The Trustee for Elatm Family Trust T/A J.E. Professional Plastering v Gregory Gibson

[2019] FWC 200005

[2019] FWC 200005

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120—Redundancy pay

The Trustee for Elatm Family Trust T/A J.E. Professional Plastering

v

Gregory Gibson

(C2019/2771)

DEPUTY PRESIDENT DEAN SYDNEY, 28 MAY 2019

Variation of redundancy pay - small business exclusion - application dismissed.

1. The Trustee for Elatm Family Trust T/A J.E. Professional Plastering (the Applicant) has made an application pursuant to s 120 of the Fair Work Act2009 for variation of the obligation to pay redundancy pay pursuant to s.119 of the Act. The application is made in relation to a former employee, Mr Gregory Gibson, who was made redundant on 10 May 2019.

1. The Applicant asserts that its financial position is such that it is unable to meet the cost of its redundancy obligation due to Mr Gibson under the Act.

1. The matter was listed for a hearing today, 28 May 2019. The Applicant was represented by Mr Jamie Elatm. Mr Gibson did not appear, after advising the Commission by telephone earlier today that he would not attend.

1. At the hearing, the issue of whether the Applicant was a small business was raised by the Commission, as it was apparent from the application that the Applicant employed fewer than 15 employees, and as such may be excluded from the obligation to provide redundancy pay to Mr Gibson.

1. An application under s.120 of the Act for variation of redundancy pay applies if an employee is entitled to be paid an amount of redundancy pay by the employer because of the operation of s.119.

1. However, s.121(1)(b) of the Act provides that s.119 does not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in s.117(1), the employer is a small business employer.

1. Section 23(1) of the Act sets out the meaning of small business employer as follows:

23 Meaning of small business employer

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and
(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.

1. If the Applicant in this matter was a small business employer at the relevant time as defined in s.23 of the Act, then by virtue of the operation of s.121 of the Act, the Applicant is excluded from an obligation to pay redundancy pay. Consequently, the threshold question to be firstly determined is whether or not the Applicant was a small business employer at the relevant time.

1. At the hearing, the Applicant made submissions to the effect that it was a small business, that Mr Gibson was the only employee other than Mr Elatm, and that there were no associated entities. These submissions were supported by oral evidence given by Mr Elatm to this effect.

Consideration and Conclusion

1. The evidence is clear that the Applicant was a small business employer at the relevant time. By virtue of the operation of s.121 of the Act, the Applicant is excluded from an obligation to pay redundancy pay pursuant to s.119 of the Act.

1. The Applicant’s application to vary the redundancy pay for reasons of incapacity to pay cannot have jurisdiction as the section only applies if an employee is entitled to be paid an amount of redundancy pay by the employer.

1. For the above reasons, I dismiss the application.

DEPUTY PRESIDENT

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