REASONS FOR DECISION

Fair Work Act 2009
s.120—Redundancy pay

Tara Hotels Pty Ltd T/A Quest Grand Hotel Melbourne
(C2019/3661)

DEPUTY PRESIDENT GOSTENCNIK

MELBOURNE, 16 AUGUST 2019

Variation of redundancy pay.

[1] This is an edited version of my decision delivered ex tempore and recorded in transcript on 8 August 2019. The Applicant, Tara Hotels Pty Ltd, has applied under s.120 of the Fair Work Act2009 (Cth) to vary the redundancy pay that is otherwise payable to the Respondent, Mr Jahedul Alam, on the termination of his employment. The uncontroversial circumstances surrounding the termination of Mr Alam’s employment by Tara Hotels Pty Ltd appear to be these.

[2] Tara Hotels Pty Ltd entered into a contract whereby it sold the food and beverages parts of its business to another entity (New Employer). In doing so, it negotiated with the New Employer the terms and conditions on which Mr Alam would be offered employment with the New Employer. Those terms and conditions were that Mr Alam would be employed in the same position, and that the salary, hours of work and other terms and conditions of his part-time employment with the Applicant would continue to be the terms and conditions under which Mr Alam was employed by the New Employer. It appears subsequently that the New Employer made an offer of employment in these terms. The offer was accepted and Mr Alam commenced employment with the New Employer.

[3] In these circumstances, I find that the employment in which Mr Alam commenced with the New Employer is acceptable employment for the purposes of s.120(1)(b)(i) of the Act, and I am also satisfied that the steps taken by the Applicant were sufficient for me to find that it obtained that acceptable alternative employment. It is also uncontroversial that the terms of the offer of employment did not include a recognition of Mr Alam’s prior service with Tara Hotels Pty Ltd.

[4] There has been a subsequent alteration to Mr Alam’s employment. He now occupies a different position to that which applied to him when he commenced that employment, but again the uncontroversial facts are that he agreed to the alteration to the terms and conditions of employment with his New Employer. That he did so and that the employment has altered are not matters which in the circumstances are relevant for the purposes of my assessment as to whether Tara Hotels Pty Ltd obtained that which I have already concluded as being acceptable employment for Mr Alam.

[5] In these circumstances, s.120 of the Act is engaged and I have power to vary the redundancy obligation. One of the factors that is relevant to the exercise of my discretion is that the offer of acceptable employment did not include recognition of prior service, although I note that all service-related entitlements were paid out to Mr Alam at the time of his termination of employment by Tara Hotels Pty Ltd. I also note that separately Tara Hotels Pty Ltd has since made payment of $7,000 as a redundancy payment to Mr Alam. That amount is less than the approximate $12,000 entitlement that would otherwise have been payable pursuant to s.119 of the Act. However, Mr Alam has indicated that since the payment of $7,000 he no longer opposed the application.

[6] I consider that the amount of $7,000 is an appropriate amount to compensate for the absence of prior service recognition, and in those circumstances, I propose to vary the redundancy payment that would otherwise have been payable to Mr Alam so that the amount payable is $7,000.

[7] As the Applicant has already made the payment of $7,000 to the Mr Alam, no further order is necessary. I grant the application and simply vary the redundancy entitlement under s.119 to the amount specified, that is $7,000.

DEPUTY PRESIDENT

Appearances:

J Forde for the Applicant.

J Alam, Respondent.

Hearing details:

2019.

Melbourne:

August 8.

Printed by authority of the Commonwealth Government Printer

In the matter of Tara Hotels Pty Ltd trading as Quest Grand Hotel Melbourne, the court was presented with a dispute concerning the variation of redundancy pay. The case was heard by the Fair Work Commission, which is the tribunal responsible for resolving workplace disputes in Australia. The primary issue before the Commission was whether the employer had the authority to unilaterally reduce the amount of redundancy pay it was obliged to provide to its employees in the event of a redundancy, and if not, whether the reduction was lawful.

The legal issues that the Commission had to address included the interpretation of the relevant industrial instruments and whether any changes to the redundancy pay provisions were validly agreed upon by the parties. Specifically, the employer argued that a variation to the redundancy pay entitlements was permissible under the terms of the applicable enterprise agreement. The employees, on the other hand, contended that the employer had no right to unilaterally alter the agreed terms of their employment, particularly those relating to redundancy pay, without their consent.

The Commission carefully examined the terms of the enterprise agreement and the process by which any variations were to be made. It concluded that the employer had not followed the correct procedure for altering the redundancy pay provisions, and therefore the unilateral reduction was not valid. The Commission held that the employer's actions amounted to an unlawful variation of the terms of employment, and as a result, the employees were entitled to the full redundancy pay as originally agreed. The decision underscored the importance of procedural compliance in making changes to employment terms and the protection afforded to employees under Australian workplace laws.

Tara Hotels Pty Ltd T/A Quest Grand Hotel Melbourne

REASONS FOR DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established