Timbercraft Pty Ltd

In the recent decision of Timbercraft Pty Ltd, the Fair Work Commission was asked to consider a request by the employer to vary a decision made regarding the redundancy payments owed to an employee. The employee, who had been made redundant, had been awarded a redundancy payment. The employer sought to vary this amount, citing that the employee had subsequently taken up other employment and that the employer was experiencing financial difficulties.

The central legal issue before the Commission was whether the employee's new employment constituted "other employment" within the meaning of the Fair Work Act 2009, which would reduce the redundancy pay owed. Additionally, the employer argued that it was experiencing financial difficulties that should be taken into account when determining the redundancy pay. The Commission needed to determine whether the employer's financial situation justified a reduction in the amount of redundancy pay owed to the employee.

In its decision, the Commission found that the employee had indeed taken up other employment, and this constituted "other employment" for the purposes of the legislation. As a result, the redundancy pay owed to the employee was reduced in accordance with the statutory formula. The Commission also considered the employer's argument regarding financial hardship but found that it was not sufficient to warrant a further reduction in the redundancy pay. The Commission held that the employer's financial difficulties did not absolve it of its obligation to pay the full amount of redundancy pay as initially determined.

The Fair Work Commission ordered that the redundancy pay owed to the employee be reduced in accordance with the statutory formula due to the employee's other employment. The employer's application to reduce the redundancy pay on the basis of financial hardship was dismissed. The employer was ordered to pay the reduced amount of redundancy pay to the employee within 28 days of the decision.