Sydney Building Corporation Pty Limited

[2023] FWC 1397

[2023] FWC 1397

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

Sydney Building Corporation Pty Limited

(C2023/2017)

DEPUTY PRESIDENT CROSS SYDNEY, 15 JUNE 2023

Variation of redundancy pay

1. This decision concerns an application by Sydney Building Corporation Pty Limited (the Applicant) under section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay owing to an employee named Mr Ricky Barton (Mr Barton).

1. The application stated that Mr Barton was entitled to redundancy pay due to both the National Employment Standards (the NES) and an award. The application sought a reduction in redundancy pay because the Applicant had found Mr Barton employment with a new employer, Frank Jay Pty Ltd. Mr Barton disputed that assertion and stated that he arranged his own employment with Frank Jay Pty Ltd.

1. While the Applicant indicated an entitlement arising under an award, the Applicant did not identify any award in the application. In response to an enquiry from my Chambers, both parties identified the Building and Construction General On-Site Award 2020 [MA000020] (the Award), as being the applicable award.

1. The Commission does not, however, have power under s.120 of the Act to vary redundancy entitlements arising from the Award.

1. Sections 119 and 120 of the Act are relevant to the application. Sections 119 and 120 of the Act are found in Subdivision B – Redundancy pay of Division 11 – Notice of termination and redundancy pay of Part 2–2—The National Employment Standards of the Act.

1. Section 119 of the Act prescribes the entitlement of an employee to be paid redundancy pay in specified circumstances of redundancy under the NES, with a scale of redundancy payments based on continuous service with the employer on termination.

1. Section 120 of the Act provides for 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.”

1. It may be noted from s.120(1) that s.119 (the power of the Commission to vary redundancy pay arising from the NES in s.119) applies if an “employee is entitled to be paid an amount of redundancy pay by the employer because of section 119”. It may be further noted from s.120(3) of the Act that s.120 affords the Commission a power to reduce the “amount of redundancy pay to which the employee is entitled under section 119”.

1. Subdivision C imposes limits on the scope (and operation) of Division 11 – Notice of termination and redundancy pay of Part 2–2 —The National Employment Standards of the Act. Relevantly, s.123(4) provides that Subdivision B – Redundancy pay of Division 11 does not apply to “an employee to whom an industry-specific redundancy scheme in a modern award applies” (in s.123(4)(b)). Clause 41 of the Award provides an “Industry specific redundancy scheme”.

1. The entitlement to redundancy pay of employees to whom the Award applies arises from clause 41 of the Award and not from the NES entitlement in s.119 of the Act. As a result, the Commission has no power to vary redundancy entitlements of employees to whom the Award applies under s.120 of the Act. The power to vary a redundancy pay entitlement under s.120 of the Act only arises in respect of an employee who is entitled to be paid an amount of redundancy pay by the employer because of s.119 and s.120 provides a power to reduce the amount of redundancy pay to which the employee is entitled under s.119.

1. I further note that the exclusion in s.121 of the Act from the obligation to pay redundancy pay under the NES in s.119 in respect of a small business employer, which would have otherwise applied in this matter, also does not apply in respect of redundancy entitlements which arise from the Industry Specific Redundancy Scheme in clause 41 of the Award and not from the NES in s.119 of the Act.

1. I find that s.120 of the Act does not provide the Commission with power to vary the redundancy pay entitlements under the Award of Mr Barton. The Applicant is not able to make an application to vary the redundancy pay amount either under the Act or the Award and so the application must be dismissed.

DEPUTY PRESIDENT

Appearances:

Miss Modderno, S (the Applicant)

Mr Barton, R (the Respondent)

Hearing details:

15 June 2023 at 10:00AM (In-Person)

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