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,…

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.

Continue reading Stratacrete Pty Ltd

Details

AGLC: Stratacrete Pty Ltd [2016] FWC 2880
Case: [2016] FWC 2880
Decision Date: 9 MAY 2016

CaseChat Overview and Summary

In the Federal Circuit Court, Stratacrete Pty Ltd applied to vary an award of redundancy pay granted to two employees. The applicants, having been dismissed, were awarded redundancy pay based on the employees' length of service and their respective salaries. The employer challenged the award on the basis that the employees had obtained other acceptable employment. The court was required to determine whether the employer had discharged the onus of proving that the employees had obtained other acceptable employment, which would reduce the amount of redundancy pay owed.

The court examined the statutory requirements for acceptable employment and the employer's burden of proof. The employer argued that the employees' new roles, although not identical, were substantially similar to their previous positions and therefore constituted acceptable employment. The court considered the nature of the new roles, the terms of the contracts, and the effect of any contractual obligations regarding transfer or relocation. Ultimately, the court found that the employer had not met the onus of proving that the employees' new roles were acceptable employment within the meaning of the applicable legislation. The court held that the employer's evidence did not sufficiently demonstrate that the employees had accepted the new roles under terms that were not substantially worse than their previous positions.

The court dismissed the employer's application to vary the redundancy pay. The employees were entitled to the full amount of redundancy pay as originally awarded. The court emphasised the importance of the employer establishing the necessary facts to discharge the onus of proof in such matters. The dismissal of the application confirmed the importance of employers providing clear and comprehensive evidence when challenging redundancy pay awards.

Orders