The Western Australian Turf Club T/A Perth Racing
[2017] FWC 6153
•7 DECEMBER 2017
| [2017] FWC 6153 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120—Redundancy pay
The Western Australian Turf Club T/A Perth Racing
(C2017/4437)
DEPUTY PRESIDENT BULL | PERTH, 7 DECEMBER 2017 |
S.120 application to vary redundancy pay entitlement. Offer of other acceptable employment. Variation limited to NES entitlement.
[1] The Western Australian Turf Club, which trades under the name of Perth Racing, has made an application pursuant to s.120(2)of the Fair Work Act 2009 (FW Act) to reduce the redundancy entitlement of Ms Janine Turner who was previously employed by Perth Racing as an Administration Officer in the Tracks and Facilities Department. Perth Racing states that Ms Turner’s previous position was made redundant.
[2] Ms Turner, until her redundancy, had been employed for a period of 3.8 years with Perth Racing which, under the National Employment Standards (NES), provides a redundancy entitlement of 7 weeks pay where an employee is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour. 1
[3] The applicant sought to reduce Ms Turner’s redundancy entitlement to 19% of her entitlement. 2 The applicant sought this reduction on the basis that the applicant had offered Ms Turner a new Administration Officer position which involved a 19% reduction in hours from her previous position.
[4] Perth Racing seeks to reduce the redundancy entitlement of Ms Turner on the basis that she was offered a position as an Administration Officer, which guaranteed 24 hours work per week at the same rate as her previous position as an Administration Officer.
[5] In a letter dated 10 August 2017, following a meeting the previous day, Perth Racing wrote to Ms Turner confirming that her position and that of others had become redundant due to a review of the business structure of Perth Racing which aimed to make roles within the business functionally aligned to the business strategy.
[6] The correspondence confirmed the offer of an alternative position as an Administrative Officer with the same hourly rate of pay as her current role. The alternative position involved a reduction in working hours from 27.5 to 24 hours per week, a reduction of 3.5 hours per week. 3 The reduced hours took into account that the rostering for the Facilities and Tracks Department would be fulfilled by a central team also responsible for Hospitality and Events and Security rostering. Ms Turner was advised that should she decline the offer of an alternative role, an application would be made to the Fair Work Commission to vary her redundancy entitlement on the basis that Perth Racing have offered her a ‘suitable and similar alternative role’.
[7] Ms Turner opposes any reduction of her redundancy entitlement on the basis the offer of alternate employment was not suitable to her. Ms Turner’s submissions referred to the application to reduce her redundancy entitlement as adding stress and anxiety to difficult personal circumstances she was facing.
[8] Ms Turner stated that at the meeting of 9 August 2017, she advised Perth Racing she could not take a reduction in hours as she was already working part-time with limited hours. The following day, at a further meeting, Ms Turner was again asked whether she would accept a reduction in hours, which she declined. Ms Turner was then provided written advice confirming her redundancy.
[9] Ms Turner also raised issues about the alleged failure of Perth Racing to genuinely consult about her redundancy and questioned why other redundant employees had been paid out their full redundancy entitlement.
[10] It appears that Perth Racing initially held the view that Ms Turner was not covered by an award or enterprise agreement. The application to reduce the redundancy entitlement, lodged with the Commission on 10 August 2017, refers to Ms Turner being employed under a common law contract. Since the application was lodged with the Commission, it has been accepted by Perth Racing that the position of Administration Officer is covered by the Racing Clubs and Events Award 2010 and the Perth Racing Enterprise Agreement 2016 (the Agreement).
[11] Ms Turner’s contract of employment contains terms in respect to her part time employment that are inferior to the Award provisions, 4 as does the Agreement.5 Ms Turner’s evidence was that she was not provided with an opportunity to vote on the Perth Racing Enterprise Agreement 2016, on the basis that Perth Racing had indicated she was not covered by the Agreement.
[12] As the matter could not be resolved by a Commission convened conciliation conference, the matter was listed for arbitration.
[13] Ms Turner’s permanent employment commenced on her acceptance of a written offer of employment dated 17 April 2015, 6 which stated that she was to be engaged as an Administration Officer on a permanent part-time basis.7 The ordinary hours of work were stated to be a “minimum of 27.5 hours per week to a maximum of 38 hours per week.”8
[14] As stated above, the application by Perth Racing is made pursuant to s.120(2) of the FW Act which provides the Commission with a discretion to reduce or remove an entitlement to the National Employment Standards (NES) redundancy pay, should the Commission consider it appropriate.
[15] Section 120 of the FW Act applies to National System employees and employers 9 and the redundancy entitlements are contained within the FW Act’s National Employment Standards.
[16] These terms are defined in ss. 13 and 14 of the FW Act as follows:
“Section 13 Meaning of National System Employee
13 A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.
Section 14 Meaning of National System Employer
14(1) A national system employer is:
(a) a constitutional corporation, so far as it employs, or usually employs, an individual; or
(b) the Commonwealth, so far as it employs, or usually employs, an individual; or
(c) a Commonwealth authority, so far as it employs, or usually employs, an individual; or
(d) a person so far as the person, in connection with constitutional trade or commerce, employs, or usually employs, an individual as:
(i) a flight crew officer; or
(ii) a maritime employee; or
(iii) a waterside worker; or
(e) a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or
(f) a person who carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory.”
[17] The jurisdiction of the Commission in respect of determining an application under s.120 - Variation of Redundancy Pay for other Employment or Incapacity to Pay is therefore restricted to where the employee is employed by a national system employer, which must meet the definition under s.14(1) above. An extended meaning of national system employer to cover unincorporated employers applies where a State has, before 1 July 2009, referred its powers to the Commonwealth for the purposes of paragraph 51 (xxxvii) 10 (see s.30B of the Act). Unlike some states11, the State of Western Australia has not referred its powers under s.30B.
[18] Section 12 of the FW Act defines constitutional corporation to mean a corporation to which paragraph 51(xx) of the Constitution applies. Section 51(xx) gives the Commonwealth Parliament the power to legislate with respect to foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth. 12
[19] The Corporations Act 2001(Cth) defines a corporation at s.57A:
“Meaning of corporation
(1) Subject to this section, in this Act, corporation includes:
(a) a company; and
(b) any body corporate (whether incorporated in this jurisdiction or elsewhere); and
(c) an unincorporated body that under the law of its place of origin, may sue or be sued, or may hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose.
(2) Neither of the following is a corporation:
(a) an exempt public authority;
(b) a corporation sole.
(3) To avoid doubt, an Aboriginal and Torres Strait Islander corporation is taken to be a corporation for the purposes of this Act.”
(My underline)
[20] Perth Racing submits that while they are an unincorporated body, they still meet the definition of a constitutional corporation and are thus a national system employer. This is because under The Western Australian Turf Club Act 1892 (WA), Perth Racing may sue or be sued, or may hold property in the name of its secretary or of an office holder duly appointed for that purpose 13 as per the definition of a corporation at s.57A(1)(c) of the Corporations Act 2001.
[21] Further, it is submitted that Perth Racing is involved in trading activities, including the provision of services during race meetings, from which it derives substantial revenue which demonstrates that they are a trading corporation.
[22] On the basis of what has been put by Perth Racing, I am satisfied that Perth Racing is a national system employer with standing to bring this application.
[23] Section 120(2) is couched in the following terms:
“120(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.”
[24] Section 120(2) of the FW Act only applies where the terms of s.120(1) are met:
“120(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.”
(my underline)
[25] Redundancy payments are intended to compensate for the loss of non-transferrable credits such as sick and long service leave and other entitlements based on length of service, and the inconvenience and hardship imposed on employees.14
[26] The statutory provision to enable a reduction in redundancy entitlements arises historically from a decision of a Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case (theRedundancy Case).15 This case introduced a general severance pay entitlement under federal awards for employees whose employment was terminated on account of redundancy.
[27] In the Redundancy Case, employers submitted that it would not be appropriate, where alternative employment had been secured for the employee concerned, for the employee to then receive a redundancy benefit. The Full Bench stated:
“We do not wish to prevent an employer making an application to be exempted from the general prescription pursuant to this decision in cases where an employer obtains acceptable alternative employment for an employee but we would point out that, in our decision, severance payments are not made for the purpose of assisting employees to find alternative employment. Where such an application was made it would be important to consider whether previous service with the previous employer was recognized as service with the new employer. However, we would make it clear that we do not envisage severance payments being made in cases of succession, assignment or transmission of a business.”16
[28] Later in that case, the Full Bench considered the terms of an amendment to the Metal Industry Award 1984 that should be made to reflect its decision.17 The Full Bench ruled that the following provision should be included in the amendment to that award:
“An employer, in a particular redundancy case, may make application to the Commission to have the general severance pay prescription varied if he/she obtains acceptable alternative employment for an employee.”18
[29] Redundancy payments are intended to compensate for the loss of non-transferrable credits such as sick and long service leave as well as other entitlements based on length of service and the inconvenience and hardship imposed on employees, as discussed in the Redundancy Case.
[30] It is a severe step for the Commission to make an order to limit or remove an employee’s statutory entitlements to redundancy pay. The employer must demonstrate that they have ‘obtained other acceptable employment’ for the employee concerned before the discretion provided in s.120(2) can be invoked.
[31] Ms Turner’s redundancy entitlement is derived from the Perth Racing Enterprise Agreement 2016,which states atclause 15 – Redundancy, that an employee’s entitlement will be as per the NES plus an additional one week’s pay.
[32] Section 55(4) of the FW Act permits an enterprise agreement to include terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES or that supplement the NES. Section 55(6) provides that if an enterprise agreement includes such terms, those terms operate in parallel with the employee’s NES entitlement, but not so as to provide a double benefit.
[33] Section 120 is a provision of the NES relating to the NES redundancy pay entitlement in s.119 and is not excluded by the Agreement. 19 Despite this conclusion, s.120 only provides the Commission with jurisdiction to reduce an employee’s NES entitlement; the Commission has no power to reduce the additional week’s pay provided for under the Agreement.
[34] The Commission must determine whether the job offer made to Ms Turner by Perth Racing constitutes obtaining other acceptable employment. The Full Court of the Federal Court in FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia20 stated that if an offer of alternative employment has been made by the employer, and the employee does not accept it, then the question turns to whether the offer was an acceptable one.
[35] There is no dispute that Perth Racing made an alternative job offer to Ms Turner in the sense that it ‘obtained’ for Ms Turner other alternative employment, which Ms Turner has declined. The Commission must then determine whether the other alternative employment obtained was ‘acceptable’ employment, which Ms Turner disputes.
[36] It is well established that the onus rests with the employer who seeks to activate the exemption from redundancy payment obligations21 to its employees.
[37] To establish the acceptability of alternative employment, the test is an objective one, involving a consideration of matters such as hours of work, pay levels, recognition of previous service, fringe benefits, distance of travel to job, workload, job security and other matters.22
[38] There is no requirement that the new job offer be identical or broadly comparable with the redundant position. As SDP Watson stated in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 23:
“I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.”
Further, VP Lawler stated in Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai 24:
“Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.”
[39] The position of Administration Officer was offered to Ms Turner following Perth Racing’s review of internal structures and processes within its operations and support functions, which resulted in some roles no longer existing and new roles being created. The position was offered with the same position title, the same hourly rate of pay, but with 3.5 hours less to be worked per week. In addition, the position description was altered to reflect the reduction in rostering duties to be undertaken. Ms Turner would not have lost any non-transferrable credits nor broken her continuity of service.
[40] On balance, I consider that the position of Administrative Officer working 3.5 hours less per week with the removal of the rostering duties to be acceptable alternative employment within the meaning of s.120(1)(b)(i) of the FW Act. Albeit that from Ms Turner’s perspective the position offered was inferior in respect of the hours to be worked, the position offered was not such that it could not be described as other acceptable employment.
[41] However, the factors raised by Ms Turner arising from the redundancy process and being offered the new position, including the reduction in income associated with working 3.5 hours less per week, are relevant factors to be considered in terms of the discretion to be exercised in this application.
[42] Ms Turner states that she declined the offer of alternate employment on the basis that working 24 hours over 5 days a week was not a viable proposition, taking into consideration a one hour commute in travelling time each way to and from work and the approximate $150 per fortnight wage reduction. Ms Turner states that at no time was she advised that she could work the reduced hours over a 3 day period, at 8 hours per day, rather than over the existing 5 day arrangement. Ms Turner states that this possibility only came to light at a conference held before the Commission, following the cessation of her employment.
[43] Ms Turner stated that had she been advised prior to her termination that there was an ability to work the reduced hours over a 3 day week, this may have been a viable arrangement for her circumstances.
[44] Perth Racing submitted in its defence that Ms Turner refused to entertain any discussion about the job offer at the meeting of 9 August and therefore discussions about arrangements as to how the reduced hours may be worked were not able to be conducted. I note however, the obligation arising out of clause 17 of the Agreement, which requires the employer to discuss with the affected employee, measures to avert or mitigate any adverse effects of such changes on the employee.
[45] It was put by Perth Racing that Ms Turner was only interested in receiving her full redundancy entitlement. In this regard I adopt the comments of DP Sams in Mantra Hospitality (Admin) Pty Ltd 25:
“Let me say from the outset that I have no truck with an employee who is faced with redundancy and is offered comparable alternative employment, but refuses it because he/she would rather take a redundancy payout. In my opinion, that is not the underlying intention or social and industrial purpose of redundancy benefits. Nor do I think it was the intention of the legislature when enacting s 120 of the Act. It goes without saying, that in many cases, the existence of generous redundancy payouts, coupled with voluntary redundancy, actually serves as a disincentive to the preservation of jobs.”
[46] In determining to exercise the discretion to reduce Ms Turner’s NES redundancy pay entitlement, as claimed by Perth Racing, I need to balance the conclusion that other acceptable employment was obtained for Ms Turner by Perth Racing against the factors Ms Turner raises and any other factors which weigh for or against a reduction of her statutory entitlement.
[47] These factors include Ms Turner’s already limited income from working 27.5 hours per week being reduced by 3.5 hours per week, and the fact that Ms Turner was not advised of the additional weeks redundancy entitlement under the Agreement at the time of the discussions, nor was she advised of the ability to work the new hours in an manner other than a 5 day week, which at the time Ms Turner considered was not a viable proposition considering her travel commitments.
[48] The Applicant has satisfied the Commission that, in all the circumstances, the discretion available to reduce its redundancy pay obligations to Ms Turner should be exercised, however not to the extent claimed. It should be exercised to reduce the entitlement by 4 weeks, to a period of 3 weeks redundancy pay.
[49] As discussed above, the Commission is unable to make any adjustment to the additional week’s pay provided for by the Agreement.
[50] An order will issue reflecting this decision.
DEPUTY PRESIDENT
Appearances:
Ms J Turner on her own behalf
Ms J Homden of The West Australian Turf Club T/A Perth Racing
Hearing details:
2017
Perth
26 October
1 S.119(1)(a)
2 In an email dated 30 October Perth Racing advised the Commission that they sought to reduce the redundancy payment entitlement to 18.916% of the entitlement.
3 The application to reduce the redundancy to 19% was based on the average hours worked by Ms Turner, being 29.6 hours/week, per email of 30 October 2017
4 See clause 12 of the Award and in particular subclause 12.2
5 See subclauses 5.1 and 5.4 of the Agreement not requiring all the conditions of 12.2 of the Award
6 Exhibit A5
7 Ms Turner was previously engaged by Perth Racing as a casual commencing September 2013
8 Exhibit A5
9 S.41 of the FW Act
10 Section 51(xxxvii) of the Constitution provides a mechanism through which state parliaments can refer powers over matters to the Commonwealth Parliament. The Commonwealth Parliament is consequently provided the power to make laws with respect to those referred matters, but only for those states from which the matter is referred.
11 For example on 25 September 2009, at a meeting of the Workplace Relations Ministerial Council the NSW government signed an agreement to refer its powers to the Commonwealth for the purposes of creating a national industrial relations system. The state parliament of NSW then enacted the Industrial Relations (Commonwealth Powers) Act 2009 No 115 to give legislative effect to this agreement.
12 Constitution Act 1901
13 Sections 7,9, 10 and 42 of The Western Australian Turf Club Act 1892
14 Termination Change and Redundancy Case (1984) 8 IR 34; AIRC Print F6230 at p.50.
15 (1984) 8 IR 34
16 Ibid at 75
17 (1984) 9 IR 115
18 Ibid at 135
19 See Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd[2014] FWCFB 6737 at [30]
20 [2015] FCAFC 90
21Clothing and Allied Trades Union v Hot Tuna (1988) 27 IR 226, Re Target Retail Agreement 2001, PR916204, 4 April 2002, at para 6
22 Ibid at 230-231
23 PR974699 at [89]
24 [2013] FWC 1327 at [9]
25 [2013] FWC 1063 at [31]
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