West Australian Symphony Orchestra Pty Ltd v Savos Papos

[2016] FWC 1266

[2016] FWC 1266

FAIR WORK COMMISSION

DECISION

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

West Australian Symphony Orchestra Pty Ltd

v

Savos Papos

(C2015/4708)

VICE PRESIDENT WATSON MELBOURNE, 4 MARCH 2016

Variation of redundancy pay – Whether employer obtained other acceptable employment for the employee – Fair Work Act 2009, ss. 119 and 120.

Introduction

[1] This decision concerns an application by West Australian Symphony Orchestra Pty Ltd (WA Symphony Orchestra) pursuant to s.120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay obligations in s.119 of the Act with respect of a former employee, Sava Papos.

[2] Mr Papos was employed by the WA Symphony Orchestra as a Customer Service & Sales Manager in 2012. He was issued a formal letter on 3 July 2015 advising that he was being made redundant, effective 31 July 2015, and outlining the reasons behind his redundancy. The correspondence also noted that the WA Symphony Orchestra had applied to the Fair Work Commission to vary his redundancy pay due to the fact that he had rejected an offer of employment made to him that was substantially similar to, and considered on an overall basis, to be no less favourable than the terms and conditions of employment in his current role.

Background

[3] In 2015, the WA Symphony Orchestra was provided with an opportunity to take on the management of the Perth Concert Hall, in partnership with the West Australian Government. As part of the proposal for the lease and management of the Perth Concert Hall, the WA Symphony Orchestra would take over the management of ticketing at the Perth Concert Hall at the conclusion of Ticketek’s contract in September 2015. A result of this was that the WA Symphony Orchestra and Perth Concert Hall would merge their box office operations. It was also viewed that there would need to be a restructuring of the current WA Symphony Orchestra ticketing team with a transfer of staff to a related business entity, as well as new reporting lines, structure and job descriptions.

[4] The WA Symphony Orchestra undertook a consultation process with affected staff in March 2015 to outline the planned changes and the potential effect of these changes on individual employees, including the potential for retraining, redeployment or redundancy.

[5] Consultation meetings were held with Mr Papos on 17, 18 March and 1April 2015, with follow-up meetings held on 25 and 26 June 2015. At the first of these meetings, the planned changes were discussed and Mr Papos noted that while he enjoyed the technical and data side of his job, he did not like the customer service or staff/performance management side. Mr Papos also stated that he would prefer a role with more flexibility.

[6] At the further consultation meeting held on 1 April 2015, Mr Papos was shown a draft position description for the role of “Ticketing Systems & Client Services Manager”. Changes were made to this new role to accommodate requests made by Mr Papos in previous consultation meetings. The role would allow him to work on ticketing, part-time with some flexibility, in a more technical capacity. However, the role would be slightly less senior as it would not involve managing a team or customer service. The WA Symphony Orchestra notes show that at this meeting, Mr Papos stated that the role would suit him and that he was happy about the potential of it.

[7] At the follow-up meeting held on 25 June 2015, the WA Symphony Orchestra notes indicate that Mr Papos expressed a different opinion to that previously stated about the new role that had been earlier offered to him. Mr Papos was of the view that the role was not offering him the direction that he wanted to go in at the WA Symphony Orchestra and that he did not want to be pigeon-holed and stagnate professionally. He did not elaborate on what direction he wanted his career to go and stated that this was personal. He also stated that he did not want to work in ticketing for the Perth Concert Hall and would rather stay at the WA Symphony Orchestra and work in other areas. However, he was not prepared to take a step back from his current level to move across into these areas.

[8] At the conclusion of this meeting, legal advice was sought by the WA Symphony Orchestra Human Resources Manager to ascertain the next steps in the process. The legal advice outlined three options available to Mr Papos and these were conveyed to him at a meeting held on 26 June 2015:

• To accept the role offered (full time or part time) at the same salary and level;



• To resign; or



• Employment is terminated on redundancy without payment.

[9] At this meeting, he was advised that he would not qualify for redundancy pay if he rejected the offer of employment made to him as it was substantially similar to, and considered on an overall basis, to be no less favourable than the terms and conditions of employment in his substantive role. Mr Papos was asked to consider these options and advise the WA Symphony Orchestra of his intention. On 30 June 2015 he informed management that he did not wish to accept the role offered to him and was taking the option of redundancy.

[10] In these circumstances it is necessary to consider whether s.120 of the Act applies. The first issue is whether Mr Papos is entitled to be paid an amount of redundancy pay because of s.119 of the Act: s.120(1)(a). If so, I am required to consider whether the other circumstances in s.120(1) are present – in this case, whether the employer obtained other acceptable employment for the employee: s.120(1)(b).

The Legislative Test

[11] Section 119 of the Act relevantly provides:

“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.”

[12] Section 119 goes on to provide the amount of redundancy pay by reference to the employee’s period of continuous service with the employer.

[13] Section 120 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.”

[14] In Central Norseman Gold Corporation Limited v Kempton, Commissioner Williams summarised the principles applying to applications of this nature as follows: 1

“[26] As noted by the Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 2 at 124:

"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 provisions 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 elections 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."

[27] The determination of whether the position offered was acceptable alternative employment must be determined objectively and not subjectively from the perspective of the employer or the employee.

[28] As was explained by Watson SDP in Feltex Australia Enterprise Agreement 2004 3 at [89]

"…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."

[29] That the alternative employment may be rejected by employees does not objectively make it unacceptable.

[30] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 4 a Full Bench of the Commission found that the determination of whether alternative employment is acceptable will involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters including the location of the employment and travelling time.

[31] In National Union of Workers v Linfox Australia Pty Ltd 5 Vice President Watson considered the following criteria:

(a) the employee's skills, experience and physical capacity;

(b) the rates of pay, hours of work, duties and conditions of employment associated with the proposed job;

(c) whether or not continuity of employment is provided to the employee;

(d) the extent of any additional travel distances from home to the new place of work and whether the employee has to substantially alter their method of travelling to and from work in order to attend to duty; and

(e) the level of any compensation.”

[15] I apply the approach arising from these cases in determining the matter before me.

Other Acceptable Employment

[16] The position offered to Mr Papos involved the same rate of pay, similar hours of work, some reduction in seniority, similar work location, continuity of employment and significant overlap in duties. It is properly viewed as a restructured position covering a wider ticketing function consequent upon the expanded business activities of the employer, but in a venue context rather than the context of a discrete performing arts organisation. The new employer entity following the merger of the ticketing functions, WA Venue and Events is a sister organisation to WA Symphony Orchestra under the umbrella of WASO Holdings Ltd. The different nature of the employer, as it had evolved after the merger, was an overriding factor for Mr Papos. In his submissions to the Commission he said:

“Having started my career in the arts working at His Majesty's Theatre (a performing arts venue in Perth) I understood from my contact with performing arts organisations, that the career path I wanted to pursue was in working for one of the key performing arts organisations in the state.

From His Majesty's Theatre, I took a role at a ticketing agency, where I worked for 6 years and from there I accepted a role at Perth International Arts Festival where I also worked for 6 years. The next step for me was to work for the West Australian Symphony Orchestra (WASO). When a suitable role arose, I took the opportunity and challenge to accept a role as Customer Service and Sales Manager. This was a step up for me in my career, and my first management role, so the experience to be gained was obvious. In addition, I accepted the role as it was a very good entry point into an organisation which I had sought to work within for a long time.

After approximately two and a half years working at WASO, my job (which I was enjoying very much and still learning from), become unstable with my department and role looking certain to become redundant at WASO. Although it was stressful and unsettling to do so, I began working with my manager to develop roles and a structure for a new department at Perth Concert Hall. My idea of work did not involve working in a venue since having started my career in arts management within a venue, I was aware of the limited career pathways suitable for me in arts venues. My next step in my career was hoping to seek other roles within WASO, in Marketing, Communications, Audience/Customer Development, or database management.

In working with my manager (Kelli Carnachan), she mentioned several times that the WASO CEO’s perspective was that we “should not consider people” in structuring a new department at Perth Concert Hall. We should be motivated by the best interests of the two organisations (Perth Concert Hall and WASO). Once again, this was upsetting to me, however I continued to do my job and assist my manager in preparing a structure which suited the organisation as instructed. This process also sought to discover my ideal role at Perth Concert Hall. Through the negotiation process, since I was anxious and confused about my job stability and my career at WASO, I did not mention that I was never seeking employment at Perth Concert Hall. I continued with the process as instructed, and answered all questions and worked on various scenarios with my manager.”

[17] In a subjective sense the position was clearly not acceptable to Mr Papos and would never be so because it was not employment with a performing arts organisation as such. Objectively however, I consider that the two positions are broadly equivalent. The work still relates to ticketing for the WA Symphony Orchestra. The employer is under the umbrella of a diversified performing arts organisation. The positions attract similar if not identical terms, conditions and remuneration. The position has good job security and does not preclude career advancement within the wider organisation. Despite Mr Papos’ preference to work for a performing arts organisation, in my view the offer of employment was acceptable employment in an objective sense. I find that in developing the position in consultation with him and offering him the position, the employer obtained other acceptable employment for Mr Papos.

Conclusions

[18] In the light of the conclusion I have reached that WA Symphony Orchestra obtained other acceptable employment for Mr Papos, I determine that the amount of redundancy pay payable under s.119 of the Act be reduced to nil. An order giving effect to this decision is published with this decision.

VICE PRESIDENT

Appearances:

Mr T. Pickburn on behalf of the WA Symphony Orchestra.

Mr S. Papos on his own behalf.

Hearing details:

2016.

Perth.

22 February.

Final written submissions:

WA Symphony Orchestra on 15 January 2016.

Mr S. Papos on 5 February 2016.

 1   [2010] FWA 5316.

 2 (1990) 140 IR 123.

 3   PR974699.

 4 27 IR 226.

 5   [2008] AIRC 647.

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