DECISION

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

Spotless Services Australia Limited t/as Alliance Catering
(C2016/450)

Application to vary redundancy pay – loss of catering contract at oil refinery – whether various offers of alternative employment were ‘acceptable’– employee’s terms of employment – distance from home to place of work – all other conditions the same or comparable – conflicting evidence – Union’s representations – employee’s bona fides – secured alternative employment while employer continued to explore options for reemployment – travel time not unreasonable – alternative employment ‘acceptable’ – entitlement to redundancy pay reduced to nil.

BACKGROUND

[1] This decision will determine an application, filed by Spotless Services Australia Limited (‘Spotless’), pursuant to s 120 of the Fair Work Act 2009 (the ‘Act’), in respect to the termination of employment of Ms Ruth Ilsley (Ms Ilsley). Ms Ilsley had worked part time, (35 hours a week, at $19.10 per hour) in the canteen, at the Caltex Oil Refinery at Kurnell, NSW. Ms Ilsley commenced employment with Spotless’ predecessor entity on 19 September 2005 as a Catering/Food Services Assistant, Grade B under the Hospitality Industry (General) Award 2010 (the ‘Award’). Relevantly, Ms Ilsley has lived in Kurnell for 22 years.

[2] Spotless had provided the catering services to Caltex until its contract was terminated, effective from 31 July 2015, when Caltex effectively shut down its oil refinery operations at Kurnell. Nevertheless, Spotless has numerous contracts nationally to provide catering/canteen/cleaning and other service contracts to many diverse industry clients. Although Ms Ilsley worked continuously at Kurnell for over 10 years, it was well understood, given the contractual nature of the catering industry, she could be reassigned to other suitable alternative positions and locations, depending on Spotless’ business needs. This understanding arises from Ms Ilsley’s letter of appointment which states:

‘You acknowledge that from time to time you may be re-assigned to another suitable alternative position, as the Company deems reasonably necessary. The Company will do its best to ensure that any such re-assignment will be in your best interest and made after full consultation with you.

You may be required to perform work on behalf of any company in the Spotless Group and such a transfer will not constitute termination of your employment.’

[3] On 3 July 2015, Ms Ilsley and three of her work colleagues were advised of the loss of the Caltex contract effective from 31 July 2015. After the end of the contract, attempts were made by Spotless to redeploy Ms Ilsley, firstly to GlaxoSmithKline (‘GSK’) at Ermington and then to the Emirates Lounge at Sydney Airport. Throughout this period, Ms Ilsley was represented by the Australian Workers’ Union (‘AWU’ or the ‘Union’). Both of these options were ultimately rejected by Ms Ilsley – although she did work at both sites for a few days. On 24 September 2015, Ms Ilsley applied for, and was approved to take long service leave until 9 December 2015. She did not return to work for Spotless.

[4] On 30 November 2015, the AWU filed a dispute notification, pursuant to s 739 of the Act (C2015/7953), which sought orders from the Fair Work Commission (‘the Commission’) which, in substance, were for Ms Ilsley to be paid redundancy pay (12 weeks) under s 119 of the Act. It was put that as none of the redeployment alternatives, proposed to Ms Ilsley by Spotless, were acceptable to her, she was entitled to be paid redundancy pay. As a result of proceedings before the Commission, as presently constituted, Spotless continued to engage with the Union, while Ms Ilsley was not at work by providing lists of vacancies for other positions in the Sydney CBD and Greater Sydney areas. None of these options were accepted by Ms Ilsley because of the distances, costs and inconvenience involved in travelling to these locations.

[5] On 25 February 2016, Ms Ilsley was advised by email that her employment with Spotless was to be terminated on 31 March 2016. On 1 March 2016, this application was filed in which Spotless seeks to have the redundancy pay otherwise payable to Ms Ilsley, to be reduced to nil, pursuant to s 120 of the Act.

[6] At this point, it is convenient to set out below the terms of ss 119 and 120:

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.

[7] It is noted that Spotless had advised Ms Ilsley on 3 July 2015 in writing that, ‘Should no acceptable alternative employment options be identified with either Spotless/Alliance Catering or the incoming contractor your employment will be terminated as a consequence of ordinary and customary turnover of labour on 31st July 2015.’ However, Spotless did not pursue this as a basis for not paying redundancy pay to Ms Ilsley. Rather, its case focused entirely on the exemptions provisions of s 120 of the Act to have Ms Ilsley’s prima facie entitlement to redundancy pay, reduced to nil. Logically, this submission must imply an acknowledgement that Ms Ilsley’s position was a true redundancy, in both fact and law. More will be said about this later.

[8] Further unsuccessful attempts at settling both applications were made by the Commission. Directions were issued to the parties in preparation for the hearing of the s 120 application on 20 May 2016. Mr John Douglas, Spotless General Manager, Human Resources, appeared with Ms M Massey for Spotless and Mr G Symington appeared for the AWU on behalf of Ms Ilsley.

THE EVIDENCE

[9] Written and oral evidence was provided by Mr Ken Stewart, Operations Manager, Business and Industry, for Spotless and by Ms Ilsley.

Mr Ken Stewart

[10] Mr Stewart has responsibilities for client and customer retention and focus, staff retention, financial performance, Workplace Health and Safety, risk management, food safety and Human Resources. Site based managers report to him. After outlining the background to Spotless’ loss of contract at Kurnell, Mr Stewart said he had visited the site on 8 occasions in July 2015 to discuss redeployment with the Catering Supervisor, Ms Joanne Hiskins and affected staff. This included face to face meetings with employees about options within the wider business. When he met with Ms Ilsley, she informed him that she needed a job, as she had just purchased a new home in Kurnell.

[11] Ms Ilsley was firstly offered a position at Bluescope in Wollongong and then at GSK at Ermington. Ms Ilsley worked at GSK for three days on 3, 4 and 5 August 2015. She worked in the sandwich bar, performed general cleaning and washing up duties and assisted the barista with making coffee. She had told him that she liked the position and the work (commencing at 7 am – 1.30 pm being the same hours as at Kurnell) and had asked if she could work full time to ease the burden of the journey costs.

[12] Mr Stewart received a long email from GSK Site management on 19 August 2015 informing him that Ms Ilsley had:

● only worked on 3, 4 and 5 August 2015;
● received positive feedback about her work and interaction with customers;
● attended a funeral on 6 August 2015;
● left for Taree on 7 August to care for her mother, who had taken ill;
● advised that her mother was not recovering. However, she was concerned about not being at work;
● been assured by local management that her family was a ‘priority’. She remained in Taree until at least 18 August 2015; and
● herself became ill with an ear infection.

[13] GSK management had made a number of attempts to contact Ms Ilsley while she was in Taree to determine when she might be returning to work. Finally, Ms Ilsley told them that she was going to speak to Mr Stewart. Mr Stewart said that on 16 August he received an email from Ms Ilsley informing him that she had no car (which he found surprising, given he was aware that she had driven to the Caltex site), her mother was still ill and she would call him later. She never did.

[14] Both Mr Stewart and GSK were unsuccessfully seeking to communicate with Ms Ilsley until on Wednesday 19 August 2015, she texted to say she was ill and stressed. She had a doctor’s certificate for the rest of the week. That day, Mr Stewart received a letter from the AWU which indicated Ms Ilsley’s employment at GSK was not acceptable, because of the travel distance. Mr Stewart met with the AWU representative, Mr V Falconer and they discussed the process of redeploying the staff to vacant positions. Mr Stewart told him most of the employees lived within five minutes of the Caltex site and were reluctant to work anywhere else. He believed the Union understood Spotless’ situation.

[15] Mr Stewart phoned Ms Ilsley on 28 August 2015 (while she was on sick leave) to advise of a vacant position within Spotless’ business at the Emirates Lounge at Sydney Airport. She requested details of the job on 4 September 2015. He had advised that it was a catering position, working variable shifts, although her hours would be the same and she had the option of working additional shifts. Her conditions of employment would remain the same. Ms Ilsley told him that she continued to have issues with her mother, amidst other personal problems. However, Mr Stewart replied that he needed to have an answer about the Emirates position by 11 September 2015. Further exchanges of information were made and Ms Ilsley commenced work at the Emirates Lounge on 21 September 2015, left on 25 September and commenced long service leave from 28 September for three weeks.

[16] Mr Stewart said that while the State Manager, Ms Massey, had sent lists of vacancies to the AWU on 16 December 2015 and 4 January 2016, no response was received. As a result, Mr Stewart contacted Ms Ilsley on 15 February 2016. She advised him that she had not seen these vacancies, but in any event, they were not acceptable, due to the distances for her to travel and added travel expenses. A further list of vacancies was sent to the AWU and Ms Ilsley on 16 March 2016. On 24 March 2016, Ms Ilsley advised that none of the positions were acceptable.

[17] In his evidence, Mr Stewart included research he had undertaking of travel times from Ms Ilsley’s home to GSK and the Airport. From Google Maps, he ascertained the following:

[18] In determining what might be reasonable travel times, it was Mr Stewart’s view that rather than starting from a point of three minutes, a more reasonable test was to assess the additional travel time against the average travel commute time for Sydney residents. From relevant survey material in 2012-2013, he determined that the average commute time in Sydney was 35 minutes, with an average distance of 15.5 km. Mr Stewart considered that this comparison demonstrated that the travel time to GSK and the Airport was not unreasonable.

[19] Mr Stewart further believed that Ms Ilsley’s increased costs driving to the Airport and then parking in nearby streets was not unreasonable. He provided a string of emails in which Ms Ilsley was informed that other employees park for free in nearby streets and walk about 20 minutes to the Airport. There are also free parking areas within 10 minutes’ walk. In addition, Ms Ilsley would also be entitled to a daily travel allowance of $6.68 under the Award.

Ms Ilsley

[20] Ms Ilsley has three adult sons and five grandchildren. She helps her sons’ families with school pick-ups, babysitting and after school activities. Her help is much valued by her family.

[21] As to the loss of the Caltex contract, Ms Ilsley said that staff were asked on 21 July 2015 to respond, in writing by 23 July 2015, as to whether they had selected a position on a vacancy list or intended to resign. She added that in a meeting with Mr Stewart on 21 July, he had said that if none of the jobs were suitable, the employees’ last alternative was to resign.

[22] Ms Ilsley said she was never offered a position at Bluescope, nor had she made herself unavailable during July for meetings with Management. Rather, she had been on approved leave from 20 to 24 July 2015.

[23] It was Ms Ilsley’s evidence that on 31 July 2015, Mr Stewart warned her that if she did not start work at GSK on Monday 3 August, she would not have a job. She arrived for work at GSK on 3 August at 7:00am. On the second day, she told local management not to order her a uniform as she did not know what was happening, because the travel time seemed excessive. She said the time was 1 hour 35 minutes and 43.6 km away from her home. It would cost $24 a day by car or $25 using public transport and take one hour and 45 minutes.

[24] It was Ms Ilsley’s further evidence that the Chef at GSK had told her the job was full time and that she was asked to work longer hours (In oral evidence, Ms Ilsley conceded that this was incorrect and that she had asked for more hours). The next day she attended a funeral. She then told GSK that she may need to travel to Taree to help her mother transit to a nursing home. She said that she became very stressed and contracted an ear infection.

[25] Ms Ilsley claimed that she had never accepted the GSK position. She had told Mr Stewart that she no longer had access to a car and that as the first bus from Kurnell to the train station did not leave until 6:30am, she could not get to her shift in time to start at 7:00am.

[26] As to the Emirates position, Ms Ilsley said that between 1 and 4 September 2015, she had asked for details of the position and was not provided with any information until 24 September. She worked two days at Emirates. It had cost $34.50 a day by train. This was the only means of travel, because parking was $172.50 a week. As she only received a gross income of $458.40 a week, this was not a financially feasible option.

[27] Ms Ilsley said that the only free parking was on a public street, which was a 30 minute walk to the Airport. In any event, all the parking spots were taken by 6:30am. Moreover, she did not believe it was safe to walk in the area in the dark or cross six lanes of traffic, without traffic lights.

[28] It was Ms Ilsely’s opinion that the job at Emirates was different to what she had been used to at Caltex. She had to carry a tray in one hand and pick up items with the other. As she had a wrist problem, she told the Manager she only could pick a few things up at a time. She claimed he said ‘Is there anything you can do?’ While the hours for other employees working at Emirates were 3:00am to 11:00pm, she worked 7:00am to 1:30pm. When she had asked if Management was comfortable with her hours, the supervisor replied, ‘I am stuck with you’.

[29] As a result of feeling stressed and anxious about the position and as the job was not what she was used to, she decided to take long service leave. Ms Ilsley said the closeness to Caltex made a huge difference, even though her hourly rate was the minimum and the site was considered dangerous. She believed the alternatives offered by Spotless were prohibitively expensive and that Centrelink benefits would be a ‘better proposition’.

[30] Mr Stewart gave the following evidence in reply to Ms Ilsley’s statement:

• At no time, had he directed or instructed Ms Ilsley, or anyone else to resign. The opposite was the case.



• Ms Ilsley was offered a job at Bluescope by Ms Jackie Jankuloska, Alliance Catering Manager.



• He denied telling Ms Ilsley that she would not have a job if she did not start work at GSK on Monday 3 August 2015. In fact, he was providing her with assistance at the time.



• Ms Ilsley had not raised any issue about not having access to a car.



• The allegations of what she alleged her managers at the Emirates Lounge had said to her, were entirely inconsistent with the favourable comments made by her manager to him.



• Management was very understanding of her circumstances. Her hours and roster were at her request. She had been offered training in different skills.



• He had never been aware of Ms Ilsley having any problem with her wrist until this case. She had had no medical restrictions at Caltex and had performed a full range of duties.



• Ms Ilsley was not paid the Award’s minimum rate. She was paid at Level 3 under the Award.



• Every possible effort was made to redeploy Ms Ilsley on the same rates and terms and conditions as she had previously enjoyed, save for location.

[31] In oral evidence, Mr Stewart reiterated that he had never instructed any employee to resign. While some of the employees had expressed a wish to retire, if others were interested in full and part-time positions in the CBD, or elsewhere, then they could apply. In cross examination, Mr Stewart accepted Ms Ilsley had not said he had instructed anyone to resign. He acknowledged that in the email to staff on 21 July 2015, the words used were ‘let me know what decisions the staff would like to make regarding staying or leaving Spotless’. He expressed it this way, because as some of the staff had wanted to retire (resign), he had wanted to make sure that the necessary paperwork was appropriately prepared. Mr Stewart had used the words, ‘if it is deemed they are suitable for these positions’, because there were positions available, other than in catering, such as cleaning and meter reading. However, it was not meant to infer that employees could not apply for such positions.

[32] Mr Stewart agreed Ms Ilsley was asked to sign a ‘change of employment’ form for the GSK position. However, she never did so. Mr Stewart was asked for his opinion of Spotless’ submission that the GSK position ‘may or may not be objectively considered to be acceptable alternative employment’. He now agreed with this submission. Mr Stewart maintained he had first mentioned the GSK job to Ms Ilsley on 28 July, rather than on 31 July as she contended. While he had been aware of the GSK job a week before that date, he had not told Ms Ilsley, because he could not get in contact with her. Mr Stewart denied having sent Ms Ilsley to GSK as a ‘supernumerary’, so as to justify a later claim that Spotless had obtained alternative employment for her.

[33] In re-examination, Mr Stewart outlined the process for employees when contracts come to an end, noting in particular, that redundant employees are always given preference for vacant positions within the business. Mr Stewart said the vacancy list is not exhaustive. It changes all the time. The GSK position was not even on the vacancy list at the time, because the person had just resigned. The system includes an ‘approval to recruit’ process before internal advertising. It was Mr Stewart’s further evidence that when Ms Ilsley was given notice of her termination on 25 February 2016 she worked out that notice, although she was not at work by her own choice.

[34] In further evidence, Ms Ilsley said that in July 2015, a list of vacancies was printed out every few days and left on a table in the Caltex canteen. She insisted she was first offered the GSK position on 31 July 2015 when Mr Stewart approached her in the wash up area of the canteen.

[35] Ms Ilsley secured alternative catering work at Taren Point in mid October 2015. She drove to Taren Point. Driving time was 20 minutes each way. In cross examination, Ms Ilsley was asked why she was now able to drive to Taren Point, when she was unable to drive to Mascot. She explained that she relied on her son to take her to work if necessary. There are also buses and trains available before she starts work at 8 am. She agreed she has no physical issues with the new work at Taren Point.

[36] Ms Ilsley agreed that if employees had not accepted a vacant position or moved into the casual pool, the consequence must be that they would have to resign. She said that even if she had been offered the job at Bluescope, it would have been too far to travel, being in excess of 45 minutes from Kurnell to Wollongong.

[37] Ms Ilsley claimed that parking in the streets around the Airport was not acceptable. She had asked the other employees at Emirates about parking in the street, but they started at 4 am and she started at 7:00am. She conceded that she had not raised her wrist injury during her employment at Kurnell or GSK. However, it was now a problem, because of the repetitive function of carrying trays at the Emirates Lounge and there were not really any other duties for her there.

[38] Ms Ilsley claimed Ms Marian McGloin (her supervisor at Emirates) had not told the truth in her evidence about the conversation with her about her hours. Ms McGloin had said that while Ms Ilsley’s rostered hours did not suit the site, she was ‘stuck’ with her. Ms Ilsley agreed that Ms McGloin had not stopped her working there. Nor had she asked Ms Massey to affect a transfer. Ms Ilsley believed she had no real choice but to stop working at the Airport, as she had issues with her mother and her own health.

SUBMISSIONS

For Spotless

[39] After setting out the background to Spotless’ loss of contract with Caltex, Mr Douglas described the various offers of employment made to Ms Ilsley.

[40] The positions at GSK and Emirates were on exactly the same terms and conditions which she had enjoyed at Caltex. He agreed the GSK position would require an additional one hour, six minutes in travel to the site. However, she had only worked there for three days. The Emirates position was on similar terms and conditions with a daily travel allowance of $6.68 and with parking in nearby streets, which was currently utilised by existing employees.

[41] Mr Douglas made clear that Spotless did not dispute that Ms Ilsley was made redundant when it lost the Caltex contract. The issue in this case was whether the GSK or the Emirates position were ‘acceptable employment’, within the meaning of s 120 of the Act. Spotless accepted its onus of satisfying the Commission that these offers of alternative employment were objectively acceptable; See: Australian Chamber of Manufactures v Derole Nominees Pty Ltd (1990) 140 IR 123 (‘Derole Nominees’) and Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia, 21 November 2006 [PR974699] ('Feltex'). The fact the employee rejected the offer is not determinative of this question. Mr Douglas referred to Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 27 IR 226 and National Union of Workers v Linfox Australia Pty Ltd [2008] AIRC 647 as cases in which a number of criteria were identified as to whether alternative employment is ‘acceptable’. He submitted that the offers to Ms Ilsley were on exactly the same terms and conditions and performing the same functions under the Award. The only difference was location.

[42] Mr Douglas submitted that the objective test as to whether the distances to Ermington and Mascot were excessive, cannot be viewed from the subjective view of Ms Ilsley, who had only travelled a mere three minutes to work. An appropriate objective measure was the average length of time Sydney residents commute to work. In 2012-2013, this was 35 minutes. It might reasonably be assumed that this time had increased. Google Maps disclosed the additional travel time was one hour and three minutes to GSK and an additional 34 minutes to Mascot. This is not excessive. Further, Mr Douglas submitted that the nature of Spotless’ business and the mobile requirement of its workforce was a relevant consideration.

[43] In further submissions, Mr Douglas conceded that it may be that the extra travel time to GSK could be viewed objectively as not constituting ‘acceptable employment’. However, the job option at Mascot certainly was ‘acceptable employment’ because 35 minutes’ travel time is not excessive. Parking was available and Ms Ilsley was entitled to a travel allowance of $6.68 a day under the Award. Ms Ilsley travelled by car to Caltex, to GSK and now travelled by car to her new employment at Taren Point. Whether travel to Mascot was by car or a mix of car and public transport, the question remained unanswered as to why car travel to Mascot was not an option at the time.

[44] Mr Douglas added that Ms Ilsley had retained her existing hours and there was scope for hours flexibility at Mascot. This could only have been to Ms Ilsley’s benefit. The additional travel to Mascot was not excessive and combined with other factors, the overall employment was acceptable.

The Union and Ms Ilsley

[45] The Union noted that the decision to close the Caltex canteen was known for approximately three months before the actual closure and staff were consulted in relation to the closure. Ms Ilsley was advised in writing on 3 July 2015 that her employment would be terminated on 31 July 2015. She was required to work out her period of notice. A vacancy list was attached to the letter, inviting her to consider other positions within the business which she might be interested in and to contact her manager. She did not do so because none of the positions were of interest to her. At the time of termination (31 July 2015), no acceptable alternative employment options had been identified by Spotless. Accordingly, Ms Ilsley was entitled to be paid redundancy pay, as set out in s 119 of the Act, plus notice.

[46] It was the Union’s submission that the exclusive focus of Spotless, up to 31 July 2015, had been to secure Ms Ilsley’s resignation and those of her three co-workers at Kurnell. Mr Symington said that on her last day of employment, Mr Stewart gave her an incomplete ‘change in employment’ letter. While she did not agree with, or sign the letter, she did go to work at GSK on a trial basis. This meant Ms Ilsley’s employment was terminated on 31 July 2015 without Spotless having obtained ‘acceptable employment’ for her prior to termination; See: Fryar v System Services Pty Ltd [1995] IRCA 256.

[47] Mr Symington submitted that five days’ ‘trial work’ (at GSK and Emirates) over 8 months interspersed with various periods of leave, while ‘untidy and open to interpretation’, was not an arrangement of ongoing part-time employment. Mr Symington added that Spotless had not obtained employment for Ms Ilsley in circumstances where the options were ambiguous and had placed an unreasonable onus on her to ‘obtain’ employment; see FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90.

[48] In the alternative, Mr Symington put that the offers of employment at Ermington and Mascot were not ‘acceptable’; see Datamars (Australia) Pty Ltd [2015] FWC 1269; Derole Nominees and Health Services Union v Goulburn Valley Health [2012] FWA 7488. Mr Symington said that Spotless had misconstrued the principles in these decisions as to the objective test, by its reliance on the average length of commute time for Sydney residents. Mr Stewart’s subjective view as to this comparison was purely his personal opinion.

[49] Mr Symington noted that the objective assessment of additional travelling time was considered in DL Employment Pty Ltd v Australian Manufacturing Workers’ Union [2014] FWCFB 7946. There, the Full Bench found that an additional distance of 34 km, constituted a repudiation of the employees’ contracts of employment. In this case, the distances were 43 km (Ermington) and 25 km (Sydney Airport). In respect to Ermington, this would have meant 90 minutes each way in peak traffic. This would have significantly disrupted Ms Ilsley’s home and family life, with additional expenditure in vehicle running costs.

[50] As to the Sydney Airport position, Mr Symington submitted that driving was not an option for Ms Ilsley, given the parking restrictions and uncertain conditions (the dark and weather) of walking 20-30 minutes to the Airport. Public transport, would mean her driving to Cronulla Station because there is no bus before 6:30am and would cost $36.44 a day. The daily travel allowance would do little to defray this cost and was particularly unreasonable, given her hourly rate of pay was only $19.10. Accordingly, the Emirates job was not ‘acceptable employment’. Ms Ilsley also described the work as being significantly different to what she had experienced at Kurnell. It was restricted to clearing tables and cleaning windows.

[51] In summary, Mr Symington sought the following orders from the Commission:

a. That Ms Ilsley’s employment was terminated at the employer’s initiative as from 31 July 2015 due to redundancy.
b. That Ms Ilsley is entitled to be paid 12 weeks redundancy pay, according to s 119 of the Fair Work Act 2009.
c. That Spotless Facilities Services Australia Limited has not obtained other ‘acceptable employment’ for Ms Ilsley, within the meaning of section 120 of the Fair Work Act 2009.
d. That the Application is dismissed.

[52] In oral submissions, Mr Symington developed his argument that Ms Ilsley’s employment was terminated on 31 July 2015. He said that the scheme of the Act could not permit an employer to:

‘keep an employee on a string for eight months and send a range of emails, leave her off the radar for six weeks, and then send her an email and say, ‘Oh, look, we’ve got a job at Sydney Airport, would you care to have a look at that’, and then bring an application to the Commission and say, ‘Look, we want the Commission to traverse the field and please find one offer to other employment that can be said to be acceptable within the cases so that we don’t have to pay redundancy.’ That is not what it is about.’

Mr Symington stressed it cannot be an ‘open ended’ process. It followed, Mr Symington argued, that anything offered after the GSK employment and Ms Ilsley’s refusal to sign a change of employment form, was an invitation for ‘new employment’.

[53] As to the Sydney Airport option, Mr Symington highlighted the uncontested evidence of Ms Ilsley as the unacceptability of it, including being asked to spend $175 a week on train fares, when she only earned $19.10 per hour.

[54] In reply, Mr Douglas queried how it could be that Mr Ilsley’s employment ceased on 31 July 2015, when she proceeded on long service leave and worked five days well beyond that date.

[55] Mr Douglas put that it was wrong to suggest Spotless ‘sat on its hands’ and waited for an opportunity to make this application. The issue had been running for months, in circumstances not brought about by the actions of Spotless. To the contrary, Spotless had been actively engaged in seeking a resolution, through its commendable efforts to redeploy Ms Ilsley. No one pushed Ms Ilsley to accept any offer of re-employment, yet Spotless produced countless offers of employment – all of which she rejected.

[56] In further written submissions, Mr Douglas added that Ms Ilsely had no entitlement to notice because she was given notice of the termination of her employment on 25 February 2016 which was to take effect on 31 March 2016. This was distinct to the letter of 3 July 2015, which gave notice that the commercial contract with Caltex would end on 31 July 2015 and the consequences the loss of contract had for Ms Ilsley’s ongoing employment. It was only in the event of redeployment being unsuccessful, that the termination of employment applied. In any event, Mr Douglas observed that the parties had conducted themselves as if the employment with Spotless was ongoing for a further 8 months.

[57] Mr Douglas rejected the assertion that Spotless did not contact Ms Ilsley in relation to any other roles. This was completely contrary to all the evidence, including her own.

[58] Mr Douglas submitted that the decided cases are not definitive as to the extent of additional travel time in the overall objective test undertaken by the Commission. However, the test cannot be made against the subjective test of Ms Ilsley’s initial travel time of a mere three minutes. Nevertheless, he conceded that an additional travel time to the GSK site of 43.6 km ‘may or may not’ be objectively considered as ‘acceptable’. The same cannot be said for the Airport option (24 kms).

[59] As to the allegedly different duties at the Airport, Ms Ilsley had not been restricted to merely clearing tables and cleaning windows. In fact, she had been invited to broaden her skills through training if she wished. Given she was only there for two days, other duties had not been able to be properly explored.

CONSIDERATION

Meaning of ‘other acceptable employment’

[60] The question of what constitutes ‘other acceptable employment’ in the context of a redundancy situation, has been considered by the Commission and its predecessors in many and varied circumstances and industries over a number of years. In Derole Nominees, a Full Bench of the Australian Industrial Relations Commission (AIRC) said at pp 128-129:

‘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”.

…

The exemption provision imports the notion that an effort of a sufficient kind by an outgoing employer may cause his obligation for redundancy pay to be reduced; a decision by an employee not to co-operate with the employer may well disentitle the employee to all or some of the payment.’ (my emphasis)

[61] In Oscar Oscar Group Services Pty Ltd v Lees [2012] FWC 3901 (‘Oscar Oscar’), Commissioner Asbury (as Her Honour then was), said at paras [18]-[19]:

‘[18] The question of whether alternative employment is acceptable, must be assessed on an objective basis. It is relevant to the assessment that redundancy payments are not made solely for the purpose of assisting employees to find alternative employment. Redundancy payments are intended to tide an employee over during the search for alternative employment, and to compensate the employee for loss of credits for sick leave, long service leave and other entitlements based on length of service. The question of whether previous service with the previous employer is recognised as service with the new employer, will also be relevant.

[19] Other considerations will be whether the alternative employment is of a like nature; a reasonable distance from the previous employment; whether pay and conditions are comparable; hours of work and job security in relation to the new position. The fact that an alternative position does not meet the personal preferences of an employee, may place the right to receive full redundancy pay at risk, where the employee refuses a position that is found to be acceptable on an objective basis.’ (my emphasis)

[62] Senior Deputy President Watson in Feltex said at a para [33] and [89]:

‘[33] The parties accept, as do I, that matters to be considered in assessing whether alternative acceptable employment has been obtained include matters such as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security, the location of work, continuity of service and accruals and the application of probationary periods. The relevant authorities also demonstrate that this listing of matters is not exhaustive and the question of whether an employment is acceptable alternative employment will be decided on the peculiar facts of a matter. Further, the authorities suggest that acceptable employment is not synonymous with identical employment, although the basis of the 2004 variation of the TCR test case provision suggests that, whilst not identical, terms and conditions should be substantially similar and no less favourable, overall, than the terms and conditions applicable to the employee at the time of the redundancy.

…

[89] 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.’

[63] In Vicstaff Pty Ltd (t/as Stratco) v May (2010) 204 IR 233 (‘Vicstaff’), Bissett C said at paras [29]-[30]:

‘[29] The determination of whether or not alternative employment is acceptable must be determined objectively and not subjectively from the perspective of the employer or employees. That the alternative employment may be rejected does not objectively make it unacceptable nor does the fact that the employment was offered make it, by virtue of the offer, acceptable. Further, that one of the persons out of a group may have accepted the employment does not make the employment acceptable for the others in the group. The reasons for the acceptance of alternative employment are many and varied and general conclusions should not be drawn from a particular circumstance.

[30] It is therefore incumbent upon the employer (Vicstaff) in this matter to demonstrate that the alternative employment is acceptable taking into account all matters relevant in such a consideration. Had the alternative work been considered acceptable to the individuals one imagines they would have accepted the work offered.’

[64] In DRW Investments t/as Wettenhalls v Timothy Richards & Others [2016] FWC 461, I said at para [183]:

‘[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:

● rate of pay;
● hours of work;
● work location;
● seniority;
● fringe benefits;
● workload;
● job security;
● continuity of service;
● accrual of benefits;
● probationary periods;
● carer’s responsibilities; and
● family circumstances.

This list is not exhaustive. There may be other relevant factors.’

[65] The above decisions have some common features, including:

• The test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.



• ‘Acceptable employment’ is not identical employment, as no two jobs could be exactly the same.



• An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.



• An employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.



• The acceptance of alternative employment by one or more persons in a group of redundant employees, does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.



• There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment.

[66] I now turn to make some observations on the Union’s submissions. For the following reasons, I do not accept the Union’s submission that Ms Ilsley’s employment with Spotless was terminated on 31 July 2015, without the Company obtaining ‘acceptable employment’ for her prior to her dismissal on that date.

[67] Firstly, nowhere in s 120 of the Act is there any reference to the employer being required to ‘obtain acceptable employment’, prior to the employees’ termination of employment. Indeed, the structure and placement of the two provisions – ss 119 and 120 – make it unambiguously clear that a prima facie entitlement to redundancy pay under s 119, can only arise in circumstances where the employee has already been dismissed. To put it another way, if the factual trigger of dismissal has not occurred then an entitlement to redundancy pay has not crystallised. It follows, that when the redundancy pay entitlement has not crystallised, then an application to reduce the entitlement (including to nil) cannot be made. The statutory framework supports this interpretation. The provisions dealing with the right of an employer to seek a reduction in the redundancy pay entitlements (s 120) are placed immediately after the entitlement has materialised under s 119.

[68] In my judgement, there is no statutory prohibition (if this was really the implication of the Union’s submission) on an application, made under s 120 of the Act being filed after the dismissal of the employment of the employee/s to whom the application is directed. In other words, an application made under s 120 made after an employee’s termination of employment is a valid application under the Act.

[69] Moreover, in my view, while it may be convenient or preferable to arrange for options for alternative employment to be identified and considered prior to actual dismissal (i.e. during a period of notice), no adverse inference should necessarily be drawn when this does not occur. No such inference can be drawn in this case, even if Ms Ilsley’s employment with Spotless came to an end in conventional circumstances on 31 July 2015.

[70] Secondly, the fact that Ms Ilsley worked at GSK and Emirates, plainly under Spotless contracts and had requested and was granted sick leave, unpaid leave and long service leave from Spotless in late September 2015 until December 2015, and continued to engage with Spotless’ representatives until March 2016, is irreconcilable with a proposition that her employment with Spotless came to an end on 31 July 2015. It is a nonsense submission.

[71] Thirdly, it seems counterintuitive that the Union, on Ms Ilsley’s behalf, filed a dispute notification on 30 November 2015 about the same subject matter, the subject of these proceedings. Yet it now argues that she was not an employee of Spotless after 31 July 2015. Surely, if there was any view that Ms Ilsley had been dismissed 4 months earlier, some other application would have been lodged around the earlier time. The evidence is unequivocal that both the Union and Ms Ilsley had always conducted themselves and acted on the understanding that she was an employee of Spotless, until her actual dismissal on 31 March 2016.

[72] In addition, I reject Mr Symington’s submission that Spotless had not ‘obtained acceptable employment’ for Ms Ilsley, because the communications of the offers of alternative employment were ambiguous. It is difficult to reconcile that argument with the fact that Ms Ilsley actually worked at both sites. There could be nothing ambiguous about what she was doing or the circumstances surrounding those positions. Indeed, her evidence was that these positions were both unacceptable, not that they were ‘ambiguous’.

[73] On one view, given that Ms Ilsley’s employment with Spotless was continuous until 31 March 2016, it is irrelevant that Spotless was required to ‘obtain’ alternative acceptable employment for her. It seems a self-defeating proposition that Spotless was required to ‘obtain’ employment for Ms Ilsley when she remained employed by Spotless during this period. In terms of its contractual obligations, it could be argued that Spotless was required to do no more than comply with what was set out in the letter of appointment at para [3] earlier referred. However, given the statutory requirements of s 120, I find that Spotless did ‘obtain’ other employment for Ms Ilsley. The next question is whether it was ‘acceptable’ employment.

[74] In my opinion, Mr Symington’s description of ‘an employee kept on a string for 8 months, with numerous emails, leaving her off the radar for six weeks and then sending her an email about the Emirates job to ground its s 120 application’, is a misrepresentation of the true position. It was Ms Ilsley herself who asked for and was granted, long service leave for a number of months. It was Ms Ilsley who was difficult to contact and engage with. It was the Union which had energetically engaged with Spotless about the vacancy lists over a number of weeks. I found Mr Symington’s painting of a picture of Spotless as an uncaring, opportunistic employer to be misconceived and disingenuous.

[75] Mr Symington also submitted that the extra travel time to Emirates and Mascot would create significant disruption to Ms Ilsley’s family and home life. There was a paucity of evidence to ground this submission. Moreover, it would have been difficult to objectively assess the impact of the changes, given that she had not worked in either job for more than two or three days. Ms Ilsley said was that the distances travelled would impact on her capacity to undertake after school duties for her grandchildren. While I accept that this may have been of real concern, the evidence was non-specific. It was probably an overstatement to describe the impact of working at either location as a significant disruption to home and family life.

[76] That said, given that Ms Ilsley had the convenience of working three minutes from home for over ten years, I can understand her reluctance to accept a position that was not very close to her residence. However, balanced against these circumstances is the obvious fact that for the vast majority of Sydneysiders (including, I dare say, for the majority living at Kurnell), such a convenience could only be dreamed about. In addition, Ms Ilsley’s contract of employment was underpinned by the reality that her location of employment may be subject to change, depending on the operational needs of the business. It is trite to observe that the industry in which she worked is notorious for the winning, losing and competing for contracts. Some might say, she had a ‘pretty good run’ for ten years.

[77] Nevertheless, in my opinion, this case is a classic example where the subjective views of the employee must give way to the objective analysis of whether the alternative positions offered to Ms Ilsley were acceptable. So much so is apparent from the various authorities I have referred to earlier.

[78] While I make no adverse findings of witness credit against Ms Ilsley, I found the negativity and contortion of her evidence particularly troubling, as it was seemingly constructed in order to create a perception that Spotless was a heartless and uncaring employer, whose actions were only ever intended to force her resignation. This proposition did not sit comfortably with me, nor is it consistent with the evidence in the case. I accept Mr Stewart’s evidence that he was personally encouraging and sympathetic to Ms Ilsley’s personal and family issues, as was the Company generally throughout many months of absence, indecision and her failure to contact the business as to her intentions. Despite all of this, Spotless, in my view, went to commendable lengths to provide vacancy lists to Ms Ilsley and offer support and encouragement to her in respect to alternative positions within the business. It seems that every time an option was raised, a new excuse was found to justify the unacceptability of the position to Ms Ilsley.

[79] Of course, Ms Ilsley did try the two main options at GSK and Emirates. But after only a few days, and after raising personal issues and duties about which she was unhappy, she did not return. Was this truly giving either position a ‘red hot go’? I think not. I hasten to add that I accept unreservedly that Ms Ilsley was dealing concurrently with stressful family issues which distracted from a focus on work. However, it is curious that she was granted long service leave, in order to deal with these matters, yet within a few weeks, she had commenced employment at Taren Point.

[80] Much of Ms Ilsley’s evidence raised a troubling question in my mind as to whether she was ever really interested in pursuing alternative employment from the outset, except on her own terms. This evidence was as follows.

[81] As to the GSK position, Ms Ilsley:

● worked at GSK for three days;
● always believed it was trial;
● told GSK site management after a day, not to provide her with a uniform, because she was unsure about the position;
● claimed that she did not have access to a car, despite Mr Stewart’s understanding that she had always driven to Caltex;
● initially said she had been forced to work longer hours, but conceded in cross examination that full time work had been offered, if she was interested;
● was difficult to contact when she was in Taree; and
● claimed Mr Stewart told her that she would not have a job if she did not start at GSK on 3 August 2015. Mr Stewart emphatically denied this. I accept his evidence in this respect.

[82] In respect to the Emirates position, Ms Ilsley:

● worked at the Emirates Lounge for two days;
● claimed the job was not the same as the job she had at Caltex and was not what she had expected. I ask, how could she possibly make a sensible or rational assessment of the job after only two days?;
● claimed that, because she had a previous wrist injury, it was difficult for her to carry a tray with many items. Given that at no time in the previous ten years of employment with Spotless had she ever raised an issue with her wrist, this was a puzzling excuse;
● believed she was made to feel unwelcome by the management at Emirates by comments made by Ms McGloin such as ‘I am stuck with you’. There was no corroborative evidence that these comments were made. Considering these comments are inconsistent with Ms McGloin’s favourable comments to Mr Stewart about her performance, I do not accept Ms Ilsley’s evidence on this matter.
● said that a 20 minute walk from free street parking to the Airport was unreasonable;
● then said it was unsafe to walk the distance in the dark;
● and then claimed that there were no car spots anyway because her shifts started at 7:00am, whereas other Emirates employees had already commenced their shifts at 3:00am;
● had been offered hours of work which she had requested; and
● had been asked to undertake training in tasks other than carrying trays or cleaning windows.

[83] There were other examples of Ms Ilsley’s evidence which I feel bound to comment on. Firstly, Ms Ilsley claimed that in July 2015, Mr Stewart had told her and her coworkers that if they did not accept vacant positions, their last alternative was to resign. This was not strictly correct. Mr Stewart strongly disputed he had instructed employees to resign. While Ms Ilsley did not contend Mr Stewart had instructed employees to resign, her adverse implication was manifest. I accept Mr Stewart’s evidence that the words he used were directed to employees he knew had intended to retire and would need to resign in order to do so.

[84] Secondly, I reject Ms Ilsley’s evidence that she was not offered a role at Bluescope, Wollongong. In any event, she subsequently said it was unacceptable, because it was too far away from her home.

[85] Thirdly, Ms Ilsley said that the offer of the GSK position was made on 31 July 2015. Mr Stewart insisted he told her on 28 July. While it might be said that little turns on this conflict as Ms Ilsley started at GSK on 3 August, it is obvious that Ms Ilsley was implying some improper motive by Mr Stewart. Mr Symington’s submission was that the offer was made on the last afternoon before the closure of the Caltex canteen. It was then asserted that Spotless’ focus was entirely on securing Ms Ilsley’s resignation. If this was so, the Company went to a lot of time and effort, to achieve exactly the opposite result. In my view, Spotless acted in good faith in attempting to find alternative options for Ms Ilsley to remain in the business.

[86] However, there was one matter which raised a question as to whether Ms Ilsley was truly acting in good faith throughout the process. Ms Ilsley requested extended long service in late September 2015 on the grounds that she was stressed and dealing with family issues. Strangely, a few weeks later she commenced alternative employment at Taren Point. This fact only came to light at the hearing on 20 May 2016. Apparently, Spotless was unaware that she had commenced this employment until the hearing.

[87] Spotless would be entitled to be less than impressed, given that it had been sending vacancy lists to the Union, in good faith and that it understood that Ms Ilsley was dealing with personal issues on leave at the same time, when she had independently secured alternative employment and had been working that employment for months. It is not apparent to me whether the Union was aware of this matter. If not, Ms Ilsley should have told the Union. If the Union did know, then I consider its failure to disclose such information to be most improper. For my own part, I am very disappointed that in two conferences before the Commission on 16 December 2015 and 15 March 2016, and at the Directions hearing on 24 March 2016, the Commission was not informed of Ms Ilsley’s new employment and that she had been working in the new job for some months.

[88] Further, it was misleading (by deliberate omission) that in Ms Ilsley’s statement of evidence, filed on 5 May 2016, there is no mention of her having obtained this employment and that she continued to work at Taren Point. In fact, in the last paragraph of that statement, she foreshadowed being reliant on Centrelink payments, rather than accepting any of Spotless’ offers.

[89] Finally, there does not appear, from the Union’s submissions, that the offers of alternative employment, were unacceptable for any other reason/s other than the location and costs of travel. This is consistent with the evidence that the positions at GSK and Emirates were on the same terms and conditions, under the same Award, classification, hours of work and without loss of seniority or continuity of employment. Ms Ilsley would not have lost non-transferable credits, job security or seniority. There was evidence that GSK had offered her a full time position to assist in alleviating the costs of travel. At Mascot, she was entitled to a $6.68 per day travel allowance. Nevertheless, I accept Mr Douglas’ submission that the position at GSK might not be objectively considered to be acceptable employment. This was an appropriate concession to make and I endorse it.

[90] However, in considering and balancing all of the circumstances in this case, I am satisfied that the offer to Ms Ilsley of alternative employment at the Emirates Lounge at Sydney Airport was ‘acceptable employment’, within meaning of s 120 of the Act. To the extent it is necessary, I find that Ms Ilsley demonstrated an unwillingness to meaningfully engage with Spotless as to various offers of reemployment. Accordingly, in the exercise of my discretion under s 120(2) of the Act, I determine that any prima facie entitlement to redundancy pay to Ms Ilsley, should be reduced to nil. Lastly, as I find that Ms Ilsley was not dismissed on 31 July 2015 and was dismissed on 31 March 2016, with notice from 25 February 2016, no payment in lieu of notice arises.

[91] A determination to this effect will be issued contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

J Douglas with M Massey for Spotless Services Australia Limited.

G Symington of the Australian Workers’ Union for Ruth Ilsley.

Hearing details:

2016.

Sydney:

May 20.

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