Szanto v ISS Facility Services Pty Ltd

[2013] FWC 3270

[2013] FWC 3270

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Mr Geza Szanto
v
ISS Facility Services Pty Ltd
(C2013/2814)

COMMISSIONER CAMBRIDGE SYDNEY, 24 MAY 2013

Dispute settlement procedure - dispute as to entitlement to redundancy pay arising under the National Employment Standards - s.119 dispute as to redundancy circumstance - s.120 dispute as to whether employer obtained other acceptable employment - no obligation for employer to pay redundancy pay.

[1] This matter involves an application made pursuant to section 739 of the Fair Work Act 2009 (the Act), for the Fair Work Commission (the Commission), to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Canberra on 23 January 2013. The application was made by Geza Szantos (the applicant) and taken against ISS Facilities Services Australia Ltd (the employer).

[2] The Commission is empowered to deal with the matter by virtue of a DSP found at Clause 9 of the Security Services Industry Award 2010 (the Award). The question in dispute is a claim for an entitlement under the National Employment Standards (NES) which has primarily involved the interpretation and application of ss.119 and 120 of the Act.

[3] The matter was the subject of unsuccessful conciliation and the arbitration of the substantive matter in dispute has involved a Hearing conducted in Canberra on 7 May 2013.

[4] At the Hearing the applicant was represented by Mr S Russell-Uren from the United Voice (UV). Mr Russell-Uren adduced evidence from the applicant and one further witness. Mr J Moore appeared for the employer and he called one witness to provide evidence on behalf of the employer.

Background

[5] The applicant is a man of some 69 years of age. The applicant had worked for the employer and predecessor entities related to the employer, for a little over eleven years. The applicant was initially engaged as a Casual Security Officer and he worked for a short time at the American Embassy.

[6] The applicant became a part-time employee in 2002 and later he worked as a full-time employee. The applicant worked at four different sites throughout his eleven years of employment. After the American Embassy, the applicant was moved to the Treasures Exhibition site, then he worked at Telstra Tower and finally in 2010, the applicant was transferred to the Telstra House site.

[7] Up until about eight months prior to December 2012, the applicant performed a broad range of tasks associated with the work of a Security Guard. This work included a mix of patrol work and reception/concierge type work which from time to time involved engagement by way of rotating rosters including night shifts.

[8] In the period of at least six to eight months before December 2012, the applicant was engaged on a part time basis working in a reception/concierge role at the Telstra House site and working fixed afternoon engagements from 1pm to 7pm.

[9] In November 2012, the employer lost the contract to provide security services at the Telstra House site. The applicant was advised of the loss of contract and that he would be re-assigned work at the site of the Australian Sports Commission (AIS). The work offered to the applicant at the AIS site involved the broad mix of Security Guard duties including patrol work and it also involved engagements by way of a rotating roster which included some night shifts.

[10] The work that the employer offered to the applicant at the AIS site was different to that which the applicant had been performing at the Telstra House site. The work proposed at the AIS site would involve the applicant working the broad mix of Security Guard duties including patrol work, as opposed to work at Telstra House which in recent times, had been confined to reception/concierge duties. Further, the work at the AIS site was not limited to fixed afternoon engagements but instead involved a rotating roster which included some night shifts.

[11] The applicant was not enthusiastic about the changed terms which would apply to the employment at the AIS site when compared to the terms which had applied in recent times, to his employment at the Telstra House site. On 5 December 2012, the UV wrote to the employer on behalf of the applicant and advised, inter alia, that the applicant was unable to take up the offer of work at the AIS site “...due to his personal situation, 1”. This communication specifically referred to the working hours that would apply to the position at the AIS site and asserted that in the absence of an offer of a position which more closely reflected the current working hours, the applicant was entitled to severance payments in accordance with the NES.

[12] The employer rejected the assertion that the position offered to the applicant at the AIS site was not suitable alternative employment. In particular, the employer stated that the alteration to working hours was an accepted and understood term of the applicant’s employment. An exchange of e-mail communication between the employer, the applicant himself, and the UV did not resolve these differences.

[13] The applicant refused to attend for work as rostered at the AIS site. The employer warned the applicant that his refusal to attend for work would be treated as an unauthorised absence and warned that disciplinary action including termination of employment may result.

[14] On 17 January 2013, the employer provided the applicant with written advice that if he did not attend for work on or before 23 January 2013, his employment would be terminated. The applicant did not attend for work as directed.

[15] On 23 January 2013, the employer terminated the applicant’s employment. On the same day, 23 January, the UV filed the application which has given rise to these proceedings.

The Applicant’s Case

[16] Mr Russell-Uren who appeared for the applicant, made oral submissions in amplification of written submissions which had been filed earlier. In summary, Mr Russell-Uren submitted that the applicant was entitled to redundancy pay prescribed by the NES and which was an amount of 12 weeks.

[17] Mr Russell-Uren made submissions which involved an analysis of the evidence which he said supported that the circumstances of the applicant represented a redundancy. In particular, the submissions made by Mr Russell-Uren urged a finding that the employer no longer required the job done by the applicant to be performed by anyone. Mr Russell-Uren also referred to various established Authorities which provided the basis upon which a redundancy circumstance should be established to have occurred.

[18] Mr Russell-Uren made further submissions on the question of whether the evidence had established that the employer had offered the applicant suitable alternative employment. In this regard, Mr Russell-Uren submitted that an objective assessment of the position offered at the AIS site was required. According to the submissions of Mr Russell-Uren such an objective assessment should include “objectively ascertainable characteristics relating to the applicant.”

[19] The submissions made by Mr Russell-Uren sought to ensure that any assessment as to suitable alternative employment would include factors such as; the changed hours of engagement involving a rotating roster including some 12 hour night shifts; the expanded duties including foot and car patrol work; and the age and medical condition of the applicant. Mr Russell-Uren acknowledged that if an employee was offered comparable alternative employment and it was refused then they were not entitled to a redundancy payout.

[20] Mr Russell-Uren also submitted that the employer’s proposition that the applicant had abandoned his employment should be rejected. Mr Russell-Uren said that any employee who refused an offer of unacceptable alternative employment could not be held to have abandoned their employment, but instead, were entitled to redundancy pay.

[21] Mr Russell-Uren also referred to clause 8.3 of the Award which prescribed a procedure for dealing with circumstances involving a loss of contract. Mr Russell-Uren submitted that clause 8.3 should operate to influence the Commission’s assessment as to whether the AIS position offered to the applicant was suitable alternative employment.

[22] In summary, Mr Russell-Uren submitted that the applicant had been made redundant and that the offer of alternative employment did not represent acceptable alternative employment. Consequently, according to the submissions of Mr Russell-Uren,the applicant was entitled to redundancy pay.

The Employer’s Case

[23] Mr Moore appeared for the employer and commenced his submissions by acknowledging that the factual circumstances of the case were largely not in issue. Mr Moore relied upon the respondent's written outline of submissions and he made further oral submissions.

[24] Mr Moore said that the applicant was not entitled to redundancy pay because there was no redundancy circumstance, or in the alternative, acceptable alternative employment was offered and refused and therefore no entitlement to redundancy pay arose.

[25] The primary submissions made by Mr Moore involved the assertion that the circumstances of the applicant involved an absence of any redundancy. Mr Moore submitted that the employment of the applicant included the capacity for the employer to reassign the work location and other specific tasks of the applicant as deemed operationally necessary. Mr Moore stressed that the applicant had worked at different locations and performed a range of duties including patrols, security screening and concierge work undertaken via a variety of roster patterns including rotating shift rosters. According to Mr Moore the job of the applicant covered the work offered at the AIS site and therefore it was not the case that the job of the applicant was no longer required to be done.

[26] Mr Moore said that the employer routinely transferred staff between sites and this often involved some alteration to the duties performed and the shift arrangements which were worked. The submissions made by Mr Moore contended that the applicant did not wish to accept what was a transfer but instead saw an opportunity to in effect, retire and seek to obtain redundancy pay as a windfall.

[27] Mr Moore submitted that the applicant had not actively pursued any alternative employment including a concierge position which the employer had drawn to his attention and this inactivity supported the submission that the applicant had refused work at the AIS location not because it was outside of the terms of his job, but as an attempt to access a redundancy payment. Consequently, according to Mr Moore the applicant had decided not to continue to work as a Security Officer and to opt out of employment. Mr Moore said that these circumstances did not constitute a redundancy.

[28] Mr Moore made further alternative submissions which assumed that if a redundancy circumstance had arisen, the employer had offered acceptable alternative employment and therefore the applicant had no entitlement to redundancy pay. Mr Moore submitted that the work at the AIS site contained elements such as; a location that was not unreasonably distant; similar duties and pay rates; and hours of work that although different to the fixed afternoon shifts at Telstra House, were hours that were similar to those performed by the applicant in the past.

[29] Mr Moore stated that the employer had been given little detail of the personal circumstances which the applicant claimed prevented him from working the hours applicable at the AIS site. In particular, Mr Moore said that the medical information about the applicant’s diabetes had been produced after the termination of employment. Mr Moore submitted that the employer was presented with a circumstance that reflected more the applicant’s preference to not work the shift arrangements at the AIS site as opposed to any actual difficulty with the hours of work.

[30] In conclusion, Mr Moore submitted that the claim that the applicant was entitled to redundancy pay should be rejected. Mr Moore said that such rejection should be made because the applicant was not terminated because the employer no longer required the job of the applicant to be done by anyone. Alternatively, according to Mr Moore, the applicant had been offered acceptable alternative employment and he refused that employment and therefore he was not entitled to any redundancy pay.

Consideration

[31] The dispute in this case has not involved issues of significant factual contest. The matter in dispute is essentially confined to an analysis of the circumstances of the applicant as to whether an entitlement to redundancy pay under the NES exists.

[32] The relevant NES provisions are found at ss.119 and 120 of the Act. In this case the pertinent part of s.119 is found at subsection (1) which is in the following terms:

“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.” [emphasis added]

[33] In this case, the employer asserted that the loss of the contract at Telstra House did not result in the job that the applicant did there being no longer required to be done by anyone. This assertion is anchored upon a concept that the job of the applicant was broader than the particular role that he performed at Telstra House. This concept would embrace that the job of the applicant was that of a Security Officer not necessarily linked to any particular location or any of the other specific terms such as the actual tasks performed or the hours of regular engagement.

[34] I can readily appreciate that in an industry such as contract security services, there are operational requirements which require that employees be capable of working at different locations and performing different security related tasks which may involve variations in the hours that work is performed. The terms of the employment of a Security Officer in the contract security industry would almost without exception, be understood to comprehend that given reasonable notice, a Security Officer could be reassigned to work at a different location, perform different security tasks, and or be engaged on different hours of work including shift work.

[35] The reassignment of any Security Officer would also need to be reasonable having regard for the particular circumstances of each case. For instance, the reassignment of a Security Officer to a particular location may be reasonably proximate for one individual and for another at such a distance from their residence and their previous worksite so as to render the reassignment as unreasonable.

[36] Consequently, there can be no general rule which does not permit consideration of the particular circumstances surrounding any reassignment. Therefore I reject the submission made by the employer “... that it had an unfettered capacity to reassign the Applicant to alternate work sites, subject only to the notice of roster provisions of the [Award]” 2

[37] In this instance the reassignment was asserted to be part of the job and therefore not something that could enliven s.119 of the Act. The term “job” is a more specific notion than the broader generic concept of employment as a “Security Officer”. A Security Officer is a generic description and a “job” involves the specific terms that apply to particular employment. By way of example, a Security Officer may be reassigned from job to job.

[38] Consequently, I believe that the applicant was employed as a Security Officer and in November of 2012 he worked in the Telstra House concierge job. That job had particular terms attached to it such as the hours of work and the concierge functions that were performed. When the employer lost the contract for Telstra House, the employer no longer required the job that the applicant performed to be performed by anyone. In my view these circumstances enliven s.119 of the Act.

[39] In the particular circumstances of the applicant’s employment as a Security Officer working in the contract security industry, it is commonplace for there to be reassignment from job to job. Any such reassignment must be reasonable and made in accordance with the terms and conditions of the employment. The propensity for reassignment in such employment circumstances provides strong potential for the provisions of s.120 of the Act to be satisfied.

[40] The relevant provisions of s.120 of the Act are in the following terms:

“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.”[emphasis added]

[41] In this case the crucial aspect of the operation of s.120 of the Act involved the question of whether the employer had obtained other acceptable employment for the applicant. Specifically, whether the employer’s direction for the applicant to work at the AIS site represented acceptable alternative employment.

[42] In the context of s.120 of the Act the term “acceptable” is not a subjective notion involving an option available to a redundant employee. It is not a matter of choice for the redundant employee to either accept or reject alternative employment. Acceptable alternative employment is determined by way of an objective analysis involving a comparison between the terms and conditions that applied to the job that became redundant, and those terms and conditions applicable to the alternative employment.

[43] In simple terms, if the comparison between the redundant job and the alternative employment identified terms and conditions which were not comprehended by the employment and represented changes that had some significant impact on the employee, the alternative employment would be unacceptable. Conversely, if the terms and conditions of the alternative employment were comprehended by the employment which governed the redundant job or if the changed terms and conditions had little detrimental impact on the employee, then the alternative employment would be acceptable.

[44] In the present case the comparison that is required is that between the Telstra House job which became redundant, and the employment proposed at the AIS site.

[45] There were two particular conditions which applied to the work offered at the AIS site which were significantly different to the work involved with the Telstra House job. Firstly, the hours of work at the AIS site involved a rotating roster including night shifts compared to the fixed afternoon shifts worked at Telstra House. Secondly, the work at the AIS site included the broad mix of Security Guard duties including patrol work, whilst the Telstra House job was generally confined to concierge type duties.

[46] There would be employment circumstances where the requirement for shift work and a broadening of duties would render the alternative employment as unacceptable. For instance, if the employment had been established upon the basis of day work hours only and no duties other than concierge type functions were performed, it would be likely that the changes which were not comprehended and understood to be terms and conditions of the employment, would render the alternative employment as unacceptable.

[47] However, in this case the employment was clearly established on the basis that shift work and the broad mix of Security Guard duties including patrol work may be required from time to time. Indeed, the applicant had previously worked general Security Guard duties on rotating shifts including nights when he was engaged at the Telstra Tower site. Consequently, as acknowledged by the applicant 3, the work proposed at the AIS site was essentially no different to that which he had previously performed at the Telstra Tower site.

[48] Although the employer offered the applicant work which included terms and conditions which were comprehended by the employment, there was a degree of insensitivity attached to the way in which the employer handled the matter. The applicant is a man approaching 70 years of age who had worked for the employer for many years. In such circumstances it would be predictable that a return to shift work involving more physically demanding duties may present some difficulties for the applicant.

[49] The contest about the suitability of the offer of employment at the AIS site had been well established before Christmas of 2012. The applicant had not attended for work as directed in December. The employer had warned the applicant that his absence was considered to be unauthorised and disciplinary action could follow. The UV, acting on behalf of the applicant, had advised the employer that it would initiate proceedings in the Commission as a means to resolve the dispute. It was highly regrettable that the employer did not facilitate a meeting with the applicant and the UV in an attempt to find some amicable resolution whereby a long serving and ageing employee might be provided with a dignified and respectful outcome.

[50] The dismissal that subsequently occurred was activated on 23 January 2013 by virtue of the letter of 17 January. No actual written advice of dismissal was provided. There were a variety of aspects of the employer’s approach to the dispute and the dismissal from employment that followed, which seem to have been manifestly harsh. However these proceedings do not involve an adjudication of the harshness or otherwise of the dismissal of the applicant. Instead, the Commission has been asked to determine a claim for redundancy pay and in so doing is bound to apply the well established analysis of whether the applicant was offered acceptable alternative employment.

Conclusion

[51] The determination of this dispute has involved a contest about terms of the NES, specifically the application of ss.119 and 120 of the Act, which has manifest as a claim by the applicant for redundancy pay.

[52] My consideration has led me to conclude that the circumstances of the applicant satisfy s.119 of the Act, specifically the termination of the applicant’s employment occurred as a consequence of the employer no longer requiring the job done by the applicant to be done by anyone. Although the dismissal was stated to be for reason of the applicant’s refusal to attend for work at the AIS site, this conduct of the applicant was the direct result of the redundancy that arose in respect of the Telstra House job.

[53] Further consideration of the terms and conditions that applied to the offer of alternative employment when compared to the job performed by the applicant at Telstra House, has resulted in my conclusion that the employer obtained other acceptable employment for the applicant. Although there were different terms and conditions that applied to the alternative employment, these terms and conditions were comprehended by the particular employment circumstances of the applicant. Therefore the employer has satisfied the provisions of subsection 120 (1) (b) (i) of the Act and is under no obligation to make any redundancy payment to the applicant.

[54] However, in view of the manner of the handling of the dismissal of the applicant, I suggest that the employer give consideration to offering the applicant an ex gratia payment of four weeks as part of an agreement which would provide both a degree of dignity and respect to the termination of the applicant’s employment, together with a binding indemnity preventing the applicant from pursuing any further complaint against the employer.

[55] In view of the conclusions that I have reached, the application must be dismissed and the proceedings are concluded accordingly.

COMMISSIONER

Appearances:

Mr S Russell-Uren appeared on behalf of United Voice.

Mr J Moore appeared on behalf of the ISS Facility Services Pty Ltd.

Hearing details:

2013.

Canberra:

May, 7.

 1   Exhibit 4 - Attachment ISS4.

 2   Employer’s Outline of Submissions - paragraph 43.

 3   Transcript of proceedings (7May 2013), @ PN219.

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