time fitters located at North Parkes and that this work is done by an employee travelling to the site from the Orange Workshop. In relation to Mr Folpp’s evidence about the duties for the Batch Plant Supervisor Role at North Parkes, Mr Dickie agreed that Mr Folpp had accurately recorded the duties required of that role.
[34] Ms Fletcher was not required for cross-examination. Her evidence related to consultation requirements and the steps taken to ensure that StrataCrete complied with such requirements. Both Mr Dickie and Ms Fletcher gave evidence that when employees were made redundant in April 2015, they were paid redundancy entitlements on the basis that there were then no alternative positions available and there was no applicable exemption from the obligation of StrataCrete to make redundancy payments to those employees. Ms Fletcher drafted the application filed by StrataCrete in the present case. Much of her evidence relates to the provisions of the Act with respect to genuine redundancy and is not relevant to the issues for determination in this case.
[35] Mr Folpp gave evidence on his own behalf in opposition to the application. Mr Folpp lives in Blayney with his wife and three children; aged 5, 3 and 2. Mr Folpp’s wife is a teacher at the Blayney High School and works on a part-time basis, organising her work around Mr Folpp’s roster. Mr Folpp was employed by StrataCrete on a permanent full-time basis commencing on 2 October 2006. Mr Folpp states that he was employed as a Diesel Fitter and that his duties were to maintain StrataCrete’s fleet of maxijet shotcreting machines and light vehicles. In this capacity Mr Folpp’s duties included doing daily checks on machines with respect to fluid levels, greasing machines and inspecting them for damage. Mr Folpp also undertook servicing of machines including changing fluids and filters and replacing worn or damaged components if required. From 2013, Mr Folpp was based in a workshop located at Newcrest Mining’s Cadia East Underground Mine. Mr Folpp said that in this role, he was overseen by Newcrest to maintain their fleet of equipment.
[36] On being advised of the cessation of StrataCrete’s work at Cadia mine and the options for redeployment with StrataCrete, Mr Folpp expressed an interest in a position at the Orange Workshop. Mr Folpp states that when he did not have a response from StrataCrete to his expression of interest in the position at Orange, he made several attempts to clarify the situation with the Company and Ms Fletcher before having a discussion with Ms Fletcher on 5 October about his notice period in the event he was not successful in obtaining a position.
[37] According to Mr Folpp, the alternative position that he was offered was described as Supervisor/Fitter. In a discussion with Mr Dickie, Mr Folpp was later told that the position was a Site Supervisor looking after the overall operations of a concrete batch plant. The position would have involved Mr Folpp being the first point of contact for all of the concrete requirements at the mine and necessitated Mr Folpp attending daily meetings to discuss those requirements. Mr Folpp would have been expected to have significant knowledge about concrete and be able to give technical advice to the mine employees to meet their requirements. The role would also have required Mr Folpp to co-ordinate the supply of materials, test the product, ensure equipment maintenance and manage the StrataCrete site employees including payroll, rosters, reporting and other site requirements. In addition, Mr Folpp would have been required to operate the batch plant and ensure the smooth operation and delivery of concrete. Mr Folpp said that he has no experience or qualifications with concrete or batch plants and he does not believe that he has the knowledge or communication skills for the position.
[38] Mr Folpp states that throughout the course of his employment he undertook some supervisory work. In 2010, Mr Folpp worked as a Supervisor at Ridgeway (a Newcrest Mining Operation also located near Orange) on a temporary basis, under the supervision of Mr Dickie upon whom Mr Folpp relied due to his lack of confidence working in that role. Mr Folpp also states that he was made a Workshop Supervisor and was involved in ensuring that all of the Company’s site maintenance requirements were met and recorded. This position was also under the guidance of Mr Whattling and Mr Dickie. When Mr Whattling left the Company, another employee was promoted to the Site Supervisor’s role. Mr Folpp returned to role of fitter in 2013. Mr Folpp said that the supervisor role at North Parkes had greater responsibility and would have been more stressful than his role as a diesel fitter at Cadia. The supervisor role at North Parkes is the highest level StrataCrete position on site and he would have been responsible for all batch plant operations. Mr Folpp said that he did not believe that he was competent to undertake the role.
[39] Mr Folpp was also concerned about travelling time. Blayney is 30.4 km or 25 minutes from Cadia Mine and 179 km or 2 hours and 25 minutes from North Parkes Mine. Mr Folpp believes that it would be unsafe to travel for five hours to and from work every day and said that he would have to leave home at 3.00 am to attend mine meetings. Mr Folpp also calculated that his hourly rate of pay would have decreased from $53.11 to $37.17, based on five days of eight hours on site and four hours per day of travel time totalling 60 hours, or eighteen hours more per week than Mr Folpp was working in the position at Cadia.
[40] Mr Folpp said that these factors caused him to refuse the offer of alternative employment and the amended offer later given to him. Mr Folpp said that he had discussions about the possibility of remaining at Cadia, which did not eventuate. Mr Folpp continued to request a breakdown of his redundancy entitlements. In an email of 23 October 2015, Ms Fletcher, on behalf of StrataCrete, advised Mr Folpp that if he did not accept the position at North Parkes, the Company would apply for a variation to his redundancy payments. That email also advised Mr Folpp that if he did not accept the North Parkes position, the notice period for termination of his employment would commence on 28 October 2015 and he would work out his notice period in the Orange Workshop. The email also advised Mr Folpp that if he found other employment, StrataCrete would negotiate a mutually acceptable end date.
[41] Mr Folpp responded and again confirmed that he was unable to take the position at North Parkes and that he was considering other employment. Mr Folpp further advised that he could potentially do two weeks of the notice period but would advise of a definite end date when matters were clearer. On 4 November 2015, Mr Folpp advised that he had found alternative employment and would no longer need to work his notice period. Mr Folpp’s proposed end date of his employment was accepted by Mr Loncaric. 14
[42] Mr Folpp said that it was not his intention to be made redundant and he made it clear to management of StrataCrete that he wished to stay with the Company. Mr Folpp applied for a position at the Orange Workshop and was unsuccessful. Mr Folpp also said that his family is not in a position financially for him to have insecure employment. The alternative position that Mr Folpp obtained when he ceased employment with StrataCrete is a casual position and Mr Folpp maintained that he would not have given up secure employment with StrataCrete for a casual position.
[43] In his oral evidence, Mr Folpp was asked his reasons for not accepting the North Parkes position and said:
“There was a few reasons. Pay obviously being one of them. A drop of $10,000 per annum is quite a bit. It's $200 a week roughly, so that makes a big difference. My position, I'm employed as a fitter, that's what I do, I'm good at. That's what I have sort of been in a supervisor's role before, but I'm not confident in that position. I don't have very good communication skills and I just find that I wouldn't be able to fulfil the role. The travel obviously was a major one. Five hours travelling every day, just was excessive, especially on that road, it's a bad road, especially where we live, a lot of ice and snow in winter time and grease. I just didn't think that I'd be able to sustain travelling that road every day, continuously. Yes, that's about it, really.” 15
[44] Mr Folpp also said that the even time roster that he worked at Cadia, having the same number of shifts on and off, meant that he could spend more time with his family. The rotation to night shifts also meant that he was home during the days on which he was rostered to work night shift and could provide care for his children while his wife worked. The North Parkes position involved permanent day shift. If the shift started at 6.00 am or 7.00 am as is usually the case on mine sites, Mr Folpp would have been required to leave home at 3.00 am or 4.00 am to drive to site. If the shift started at 10.00 am, as StrataCrete had now submitted, then Mr Folpp would not get home after work until 8.30 pm or 9.00 pm and would lose time with his children.
[45] Under cross-examination, Mr Folpp said that his five year old child started school in 2016 and his other children have not started school. Mr Folpp’s wife works set days each week and when those days coincided with Mr Folpp working day shifts in his position at Cadia the children would be cared for by their grandparents. While Mr Folpp was employed at Cadia, he only required assistance with childcare on two days in weeks he was working day shift. Mr Folpp’s wife organised her work so that she worked more days in his weeks off and less when he was rostered on. The position at North Parkes would have increased the number of days when Mr Folpp would have required childcare to be provided by the children’s grandparents.
[46] In response to the proposition that a 10.00 am start at North Parkes would not have required him to leave home at 3.00 am or 4.00 am, Mr Folpp said that he had never known a mine position to have a normal starting time of 10.00 am. Most mine meetings are at 6.00 am or 7.00 am and as Batch Plant Supervisor at North Parkes, Mr Folpp would have been required to attend those meetings. Mr Folpp also said that he told Mr Loncaric that he was not confident that he had the supervisory skills to undertake the role at North Parkes and that he did not have the communication skills to deal with the management of the Mine. In relation to the position that he had started working in after ceasing employment with StrataCrete, Mr Folpp said he had not been looking for a position and it was a “last minute thing” 16. That position is also a casual position, and Mr Folpp maintained that he would not give up secure full-time employment just to get redundancy pay.
[47] In relation to travel, Mr Folpp agreed that the offer made by Mr Loncaric to provide him with a vehicle to travel to and from North Parkes mine was a compromise but maintained that the travel was still excessive. Mr Folpp rejected the proposition that his view about travel to North Parkes was impacted by a previous experience where he had been required to drive from Cadia to North Parkes after working a twelve hour shift on that day. In response to the proposition that the position at North Parkes would have meant he could leave home at the same time every day to start at 10.00 am, Mr Folpp said that he would be getting home later and would not see his children.
4. CONSIDERATION
[48] It was submitted for StrataCrete that Mr Folpp is entitled to be paid an amount of redundancy pay of $32,290.88. StrataCrete does not assert incapacity to pay that amount to Mr Folpp but submits that it obtained acceptable employment for Mr Folpp and that Mr Folpp should receive only 25% of that amount. I do not accept StrataCrete’s submission that it obtained other acceptable employment for Mr Folpp.
[49] The position that StrataCrete asserts is an acceptable alternative to the role held by Mr Folpp at Cadia is that of a Fitter with supervisory responsibility and responsibility for managing a concrete batch plant. There is no evidence that Mr Folpp had any previous experience managing such a plant or that he was competent to do so. Mr Folpp asserts that he is not competent to operate a concrete batch plant. Further, Mr Folpp asserts that he does not have sufficient supervisory experience to undertake the role. While Mr Folpp has performed the role of supervisor previously, he was supervising fitters and did so for a limited period. Mr Folpp’s uncontested evidence is that when a permanent supervisory role became available at the mine at which he was temporarily undertaking a supervisory role, another employee was selected as supervisor instead of Mr Folpp.
[50] Mr Folpp’s role at Cadia was as a Diesel Fitter and he had no supervisory responsibilities. His contract of employment stated that he was employed in that capacity. Other than asserting that Mr Folpp was capable of performing the role at North Parkes there was no evidence from StataCrete’s witnesses about that role or Mr Folpp’s skills, qualifications and experience to counter the evidence of Mr Folpp to the effect that he was not qualified for the role at North Parkes. I am not satisfied that the role at Cadia was comparable with the role that Mr Folpp was offered at North Parkes in terms of skills and responsibility.
[51] There was also a significant difference in the salaries. In the role at Cadia, Mr Folpp was paid an amount of $116,000.00 per annum. The salary offered for the role at North Parkes was $105,000.00. Even making allowance for the fact that the travel time for the North Parkes role would have been paid while the travel to and from Cadia was not, an amount of $11,000.00 per annum is a significant salary reduction in actual terms. While it may not be appropriate to add travelling time to working time for the purpose of a divisor to obtain an hourly rate, when the number of hours of work and travel intended to be encompassed by the salary is considered, the difference is substantial.
[52] There are also substantial differences in the hours of work between the two positions. At Cadia, Mr Folpp worked an even time roster which effectively meant that for two out of three weeks – while working night shift and on his week off – Mr Folpp could provide care for his children allowing his wife to arrange her hours of work to ensure that she worked more hours when Mr Folpp was at home. Mr Folpp’s roster at Cadia also meant that there were fewer days each month when there was a requirement for care to be provided by grandparents.
[53] It is the case that even had Mr Folpp remained at Cadia, his roster could have been altered so that he worked only day shifts or some other pattern. However, if such an alteration had occurred, its impact would have been less because Mr Folpp’s travelling time between his home in Blayney and the Cadia site was only 25 minutes per day each way. This is substantially less than the travel time associated with the North Parkes role. I accept that it would have taken Mr Folpp approximately two hours and twenty-five minutes each way – nearly five hours per day – to travel to and from the North Parkes site. Even if the travelling time between North Parkes and Mr Folpp’s home in Blayney is two hours, an amount of four hours travel each day is substantially more than the 50 minutes that Mr Folpp travelled each day to Cadia. While the provision of a vehicle goes some way to compensating for the increased travel associated with the North Parkes position, the difference in travelling time is still significant. This difference is exacerbated by the difference in the rosters. Regardless of when Mr Folpp would have been required to start work each day at North Parkes, the impact of the work and travel would have been the same in terms of reduction in family time. Even if I accept that the travel required would have been four hours per day rather than five, it would have constituted 50% of the ordinary working hours on site each day in addition to those ordinary hours, and the ratio of travel time to work time would have been significantly higher than was the case with the Cadia position.
[54] Other than the provision of a vehicle to travel to and from work, there is no evidence of any fringe benefits to offset the impact of the alternative employment. It is the case that Mr Folpp would have maintained continuity of employment had he accepted the North Parkes role and that his accrued entitlements would have continued. However, this does not outweigh the impact of the significant differences between the two positions in terms of hours of work, travel, the nature of the role and the salary reduction that Mr Folpp would have been subjected to had he accepted that role.
[55] It is not relevant that Mr Folpp’s contract of employment provided that he could be required to work at and travel to places other than his usual workplace. The position at North Parkes was not for a temporary period. I also note that Mr Loncaric decided that he would not offer Mr Folpp a role in Orange, notwithstanding the terms of his employment contract, because he formed the view that Mr Folpp did not want to travel to work temporarily at other locations. Mr Loncaric decided this without having a discussion with Mr Folpp who may have preferred to travel regularly for temporary periods, rather than spending close to five hours of every working day driving to and from work. Further, Mr Folpp was not offered a position that required him to relocate to another place. What was offered was a position that was located at a significantly greater distance from his home, than he was required to travel to work in his former position.
[56] I do not accept that Mr Folpp unreasonably rejected the alternative role or that he did so simply to obtain redundancy payments. Mr Folpp had good reasons for making that decision to reject the role at North Parkes given the substantial differences between his role at Cadia and the role at North Parkes. The approach taken by StrataCrete in pursuing the application to reduce the redundancy payments to which Mr Folpp is entitled, has essentially involved an attempt to demonstrate that the two roles are comparable on the basis of a 75% degree of difference. That approach is misconceived and starts at the wrong end. An alternative role is either acceptable or it is not. It is only when the alternative role is acceptable that the discretion for the Commission to reduce the redundancy payments is triggered. StrataCrete bore the onus of establishing that the alternative role it offered Mr Folpp was acceptable. In the present case, for the reasons set out above, StrataCrete has not met that onus.
5. CONCLUSION
[57] I am satisfied and find that the other employment offered by StrataCrete to Mr Folpp is not acceptable and that the discretion of the Commission to exercise the power in s.120(1)(b)(i) to reduce the amount of redundancy pay to which Mr Folpp is entitled has not been triggered. The application by StrataCrete is dismissed, and an Order to that effect will issue with this Decision.
DEPUTY PRESIDENT
1 See s.123 of the Act.
2 Re. Clothing Trades Award (1982)(1) Appeals by Derole Nominees Pty Ltd and The Australian Chamber of Manufactures (Derole) AIRC, 12 September 1990, Print G0207 [C037], 140 IR 123 at 128.
3 Spotless Services Australia Limited [2013] FWC 4484.
4 Derole Op. cit. 140 IR 123 at 128.
5 Vicstaff Pty Ltd (t/as Stratco) v May (2011) 204 IR 233 at 238; Re Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 at [26].
6 Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia (2006) 158 IR 450 at 462.
7 Datamars (Australia) Pty Ltd [2015] FWC 1269 at [81].
8 Clothing and Allied Trades Union of Australia v Hot Tuna Pty Ltd (1998) 27 IR 226 at [231]; Vicstaff Op. Cit. (2011) 204 IR 233 at 238; Spotless Services Australia Ltd [2013] FWC 4484 at [14].
9 Children’s Services Support Unit (CSSU) inc. [2014] FWC 7503.
10 Amended Statement of Daniel Liston, dated 11 March 2015 and amended 11 June 2015 – Exhibit 1.
11 Statement of Joseph Teohaere, dated 11 March 2015 – Exhibit 2.
12 Statement of Andrew James Kennedy, dated 11 March 2015 – Exhibit 5.
13 PN267.
14 Statement of Albert Loncaric Exhibit 1 paragraph 19.
15 PN380.
16 PN432.
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