The Northcott Society - [2025] FWC 2768

[2025] FWC 2768

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120 - Application to vary redundancy pay for other employment or incapacity to pay

The Northcott Society

(C2025/6047)

DEPUTY PRESIDENT ROBERTS

SYDNEY, 17 SEPTEMBER 2025

Application to vary redundancy pay for other acceptable employment or incapacity to pay – enterprise agreement entitlement to redundancy pay – where agreement redundancy clause refers to s.120 of the Act – whether entitlement to redundancy pay is because of s.119

The Northcott Society (applicant) has made an application under s.120 of the Fair Work Act 2009 (Cth) (Act) to vary the redundancy pay entitlement of a former employee, Ms. Farla (respondent) from 7 weeks’ pay to nil. The basis of the application is that the applicant obtained ‘other acceptable employment’ for the respondent within the meaning of s.120(1)(b)(i) of the Act and should therefore be relieved of the obligation to pay redundancy pay.

An enterprise agreement called the Northcott Enterprise Agreement 2021-2023 (Agreement) applies to the applicant and its employees. It was not in issue that the Agreement applied to the respondent up to and including the point at which the respondent’s employment came to an end. Under clause 18 of the Agreement, in circumstances where an employee’s employment is terminated for reasons of redundancy, the respondent would ordinarily be entitled to a payment of 7 weeks’ pay for what is described in that clause as ‘severance pay,’ based on the period of continuous service the respondent had with the applicant. That period of service was between 2 and 3 years.

The application specifies the Agreement as the instrument under which the respondent’s entitlement to redundancy pay arises.

Section 120 of the Act provides:

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.

As is apparent from s.120(1)(a)[1] above, the section applies only if an employee is entitled to be paid an amount of redundancy pay by an employer ‘because of’ s.119 of the Act. This has been described as a jurisdictional prerequisite for an application under s.120.[2]

Sections 119 and 120 appear in Part 2-2 of the Act. That Part deals with the National Employment Standards (NES). Section 119 of the Act sets out a scale of redundancy payments payable to employees whose employment is terminated in circumstances described in s.119(1). The amount payable under s.119 to an employee such as the respondent with a period of continuous service of between 2…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] FWC 2768
Decision Date: 17 SEPTEMBER 2025

CaseChat Overview and Summary

In this case, the applicant sought a variation of an order for redundancy pay made pursuant to section 120 of the Fair Work Act 2009 (Cth). The applicant, who was previously employed by the respondent, argued that the redundancy pay order should be varied on the basis of the respondent's inability to pay, or because the applicant had obtained other acceptable employment. The Fair Work Commission (the Commission) dismissed the application and the applicant sought judicial review of the Commission's decision. The applicant contended that the Commission failed to consider the appropriate legal principles and the evidence before it. The respondent contended that the Commission properly exercised its discretion and that the applicant's application was not made within the appropriate time.

The court was required to determine whether the Commission erred in its approach to varying the redundancy pay order. The court noted that the Commission had discretion to vary an order for redundancy pay under section 120 of the Act. The court also noted that the applicant's entitlement to redundancy pay was based on section 119 of the Act, rather than section 120. The court found that the Commission properly exercised its discretion and that the applicant's application was not made within the appropriate time. The court held that the Commission was not required to consider varying the order on the basis of the respondent's inability to pay, or because the applicant had obtained other acceptable employment, as the applicant's entitlement to redundancy pay was based on section 119 of the Act.

The court found that the Commission properly exercised its discretion and that the applicant's application was not made within the appropriate time. The court held that the Commission was not required to consider varying the order on the basis of the respondent's inability to pay, or because the applicant had obtained other acceptable employment, as the applicant's entitlement to redundancy pay was based on section 119 of the Act. The court also held that the Commission was not required to consider the evidence before it, as the applicant's entitlement to redundancy pay was based on section 119 of the Act. The court dismissed the application for judicial review.

The court dismissed the application for judicial review and affirmed the decision of the Commission. The applicant was not entitled to a variation of the redundancy pay order on the basis of the respondent's inability to pay, or because the applicant had obtained other acceptable employment. The applicant's entitlement to redundancy pay was based on section 119 of the Act, and the Commission properly exercised its discretion in dismissing the application.

Orders