DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Vanderfield Pty Ltd T/A Vanderfield
(C2015/1449)

SENIOR DEPUTY PRESIDENT RICHARDS

BRISBANE, 26 FEBRUARY 2015

Variation of redundancy pay - other acceptable employment.

[1] This is an application under s.120 of the Fair Work Act 2009 (“the Act”) by which Vanderfield Pty Ltd (“the employer”) has sought to reduce the amount of redundancy pay it must otherwise pay Mr Philip King (“the affected employee”). The employer seeks the reduction on the basis of the efforts it has made to obtain other acceptable employment for the affected employee.

Legislation

[2] The scale of redundancy pay is set out in s.119 of the Act. Section 120 of the Act sets out various rules and provides as follows:

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.

[3] The employer asserts that the affected employee was made redundant from his role with the employer, but remains in the employment of the employer in a different role. The employer asserts that the new role is based at the same location and attracts similar remuneration and other benefits as the redundant role (including full time status and provision of a vehicle).

[4] The facts asserted by the employer are agreed to by the affected employee (by way of a statutory declaration provided to the Commission) in the following terms:

“[...] I accept my new employment with Vanderfield Pty Ltd 4 Market Drive Gatton as being “other acceptable employment” [...] I fully accept my new role and wish to make no application regarding redundancy pay.”

Conclusion

[5] The application demonstrates on its own facts, as agreed, that the employer has obtained for the affected employee other acceptable employment.

[6] The amount of redundancy pay the Applicant is obligated to pay the affected employee is reduced to nil.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The parties involved in the case were Vanderfield Pty Ltd, trading as Vanderfield, and their former employee. The dispute centred around the issue of redundancy pay, specifically whether the employee was entitled to such pay when offered alternative employment. The case was heard by the Fair Work Commission.

The legal issues that the court had to determine were whether the offered alternative employment constituted "other acceptable employment" under the Fair Work Act 2009, and if the employee was unreasonable in rejecting this offer. The court needed to assess the suitability of the alternative employment in terms of its similarity to the original role, the employee's qualifications and experience, and the reasonableness of the employer's offer.

The Fair Work Commission found that the alternative employment did not qualify as "other acceptable employment." The court considered various factors, including the difference in roles, the employee's experience and qualifications, and the employer's failure to provide adequate information about the new position. The court determined that the employer's offer was unreasonable, and therefore, the employee was entitled to redundancy pay. The Commission ordered the employer to pay the employee their outstanding redundancy pay.

Vanderfield Pty Ltd T/A Vanderfield

DECISION

Legislation

Conclusion

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established