Fair Work Act 2009
s.120—Redundancy pay

Children’s Services Support Unit (CSSU) Inc
(C2014/923)

Variation of redundancy pay.

[1] This is an application made pursuant to s.120 of the Fair Work Act 2009 (the Act) by Children’s Services Support Unit (CSSU) Inc (CSSU or the applicant). The respondent is Ms Margaret McEniery (Ms McEniery or the respondent).

[2] Ms McEniery was employed under the Children’s Services Award 2010 [MA000120] (the Award).

[3] Ms McEniery’s employment was terminated because CSSU no longer required the job she was doing to be done by anyone.

[4] Clause 12.1 of the Award provides that redundancy pay is provided for in the National Employment Standards. Consequently subject to s.120 of the Act Ms McEniery is entitled to redundancy pay under s.119 of the Act.

[5] Section 119 and 120 of the Act are as follows:

“Subdivision B—Redundancy pay

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.
Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.
Amount of redundancy pay
(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

Redundancy pay period
	Employee’s period of continuous service with the employer on termination	Redundancy pay period
1	At least 1 year but less than 2 years	4 weeks
2	At least 2 years but less than 3 years	6 weeks
3	At least 3 years but less than 4 years	7 weeks
4	At least 4 years but less than 5 years	8 weeks
5	At least 5 years but less than 6 years	10 weeks
6	At least 6 years but less than 7 years	11 weeks
7	At least 7 years but less than 8 years	13 weeks
8	At least 8 years but less than 9 years	14 weeks
9	At least 9 years but less than 10 years	16 weeks
10	At least 10 years	12 weeks

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.”

Findings

[6] There is no dispute between the parties as to the factual background to this matter and based on the statements and materials provided by both parties I make the following findings.

[7] The respondent was employed in February 2012 as the Regional and Remote Coordinator in Wickham.

[8] The position was identified under the Award is being at level 6.9.

[9] Clause 2.4 of the respondent’s contract provided that:

“You will commence employment at Wickham OSC as Regional and Remote Coordinator. You agree to relocate to other CSSU services as required.”

[10] “OSC” refers to out-of-school care.

[11] The position reported to the Regional Manager whom in turn reported to the Chief Executive Officer.

[12] Centre staff reported to the respondent.

[13] The respondent’s salary at the time of the redundancy was $72 091.50 per annum and she worked a 37.5 hour week equating to an hourly rate of $36.97 per hour.

[14] The CSSU obtained an alternative position which was offered to the respondent.

[15] That alternative position was as the Contact Coordinator 2IC at the Dampier Early Learning Centre.

[16] This position is identified under the Award as being at level 5.4.

[17] The hourly rate payable for the Contact Coordinator 2IC position was $29.99 per hour.

[18] The CSSU offered the applicant the same district and housing subsidy as she had received in Wickham.

[19] The Early Learning Centre was located in Dampier.

[20] The distance from Wickham to the Dampier Early Learning Centre is approximately 70km by road. This would equate to a one-way travel time of approximately one hour.

[21] If the respondent relocated she would have lived in Karratha which is approximately 20km by road to the Dampier Early Learning Centre. This would equate to a one-way travel time of approximately 20 minutes.

[22] The respondent’s husband lives with her in Wickham and is employed there.

[23] Whilst employed at Wickham the respondent would either walk from her home to work or in the wet season drive the 2km each way.

[24] The OCS position that was made redundant involved children between school age up to 12 years old whereas the Dampier Early Learning Centre deals with children under five years old.

[25] Notwithstanding the fact that the CSSU had offered the respondent the same quantum of housing subsidy to live in Karratha that she had received in Wickham the cost of rental accommodation in Karratha is likely to be more expensive than Wickham.

[26] A number of the duties and responsibilities of the two positions, but not all, are common.

The issue - Other acceptable employment

[27] The issue to be determined by the Commission is whether the offer of alternative employment amounted to “other acceptable employment” within the terms of s.120 of the Act for Ms McEniery and if it was whether the amount of redundancy pay payable should be reduced and by what amount.

[28] I accept the alternative employment was obtained for Ms McEniery by CSSU.

[29] As noted by the Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 1 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.”

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

[31] As was explained by Watson SDP in Feltex Australia Enterprise Agreement 2004 2 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.”

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

[33] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 3 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.

[34] In National Union of Workers v Linfox Australia Pty Ltd 4 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.

[35] In this case when one objectively considers the criteria mentioned in the case law and applies these to the facts of this case it is apparent that the other employment involves a number of significant changes, the question however is whether these either individually or collectively lead to a conclusion that the other employment was or was not acceptable other employment.

[36] The requirement to move to Karratha, in the context of the express acceptance by the respondent at the time she took up her position only two years earlier that she would relocate as necessary does not indicate that the other employment was not acceptable.

[37] The applicant should have appreciated at the time she was first employed that other than the OSC site where she was working at Wickham her acceptance of a term that she would agree to relocate as required would inevitably mean that she would have to move to another town if relocation was necessary. Similarly the fact that the respondent would be dealing with children of a different age group does not involve a radical departure from the respondent’s skill set to the extent that this would indicate that the other employment was not acceptable.

[38] Turning to consider a number of the other criteria I do accept that the following changes or characteristics of the other employment compared to the redundant position does indicate that the other employment was not acceptable, these are:

• a 19% reduction in pay.



• a reduction in the seniority of the position. The alternative position is subject to direction not only from the Regional Manager but also the Director of the Centre.



• a likely increase in nett housing costs.

Conclusion

[39] A 19% reduction in pay is sufficiently significant that in the absence of any offsetting benefits from the other employment this would be sufficient by itself for the Commission to conclude that the other employment was not acceptable.

[40] The likelihood of further additional costs in terms of housing for the respondent compounds the negative consequence in the circumstances of this case.

[41] Separately the reduction in seniority is also a significant negative element of the other employment.

[42] Considering these factors then I do not accept that the Contact Coordinator 2IC position is other acceptable employment for the purposes of s.120 of the Act. Accordingly this application is hereby dismissed.

[43] Ms McEniery is entitled to the full benefits of redundancy pay as provided for in s.119 of the Act.

COMMISSIONER

Final written submissions:

Applicant, 27 June 2014

Respondent, 13 July 2014

 1   (1990) 140 IR 123

 2   PR974699

 3   27 IR 226

 4   [2008] AIRC 647

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