Fair Work Act 2009
s.120—Redundancy pay

Lighting International Pty Ltd
(C2014/4046)

Variation of redundancy pay.

[1] This is an application made pursuant to s.120 of the Fair Work Act 2009 (the Act) by Lighting International Pty Ltd (Lighting International). The respondent is Mr Peter Spriggins (Mr Spriggins).

[2] Lighting International operates a number of retail stores in Western Australia. Mr Spriggins position as Manager of its Fremantle store became redundant when the store was closed in January 2014. Consequently subject to s.120 of the Act Mr Spriggins is entitled to redundancy pay under s.119 of the Act.

[3] 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

[4] On 3 August 2006 Lighting International offered, and Mr Spriggins accepted, employment as a Retail Sales Assistant. The letter of offer stated that he understood his “...regular places of work may rotate between north or south of the river Lightning International stores.”

[5] In this position Mr Spriggins would travel to different stores as required by Lighting International.

[6] In February or March of 2007 Mr Spriggins was made the Manager of the Fremantle store.

[7] As a Manager Mr Spriggins was responsible for the supervision of Retail Salespersons and was the decision maker onsite for the day to day operations at the Fremantle store.

[8] Mr Spriggins would attend, as one of the company’s six Branch Managers, regular strategic meetings at the company’s head office organised by the Managing Director.

[9] Employees who are Retail Sales Assistants do not have the same level of responsibility and decision making as a Manager.

[10] In March 2009 Mr Spriggins sustained an injury when he was struck by a vehicle on his way to work. He returned to work at the end of May 2009.

[11] As a consequence of this accident Mr Spriggins has an ongoing physical impairment to his feet which was accommodated in his position as Manager at the Fremantle store.

[12] In July 2009 Mr Spriggins moved house to be within 1 km of the Fremantle store to minimise the commuting which was physically difficult for him whilst his rehabilitation and treatment continued through to January 2011.

[13] From January 2011 onwards he was able to resume his full duties as Manager at the Fremantle store without there being any difficulties for him.

[14] As a Branch Manager he would undertake some administrative functions each day that were most often performed sitting down. This provided periods of respite for his feet and in particular his right foot which continued to become sore and painful if exposed to prolonged standing or walking.

[15] In December 2013 the landlord of the premises that Lighting International rented for their Fremantle store advised that the lease would not be renewed. Consequently Lighting International decided to close that branch and offered employment to its staff there including Mr Spriggins at one of the five other locations Lighting International operates in the Perth metropolitan area.

[16] By letter dated 18 February 2014 Lighting International advised the details of the other employment as follows,

“You will continue to be employed as a Retail Sales Person for 38 hours minimum a week, the actual days to be advised. The locations will be at any of our five other locations i.e. Rockingham, Willetton, Midland, Joondalup and Balcatta as a fill-in staff member when others are away on Annual Leave or illness.

As a retail salesperson you will be required to be on your feet for eight hours a day, as are our other sales staff, showing and selling lighting products to customers.”

[17] Lighting International made it clear that Mr Spriggins job would be at the same rate of pay that he was receiving when he was the Manager of the Fremantle store.

Is the other employment acceptable?

[18] The issue to be determined is whether the other employment as a Retail Salesperson amounts to “other acceptable employment” within the terms of s.120 of the Act for Mr Spriggins and if it was whether the amount of redundancy pay payable should be reduced and by what amount. I accept the other employment was obtained by Lighting International.

[19] 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.”

[20] I accept that the concept of “acceptable alternative employment” and as provided for in s.120 of the Act currently “other acceptable employment” are effectively the same and consequently this Full Bench decision and related case law remains relevant. In this case the determination of whether the other employment offered was acceptable employment must be determined objectively and not subjectively from the perspective of the employer or the employee.

[21] 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.”

[22] That the other employment may be rejected by an employee does not objectively make it unacceptable.

[23] 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.

[24] In National Union of Workers v Linfox Australia Pty Ltd 4 Watson VP 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.

[25] In this particular case the fact that the other employment offered is to be on the same rate of pay that Mr Spriggins was previously receiving as a Manager counts in favour of concluding that the alternative employment is acceptable other employment.

[26] However against this are the following points.

[27] The other employment is as a Retail Salesperson which involves none of the seniority or responsibility that Mr Spriggins had enjoyed for the past seven years as a Manager.

[28] The other employment, as a fill-in staff member, will involve moving from store to store as required replacing Retail Salespersons who are on annual leave or sick leave.

[29] This arrangement will be quite different from how Mr Spriggins has worked since early 2007 when he became Manager at the Fremantle store. Since that time he has worked permanently at the same store every day other than on days he would attend Manager’s meetings.

[30] While I accept the offer of employment made to Mr Spriggins in 2006 explained that he could be required to work at any of the company’s locations the reality is that he has not been required to do this for the last seven years.

[31] I do not accept that this requirement to relocate as directed can now be relied upon by the company to argue that the mobility expected of Mr Spriggins as a fill-in Retail Salesperson should be seen as acceptable. Rather in my view working permanently from one location as Mr Spriggins has for a number of years was an inherent part of his role as a Manager of one store and this would be removed to his disadvantage in the other employment offered. Consequently the requirement of the other employment to move from location to location as required counts in favour of finding that the other employment is not acceptable.

[32] It is clear from the evidence that Mr Spriggins has some physical limitations as a consequence of the accident he suffered some years ago which I recognise was not work-related. It is clear that a requirement in the other employment as a Retail Salesperson will be for Mr Spriggins to be on his feet for up to eight hours a day which in all likelihood he will not be able to meet because of these physical limitations.

[33] Mr Spriggins has worked in the position as Manager at Fremantle with these same limitations for some years and were it not for his position being redundant would have continued to work there in circumstances where his physical limitations were not problematic for his employment. In these circumstances the requirement of the other employment to be on his feet for eight hours or so counts against finding that it is acceptable employment.

[34] In conclusion there are significant negative factors in the other employment as a Retail Salesperson with no offsetting advantages to Mr Spriggins and I have concluded that this position is not other acceptable employment within the meaning of s.120 of the Act.

[35] Consequently Mr Spriggins is entitled to the full benefits of redundancy pay as provided for in s.119 of the Act.

COMMISSIONER

Appearances:

E Edmonds and K O’Toole on behalf of the applicant.

P Spriggins on his own behalf.

Hearing details:

2014.

Perth: August 1.

 1   (1990) 140 IR 123

 2   PR974699

 3   27 IR 226

 4   [2008] AIRC 647

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