Vanderfield Northwest Pty Ltd T/A Vanderfield v Daniel Killip
[2016] FWC 5016
•26 JULY 2016
| [2016] FWC 5016 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.120—Redundancy pay
Vanderfield Northwest Pty Ltd T/A Vanderfield
v
Daniel Killip
(C2016/3212)
COMMISSIONER WILLIAMS | PERTH, 26 JULY 2016 |
Variation of redundancy pay.
[1] This decision concerns an application by Vanderfield Northwest Pty Ltd T/A Vanderfield (Vanderfield) to reduce the redundancy pay of Mr Daniel Killip (Mr Killip).
[2] Both parties have submitted that the Vehicle Manufacturing, Repair, Services and Retail Award 2010 [MA000089] (the Award) applied to Mr Killip’s employment at the relevant time.
[3] The Award includes clause 18−Redundancy which states that redundancy pay is provided for in the National Employment Standards (NES) of the Fair Work Act 2009 (the Act).
[4] The NES in the legislation include an entitlement to redundancy pay prescribed at section 119 which is set out below.
“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.
Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.
Amount of redundancy pay
(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:
Redundancy pay period | ||
Employee’s period of continuous service with the employer on termination | Redundancy pay period | |
1 | At least 1 year but less than 2 years | 4 weeks |
2 | At least 2 years but less than 3 years | 6 weeks |
3 | At least 3 years but less than 4 years | 7 weeks |
4 | At least 4 years but less than 5 years | 8 weeks |
5 | At least 5 years but less than 6 years | 10 weeks |
6 | At least 6 years but less than 7 years | 11 weeks |
7 | At least 7 years but less than 8 years | 13 weeks |
8 | At least 8 years but less than 9 years | 14 weeks |
9 | At least 9 years but less than 10 years | 16 weeks |
10 | At least 10 years | 12 weeks” |
[5] Relevantly for the purposes of this application section 120 of the Act provides that where an employee is entitled to otherwise be paid an amount of redundancy because of section 119 but their employer obtains “other acceptable employment” for that employee the employer may apply for the Commission to determine that the amount of redundancy pay is reduced to a specified amount the Commission considers appropriate. Section 120 of the legislation is set out below.
“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, 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.
(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”
The relevant facts
[6] By letter dated 21 March 2016 Mr Killip was advised that Vanderfield had lost the contract to provide the light vehicle maintenance for the Argyle diamond mine site and consequently he was advised his position was to be made redundant.
[7] Vanderfield then offered Mr Killip a position as a Service Technician at Darwin Isuzu which is owned and operated by Vanderfield.
[8] Mr Killip declined this offer.
[9] The conditions of employment of Mr Killip’s previous position relevantly were as follows.
[10] The work was undertaken at Kununurra Toyota or the Argyle diamond mine site as required.
[11] The roster was 2 weeks on 2 weeks off.
[12] The ordinary hours were 12 each day totalling 84 hours per week on.
[13] The rate of pay was $36.50 per hour plus a mining allowance of $9.34 hours worked equalling $45.84 per hour.
[14] Earnings over a four week roster were $7701.12 for 168 hours worked.
[15] Annual leave was five weeks.
[16] The conditions of employment in the other employment Vanderfield obtained for Mr Killip were as follows.
[17] The work was to be undertaken in Darwin.
[18] The rostered hours were to be 8.00 a.m. to 5.00 p.m.
[19] The ordinary hours were 40 per week.
[20] The rate of pay was $34 per hour.
[21] Annual leave was four weeks.
[22] Earnings over a four week roster were $5440 for 160 hours worked.
[23] There is no evidence that unused accrued entitlements such as personal leave were to be transferred to the new employment or that Mr Killip’s prior service would be counted for the purposes of long service leave with Darwin Isuzu.
Consideration
[24] I am satisfied that Vanderfield did obtain for Mr Killip other employment. As such the first requirement in section 120 (1)(b) of the Act has been satisfied.
[25] The remaining question is whether the other employment is “acceptable employment”.
[26] Deputy President Sams in the case of Sodexo Australia Pty Ltd T/A Sodexo 1 recently reviewed the historic case law dealing with the question of what is or is not “acceptable employment” and helpfully summarised the applicable principles from those cases as follows.
“[127] The above decisions have some common features, including:
- 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.
[128] In DRW Investments, I said at para [183]:
‘[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:
● rate of pay;
● hours of work;
● work location;
● seniority;
● fringe benefits;
● workload;
● job security;
● continuity of service;
● accrual of benefits;
● probationary periods;
● carer’s responsibilities; and
● family circumstances.
This list is not exhaustive. There may be other relevant factors.’ ”
[27] It is clear that the question, as to whether or not the other employment obtained by Vanderfield for Mr Killip was acceptable employment is to be decided objectively by the Commission. Mr Killip’s personal view as to whether the other employment Vanderfield obtained for him is acceptable or not is not relevant.
[28] What is clear is that there are a range of differences between the two positions.
[29] The original position was in Kununurra and/or the Argyle mine site whereas the other employment is in Darwin. There is no evidence before the Commission as to the impact on Mr Killip of working in one location rather than the other.
[30] The original position involved a roster of two weeks on two weeks off versus that of the other employment which is working every week. Again there is no evidence before the Commission as to the impact of these very different rosters on Mr Killip.
[31] On what evidence there is before the Commission it is however clear that the hourly rate of pay is significantly reduced in the Darwin position offered compared to the original position. In addition Mr Killip will start anew accruing personal leave and long serve leave.
[32] Even if it was assumed and that some regular overtime might be available in the Darwin position so that the same hours were being worked, that is 168 hour per four weeks, Mr Killip would earn only $5712.00 compared to $7701.12. This equates to a reduction in 26% on his previous earnings. Obviously if regular overtime was not available his earnings would be further reduced.
[33] In my view the consequential reduction in Mr Killip’s earnings of this magnitude means the position in Darwin cannot objectively be characterised as other acceptable employment.
[34] Consequently there is no basis for the Commission to reduce the amount of redundancy pay to which Mr Killip is entitled under section 119 of the Act and this application will be dismissed. An order to that effect will now be issued.
COMMISSIONER
Final written submissions:
Applicant, 18 April 2016.
Respondent, 2 May 2016.
1 [2016] FWC 4012.
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