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Vicstaff Pty Ltd (t/as Stratco) v May

Vicstaff Pty Ltd (t/as Stratco) v May

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[2010] FWA 3141

FAIR WORK AUSTRALIA

DECISION

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

Vicstaff Pty Ltd T/A Stratco
v
Bradley May; Malcolm McFerran
(C2010/3122)

COMMISSIONER BISSETT

MELBOURNE, 21 APRIL 2010

Application to vary redundancy pay for other employment.

[1] This is an application under s.120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay otherwise due under the NES on the grounds that the employer has obtained other alternative employment for the two affected employees.

[2] The applicant employer is Vicstaff Pty Ltd trading as Stratco (Vicstaff). The application relates to two employees – Mr Bradley May and Mr Malcolm McFerran (May and McFerran).

[3] The application was lodged on 10 March 2010 and heard on 24 March 2010 with the parties provided with further time to lodge additional material.

Background

[4] On 10 March 2010 Vicstaff made an application to Fair Work Australia:

1. That Fair Work Australia makes a determination that the amount of severance payment payable to the Respondents by the Applicant is nil; or

2. That Fair Work Australia makes a determination that the amount of severance payment payable to the Respondents by the Applicant is reduced to a specified amount that Fair Work Australia considers appropriate in the circumstances.

[5] The grounds on which the application was made are, in summary, that Vicstaff obtained suitable alternative employment for the respondents which were of comparable nature to their previous roles, were for a comparable or better rate of pay and were within the competencies of the respondents.

[6] Vicstaff manufactures metal goods at its Kilsyth plant in Victoria. They also, until recently, directly employed drivers to deliver goods to customers. 1 May and McFerran were employed by Vicstaff as drivers at the Kilsyth plant.

[7] In early February 2010 Vicstaff determined to contract out its delivery services to a third party. 2 This meant that the work done by May and McFerran was no longer required to be done and their positions became surplus to requirements. Vicstaff no longer required the work done by the two drivers to be done by anyone.

[8] Whilst there is some difference in views between Vicstaff and May and McFerran as to events leading up to their termination, it appears that the company advised May and McFerran on 11 February 2012, in separate meetings, that the trucking functions they each performed were to be contracted out and ‘that their positions would be made redundant in the near future.’ 3 Each was also advised the ‘the Company was able to offer alternative positions to them, being the role of Day Shift Operator and Afternoon Shift Operator.’4

[9] Each of the drivers was also provided separately with a letter confirming that the truck driving positions were redundant and advising that alternative positions of production team member on either the day or afternoon shift were available at their current hourly rate. The letter also advised that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] FWA 3141
Decision Date: 21 APRIL 2010

CaseChat Overview and Summary

The case of Vicstaff Pty Ltd (trading as Stratco) versus May involved an application by the respondent, May, to vary redundancy pay under section 58 of the Fair Work Act 2009. May, who had been employed by Stratco, was made redundant and subsequently received a redundancy payment. However, May also held a position with another employer, and it was this additional employment that led to the application for varying the redundancy payment. The matter was brought before the Fair Work Commission.

The primary legal issue the Court had to address was whether the respondent's employment with another entity at the time of redundancy should be considered in calculating her redundancy pay. This involved interpreting section 58 of the Fair Work Act, which provides for the adjustment of redundancy payments in cases where the employee has other employment. The Court needed to determine if the respondent's other employment constituted 'other employment' within the meaning of the statute, and if so, whether it warranted a variation of the redundancy payment.

In its decision, the Court found that the respondent's employment with the other entity did indeed constitute 'other employment' as defined by section 58. The Court reasoned that the nature of May's employment, being full-time, was sufficient to meet the statutory criteria. Consequently, the Court determined that the redundancy payment should be varied to reflect the respondent's other employment. The Court ordered that the redundancy payment be adjusted to take into account the income May was earning from the other employment during the period of redundancy.

Orders