1
Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay
Lake Mona Pty Ltd T/A Cambridge Street Child Care Centre
(C2014/6189, C2014/6190, C2014/6191, C2014/6192 and C2014/6193)
COMMISSIONER BOOTH BRISBANE, 13 JULY 2015
Variation of redundancy pay - Babette Desborough and Erin Ellis.
[1] Lake Mona Pty Ltd T/A Cambridge Street Child Care Centre (Lake Mona) has made
five applications to the Fair Work Commission (the Commission) under s.120 of the Fair
Work Act 2009 (the Act) to vary the redundancy pay otherwise due to a number of its former
employees (the former employees). The applications seek reduction of the redundancy
payable to nil on the basis that Lake Mona has obtained other acceptable employment for the
former employees.
[2] Two former employees, Ms Erin Ellis and Ms Babette Desborough (Respondents),
oppose Lake Mona’s application. The three other former employees advised the Commission
they are not pursuing redundancy payments.
[3] The matter was determined on the papers, including written submissions by Lake
Mona and each of the Respondents.
Background
[4] Lake Mona ceased operations at the Cambridge Street facility when its lease over the
premises was not renewed and it was required to vacate the premises.
[5] It is uncontested that Lake Mona's employees at Cambridge Street were made
redundant on closure of the Cambridge Street facility. Lake Mona operates five other
facilities. It placed some staff at other facilities, apparently paid some redundancies, and has
no further issues with others. The two Respondents were each offered positions but found the
offers unacceptable and seek payment of redundancy.
LEGISLATION
[6] Section 119 of the Act entitles an employee to redundancy pay if the employee's
employment is terminated at the employer's initiative because the employer no longer requires
the job done by the employee to be done by anyone.
[7] Section 120, under which this Application is brought, provides as follows:
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DECISION
E AUSTRALIA FairWork Commission
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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.
Obtains acceptable employment
[8] A Full Bench considered what is meant by the word "obtains" in s.120(1)(b)(i) in The
Australian Chamber of Manufacturers v Derole Nominees Pty Ltd (Derole Nominees), as
follows:
"The word 'obtains' does not appear in its context to mean actually obtain in the
fullest sense possible. In circumstances like those occurring at the company one
employer is incapable in law of effecting a contract of employment between his
employee and another employer whether by assignment or otherwise; the creation of
the legal relationship of master and servant depends on a mutuality being arrived at
between the individual and the incoming employer. Therefore, the pursuit of
alternative employment by the outgoing employer cannot be expected, by reason of
itself alone, to produce new employment; there will usually and perhaps always
remain the opportunity for the incoming employer, and the employee, to disagree as to
matters such as terms of employment, suitability of the job to the employee and vice
versa so that alternative employment may not eventuate.
It follows that 'obtain' must be given some lesser meaning. The Shorter Oxford
Dictionary (3rd ed revised) provides as its relevant meaning, the definition of 'obtain'
as 'to procure or gain, as the result of purpose and effort'. It seems to us that meaning
is of assistance here; that is, the employer by purpose and effort may establish an
opportunity which suits the employee and which crystallises as alternative
employment of an acceptable kind.” [citations removed]1
[9] Derole Nominees also considered what is meant by the phrase "acceptable alternative
employment":
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"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 provision 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 elements 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.
This approach to the test demonstrates that any alternative employment available to
the eighteen former employees of the company cannot be regarded as "acceptable"
merely because a number of other former employees took up employment at the new
location. The relevant aspects of the job must be examined objectively to determine
whether the employment is "acceptable"."2
[10] Lake Mona's submission is that each Respondent was offered the following:
immediate redeployment into an alternative position on the same hours of work
and rate of pay at another Lake Mona facility;
recognition of prior service and retention of classification and job title;
continuity of employment and service with Lake Mona;
preservation of leave entitlements;
no requirement for merit selection or probation in the new role; and
no loss of status.
[11] Ms Ellis was additionally offered "continued negotiation of flexible working
arrangements to enable her to complete practicum periods in schools for a Bachelor's degree.
Flexible rostered shifts and flexible rostered days were also available to meet other
commitments, in particular, her position as a netball coach."
[12] Ms Ellis was offered placement at one of three centres: Victoria Point, Coorparoo and
Moorooka. She initially requested, subject to conditions relating to hours and days worked, a
position at Victoria Point Child Care Centre, thinking that she might be accommodated
overnight by a friend. Lake Mona offered her a position at that facility on the conditions
requested, but Ms Ellis declined to accept the role. Lake Mona then reiterated its offer of an
alternative position at Moorooka on the same conditions. This offer was also declined.
[13] Ms Desborough was offered positions at both Moorooka and Coorparoo. She declined
the offers.
[14] Lake Mona submits that it obtained alternative, acceptable employment for Ms Ellis
and Ms Desborough in satisfaction of the requirement in s.120(1)(b)(i), but each declined to
accept the offers made.
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[15] Lake Mona submitted that “the alternative positions for the former employees are
exactly the same as currently held .... with the same ... conditions.” However, it did concede
that “the alternate location will involve additional travel ...”.
[16] The submissions of the former employees were that their reasons for declining the
alternative employment offers is because of increased travel time and distance to the other
centres. They submitted it was not financially viable and there is difficulty with transport to
and from those centres.
[17] Ms Ellis objected to the Application on the following grounds:
she has lived in close proximity to Cambridge Street throughout her employment
there over a period of some 10 years;
both the Victoria Point and Moorooka offers were not financially viable due to the
distance and time required to travel and the fact that she worked part-time;
the travel time would interfere with her other commitments;
she does not own a car, but borrowed one from her father, who also required
access to the vehicle. Working at either alternate premises, distant from both Ms
Ellis’ and her father’s homes would make that arrangement impractical;
her role at Cambridge Street was a job-share arrangement that allowed great
flexibility with informal swapping of hours with her colleague;
issues with management of her husband's ill-health made the possibility of staying
overnight at Victoria Point (as an alternative to daily commuting) impractical;
while public transport was possible to Moorooka, it was a lengthy journey in the
order of one and a half hours each way.
[18] It also seems Ms Ellis changed her family care arrangements as a result of the
redundancy.
[19] Ms Ellis objected to the Application, claiming entitlement to redundancy payment
because the "suddenness and timing of the redundancy" placed her at financial disadvantage.
Her studies and other commitments meant she was unable to find other short-term
employment. She submitted that she had worked diligently over the years but that the
positions offered were not acceptable to her given the matters outlined above.
[20] Ms Desborough submitted that the following factors entitled her to redundancy
payment:
the unreliability of her modes of transport;
the long travel time using public transport in the order of one and a half hours each
way;
the costs, and concerns over safety, of using public transport;
impracticability of car-pooling due to the variability of rosters.
[21] She submitted that she was an honest and reliable employee for some five and a half
years. She based her claim to redundancy on the following submissions:
she is not financially stable enough to purchase another car;
she is not able to afford the additional daily costs of public transport;
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increased time travelling to and from the child care centre;
her concerns about personal safety travelling home in the evening on public
transport.
Consideration
[22] There is no issue in the present case with the nature and conditions of work, continuity
of entitlement and service and the like, and no issue that Lake Mona was the driving force in
offering the prospective alternative positions within its own business.3
[23] For both Ms Ellis and Ms Desborough, one significant factor in declining the alternate
employment offered was the difficulty of travelling to the alternate places of work offered, the
proximity factor mentioned in Derole Nominees.
[24] Ms Ellis’ submission was that her husband’s health was only a consideration for the
Victoria Point position and not the Moorooka position.
Were the alternative positions acceptable?
[25] In Australian Commercial Catering Pty Ltd v Powel4 (Australian Commercial
Catering Pty Ltd) a Full Bench determined that the Commissioner at first instance was
entitled to take into account the entire factual matrix in this matter which was that despite
numerous requests from the employees no alternative offer of employment was made prior to
the employees advising that they wanted to accept the redundancy. Also considered was that
the extra travel time was in the order of 35 minutes by car. This was combined with the offer
being made after redundancy had been accepted. As a result, the entire factual matrix made
the offer objectively unacceptable.
[26] In Spotless Services Australia Limited, another contract catering case, DP Sams held
that additional travel time up to 50 minutes each way was insufficient to render an offer
unacceptable and redundancy was reduced to nil. The Deputy President was of the opinion
that:
the location and additional travel times to and from work are a relevant
consideration. For example, an offer of reemployment to another State would not
ordinarily be found to be ‘acceptable employment’.5
[27] It is not disputed that Ms Ellis and Ms Desborough along with other employees were
offered immediately, redeployment on terms identical to their previous employment. Such an
offer can be contrasted to the delayed offer in the Australian Commercial Catering Pty Ltd.
[28] The question must however be asked was whether these positions were unreasonably
distant?
[29] Ms Ellis and Ms Desborough each gave estimates of travel time by public transport of
about one and a half hours. No estimates were given of travel time by car. Both Respondents
submitted they had difficulty accessing motor vehicles. However, an objective assessment of
acceptability, in my view, needs to consider the travel time by car as well as public transport.
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[30] Ms Ellis and Ms Desborough each live less than 10 minutes drive from Cambridge
Street. Ms Ellis' address is further away from Cambridge Street and the addresses of the
alternative workplaces than Ms Desborough.
[31] Using Google maps as a reasonable estimate the driving time from their respective
home addresses to the Moorooka facility, which was offered to both, range between 25 and 50
minutes depending on traffic.6 That means the additional driving time is in the order of 15 to
45 minutes.7
[32] In my opinion, commuting time to the Moorooka facility is not so great as to make the
offer unacceptable in an objective sense.
[33] Ms Ellis also submitted that the additional travel time and change in job sharing
arrangements would make her voluntary sporting activity more difficult. I do not consider
that those matters were so significant to make the alternative employment offered objectively
unreasonable, taking into account Lake Mona’s willingness to accommodate Ms Ellis’ further
education and volunteer activity.
[34] Taking into account the entire factual matrix in this matter as outlined above I find that
the employer, in the timely offering of the alternative positions at Moorooka to the
Respondents, met the condition stated in s.120(1)(b)(i) to obtain other acceptable
employment. Accordingly the Commission's discretion to reduce the amount of the
redundancy is enlivened.
Conclusion
[35] In my opinion, the Moorooka position offered to Ms Ellis was acceptable and the
personal factors, informal arrangements in job-sharing, and travel time are not so significant
as make the offer objectively unacceptable.
[36] Ms Desborough raised travel time, logistics and safety as the main factors. For the
same reasons, the offer made by Lake Mona for her to work at Moorooka was objectively
acceptable.
[37] In each case, the redundancy payable is reduced to nil.
[38] Separate orders will issue in each matter.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
Price code C, PR568460
RK
AL 0
AUSTRALIA HE
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1 Print J4414, Re Clothing Trades Award 1982(1), (1990) 140 IR 123 at 126; see also Maritime Union of Australia v FBIS
International Protective Services (Aust) Pty Ltd [2014] FWCFB 6737 (MUA v FBIS) and cases discussed there.
2 Print J4414, Re Clothing Trades Award 1982(1), (1990) 140 IR 123 at 128.
3 MUA v FBIS
4 [2015] FWCFB 87
5 [2013] FWC 4484 at paragraph [14]. Additional commuting travel was also relevant in several other single member
decisions including Australian Workers' Union v Barminco Pty Ltd [2015] FWC 99 (additional 40 or 50 minutes each
way not unacceptable); Children's Services Support Unit (CSSU) Inc [2014] FWC 7503 (additional travel about 70km
each way and reduced pay – no reduction in redundancy ordered); Lighting International Pty Ltd [2014] FWC 7653
(requirement to relocate was unacceptable); Richards Mining Services Pty Ltd v Dunkerley [2013] FWC 4022
(redundancy reduced to nil despite considerable additional travel by begin required to visit other sites); Cleandomain Pty
Ltd [2014] FWC 5243 (reduction to nil and the basis of Applicant’s: reluctance to travel more than an additional 30
minutes and to change hours of work).
6 one of the other parties who elected not to continue suggested driving time to Moorooka would take up to an hour in poor
traffic conditions from her address
7 Travel time to Victoria Point and Coorparoo is somewhat longer, but both were offered employment at Moorooka as well,
and that is the appropriate workplace to use
