The O'Kelly Group Pty Ltd
[2024] FWC 1143
•2 MAY 2024
| [2024] FWC 1143 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
The O’Kelly Group Pty Ltd
(C2024/2434)
| COMMISSIONER MIRABELLA | MELBOURNE, 2 MAY 2024 |
Variation of redundancy pay – other acceptable employment.
On 18 April 2024, The O’Kelly Group Pty Ltd (the company) applied for an order under s.120 of the Fair Work Act 2009 (the Act) to reduce the redundancy entitlement of Ms Sopheap Chan. Ms Chan has been employed in the position of Machine Operator in the company’s paper packaging manufacturing business since 2 February 2015.
Ms Chan will have worked for the company for just over nine years and there is no dispute that she will be entitled to 16 weeks redundancy pay pursuant to s.119 of the Act.
The company has applied to reduce Ms Chan’s redundancy pay entitlement to nil because it offered her an alternative role as a Store Person in their warehouse, which is at the same location as her current work. It contends that this is ‘other acceptable employment’ for the purposes of s.120(1)(b)(i). Ms Chan advised at a conference I conducted in the matter on 2 May 2024 that after initially declining the offer, she accepts the offer. I advised the parties that I had decided to grant the application and that I would issue written reasons for my decision.
Section 120 of the Act gives the Fair Work Commission (the Commission) the discretion to vary a redundancy pay amount to which an employee would otherwise be entitled under s.119 of the Act. Section 120 applies if the employee is entitled to an amount of redundancy pay under s.119 (s.120(1)(a)) and the employer either obtains ‘other acceptable employment’ or cannot pay the amount of the redundancy pay (s.120(1)(b)). The Commission’s discretion in s.120(2) to vary the redundancy pay to a specified amount (including a nil amount) that it considers appropriate can only be exercised if the conditions of s.120(1) are met. Where an order under s.120(2) is made, the reduced redundancy pay to which the employee is entitled will be the amount specified in the determination (s.120(3)).
In this matter, I need to consider whether the company obtained ‘other acceptable employment’ for Ms Chan and if so, whether I should exercise my discretion to reduce her redundancy pay.
Background
The company operates a business manufacturing and selling paper packaging. Due to commercial viability, the company has decided to close the manufacturing part of its business and will instead source paper from overseas.
The company will continue to supply paper product and will accordingly retain its warehousing facility. The company offered Ms Chan the position of Store Person in the warehouse. Ms Chan advised at the conference on 2 May 2024 that she accepts the new position.
Submissions
The company submitted that it obtained acceptable employment for Ms Chan within the meaning of s.120 of the Act. It said it offered Ms Chan a suitable role as Store Person in its warehouse. They submit that the 16 weeks redundancy pay amount to which Ms Chan is entitled should be reduced to nil, because the Store Person position will not cause any reduction in the terms and conditions of her employment and will be performed at the same location as her current position. Ms Chan does not object to this submission.
Consideration
It is not in dispute that the company obtained other employment for Ms Chan. It offered her employment as a Store Person in its warehouse. The company started discussions with staff in August 2023 and so the offer has been made in good time before the employment in the manufacturing facility is to end. This is relevant because s.120 applies only where the employer obtains ‘other acceptable employment for the employee’; that is, Ms Chan must have been an employee when the offer was made.
The question of whether the other employment is ‘acceptable’ is an objective assessment. The ‘other employment’ will necessarily be different in some regard to the existing employment. In assessing whether other employment is acceptable, it is relevant to consider the differences between the existing employment and the role that has been offered by the company and accepted by Ms Chan.
Firstly, the location of both roles is the same. Further, Ms Chan in the position of Store Person, when compared with her current position as Machine Operator, would be paid the same hourly rate, would work the same number of hours, would have the same start and finish times, and would have the same opportunity for overtime.
The ‘other employment’ offered does not need to be the same as Ms Chan’s current job. The question I need to answer is whether the other employment offered to Ms Chan by the company was objectively acceptable; that is, capable of being agreed to or suitable.
On balance, I find that the company did obtain ‘acceptable other employment’ for Ms Chan for the purposes of s.120(1)(b)(i) of the Act.
Having satisfied the requirements of s.120(1), I must now consider whether to exercise my discretion to reduce Ms Chan’s redundancy pay. In my view, and taking all the relevant matters into consideration, it is appropriate to reduce Ms Chan’s redundancy pay.
Conclusion
I am satisfied that the company obtained other acceptable employment for Ms Chan, and that in the circumstances I should exercise my discretion to reduce the redundancy pay to which she is entitled to nil.
An order will be issued separately reflecting this decision.
COMMISSIONER
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