Visium Networks Pty Ltd

[2019] FWC 1534

[2019] FWC 1534

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Visium Networks Pty Ltd
(C2018/6863)

COMMISSIONER GREGORY MELBOURNE, 8 MARCH 2019

Variation of redundancy pay.

Introduction

[1] Visium Networks Pty Ltd (“Visium”) decided during the course of last year that it needed to change its staffing arrangements after one of its significant customers reduced its servicing requirements. As a consequence of that decision one of its employees, Mr Stewart Fullard, was made redundant. Visium now seeks to vary the redundancy pay entitlement that would otherwise be due to Mr Fullard on the basis that it obtained and offered other acceptable employment to him. This decision deals with that application.

The Issues to be Determined

[2] Section 119 of the Fair Work Act 2009 (Cth) (“the Act”) provides a statutory entitlement to redundancy pay, with the applicable amount determined by the employee’s length of continuous service. Mr Fullard’s period of continuous service of two years and four months entitles him to an amount of six weeks redundancy pay.

[3] However, s.120 of the Act also provides the Commission with a discretion to reduce or remove an entitlement to redundancy pay, on application, should the Commission consider it appropriate. Section 120 states in full:

“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.”

[4] In the present matter Visium seeks to reduce the obligation to make a redundancy payment to Mr Fullard because it obtained “other acceptable employment” for him. Therefore, is it appropriate to reduce the redundancy pay entitlement otherwise due to Mr Fullard and, if so, by what amount?

The Submissions and Evidence

[5] The parties provided only limited submissions in support of their respective positions. However, it appears that after first being employed by Visium Mr Fullard initially worked in its Network Operations Centre until 15 November 2016. He then moved to a different role where he divided his time between work in the warehouse and work in the Network Operations Centre. This continued until July 2017 when he commenced to work on a full-time basis in the warehouse. This arrangement continued until he left his employment on 30 November 2018.

[6] During the course of last year Visium decided that it needed to change its staffing requirements due to changes in customer demand. It decided that Mr Fullard’s position in the warehouse was no longer required, and he was advised in October last year that his existing position was redundant. However, given that he was originally employed as an operator in the Network Operations Centre, he was offered that position again as an alternative to being made redundant. Visium indicated in its oral submissions that the position in the Network Operations Centre involved the same terms and conditions of employment, although it did involve being rostered on rotating day, afternoon and evening shifts, whereas the work in the warehouse only involved a day shift operation.

[7] The application indicates that Mr Fullard refused this offer because he did not want to work the rotating shift roster and Mr Fullard had confirmed that this was the case in his oral submissions. He indicated that the rotating roster involved significant disruption to his life away from work and he was not prepared to be rostered on that basis for that reason. However, Visium submits that as a consequence of the offer made to Mr Fullard the amount of any redundancy payment due to him should be reduced. It indicated in the application that the amount should be reduced to a payment equivalent to two weeks salary, however, it also indicated in its oral submissions that it was unclear about the criteria to be used in assessing any deduction from a redundancy entitlement otherwise due to an employee.

[8] Mr Fullard provided a timeline of events which indicated that on 19 October last year he was called to a meeting and advised that he was either to be made redundant or he could accept a position in the Network Operations Centre. He was given the time over the following weekend to make a decision in response to these options.

[9] On 22 October Mr Fullard informed the business that he would accept the redundancy offer and on 26 October he was given a termination letter indicating that his termination was “by reason of redundancy.” 1 However, the letter made no specific reference to an amount of redundancy pay due to him. He was also informed that he could continue working until advised otherwise.

[10] On 30 November he was called to a meeting and advised that this would be his last day at work, and on 6 December Visium made the current application to the Commission.

[11] Mr Fullard confirmed in his oral submissions that he refused to accept the offer of working as an operator in the Network Operations Centre because he did not want to work on a rotating shift basis because of the resultant disruption to his life away from work.

Consideration

[12] It was made clear during the course of this matter that the circumstances involve a case of genuine redundancy and there are no issues raised about Mr Fullard’s work performance. Visium indicated that it would have liked to have kept him in employment, and would consider offering him employment again in the future in the event that there are positions available. As indicated, both parties provided limited submissions and evidence in support of their respective positions, and neither made specific reference to the relevant statutory provisions or any relevant case law. It is accordingly appropriate to have regard to that legislation and the authorities that have considered what the Commission should have regard to in coming to a decision in this matter.

[13] The provisions in s.120 of the Act have been considered in a number of previous decisions of the Tribunal. The question of what “obtains” requires was considered by a Full Bench in Australian Chamber of Manufactures v Derole Nominees Pty Ltd (Derole Nominees). 2 It held, firstly, that it cannot mean obtain “…in the fullest sense possible”3 because one employer is incapable of affecting a contract of employment with its employees and another employer, and the word must be given “some lesser meaning.”4 The Full Bench concluded:

“Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer’s ability to “obtain” alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.” 5

[14] In Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai (Datacom) 6the Commission also expressed the view that the word “obtains,” in the context of s.120, should be given a very broad interpretation.

[15] The Federal Court also concluded in FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia 7 that “obtains” should be applied on the basis that the alternative employment “must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance.”8

[16] I am satisfied that there is no question in the present matter that Visium has been the ‘moving force’ in making available the offer of alternative employment to Mr Fullard, given that it involved another position within its workforce.

[17] However, there is also an issue about whether the offer can be said to involve “acceptable employment,” given that it involved a different roster pattern from the fixed day shift roster Mr Fullard had previously been employed on. The test to be applied in determining what is “acceptable employment” has also been considered in some detail in a number of previous decisions. It is clear that it is, firstly, a test to be applied objectively and not just on the basis of whether the employee wishes to take on the role being offered. “Acceptable” also means it must meet the relevant standard. The decision in Derole Nominees found that considerations such as the work being of like nature, the location, the pay arrangements, the hours of work, seniority, fringe benefits, workload and job security are all relevant considerations in this context.

[18] The authorities also make clear that the onus of establishing that the alternative is “acceptable” rests with the applicant employer. They also indicate that when exercising its discretion the Commission may decide to remove a redundancy benefit obligation entirely, or instead reduce it. It has also been established that the employment being offered need not be identical in nature, and the following conclusions of Senior Deputy President Watson in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 9are relevant in this context:

“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.” 10

[19] The Commission also found in Datacom that:

“Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.” 11

[20] Deputy President Sams in Spotless Services Australia Limited 12 was also required to consider an offer of alternative employment which involved work at another location with a total of 50 minutes extra travel time each day in circumstances where the employee was already travelling for around 50 minutes each day to and from work. The Deputy President indicated in his decision that while he had some sympathy for the employee, given the extra inconvenience and cost involved, he was unable to conclude that this constituted a sufficient basis for refusing the offer of redeployment. He therefore concluded that the offer constituted “acceptable employment” within the meaning of s.120 and no amount of redundancy pay was applicable in the circumstances. In summary, it is clear from these authorities that the offer of other employment does not cease to be “acceptable” simply because the terms and conditions are in some respects different or even less favourable to the employee than the role previously occupied. I now turn to consider whether it can be said that Visium has obtained “other acceptable employment” for Mr Fullard.

[21] There is only one issue to be considered in this context, given that Mr Fullard does not appear to have any principle objection to working in the Network Operations Centre, and he is obviously familiar with the nature of the work involved having worked there previously. The only issue that arises is that the work in the centre involves rotating shifts, whereas the work Mr Fullard was carrying out in the warehouse only involved a day shift roster.

[22] Mr Fullard did not provide a detailed explanation about why he did not want to work a rotating roster, other than to indicate it would involve a level of upset and disruption to his personal life that he was not prepared to accept. I am satisfied that it is generally accepted that working a rotating roster can impose additional issues and challenges for employees to manage, both in terms of their working lives and their responsibilities away from work. This is recognised in part by the fact that an additional penalty rate generally applies for work performed on afternoon and night shift in recognition of the disability associated with that work. In addition, employees who are regularly required to work on rotating rosters which extend over Sundays and public holidays are also generally entitled to an additional week of annual leave. This entitlement is again provided in recognition of the additional impact involved for employees who are required to work those arrangements.

[23] The decision in the Derole Nominees also makes clear that different arrangements regarding the hours of work are relevant considerations in determining whether the alternative being offered can be said to be an acceptable alternative.

[24] As indicated already the Commission has only been provided with limited submissions and evidence in regard to this matter. I am satisfied, in conclusion, that Visium has attempted to provide an acceptable alternative position, given the limited opportunities available to it, to Mr Fullard. However, I am also satisfied that moving to a rotating roster arrangement would be a change of some significance for Mr Fullard and it is certainly not one that he is prepared to accept. Based on the limited amount of material before the Commission, and balancing these competing considerations, I am satisfied that it is appropriate to reduce the amount of redundancy pay entitlement that would otherwise be due to Mr Fullard from the amount of six weeks to an amount of three weeks. An order to this effect will be issued in conjunction with this decision.

[25] There was some indication in the hearing that Visium has already made a payment equivalent to two weeks’ salary to Mr Fullard as a redundancy payment, although this was not able to be confirmed the at the time. Obviously, if a payment of two weeks’ redundancy pay has already been made then Visium would only be required to make a further payment of one week to Mr Fullard as a consequence of this decision.

COMMISSIONER

Appearances:

M Brown for Visium Networks Pty Ltd.

S Fullard, Respondent.

Hearing details:

2019.

Melbourne (by telephone):

February 15.

Printed by authority of the Commonwealth Government Printer

<PR705667>

 1   Termination Letter from Visium to Stewart Fullard, dated 22 October 2018.

 2 (1990) 140 IR 123.

 3   Ibid,127.

 4   Ibid.

 5   Ibid, 128.

 6   [2013] FWC 1327.

 7 [2015] FCAFC 90.

 8   Ibid, [20].

 9   PR974699.

 10   Ibid, [89].

 11   [2013] FWC 1327, [9].

 12   [2013] FWC 4484.