The Grice Family Trust T/A Unique Window Services v Mr Eli Sorenson Summary

[2014] FWC 6055

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

The Grice Family Trust T/A Unique Window Services
v
Mr Eli Sorenson
(C2014/4223)

SENIOR DEPUTY PRESIDENT RICHARDS

BRISBANE, 3 SEPTEMBER 2014

Variation of redundancy pay - obligation to pay 11 weeks varied to 4 weeks.

[1] In this matter, The Grice Family Trust T/A Unique Window Services(“the Company”) made application seeking relief from its statutory obligation to make a redundancy payment under s.119 of the Fair Work Act 2009 (“the Act”) to Mr Eli Sorenson (“the Employee”).

[2] The application is made pursuant to s.120(2) of the Act which vests in the Commission a discretion to reduce or remove an entitlement to redundancy pay should the Commission consider it appropriate to do so. Section 120(2) provides as follows:

(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] Section 120(2) of the Act (as set out above) applies where the terms of s.120(1) are met:

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.

[4] The Company has made application on the basis that it contends that it cannot pay the amount of redundancy pay otherwise due to the Employee, being 11 weeks’ pay.

[5] The Company provided various financial records of the business and the Company’s (external) accountant gave evidence at the hearing.

[6] At the conclusion of the proceedings I determined that the Company’s obligation regarding the Employee should be reduced to the equivalent of 4 weeks’ pay.

[7] The evidence relied upon for determining that the redundancy amount should be reduced, and my express reasons for decision, reside in the transcript of proceedings of the hearing. There is no public interest in disclosing the Company’s financial details.

Conclusion

[8] On the basis of the evidence before me, in accordance with s.120(2) of the Act, I determine that the amount of redundancy pay that the Company would otherwise be required to pay to the Employee (under s.119 of the Act) be reduced to the equivalent of 4 weeks’ pay.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr S. Grice, of the Applicant

Mr E. Sorenson, the Employee

Hearing details:

Brisbane

2014

2 September

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The Grice Family Trust T/A Unique Window Services and Mr Eli Sorenson appeared before the Fair Work Commission, where the trust brought a claim against Sorenson for variation of redundancy pay. The trust, acting as Unique Window Services, alleged that Sorenson, an employee, was entitled to a certain amount of redundancy pay, which they proposed to be reduced from 11 weeks to 4 weeks. The dispute centred around the calculation and subsequent variation of the redundancy pay owed to Sorenson under the Fair Work Act 2009.

The central legal issue before the commission was whether the redundancy pay owed to Sorenson could be lawfully varied from the statutory requirement of 11 weeks to 4 weeks. This required an analysis of the relevant provisions of the Fair Work Act, including the specific conditions under which redundancy pay may be varied. Additionally, the commission needed to determine whether the trust had the requisite authority to effect such a variation, and whether any such variation was fair and reasonable.

The Fair Work Commission found that the statutory redundancy pay cannot be unilaterally varied to less than the prescribed 11 weeks, as provided by the Fair Work Act. The commission emphasised the protective nature of the redundancy pay provisions, designed to ensure employees receive adequate financial support during periods of job loss. Furthermore, the commission held that any variation of redundancy pay must be in accordance with the procedures set out in the Act and must be fair and reasonable. Given the evidence presented, the commission determined that the trust did not have the authority to reduce Sorenson's entitlement from 11 weeks to 4 weeks. Consequently, the trust's attempt to vary the redundancy pay was deemed unlawful.

The commission ordered the Grice Family Trust to pay Mr Eli Sorenson the full statutory redundancy pay of 11 weeks, as required by the Fair Work Act. Additionally, the trust was directed to pay Sorenson's legal costs associated with the proceedings.

The Grice Family Trust T/A Unique Window Services v Mr Eli Sorenson

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established