UXC Connect v Moore
[2012] FWA 4296
•17 MAY 2012
[2012] FWA 4296 |
|
DECISION |
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
UXC Connect
v
Mr Doug Moore
(C2012/3792)
COMMISSIONER ROE | MELBOURNE, 17 MAY 2012 |
Application to reduce to nil the redundancy payments to Mr Moore.
[1] This is an application under s.120 of the Fair Work Act 2009 (the Act) to reduce the redundancy pay otherwise due under the NES on the grounds that the employer intends to offer the employee suitable alternative employment at a lower rate of pay.
[2] The applicant employer is UXC Connect (UXC or the Applicant). The application relates to an employee Mr Doug Moore.
[3] The application was lodged on 14 May 2012 and was heard on 17 May 2012.
[4] The Applicant was represented by Mr David Ware, Human Resources Manager, and Mr Doug Moore represented himself.
[5] At the conclusion of the proceedings on 17 May 2012 I issued a decision dismissing the Application.
Statutory provisions
[6] Section 120 of the Act is to be found in Chapter 2, Part 2-2, Division 11. Division 11 relates to notice of termination and redundancy pay and is one of the National Employment Standards (NES). The NES, along with the relevant modern award, establishes the main terms and conditions of employment for employees. 1 The NES must not be contravened by an employer.2
[7] A modern award must not exclude the NES or any provisions of the NES although it may include terms with respect to the NES that it is expressly permitted to include under the NES or the relevant regulations. 3 A modern award may include terms ancillary or incidental to the NES or supplement the NES but only to the extent that the effect of those terms is not detrimental to any employee in any respect when compared to the NES.4
[8] The NES provisions in relation to notice of termination and redundancy pay specify the requirements for notice of termination or pay in lieu of notice. 5 Section 119 specifies the entitlement to and the amount of redundancy pay. Section 120 provides:
“(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, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA 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.”
[9] The Applicant relies on paragraph (b)(i), that is, that it has obtained other acceptable employment for the employee concerned.
[10] I am satisfied that there is no relevant modern award which alters the NES relevant to this application. The provisions as they appear in the Act are therefore relevant to the determination of this matter.
[11] In considering a similar provision to s.120 of the Act in the Clothing Trades Award 1982 a Full Bench of the Commission, in Australian Chamber of Manufactures and Derole Nominees 6 (Derole), found that:
“The provision does no more than provide an avenue by which an employer may apply to the Commission to vary the obligation which otherwise would be imposed by the award. It does not follow from the terms of the clause that an employer coming within its scope will achieve necessarily full or partial relief. The level of relief, if any, to apply in a given case is a matter to be determined as an exercise of discretion in the circumstances of that case.” 7
[12] This has not changed. Fair Work Australia has a discretion to reduce redundancy pay if the requirements set out in s.120(1)(b) of the Act are met. This is clear from the use of the word ‘may’ in subsection 120(2).
Considerations
[13] Commissioner Bissett in Vicstaff Pty Ltd T/A Stratco 8 usefully analysed the relevant considerations for determining if other employment obtained by the employer for the employee is ‘acceptable employment. Commissioner Bissett quoted the case of Derole where a Full Bench found:
“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 like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 9 (emphasis added)
[14] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 10(Hot Tuna), a Full Bench of the Commission found that the onus rested on the employer making an application to vary redundancy pay to demonstrate that the alternative employment is acceptable. The determination of that issue may involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and travelling time. The determination of the question of acceptability of the employment however can only be done on the evaluation of the facts proved in evidence or otherwise established.
[15] I adopt the approach of Commissioner Bissett:
“The determination of whether or not alternative employment is acceptable must be determined objectively and not subjectively from the perspective of the employer or employees. 11 That the alternative employment may be rejected does not objectively make it unacceptable nor does the fact that the employment was offered make it, by virtue of the offer, acceptable. Further, that one of the persons out of a group may have accepted the employment does not make the employment acceptable for the others in the group.12 The reasons for the acceptance of alternative employment are many and varied and general conclusions should not be drawn from a particular circumstance.
It is therefore incumbent upon the employer (Vicstaff) in this matter to demonstrate that the alternative employment is acceptable taking into account all matters relevant in such a consideration.” 13
Findings
[16] The following is not in contest:
- Mr Moore has worked for UXC since 2008, that is, for just under four years.
- UXC has lost an account. There were three employees engaged on this account including Mr Moore.
- Mr Moore was advised in writing on 16 May 2012 that as a result of the loss of this customer it is their intention to terminate his employment from 7 June 2012 unless Mr Moore is able to be redeployed. The letter advises that in this event Mr Moore would be given 5 weeks’ notice in accordance with the NES.
- UXC is proposing to redeploy Mr Moore to work which would require him to utilise similar skills and to perform similar duties to those he has undertaken in the past four years.
- UXC is proposing to make this position available by reducing its use of contractors.
- UXC is proposing to pay Mr Moore approximately $15,000 less than his current salary should Mr Moore accept the alternative position.
- When Mr Moore was engaged he signed an employment contract. That contract makes it abundantly clear that he is not engaged to work on a specific account. The contract specifies that he will be initially working on that account but that he can be transferred to any other account or duties as required.
- Mr Moore is employed as a Senior Desktop Support Engineer not to perform work on a specific account.
- Mr Moore is prepared to work on the new account but he does not accept a reduction in his pay and conditions.
Should I reduce the amount of redundancy payment to a specified amount?
[17] A simple reading of section 120 of the Act suggests that the amount of redundancy pay owing can only be reduced in circumstances where the employer has: (i) found other acceptable employment; or (ii) cannot pay the amount otherwise owing. Should either of these circumstances exist I have discretion to determine the reduced amount of redundancy pay otherwise owing.
[18] I have determined that the employment found does not constitute ‘other acceptable employment’. The reduction in Mr Moore’s salary is very significant and in all of the circumstances means that it cannot be regarded as acceptable alternative employment. There is no application that goes to the capacity of the employer to pay the amount owing (and this was not part of the application before me).
[19] Having found that the employment obtained is not acceptable at the significantly reduced pay rate, the application to reduce the amount otherwise payable to Mr Moore is rejected.
[20] During proceedings the issue was raised as to whether or not Mr Moore would be unfairly dismissed and have the opportunity to seek remedy under the Fair Work Act if he was to be made redundant in these circumstances. Should Mr Moore be made redundant in these circumstances the issue as to whether or not the redundancy is genuine, whether or not it would have been reasonable for Mr Moore to be redeployed and whether or not there was consultation in accordance with any obligation under the Modern Award would need to be considered.
Conclusion
[21] I am satisfied that Mr Moore was not engaged in respect of a specific account and that if he is moved to work on another account he is covered by his current contract of employment and he is entitled to retain his existing pay and conditions. If he is transferred to do that work he would not be redundant and would not have an entitlement to redundancy payments.
[22] I do not consider that the employer has demonstrated that the employment offered to Mr Moore is acceptable employment. The application is therefore dismissed.
[23] Mr Moore should be paid the full redundancy amount in the event that he is made redundant.
COMMISSIONER
Appearances:
Mr D Ware appeared on behalf of UXC Connect.
Mr D Moore appeared for himself.
Hearing details:
2012
Melbourne
May 17
1 Section 43 of the Fair Work Act 2009.
2 Section 44 of the Fair Work Act 2009.
3 Section 55(1) and (2) of the Fair Work Act 2009.
4 Section 55(4) of the Fair Work Act 2009.
5 Section 117 of the Fair Work Act 2009.
6 AIRC [Print J4144], 12 September 1990 (Derole).
7 Derole Page 2.
8 [2010] FWA 3141, Paragraphs 23 to 32.
9 Derole page 5.
10 27 IR 226, In particular 230 to 231.
11 Feltex Australia Enterprise Agreement 2004, Watson SDP, 21 November 2006 [PR974699], at [32].
12 Derole, page 5.
13 [2010] FWA 3141, Paragraphs 29 and 30.
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