SuperChoice Services Pty Limited T/A SuperChoice Services Pty Limited v Bryan Lovquist

[2014] FWC 8582

[2014] FWC 8582

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

SuperChoice Services Pty Limited T/A SuperChoice Services Pty Limited
v
Bryan Lovquist
(C2014/6294)

COMMISSIONER LEE MELBOURNE, 11 DECEMBER 2014

Application to vary redundancy pay for other employment - National Employment Standards - whether employer obtained acceptable alternative employment - application granted - redundancy pay reduced.

[1] SuperChoice Services Pty Limited T/A SuperChoice Services Pty Limited (the Applicant) has made an application to the Fair Work Commission (the Commission) pursuant to section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay otherwise due to its former employee, Mr Bryan Lovquist (the Respondent). The application was made on the basis that the Applicant had obtained other acceptable employment for the Respondent as part of the sale of its business. The Applicant seeks that the obligation to pay redundancy pay to the Respondent under the National Employment Standards be reduced to zero.

[2] The Applicant develops and provides software solutions to superannuation fund administrators and other employers to facilitate the making and receiving of superannuation contributions and the implementation of superannuation “rollovers”.

[3] The Respondent opposes the application on the basis that the Applicant has not fulfilled the obligations regarding the obtaining of other acceptable employment for the Respondent.

[4] The parties filed written submissions and a statement of agreed facts. Both parties were offered the opportunity of participating in a hearing. Neither party sought a hearing and indicated that they were content for the matter to be determined based on the materials filed in the case.

[5] Accordingly, I have determined the application based upon the materials filed by the parties.

The Evidence

[6] The parties provided a statement of agreed facts. The director of the Applicant, Mr. Ian Campbell provided a written statement. The Respondent also provided a statement setting out the facts of the matter from his perspective.

[7] The Respondent commenced employment with “CPS Systems” in either August 1983 or August 1984. The Respondent believes he commenced employment at the latter date. On or about February 2008, the Respondents’ services were contracted by the Applicant to “Clarity OSS Limited” or a subsidiary of that company (“Clarity”). On or about 1 October 2008, the Respondent’s employment was transferred to the Applicant in this matter, SuperChoice Services Pty. Limited.

[8] From that point until his termination of employment, the Respondent remained an employee of the Applicant but performed work on their behalf for Clarity. The work that the Respondent performed for Clarity involved analysis and development of the Clarity Operational Support Software Solution (“OSS”). In October 2013 Clarity Services Pty Ltd. was placed in liquidation. In May 2014, a second company, Clarity OSS Services Pty Ltd. was placed in liquidation.

[9] According to the Respondent, in early July 2014, he and Mr. Campbell had a conversation “re: the sale of Clarity Assets and possible directions that the Respondents career might take”. 1 Mr. Campbell’s evidence was that he advised the Respondent that it was likely that the Malaysian part of the business would be sold to AGA; the Iranian business to Fakour and the rest to Synchronoss.2 At that time, the Respondent informed Mr. Campbell that he intended to retire on or about 30 June 2015.3 He also informed Mr. Campbell that his preferred option was to continue to be employed by the Applicant until that time but was open to the idea of the Applicant contracting his services out to one of the purchasers of the Clarity assets.4 Mr. Campbell’s evidence is consistent with this, however he claims that the Respondent stated that he was also open to a transfer to Fakour or Synchronoss.5 Mr. Campbell states that he undertook to “see what [was] possible”.6

[10] The evidence of Mr. Campbell is that he made enquiries to see whether the Respondent might be able to continue as an employee of the Applicant or with Synchronoss, a North American telecom company and possible buyer of part of the Clarity business. His evidence was that these enquiries revealed that these two options were not achievable. 7 His evidence is that he then had a conversation with Mr Tony Kalcina a former Clarity employee who was now representing Fakour.8 The evidence as to what followed is set out in Mr. Campbell statement9. In summary that evidence is that:

• Mr. Campell told Mr Kalcina that Fakour should offer a job to the Respondent as the Respondent had extensive knowledge of OSS especially in regard to the “MCI project” and was planning to retire in a year but would be a very valuable person to transfer this knowledge to a new recruit.



• Mr Kalcina agreed and said he would suggest to Mr Hassan Shakeri, the director of Fakour, that they make the offer to the Respondent.



• A short time later, Fakour indicated its interest in the Respondent and corresponded with him.



• Subsequently, Mr. Campbell advised the Respondent that the Fakour deal was definitely going ahead and that Mr Campbell knew that they wanted to employ the Respondent.



• The Respondent advised Mr Campbell that he would rather stay with the Applicant until the deal was finalised and that he had not received anything definite from Fakour at that point. As a result, Mr. Campbell instructed the Applicant’s Human Resources personnell to keep the Respondent on the Applicant’s payroll until the Fakour sale was completed.



• Mr. Campbell then spoke to Mr Kalcina again suggesting that Fakour put a formal offer to the Respondent if they didn’t want him looking elsewhere and that his leave entitlements would be paid out if Fakour took him on from 1 July. Mr Campbell stated that Mr Kalcina indicated that Fakour would make an attractive offer and made enquiries about the Respondent’s current rate of pay.



• Mr Campbell stated that after that conversation with Mr Kalcina, he understood that a formal offer of employment was made.

[11] The Applicant submits in the statement of agreed facts that on or about 12 July 2014, Fakour, an Iranian based company, offered the Respondent permanent employment as “Regional Vice President and Country Manager” with a new Australian based company delivering “Clarity capabilities to Iran and neighbouring countries” (the Fakour offer). The Respondent does not admit this fact and states that the contract was with Fakour and that it would be later transferred to an Australian entity. It is quite clear from Annexure C to the statement of Mr Campbell that the letter of offer to the Respondent was from the Fakour company. The letter of offer is dated 12 July 2014.

[12] A copy of the employment contract is attached to the letter of offer. Relevantly, the employment contract from Fakour provides:

• That the Respondent is being offered the role of “Product Architect-Real Time and MDD”.

• That the base location will be the Respondent’s home in Sydney or any other location mutually agreed.

• A requirement to travel to, and work in, countries as the work may require, to be mutually agreed.

• A salary level of $167,207.00 per annum including superannuation would be paid for the working of a forty hour week.

• Annual leave of 20 days.

[13] The Applicant submits that the Fakour offer was made to the Respondent after Mr. Campbell on behalf of the Applicant recommended the Respondent be employed by Fakour. The Respondent does not admit this fact as he states he has no knowledge that this occurred.

[14] On 15 July 2014 the Respondent informed Fakour, “I am not at this time in a position where I would be able to accept your offer”. 10

[15] On 24 July 2014, the Applicant gave the Respondent notice of termination of employment on the basis that it had no suitable work for the Respondent, such termination to take effect on 28 August 2014. At the same time the notice was given, the Respondent was offered employment by Clarity International Pty. Ltd.

[16] According to the statement of Mr Campbell, at the time the Clarity International Pty Ltd offer was made, he believed that Fakour would be buying Clarity International Pty Ltd, a company which held the OSS software rights. 11 He states that he also anticipated that the Respondent would accept the Fakour offer of employment.

[17] It appears at this point that Mr. Campbell anticipated that if the Respondent accepted the offer from Clarity International Pty Ltd, he would then be employed by a company that Fakour would purchase. Attachment G to Mr. Campbell’s statement sets out the offer from Clarity International Pty Ltd. The letter is dated 24 July 2014, the same date that the Respondent was given notice of termination. The letter from Clarity International Pty Ltd included the following:

“Clarity hereby offers to employ you as a Senior Developer effective from the date your employment with SuperChoice Services Pty Ltd (“SuperChoice”) terminates. If Clarity would like you to start sooner, it will ask SuperChoice if it is prepared to release you earlier.

The terms of your employment with Clarity will be on terms and conditions substantially similar to, and no less favourable on an overall basis than, your current terms with SuperChoice. Clarity will be happy to discuss with you any specific package or terms you may wish to implement that suit your personal needs.

Clarity will also recognize your service with SuperChoice for the purposes of any future redundancy pay to which you may become entitled.

Please confirm your acceptance of this offer by signing the duplicate letter and returning it to me as soon as possible.”

[18] However, it transpired that Fakour did not purchase Clarity International Pty Ltd but instead purchased that company’s intellectual property rights. 12 It is for that reason that the Applicant submits that the Fakour offer of employment is the relevant offer of employment for the purposes of this application. The offer from Clarity International Pty Ltd is not relied upon by the Applicant for the variation of redundancy pay pursuant to section 120 of the Act.

[19] The Respondent submits that the fact that the offer from Clarity International Pty Ltd was made implies that the Applicant recognised that the Fakour job offer was not acceptable to the Respondent and had been rejected. 13 Further, the Respondent submits that the Clarity International Pty Ltd offer was vague in that it offered terms “substantially similar to” and no less favourable on an overall basis than the Respondent’s current terms with the Applicant.14

[20] On or about the 13 August 2014, the Applicant submits that certain rights to retain and use OSS software were sold to a company called Clarity Support Services Pty.Ltd.

[21] The amount of redundancy pay to which the Respondent is entitled, pursuant to section 119 of the Act, is agreed between the parties as $21,356.69. 15As the Respondent was earning $138,818.47 per annum ($2,669.58 per week) at the time of termination, the amount of $21,356.69 equates to 8 weeks pay.

[22] The agreed entitlement to 8 weeks pay aligns with the period of service for the Respondent commencing from the commencement of the National Employment Standards provisions on 1 January 2010. Years of service, for the purpose of the redundancy pay entitlement under the National Employment Standards, count only from that time. 16

The law to be applied

[23] Sections 119 and 120 of the Act provide as follows:

“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:

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

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.”

[24] A Full Bench of the Commission recently considered what is meant by the word “obtains” in section 120(1)(b)(i) in the Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd 17, an appeal of a decision of Commissioner Gregory, as follows;

“[42] The question of what is required by the word “obtains” was considered by the Full Bench in Derole Nominees. It found:

“The word ‘obtains’ does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate.

It follows that ‘obtain’ must be given some lesser meaning. The Shorter Oxford Dictionary (3rd ed revised) provides as its relevant meaning, the definition of ‘obtain’ as ‘to procure or gain, as the result of purpose and effort’. It seems to us that meaning is of assistance here; that is, the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind.” [citations removed]

and

“Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer’s ability to ‘obtain’ alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.”

[43] In Datacom Vice President Lawler also expressed the view that the word “obtains” in the context of s.120 should be given a very broad interpretation.”[footnotes removed] 18

[25] Commissioner Hampton in Mildren Automotive Pty Ltd 19 also considered what was meant by acceptable alternative employment, as follows:

“[33] It is also well established in this jurisdiction that the concept of acceptable alternative employment is to be determined objectively. As noted by a Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd:

“What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.”

[34] The onus of establishing that the alternative employment in question is acceptable rests with the applicant employer. In order to establish whether the alternative employment obtained by the employer is acceptable, it is necessary to have regard to such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters (including the location of the employment and travelling time).” 20 [footnotes omitted]

[26] The full bench of the Commission in The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd 21 did not take issue with the approach of Commissioner Gregory who applied the approach in Derole Nominees in reaching his determination as to whether there was acceptable alternative employment.

[27] The Applicant also refered to the “Datacom” decision of Vice President Lawler in Datacom Systems Vic Pty Ltd v Khan and Another 22 where His Honour found that that;

“[9] Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.”

[28] The Full Bench in The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd 23 found error in the decision of Commissioner Gregory in that he conflated the issue of acceptable alternative employment and the extent of any reduction in redundancy entitlements. The Full Bench stated:

“[65] Having recognised some detriment to employees arising from the loss of accrued service and the role, in part, of compensating employees for the loss of service related entitlements, the Commissioner removed the redundancy entitlements entirely for each employee other than Ms Pickering. The Commissioner did so without separately considering the extent of any reduction and without considering the different circumstances of each employee in terms of service, which ranged from four months to nine and a half years, and accrued personal leave which ranged from a negative accrual through to over 300 hours. The decision of the Commissioner provides no indication as to how he reached that conclusion in exercising the discretion to reduce the redundancy pay entitlements in respect of each employee subject to his first order to nil. In our view, this constitutes a further error in the decision of Commissioner Gregory.” 24 [footnotes omitted]

[29] That is, the Full Bench made clear that even in circumstances where it is found that the employer has obtained acceptable alternative employment, discrete consideration needs to be given to the circumstances of each employee in determining the extent to which the entitled to redundancy pay is reduced.

[30] I will apply the authority cited above where relevant to the facts in this matter

Consideration

[31] It is not in dispute that the Respondent is entitled to be paid redundancy in accordance with section 119 of the Act. The matter to be determined is whether I should vary that obligation pursuant to section 120 of the Act having regard to the circumstances in this matter, to zero as sought by the Applicant, by some other amount, or not at all.

Was there an alternative employment opportunity at the relevant time?

[32] A first and fundamental issue is to consider whether there was in fact any other acceptable employment for the Respondent in the circumstances of this case. For an employment opportunity to be available it would need to be available at the relevant time, that is, at the time an employee is aware they are to be made redundant. To illustrate the point, it is unlikely an employer could rely on their action in obtaining suitable alternative employment for an employee well in advance of any notice to the employee they are to be made redundant, have the employee reject that employment as they did not have an expectation they were to be made redundant, and then rely on that action for an application under section 120 of the Act at a later time when the employee is advised they are redundant.

[33] In that context, I note that the Fakour offer of 12 July 2014 was made around the time Mr. Campbell had discussed the sale of Clarity assets and “possible career directions for the Respondent” but prior to the Applicant being formally advised of his termination of employment. The Respondent was advised of his termination of employment on or about 24 July 2014.

[34] The letter of offer from Fakour seeks a response in 48 hours. However, it did not indicate that the offer would lapse after that time. The Respondent advised Fakour in an email dated 15 July 2014 that “I am not at this time in a position where I would be able to accept your offer”. 25

[35] It is clear from the email exchange between Mr. Campbell and the Respondent (attachment J to Mr. Campbell’s statement) that well after the Respondent’s employment by the Applicant had ceased, that both he and Mr. Campbell held to the view that the Fakour job was still open.

[36] Relevantly, Mr. Campbell states in an email of 10 September 2014;

“The main issue for everyone is whether or not you want the Fakour job. They certainly want you and I am sure they will put you on the payroll from September 1 if you accept now.” 26

[37] The reply from the respondent was as follows:

“Hi Ian,

I do want the job and given that I had indicated that I would work until the end of this financial year I would honour that. The fact is that when my employment at SuperChoice was terminated the incentives to work to EOFY disappeared.

FWA called me yesterday and I have spoken to them again this morning and the wheels are turning. I understand that Facour may not be able to hold the job open, but the job and in fact the income are of secondary importance to me. I realise that you do not accept it, but this is not about the money.

When this issue has been resolved I will inform Facour that I am willing to discuss employment with them. We can then have that conversation if they are still able to.” 27

[38] The Respondent claims in his submissions that the job he was referring to in this email was not the 12 July 2014 offer and that he was engaged in an earlier conversation with Fakour in an attempt to determine if there was an opportunity for employment 28. There is no evidence advanced from the Respondent to support this proposition. Nor is it consistent with the content of the exchange of the emails between the the Respondent and Mr Campbell. The Respondent in indicating at the outset of his email, which is a clearly a reply to the email from Mr. Campbell the previous day “I do want the job” gives no impression he is contemplating some other job. Nor does the last paragraph of his email suggest that he was engaged in conversation with Fakour about some different job. Indeed, it rules out talking to them until, “...this issue is resolved”.

[39] I am satisfied on the evidence that the offer from Fakour, as detailed in the letter of offer dated 12 July 2014 remained available for the Respondent at least until 11 September 2014. I am satisfied that there was an employment opportunity for the Respondent at the relevant time, that time being the point at which he was advised he was to be made redundant(24 July 2014) and that the offer remained open until at least 11 September 2014 which is beyond the Respondent’s termination date.

Did the Applicant obtain the employment?

[40] The evidence of Mr. Campbell as to how the offer of employment from Fakour to the Applicant came about is set out above. There is no contest to that evidence from the Respondent. There is no indication from the evidence that there is some alternative explanation as to how the offer from Fakour to the Respondent came about.

[41] I accept the evidence of Mr. Campbell as to his role in securing the offer of employment from Fakour to the Respondent. He spoke directly to Mr Kalcina, the Fakour representative, on two occasions, making strong representations as to the capability and value of the Respondent to Fakour. It is clear on the evidence that he was a strong moving force as to the creation of the available opportunity. Overall, I am satisfied that the Applicant obtained the employment opportunity.

Was the employment acceptable employment?

The remuneration and hours of work

[42] As set out in the evidence above, the Fakour offer of employment had a seemingly much higher rate of remuneration. However, as the Respondent points out in his submission, when the differing hours of work (40 verses 37.5 hours) and the likely deduction of superannuation from the salary offered by Fakour is taken into account, the real difference between the two salaries is $4,269.27 or 2.62%, with the Fakour salary slightly higher.

[43] The Applicants’ calculation, while not conceding that superannuation is deducted from the salary offered, puts the advantage slightly higher, at $4,625.00. I think it is reasonable to assume that clause 5 of the contract of employment contemplates the deduction of superannuation. The Applicant also claims that the hours worked for an employee on this level of salary and this level of seniority is not a crucial factor and therefore the salary difference is effectively $13,882.00. I do not accept that submission. The hours of work offered in combination with the salary rate are key factors in any contract of employment. While unpaid overtime is often a feature of more senior positions, the contractual right to work the hours specified for the remuneration agreed remains a key feature in even senior employee’s contracts of employment.

[44] Overall, I am satisfied that the Respondent accurately depicts the Fakour offer as a slightly higher salary than that he was already paid once the difference in hours is factored in. However the Respondents’ suggestion that because the inflation rate was approximately 3% at the time the salary was offered is marginally lower in real terms, is erroneous. The remuneration and hours of work components of the offer are more beneficial to the Respondent.

The position and duties

[45] The offer itself, in the covering letter, referred to a permanent position of “Regional Vice President and Country Manager” with a new Australian based Venture delivering Clarity capabilities to Iran and neighbouring countries. However, clause 1 as well as the Schedule to the contract states the position is “Product Architect-Real Time and MDD” with a right for the company to direct the respondent to undertake other duties within his skill experience and training.

[46] The Applicant in its submissions in reply asserts that this is consistent with the description of the Respondent’s role with the Applicant;

“To work as a senior member of a team of software developers mentoring more junior members and participating in and contributing to the design and implementation of software such that it was capable of meeting the required business needs of the company” 29

[47] The Applicant asserts that Regional Vice President and Country Manager is only a title, and not the position.

[48] The Respondent makes no mention of the position title in the contract schedule. The Respondent’s submission focuses on the position title in the covering letter of “Regional Vice President and Country Manager”, stating that he did not aspire to a management position and that such a position was not within his area of expertise.

[49] Having considered the terms of the offer of employment, the surrounding circumstances that led to the offer being made that I dealt with earlier in the decision, most particularly the representations to Fakour by Mr. Campbell as to the Respondent’s skills and capabilities, I am satisfied that the position offered, despite its rather grand title, was in fact a position that was in line with the Respondent’s expertise. There was nothing detrimental to the Respondent in the offer in this respect.

The location of the employment and the requirement to travel

[50] The letter of offer referred to employment by an “Australian based venture” that, in the letter of offer was referred to as “The Company”. The offer made to the Respondent on 12 July 2014 is on Fakour letterhead, with the employer details in the schedule and in the heading as Fakour, with an address in Tehran, Iran. However, the letter of offer includes the following in the second paragraph, “Please note that the name and address of the Company will be replaced with the Australian based company within the next week.”
[51] There is nothing in the materials submitted to suggest that this ever occurred. I have assumed that the offer of employment was from Fakour and remained from Fakour rather than another associated Australian based company. The Respondent submits that I should take into account that international sanctions exist against Iranian based companies. The Applicant in reply agreed that while international sanctions exist against Iranian based companies, there was no evidence that Australian sanctions applied in respect to Fakour with which Clarity had contracted to supply certain products and services to the Mobile Communciations Company of Iran (MCCI). The Applicant asserts that Clarity sought the approval of the Department of Foreign Affairs and Trade (DFAT) to supply OSS to MCCI. A letter from DFAT in 2011 to Clarity International Pty Ltd was provided by the Applicant. The letter is written by the Director of Sanctions and Transnational Crime and included the following:

“I am writing to inform you that, based on the information provided by you, we have determined that the conduct of this business is not prohibited by, or subject to authorisation under, the Charter of the United Nations (Sanctions - Iran) Regulations 2008 and is not subject to Australia’s autonomous sanctions in relation to Iran. Your inquiry on the UNSPMS has now been closed.”

[52] It seems clear on the evidence that the international sanctions against Iran did not apply to this particular venture.

[53] Clause 2 of the contract states that the base location will be, “...in your home, Sydney or any other location to be mutually agreed”. Clause 3 states “this agreement and the continuity of the engagement... are subject to the employee being willing and able to travel to and work in countries as your work may require, to be mutually agreed. The focus is Product Development and Support in Sydney”. In clause 6, the Hours of Work clause the second sentence reads as follows: “When working in Iran you will observe Iranian working hours”. In the schedule under “Duties and Responsibilities” is the following: “You may also be required to travel overseas and should have appropriate documentation”

[54] Against this background, the Respondent submits that he is a Canadian citizen and travels on a Canadian passport. The Respondent submits that the travel advice of the Canadian Government to its nationals regarding travel to Iran is “Avoid all travel”. The travel advice of the Australian government at the time of submissions was “reconsider your need to travel”, one level below “do not travel”. The Respondent refers to Iran having recently engaged in airstrikes against Islamic state forces in Iraq.

[55] In their submissions in reply, the Applicant emphasises the references to mutual agreement being needed for travel and the base location as clearly indicating the Respondents’ right to decline travel or a change in base location.

[56] There is no doubt the offer of employment is premised on the employee being based in Sydney. However, it is also clear the contract of employment clearly contemplates travel. Further, the hours of work clause clearly contemplates the employee working in Iran. However, travel and the base of employment both require mutual agreement. Under the terms of the contract of employment, the Respondent would be able to withhold agreement to travel to Iran. In the face of the Australian DFAT and Canadian Government travel warnings not to travel to Iran, it could be hardly be said that the withholding of agreement to travel there would be considered unreasonable. Nor would a direction from the employer to travel to Iran in line with its power to require travel in the schedule, where those travel warnings were in existence, likely be a reasonable direction. However, one cannot ignore the fact that the offer is from an Iranian company and it clearly contemplates the employee performing work in Iran. Despite the mutual agreement component, a refusal of the Respondent to travel to and work in Iran in circumstances where the focus is on “...delivering Clarity capabilities to Iran and neighbouring countries” suggests that travel to Iran may be expected and may cause difficulties in the future employment relationship should the respondent withhold agreement to travel. Overall, there is a level of detriment to this aspect of the employment offer that needs to be considered.

Recognition of previous service

[57] There is no dispute that the offer of employment did not include continuity of service. The letter of offer from Fakour explicitly envisaged that current employment leave and long service leave would be paid out before the Respondent joined Fakour, where new benefits will be accrued. The Applicant has paid out the annual leave and long service leave entitlements owing to the Respondent. However, the loss of continuity will be detrimental to some degree. The Respondent had been employed for some 30 years and would have presumably accrued personal leave which would not have transferred. While his long service leave had been paid out, he was accruing additional LSL with the previous employer. When taking up employment with Fakour, he would need to work the minimum period before once again accruing LSL. Given it is clear on the evidence that the Respondent did not intend working for more than another year, he would likely not enjoy any further LSL benefit. Overall, there is a level of detriment to this aspect of the employment offer that needs to be considered.

Was the offer of employment acceptable alternative employment.

[58] The remuneration, hours of work and required duties were not detrimental and overall more beneficial to the Respondent. The location of employment was the same location in which he was previously employed. However, the travel considerations are possibly detrimental and the lack of recognition of previous service is certainly detrimental to the Respondent. However, considering the totality of the circumstances of this case, I find not significantly so. Matters of degree are involved. When the evidence is viewed objectively, I am satisfied that the employment offer from Fakour was acceptable alternative employment.

The amount of the reduction in redundancy payment, if any, to be made.

[59] In line with the approach of the Full Bench in The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd, 30 I find the following.

[60] Having considered the evidence, it is clear that the offer of employment made in terms of the duties involved, the location of employment being based in Sydney, the remuneration and hours of work are more beneficial to the Respondent. If this was the totality of the matters in consideration, a reduction in the redundancy entitlement to zero, as sought by the Applicant, would be appropriate.

[61] However, the likely requests to travel to Iran, notwithstanding the mutual agreement component, could have an impact on the employment relationship though such an impact is difficult to determine. In combination with the loss of accrual of personal leave and future Long Service Leave accrual there is some detriment to the Respondent.

[62] Considering all of the factors, I determine that a reduction of a significant amount of the redundancy entitlement is appropriate. However, a reduction to zero would not take into account the detrimental aspects. I have therefore decided in the circumstances of this case to reduce the amount of redundancy pay to which the employee is entitled by 80%.

Conclusion

[63] The amount of redundancy to which the Respondent is entitled under section 119 of the Act is 8 weeks pay, agreed between the parties as equating to $21,356.69.

[64] Pursuant to section 120 of the Act I determine that the amount of redundancy to which the Respondent is entitled be reduced by 80% to an amount of $4271.33 gross. An order to that effect has been issued in conjunction with this decision.

COMMISSIONER

 1   Respondents “Response to SuperChoice Application to Reduce Redundancy Pay”, filed 16 October 2014, [11]

 2   Statement of Ian Campbell, filed 2 October 2014, [14]

 3   Respondents “Response to SuperChoice Application to Reduce Redundancy Pay”, filed 16 October 2014, [11]

 4   Respondents “Response to SuperChoice Application to Reduce Redundancy Pay”, filed 16 October 2014, [11]

 5   Statement of Ian Campbell, filed 2 October 2014, [14]

 6   Statement of Ian Campbell, filed 2 October 2014, [14]

 7 Statement of Ian Campbell, filed 2 October 2014, [15] and [16]

 8   Statement of Ian Campbell, filed 2 October 2014, [17]

 9   Statement of Ian Campbell, filed 2 October 2014, [17] - [21]

 10   See the Statement of Agreed Facts, filed 20 October 2014

 11   Statement of Ian Campbell, filed 2 October 2014, [25]

 12   Applicant’s Outline of Submissions in Reply, filed 21 October 2014, [15]

 13   Respondents “Response to SuperChoice Application to Reduce Redundancy Pay”, filed 16 October 2014, [15]

 14   Respondents “Response to SuperChoice Application to Reduce Redundancy Pay”, filed 16 October 2014, [15]

 15   See the Statement of Agreed Facts, filed 20 October 2014

 16 Schedule 4, item 5(4) of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

 17   The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd, [2014] FWCFB 6737

 18   The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd, [2014] FWCFB 6737, [42] - [43]

 19   [2013] FWC 2113

 20   Mildren Automotive Pty Ltd, [2013] FWC 2113, [33] - [34]

 21   [2014] FWCFB 6737

 22   [2013] FWC 1327

 23   [2014] FWCFB 6737

 24   The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd, [2014] FWCFB 6737, [65]

 25   Attachment to Respondent’s Response to SuperChoice Application to Reduce Redundancy Pay, filed 16 October 2014.

 26   Statement of Ian Campbell, filed 2 October 2014, Attachment J, marked page 44

 27   Statement of Ian Campbell, filed 2 October 2014, Attachment J, marked page 45

 28   Respondents “Response to SuperChoice Application to Reduce Redundancy Pay”, filed 16 October 2014, [First dot point - Comments on Applicants Outline of Submissions]

 29   Applicant’s Outline of Submissions in Reply, filed 21 October 2014.

 30   [2014] FWCFB 6737

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