Trivett Automotive Retail Pty Ltd v Mark Allen

[2020] FWC 589

[2020] FWC 589

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Trivett Automotive Retail Pty Ltd
v
Mark Allen
(C2019/7302)

DEPUTY PRESIDENT DEAN SYDNEY, 5 FEBRUARY 2020

Variation of redundancy pay.

[1] On 29 November 2019 Trivett Automotive Retail Pty Ltd (Trivett) made an application pursuant to s.120 of the Fair Work Act 2009 seeking an order to vary the redundancy pay entitlement with respect to its former employee, Mr Mark Allen. Trivett seeks to reduce the amount of redundancy pay Mr Allen is otherwise entitled to be paid to nil, or to an amount which the Commission considers appropriate. The application is made on the basis that Trivett obtained ‘other acceptable employment’ for Mr Allen within its own business for the purposes of s.120(1)(b)(i) but such offer was rejected by Mr Allen.

[2] Mr Allen opposes the application and asserts that the position offered was not acceptable employment.

[3] The matter was heard on 15 January 2020. Mr P Almond appeared with permission for Trivett and Mr Allen appeared on his own behalf. Evidence was given by Ms Amanda Secchiaroli (HR Manager) and Mr Allen.

Relevant legislative provisions

[4] Section 119 of the Act relevantly provides as follows:

119 Redundancy pay

Entitlement to redundancy pay

(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a) 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; or

(b) because of the insolvency or bankruptcy of the employer.

[5] Section 119 goes on to provide the amount of redundancy pay by reference to the employee’s period of continuous service with the employer.

[6] 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, FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that 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.

Factual Background

[7] Mr Allen was employed by Trivett (formerly known as Inchcape Motors Australia Limited and Inchcape Automotive Retail Pty Limited) from 12 September 2005. At the relevant time Mr Allen performed the role of General Sales Manager at Subaru Waitara operated by Trivett.

[8] On 6 November 2019, Trivett notified a number of its employees including Mr Allen that their positions would be made redundant as a result of an organisational restructure. At a meeting attended by Ms Secchiaroli, Mr Craig Cairnduff, (Franchise Director), Mr Allen and other affected employees, discussions were held around redundancy and alternative work available within Trivett and its related companies. Mr Allen was offered the opportunity to apply for a newly created position, namely General Manager, Sales.

[9] Mr Allen was interviewed for the new role on 8 November 2019. On 11 November 209 he attended a further meeting with Ms Secchiaroli, Mr Cairnduff and Mr Tristan Archer (Head of Sales Operations) where he was advised that Trivett would offer him the new role of General Manager, Sales (the new role). Mr Allen was given material relating to the new role which included an employment contract, position description and commission plan.

[10] On 12 November 2019, Mr Allen through his solicitor Mr Rod Berry, declined the offer of the new role. Mr Allen’s view was that the new role was more senior with significantly increased responsibilities covering two sites (Waitara and Chatswood) and in that context the remuneration was insufficient.

[11] Upon being advised that the offer was rejected, Trivett provided Mr Allen with a list of vacant roles across its entities. Mr Allen was asked to advise by the following day if he was interested in any of the listed vacancies.

[12] At a meeting via telephone held on 13 November 2019, Mr Allen indicated that he was not interested in any of the other vacant roles.

[13] By letter dated 13 November 2019, Mr Allen was formally advised that his employment with Trivett was terminated for reason of redundancy and was placed on gardening leave until the termination took effect from 11 December 2019.

[14] There is no dispute that the amount of redundancy pay to which Mr Allen is entitled is 12 weeks which equates to $18,068.08 before deduction of applicable tax.

Issue to be determined

[15] Section 120 confers a discretion on the Commission to reduce the amount of redundancy pay where the employer ‘obtains other acceptable employment’ for the employee or cannot pay.

[16] It is common ground that Mr Allen’s former position was made redundant and that he is entitled to a redundancy payment by virtue of s.119. There is also no dispute that Trivett made an alternative employment offer to Mr Allen which he rejected. Trivett does not claim any incapacity to pay.

[17] Accordingly, the only issue to be determined is whether the ‘other employment’ offered to Mr Allen by Trivett was ‘acceptable’ within the meaning of s.120(1)(b)(i). If I am satisfied that the employment offered to Mr Allen was acceptable, I will then proceed to consider whether to reduce the redundancy payment.

Evidence and submissions

Trivett

[18] Trivett, through its solicitor, Mr P Almond, made oral and written submissions and provided two witness statements made by Ms A Secchiaroli (HR Manager) in support of its application. Both of Ms Secchiaroli’s statements were unchallenged.

[19] Ms Secchiaroli was responsible for managing the restructure and redundancy process which led to the present application. She provided detailed evidence as to what occurred at the meetings involving Mr Allen, and communications between her and Mr Berry, Mr Allen’s lawyer.

[20] Ms Secchiaroli said that at the meeting on 11 November 2019, Mr Allen asked if the salary offered for the new role could be negotiated, and if the car allowance which he had been provided with could be maintained. Mr Allen also expressed the view that the new role appeared to involve “a lot of extra work for not much of an increase in salary”.

[21] Ms Secchiaroli later said to Mr Allen:

“We encourage you to review the offer and get back to us tomorrow. This is a comparable role that we are offering you as part of the re deployment process. If you do not want to accept this role, I will continue to the next stage in the re deployment period. Ultimately you will need to resign as you will not be eligible for a redundancy payout as we have offered you a comparable role that you rejected.”

[22] Ms Secchiaroli was contacted by Mr Berry on 12 November 2019. Mr Berry pointed out that it was ‘illegal’ that Mr Allen was asked to resign and not be paid his redundancy entitlements. Mr Berry indicated that Mr Allen would decline the offer of the new role unless a higher salary was offered.

[23] She had further discussions with Mr Berry later the same day during which she advised that Trivett was not prepared to increase the salary for the new role and would not offer a car allowance. After Mr Berry confirmed that Mr Allen declined the new role, she advised that Trivett would proceed to the next stage in the redeployment process which included Mr Allen expressing interest in any other vacant roles across Trivett’s business. She then advised that if Mr Allen was not interested in any of the vacancies, his employment would be terminated on the grounds of redundancy and in such case he would be asked to work out his 4 weeks’ notice period on a gardening leave arrangement. Further, Trivett would apply to vary his redundancy pay.

[24] Ms Secchiaroli provided a comparison table of Mr Allen’s role and the new role, together with the associated remuneration packages, which is below:

Current role: General Sales Manager	Offered role: General Manager, Sales	Comments
Location	Waitara	Waitara (30%) and Chatswood (70%)	Chatswood is approximately 25 minutes drive from Waitara. The Respondent's contract of employment dated 14 March 2014 (Exhibit AS3) in clause 3.1 states "the company reserves the right to relocate your designated place of employment to another location within your metropolitan area." The Respondent lives at 21 Casino Road Greystanes NSW 2145. Waitara is approximately 55 minutes drive from the Respondent's home. Chatswood is about 70 minutes from the Respondent's home.
Base salary	$69,195.00	$85,000.00
Commissions (on target earning)	$70,200.00	$85,000.00
Hours of work	The Respondent's contract of employment dated 14 March 2014 in clause 8.1 (Exhibit AS3) states that the minimum hours of work required will be 38 per week. There is an expectation that weekend work is required, that the remuneration offered covers all hours worked (including weekends) and that appropriate time should be devoted to ensure the responsibilities and duties of the job are upheld.	The contract offered to Mark Allen dated 11 November 2019 (Exhibit AS5) in clause 8.1 state that the minimum hours of work required will be 38 per week, however flexibility of when work is performed is required. This includes working weekends and the remuneration offered reflects this.
Scope	Managing one site, Waitara	Managing two sites; Waitara and Chatswood
Job security	Full time, permanent role Notice of termination 4 weeks	Full time, permanent role Notice of termination 4 weeks
Accrual of benefits	All benefits including annual leave, sick leave, long service leave etc will continue to accrue at the same rate for a full time employee.	All benefits including annual leave, sick leave, long service leave etc will continue to accrue at the same rate for a full time employee.
Probationary period	Did not apply	Did not apply
Continuity of service	The Respondent's original service date of 12 September 2005 will be upheld and remain unchanged.	The Respondent's original service date of 12 September 2005 will be upheld and remain unchanged.	Unbroken
Other benefits	Car allowance of $175 per week (excluding tax). This is equivalent to $9,100.00 per anum (excluding tax).	Fully maintained company vehicle plus fuel card. Based on information obtained from the Applicant's Payroll Manager the indicative value of the vehicle and fuel that would be used for severance calculations is $19,196.
Banding of role / seniority	5C	5C	The Applicant has a system of role banding from band 7 (lowest) to 1 (highest). Bands 1 to 4 are Executive levels. The majority of the Applicant’s positions fit into bands 6 and 7 which include; Sales Consultants, Concierges, Technicians etc. The number “5” determines seniority and certain benefits. The “C” indicates that the role is eligible to receive commissions.
Reporting to	General Manager, which is band 5C	Head of Sales Operations, which is band 5C	The role of General Manager was made redundant as part of the same restructure that lead to the Respondent's role being made redundant. The role offered to the Respondent will report into the newly created role of Head of Sales Operations. This is one of the new roles created as part of the same restructure.
Manager reports to	Franchise Director, which is band 4C	Franchise Director, which is band 4C
Qualifications required	No qualifications are required for this role. The Position Description (Exhibit AS4) requires; a full drivers licence and a sound driving record; deep knowledge of the automotive industry and the competitive consumer landscape and significant experience managing and leading teams.	No qualifications are required for this role. The Position Description (Exhibit AS10) requires; a full drivers licence and a sound driving record; deep knowledge of the automotive industry and the competitive consumer landscape and significant experience managing and leading high performing sales teams.
Direct reports	x 2 Assistant Sales Managers (x 2 Waitara) x 1 Aftermarket Consultant (x 1 Waitara) x 1 Business Manager (x 1 Waitara)	x 1 Assistant Sales Manager (x 1 Waitara) x 2 Aftermarket Consultants (x 1 Waitara, x 1 Chatswood) x 2 Business Managers (x 1 Waitara, x 1 Chatswood) x 2 Sales Managers (x 1 Waitara, x 1 Chatswood) x 2 Sales Consultants (x 2 Chatswood)	Direct reports increasing from approximately 4 to 9.
Carer/family responsibilities	None known	None known

[25] Trivett submitted that the Commission should adopt the approach taken in Australian Commercial Catering Pty Ltd v Fair Work Commission 1 in considering whether the new role offered to Mr Allen was acceptable: that the test is an objective one and it is necessary to have regard to factors such as whether the work is of a like nature, whether the location of the employment being offered is not unreasonably distant, pay levels, hours of work, seniority, fringe benefits, workload and speed, job security, and the location of the employment and travelling time.

[26] Trivett noted that acceptable employment does not mean identical employment and relied on the decisions in Von Bibra Robina Autovillage Pty Ltd 2 and Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia (Feltex)3.

[27] Trivett in its submissions outlined the differences between Mr Allen’s former position and the new role as follows:

1. The new role required Mr Allen to manage two sites rather than one;

2. The number of employees reporting to him in the new role would have increased from 4 to 9; and

3. Mr Allen would also have been required to manage sales for used cars at the Chatswood site in the new role, in addition to managing sales for Waitara.

[28] Despite those differences, Trivett submitted that there are overwhelming similarities in the new role and identified the following matters which support its claim that the other employment was acceptable:

1. the rate of pay for the new role is greater than the rate of pay in the former role;

2. potential income from commissions would be greater in the new role – this is not detrimental to the employee;

3. hours of work are the same;

4. work location is in part the same;

5. seniority is the same, that is, the employee would still have had a single direct report between his role and the Franchise Director;

6. job security is the same, namely employment would remain terminable on 4 weeks’ notice but otherwise, the roles are both permanent and full-time;

7. continuity of service is unaffected;

8. there is no probationary period of employment to consider;

9. there is no evidence of carer’s responsibilities needing to be addressed;

10. there is no impact on the accrual of leave;

11. his ‘Band’ would be the same; and

12. there are no differences in required qualifications.

[29] Trivett contended that the additional travelling between the Waitara and North Shore sites would have occurred during working hours or directly from Mr Allen’s home to work and does not constitute a basis for non-acceptability. Further, Mr Allen would be travelling in a vehicle provided by Trivett.

[30] It was submitted that notwithstanding the increased responsibilities, there is nothing to suggest that Mr Allen could not have performed the new role. It argued that Mr Allen would in fact accept the offer if the annual base salary was increased.

[31] Trivett conceded that during the consultation process Mr Allen was erroneously informed that he would be required to resign if the alternative employment was not accepted but contended that such error was corrected and caused no detriment to Mr Allen other than some inconvenience.

[32] It was submitted that Trivett had been thorough and open in the processes it followed and that discretion should be exercised to reduce the redundancy pay to nil.

Mr Allen

[33] In reply, Mr Allen filed an outline of written submissions opposing the application. Mr Allen also provided a statement by his lawyer, Mr Berry. Mr Berry’s statement provided an account of the discussion he had with Mr Allen and the communications with Ms Secchiaroli. Mr Berry’s evidence was uncontroversial and unchallenged.

[34] Mr Allen relied on the additional responsibility of the role offered to him as the essential factor rendering the alternative employment unacceptable. This involved managing an additional site, travelling to another location and having more staff under his direct reporting line.

[35] He submitted that he sought legal advice from Mr Berry after being told by Ms Secchiaroli at the meeting that he would ultimately would have had to resign and would not be eligible for a redundancy payout as he had rejected the offer of a comparable role.

[36] He also contended:

“I believe this isn’t an alternative role compared to other employees that were affected. We were all offered the same salary for the newly created role General Manager of Sales. I was to look after 2 sites and the other 2 are only looking after one site each. I believe they have the comparable role. Their roles didn’t really change, just the title and who they report to.”

[37] Mr Allen stated that he made the following comments at the meeting on 11 November 2019 where he was offered the new role:

“My current salary per annum is $69,160 plus car allowance of $9,100 which totals $78,260. So you are offering an increase of $6,740 to manage 2 sites with more responsibilities, double the staff, and Manage Used Cars for Chatswood while travelling between the two ... This is not a comparable role compared to the other employees that were affected.”

[38] Mr Allen’s evidence confirmed that the other employment he was offered had a base salary of $85,000 plus a fully maintained company vehicle for both business and private use. Mr Allen said that he just purchased a new car and that payment of a car allowance was preferable in his circumstance. He said that he viewed the increase in monetary terms overall and did not take into account the provision of a vehicle.

Trivett’s reply

[39] In terms of Mr Allen’s view that other affected employees were offered comparable roles which did not involve higher responsibility, Trivett submitted that it is not a relevant consideration of whether the job offered to him was acceptable and that each case is determined on its own facts and circumstances. It relied on the decision in Sodexo Australia Pty Ltd 4 where Deputy President Sams stated:

“… the acceptance of alternative employment by one or more persons in a group of redundant employees does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.”

Was the other employment offered to Mr Allen ‘acceptable’?

[40] It is well established that the question of whether the position offered was acceptable alternative employment must be determined objectively and that the mere rejection of the alternative employment does not make it objectively unacceptable.

[41] The Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 5 (Derole Nominees) considered what constitutes ‘acceptable alternative employment’ and held:

“What constitutes ‘acceptable alternative employment’ is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification ‘acceptable’ is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 6

[42] As put by Watson SDP in Feltex:

“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.” 7 

[43] In a similar vein the Full Bench in Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 8 found that the determination of whether alternative employment is acceptable will involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters including the location of the employment and travelling time.

[44] In Sodexo Australia Pty Ltd T/A Sodexo 9, Deputy President Sams considered various authorities in respect of the question of what constitutes ‘other acceptable employment’ and helpfully summarised the principles in the following terms:

“•  the test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.

•  ‘acceptable employment’ is not identical employment, as no two jobs could be exactly the same.

•  an employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.

•  an employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.

•  the acceptance of alternative employment by one or more persons in a group of redundant employees does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.

•  There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment.” 10

[45] Having considered those factors, I find the alternative role offered to Mr Allen to be acceptable employment.

[46] I accept that the comparisons between the role Mr Allen had performed and the new role offered by Trivett, which are not challenged by Mr Allen, demonstrate a high level of similarity in the terms and conditions and support a finding that the alternative employment was objectively acceptable. This is particularly so given the new role would not break Mr Allen’s continuity of service and would not cause any loss of entitlements such as personal leave and long service leave.

[47] Notwithstanding that the new role involves a higher level of responsibility (ie. an additional site and five additional employees to manage), I do not consider the differences in the two roles make the employment unacceptable. The evidence demonstrated that the work was broadly the same at the two locations, ie selling vehicles.

[48] The salary offered to Mr Allen in the new position is higher, albeit marginally, than what was paid to him in his previous position.

[49] The distance between the two locations is not substantial, and in my view does not militate against the acceptability of the new role.

[50] I am also unable to discern any significant detriment of the new role which would make it unacceptable as a whole.

[51] Having considered all the relevant factors objectively, I am satisfied that the new role obtained by and offered to Mr Allen was acceptable. I therefore find that Trivett had obtained other acceptable employment for Mr Allen within the meaning of s.120(1)(b)(i).

Should the redundancy pay be reduced?

[52] I have considered the steps taken by Trivett leading up to Mr Allen’s dismissal. Trivett freely acknowledged that it made one mistake during its consultation with Mr Allen, in that Mr Allen was told he would have to resign if he did not accept the offer of the new role. The error was corrected after Mr Allen’s lawyer contacted Ms Secchairoli. Trivett argued that while this caused some inconvenience to Mr Allen, it did not cause him any detriment. Otherwise, Trivett submitted it was thorough and open in the processes it followed.

[53] I agree that with the exception of the mistake made by Trivett, the process it followed was appropriate. However, the error would have no doubt caused a level of anxiety to Mr Allen that was unnecessary, and it prompted him to incur costs in obtaining legal advice.

[54] Taking this into account, and having come to the conclusion that Trivett had obtained other acceptable employment for Mr Allen, I determine that it is appropriate in all the circumstances to reduce the amount of redundancy pay to an entitlement of 2 weeks’ pay.

[55] An order giving effect to this decision will be issued accordingly.

DEPUTY PRESIDENT

Appearances:

P Almond for Trivett Automotive Retail Pty Ltd.

M Allen on his own behalf.

Hearing details:

2019.

Sydney:

January 15.

Printed by authority of the Commonwealth Government Printer

<PR716424>

 1 [2015] FCAFC 189.

 2   [2007] AIRC 397.

 3   PR974699.

 4   [2016] FWC 4012.

 5 (1990) 140 IR 128.

 6   Ibid at 128.

 7 PR974699 at [89].

 8 (1988) 27 IR 226.

 9   [2016] FWC 4012.

 10 Ibid at [127].