[2020] FWC 582 [Note: An appeal pursuant to s.604 (C2020/4583) was lodged against this decision - refer to Full Bench decision dated 7 October 2020 [[2020] FWCFB 5228] for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.120—Redundancy pay

Electricity Networks Corporation T/A Western Power
(C2019/7689)

DEPUTY PRESIDENT BINET

PERTH, 26 MAY 2020

Variation of redundancy pay.

[1] Electricity Networks Corporation T/A Western Power (Western Power) has applied to the Fair Work Commission (FWC) for an order pursuant to section 120 of the Fair Work Act 2009 (Cth) (FW Act) to vary the amount of redundancy pay to be paid to Mr Sinisa Krstic (Krstic).

[2] Western Power have sought an Order that the amount of redundancy pay be reduced from 16 weeks of Mr Krstic’s base rate of pay for his ordinary hours of work to zero (Order) on the grounds that Western Power have found other acceptable employment for Mr Krstic (Application).

[3] On 31 December 2019 Directions were issued for the filing of materials to enable the Application to be determined (Directions).

[4] In accordance with the Directions the parties filed a jointly prepared Agreed Statement of Facts, which the parties were advised would be admitted into evidence and considered not in dispute.

Permission to be represented

[5] The Directions invited the parties to make submissions as to whether the FWC should grant permission to the parties to be represented. Western Power sought permission to be represented by a lawyer or paid agent at the Hearing. The granting of leave to Western Power be represented was not opposed by Mr Krstic.

[6] Having considered the submissions of Western Power leave was granted to Western Power to be represented pursuant to section 596(2)(a) of the FW Act on the grounds that it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

[7] At the hearing Western Power was represented by Mr Rayn Wade, of Ashurst. The following witnesses provided written and oral evidence on behalf of Western Power:

a. Ms Raeleen Cattach – Functional Support Consultant (Ms Cattach)

b. Mr Andrew Boots – Planning and Strategy Manager, Property and Fleet Division (Mr Boots)

[8] At the Hearing Mr Krstic represented himself and provided written and oral evidence on his own behalf.

[9] Final written submissions were filed on behalf of Western Power on 1 April 2020. Final written submissions were filed by Mr Krstic on 14 April 2020. I note that Mr Krstic advanced some additional arguments in his written closing submissions which were not raised in his written opening submissions or orally at the Hearing. I did not invite the Applicant to respond because the submissions have not altered my final decision and/or were not relevant to the issues I was required to determine in this Application.

Factual circumstances

[10] Mr Krstic commenced his employment with Western Power on 18 October 2010 as a Business Analyst, initially on a temporary contract. His appointment was converted to a full time position effective from 13 December 2010. 1

[11] Western Power categorises roles within the organisation into four different classifications or ‘workstreams’. The four workstreams are designated as ‘Formal Leadership’, ‘Professional Other and Engineering’, ‘Business Support’ and ‘Operational’. The position classification for a Business Analyst is workstream ‘Professional Other’ 2

[12] The workstreams represent career streams or pathways. Within each workstream employees progress through different career levels and pay points. It is relevant to note that the various career levels in each workstream are not directly comparable. By way of example, the career level F5 in the Formal Leadership workstream cannot necessarily be equated (either in respect of salary, seniority, status, etcetera) to career level P5 in the Professional Other and Engineering workstream. 3

[13] The evidence is that it is not unusual for employees to transfer between workstreams during the course of their career, as in fact Mr Krstic subsequently did without objection. 4

[14] With effect from 11 November 2013 Mr Krstic was promoted to the role of Senior Financial Analyst. In this role the position classification was workstream “Professional Other”, career level P3 and pay point 8.1P.  5

[15] Mr Krstic was subsequently seconded to the role of Property Team Leader in the Planning and Asset Area of the Planning and Fleet Function. His secondment into the role of Property Team Leader was made permanent on 22 November 2016. In this role the position classification was workstream “Formal Leader”, career level Fl and pay point 7.1P.  6

[16] Career level F1 is the lowest career level in the Formal Leadership workstream and generally reserved for Team Leaders. The next career level F2 captures Area or Middle Management. F3 captures Senior Management such as Head of Human Resources. F4 captures members of the Executive Management Team including the Chief Financial Officer. The highest level, F5, is reserved for the Chief Executive Officer. 7

[17] Within the career level F1 there are three different salary bands. The salary band of each team leader is dependent upon the size of the team leader’s role as evaluated according to the Hay Job Evaluation Methodology (Hay Evaluation). Mr Krstic’s role as Property Team Leader was evaluated at Hay Evaluation Level 16. 8

[18] At the time of his appointment to a permanent role as the Property Team Leader in the Planning and Asset Area of the Property and Fleet Function, the Planning and Asset Area was overseen by Mr Boots, Planning and Asset Manager. The Planning and Asset Area was overseen by Mr Gavin Hobbs, Head of the Property and Fleet Function. Mr Boots reported to Mr Hobbs. Also reporting to Mr Hobbs were the Property Works Manager, Mr Andrew Ling (Mr Ling) and the Fleet Manager Mr Dennis Bollard.

[19] In his role as a Property Team Leader Mr Krstic reported to Mr Boots, Planning and Asset Manager of the Planning and Asset Area. In addition to Mr Krstic, a Project Manager, Project Support Officer and Property Support Administrator also reported to Mr Boots.

[20] Mr Boots reported to Mr Gavin Hobbs, Head of the Property and Fleet Function. Also reporting to Mr Hobbs were the Property Works Manager, Mr Andrew Ling (Mr Ling) and the Fleet Manager Mr Dennis Ballard (Mr Ballard).

[21] When he first commenced his secondment as Property Team Leader five employees reported to Mr Krstic. During November 2016 a restructure occurred and the number of employees reporting to Mr Krstic decreased from five to two. At the time Mr Krstic’s position was made redundant only two Property Specialists reported to Mr Krstic - Mr Peter Gianatti (Gianatti) and Mr Martin Wong (Wong). Mr Krstic asserts that he was also, in practise responsible for the supervision of the Property Support Administrator. The relevant organisational charts indicate that the Property Support Administrator reported to Mr Boots and elsewhere in his submissions Mr Krstic acknowledges that at the time his position was made redundant that he had only two subordinates. 9

[22] As Property Team Leader Mr Krstic was required to undertake the following types of tasks with the assistance of Mr Gianatti and Mr Wong:

a.
managing the acquisition, leasing and disposal of properties and property interests;b. negotiating easements to protect Western Power’s assets;

c. undertaking evaluations to provide advice to the business on property transactions and the maintenance of an optimal property portfolio;

d. advising the business in relation to maintaining an optimal property portfolio; and

e.
ensuring the delivery of timely commercial property transactions.

[23] The extent to which Mr Krstic was involved in the actual day to day performance of these tasks as opposed to exclusively managing the work flow of Mr Gianatti and Mr Wong is in dispute. 10

[24] In June 2019, Western Power undertook a restructure of the Property and Fleet Function which aimed to streamline the structure of the Property and Fleet Function in order to improve outcome delivery. The restructure divided the Property and Fleet Function into two teams, both still overseen by Mr Hobbs. Firstly, the Property and Fleet Planning Strategy Area (Strategy Team), responsible for undertaking planning, policy, strategy, procedures, funding and business approvals, led by Mr Boots. Secondly, the Property and Fleet Delivery Area (Delivery Team), responsible for the actual delivery of the transaction through design, tendering, construction and commissioning. The Delivery Team was to be overseen by Mr Ling in the new role of Property and Fleet Delivery Manager and Mr Ballard undisturbed in his role as Fleet Manager. 11

[25] As part of the restructure, the Planning and Assets Area in which Mr Krstic was previously employed, ceased to exist. Mr Wong who had previously reported to Mr Krstic was allocated to Delivery Team and Mr Gianatti who had also previously reported to Mr Krstic was allocated to work in the Strategy Team reporting directly to Mr Boots. 12

[26] On 20 June 2019 Mr Ling contacted Mr Krstic (who at that time was overseas on holiday) by email and informed him of the new structure and proposal that Mr Krstic be redeployed to the new role of Senior Property Specialist. Mr Ling informed Mr Krstic that Mr Krstic would still report to Mr Boots and would retain his existing benefits and remuneration but without any team leadership duties given the proposed redeployment of his existing subordinates. Mr Ling also informed Mr Krstic that he would be provided with a copy of the new organisational chart and that there would be opportunity to provide feedback. He also indicated that he was happy to arrange a time to personally discuss any questions or issues Mr Krstic might have. 13

[27] On 24 June 2019 Mr Ling forwarded to Mr Krstic an email from Mr Hobbs providing more information about the restructure process. 14

[28] On 25 June 2019 Mr Ling forwarded another email to Mr Krstic from Mr Hobbs which had attached to it the proposed restructure organisational chart and provided details of the consultation process. In the email Mr Hobbs stated that Western Power ‘will give genuine consideration to your feedback before making any final decisions.’ 15

[29] On 26 June Ms Samantha Aiken, a Human Resources business partner, sent an email with Mr Ling and Mr Boots copied in, informing Mr Krstic that because Western Power had offered him the alternative position of Senior Property Specialist that he was not entitled to severance pay. In the same email she invited Mr Krstic to send Mr Ling, Mr Boots or Mr Hobbs any feedback he had in relation to the proposed changes. 16

[30] On the same day Mr Krstic replied to Ms Aiken indicating that he wished to appeal the decision that he was not entitled to severance pay and asking her the process to do so. He requested that the process be delayed until his return to Australia. 17

[31] On 28 June 2019 Ms Aiken informed Mr Krstic that the consultation process for the restructure would close on 1 July 2019 and he should provide any relevant feedback before that date. 18

[32] On 28 June 2019 Mr Krstic replied requesting a severance payment arguing that the proposed position was a lower position with less responsibilities which would affect his future career prospects and was not therefore reasonable redeployment. 19

[33] On 1 July 2019 Ms Aiken emailed Mr Krstic again inviting him to provide feedback on the proposed changes. On the same day Mr Krstic replied stating that the impact of his current position being made redundant was that he would have no further duties to perform.  20

[34] On 2 July 2019 Mr Krstic commenced an internal grievance process in relation to the restructure process.  21

[35] 05 Jul 2019 Mr Ling emailed Mr Krstic acknowledging receipt of the completed grievance form stating that Western Power looked forward to discussing it with him on his return to work. In the same email Mr Ling confirmed that Mr Krstic’s position had been made redundant and Mr Krstic had been appointed to the new role effective from Monday 8th July 2019. Attached to the email was the Position Description for the new role and new organisational chart.  22

[36] On 16 August 2019 Mr Boots, Mr Hobbs and Ms Aiken met with Mr Krstic and his union representative to discuss his grievance. During this meeting Mr Boots says that he explained to Mr Krstic that the role that he was being offered would involve him undertaking the same day to day tasks that he had been carrying out as a Property Team Leader but with additional responsibilities of providing strategic advice to the leaders of the business. Mr Boots says that he told Mr Krstic that the role would offer him the opportunity for greater exposure to senior leadership and more complex work. Mr Boots also says that he informed Mr Krstic that he would receive internal leadership training as well as the opportunity to undertake external training. 23

[37] Following the meeting Mr Krstic’s union representative emailed a summary of his record of the meeting to the union industrial officer and Mr Krstic. Interestingly those records state as follows: 24

“Prior to meeting with Sinisa I reviewed both position descriptions. Effectively, in the new position Sinisa will be undertaking virtually the same work but in a position classified a level higher than his redundant position. The main difference between the 2 positions is that there was considerable emphasis placed on developing staff for succession planning and business continuity in the Property Team Leader role while strategy – providing recommendations on which informed decision making can be based is the key driver for the Senior Property Specialist. Andrew discussed in detail at the meeting how he sees Sinisa’s new role developing once Sinisa takes up his duties.

Andrew stated that he was supportive of Sinisa undertaking leadership training.

…

When asked by Sam if he considered his consultation grievance resolved he responded yes.”

[38] However, on 2 September 2019 Mr Krstic commenced arbitration proceedings in the FWC seeking redundancy and other payments under clause 23 of the Western Power and Australian Services Union Enterprise Agreement 2017 (Agreement). 25

[39] In a decision handed down on 29 November 2019 in Sinisa Krstic v Electricity Networks Corporation t/a Western Power [2019] FWC 7962 Deputy President Beaumont determined that on a proper construction of the Agreement Western Power was required to offer Mr Krstic an alternative role, that offering Mr Krstic the role of Senior Property Specialist met that requirement and that therefore Mr Krstic was not entitled to severance payment pursuant to the Agreement.

[40] Mr Krstic’s employment was subsequently terminated effective 3 December 2019. Mr Krstic was paid 4 weeks’ pay in lieu of notice and received all other relevant accrued entitlements, save that Western Power withheld payment of any alleged entitlement to redundancy pay pending the determination of this Application.

Relevant Statutory Provisions

[41] Section 120 of the FW Act states that:

“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.”

[42] Section 119 of the FW Act states that:

“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:

[43] Given Deputy President Beaumont’s decision in Sinisa Krstic v Electricity Networks Corporation t/a Western Power [2019] FWC 7962 any entitlement of Mr Krstic to redundancy pay, if it arises, does so by virtue of section 119 of the FW Act.

Consideration

[44] Western Power submits that it obtained “other acceptable employment” within the contemplation of section 120(1)(b)(i) of the FW Act by offering Mr Krstic the role of Senior Property Specialist.

[45] In order to satisfy the requirement to ‘obtain’ other acceptable employment the employer must have caused the alternative employment to become available to the redundant employee. 26 This requires the employer to have procured an offer of employment whether or not it is accepted by the employee.27 I am satisfied that the position that Mr Krstic was offered as Senior Property Specialist was ‘obtained’ by Western Power for the purposes of section 120(1)(b)(i) of the FW Act.

[46] Western Power acknowledge that in his previous role Mr Krstic had responsibility for two subordinates and that in his new role he would have no responsibility for subordinates however it submits that the new role is otherwise commensurate with or an improvement on his former role and therefore was acceptable employment for the purposes of the section 120(1)(b)(i) of the FW Act. Western Power assert that had he accepted the role of Senior Property Specialist Mr Krstic would not be disadvantaged in relation to important matters such as his level of remuneration, hours of work, job security and work location. Western Power says that the alternative role was commensurate with Mr Krstic’s former role in key aspects, such as his day to day work duties, the required skillset, the nature of his work, his reporting structures and the availability of internal and external training. Western Power says that in fact acceptance of the new role would have carried with it potentially significant advantages for Mr Krstic including the opportunity for the acquisition of relevant experience, routine interaction with senior management, increased levels of responsibility and, ultimately, enhanced potential for advancement. 28

[47] It is agreed by the parties that the position Mr Krstic was offered as a Senior Property Specialist has the same hours, work location, service accruals/entitlements, travel time and salary, as the Property Team Leader role he previously held. 29

[48] Mr Krstic points out that the proposed new contract of employment allowed for the variation of his hours and work location and therefore submits that limited weight should be given to these factors when determining whether the proposed role was objectively acceptable. 30 I note that his previous contract of employment contained equivalent ‘variation’ clauses and therefore I consider that the hours and location of work between his former position and the proposed position are equivalent and should be given weight accordingly.31

[49] Notwithstanding the similarities between the positions Mr Krstic submits that the duties and responsibilities are at a lower status and that therefore the position is not ‘other acceptable employment’ for the purposes of section 120(1)(b)(i) of the FW Act.

[50] In particular Mr Krstic submits that the proposed role represented the following changes:

a. A reduction of higher level accountabilities.

b. A removal of reporting staff

c. A removal of Delegated Financial Authority

d. Work of a different nature.

e. A reduction in seniority and status.

f. A loss of autonomy and independent judgement.

g. A negative impact on career trajectory.

h. A reduction in access to leadership training

[51] I deal with each of these matters in further detail below.

[52] For the purpose of assessing these matters Mr Krstic submits that the comparison should be made between his existing role and the information contained in the job description provided to him on 26 June 2019. 32

[53] I do not accept that this is the only relevant evidence of the nature of the proposed role. It is undisputed that further information about the new role was provided to Mr Krstic at the 16 August 2019 meeting. While the information provided at the 16 August 2019 meeting was given verbally the meeting was documented by both Western Power and Mr Krstic’s union representative. There is no evidence to suggest that Western Power would have refused to confirm the information in writing had Mr Krstic requested some other form of record of discussion.

Nor do I accept Mr Krstic’s submission that I should not take the information provided to him at the 16 August 2019 meeting into account when assessing the two positions because the meeting occurred as a part of a grievance process initiated by him. The point of such processes is to provide a forum for employees to resolve grievances with their employers. If the employer was not able to provide additional information or clarification in an endeavour to resolve employee grievances the process would be pointless. The process occurred while Mr Krstic was still employed and therefore while he still had the opportunity to reconsider his initial negative view of the role and accept the appointment.

[54] Mr Krstic says that had he accepted the new role he would have suffered a reduction in higher level accountabilities, seniority and status, been required to perform work of a different nature and suffered a loss in autonomy and independent judgement.

[55] Mr Krstic points to differences in the position description of his former role and his new role to support his assertion that the new position is both different and inferior. In particular he points to differences in the position purpose, impact, key challenges, reporting structure, selection profile and key accountabilities.  33

[56] With respect to position purpose the position description for Property Team Leader provides:

“The position is accountable for managing the acquisition, lease and disposal of property and property interests (such as easement) required by Western Power, including associated conveyance, sub division and administrative processes.”

[57] Whereas the position description for the Senior Property Specialist provides:

“To be accountable for providing high level support in the management of Western Powers property through the active management of high value and complex acquisitions, leasing, disposals and management of a portfolio of properties and property interests (such as easements) required by Western Power, including financial and commercial analysis, subdivisions and administrative processes.”

[58] Mr Krstic says the reference to “providing high level support in the management” indicates that the role is different because it is inferior to his previous role “managing property”. The evidence of Mr Boots is that he intended the incumbent of the Senior Property Specialist role to perform more complex tasks. In this regard he points to the use of the phrase “active management of high value and complex”. 34

[59] Mr Krstic also compares elements of the key challenges and accountabilities of his current role and says that these are different because they are inferior to the key challenges of the Senior Property Specialist Role. In particular he highlights several references to undertaking tasks ‘on behalf of the Area Manager’ and says that the inclusion of these words is indicative of a lower status role than his current role. Western Power on the other hand point to the use of the words “detailed and complex”, “high quality” “sensitivity” as indicia that the new role contemplated more complex tasks. 35

[60] Mr Krstic also points to elements of the selection profile such as the requirement of “demonstrated ability to work autonomously with initiative and independent judgement”, “strong leadership, influencing skills” as indication that his former role was a more senior role. However, a review of the selection profile for the new role contains many adjectives which suggest that new role required more superior experience and knowledge. For example “extensive experience” versus “solid experience”, “minimum 7 years extensive and/or broad experience and knowledge” versus “broad experience”.  36

[61] Mr Krstic also points to the differences in the reporting structures between the two roles. The position description for the Property Team Leader role indicates that the incumbent is responsible for 5 direct reports. Mr Krstic concedes that this had subsequently reduced to two direct reports as at the time the position was made redundant. The position description for the new role had zero direct reports.  37

[62] Mr Krstic also submits that his actual duties as Property Team Leader varied significantly from what was contemplated in the new role. According to Mr Krstic the majority of his work as Property Team Leader was in a leadership capacity: managing workflow, resolving issues for his team members, coaching his team members, planning strategies to be implemented by his team members and reviewing the analytical work of his team members. He says that without any subordinates in the new role it is inevitable that he must perform all of the duties directly. 38

[63] He also says that in practise a significant portion of his time in his role as Property Team Leader was spent working autonomously conducting negotiations. He says because the position description for the new role states that the incumbent would “undertake on behalf of the area manager as required negotiation …” that in the new role he would have less autonomy than in his role as Property Team Leader.  39

[64] In addition, Mr Krstic says that as Property Team Leader he acted as a sponsor for specific projects which required strong influencing skills and independent judgement. He submits that as these skills are cited in the position description for the Property Team Leader role but not mentioned in the position description for the new role then he would lose the opportunity to perform such duties.  40

[65] Western Power say that it was made clear to Mr Krstic from the outset of the restructuring process that, with the exception of his supervisory responsibilities, it was envisaged that in the new role he would “effectively be undertaking the same work.”. Western Power say that this was reinforced with Mr Krstic during the consultation process and at the 16 August 2019 meeting. 41

[66] With respect to the position descriptions Western Power say that the position descriptions are not intended to be an exhaustive list of duties. In this regard they point to instructions on the job description such as:

“POSITION PURPOSE (In no more than two sentences describe the main purpose of the position

…

IMPACT (List up to four examples of how the position will impact …

..

KEY ACCOUNTABILITIES (list between five and eight key accountabilities, …”

Western Power also assert that the position descriptions do not refer to levels of function but rather to types of functions and therefore are not indicative of status.

[67] Western Power point out that the new role attracted a higher pay point, a higher Hay Evaluation and demanded higher education requirements or criteria for appointment to the role. 42

[68] The position descriptions do clearly differ in terms of their reference to leadership skills and supervisory responsibilities. This is reflective of the lack of supervisory responsibilities in the new role. However, supervisory duties is only one of eleven key duties identified in the Property Team Leader position description. The balance of the duties relate to the performance of technical property management skills of the same or similar nature to the new role.

[69] Clearly the position descriptions are intended to provide a ‘flavour’ of the role rather than to codify all the tasks and duties. Evidence of those tasked with drafting the position description and/or directing the work of the incumbent in the position is relevant to the interpretation of the intent of the language used in the position descriptions. Consideration must also be given to evidence as to what duties in practise Mr Krstic performed which were not fully captured in his position description and what duties Western Power contemplated him performing in the new role which were not fully captured in the new position description.

[70] While select aspects of his existing role might be suggestive of a higher level of function than the new role there are numerous elements of the new role which are consistent with the new role being of a higher level of function. When the evidence is considered in its totality, I am satisfied that the new role contemplated the performance of work of a similar, albeit not identical, nature. Potentially, particularly by reference to the selection profile, it contemplated work of a similar but more complex nature.

[71] Mr Krstic points to the lack of supervisory responsibilities as evidence that the new role is less senior that his former role. According to Mr Krstic the majority of his work as Property Team Leader was in a leadership capacity: managing workflow, resolving issues for his team members, coaching his team members, planning strategies to be implemented by his team members and reviewing the analytical work of his team members. He says that but for budgetary constraints he would have been supervising three rather than two subordinates at the time his position was made redundant. He says that without any subordinates in the new role it is inevitable that all of the duties must be performed directly by him and that therefore the role constitutes a demotion or diminution in his status. 43

[72] Western Power submit that the absence of direct reports cannot objectively be construed as a demotion or diminution in his status. Western Power submit that supervision of his direct reports was not a key element of Mr Krstic’s duties in his former role. Western Power allege that Mr Krstic performed operational duties and was not exclusively undertaking supervisor functions. Furthermore, Western Power submit that the new role provided the opportunity for expanded leadership responsibilities and greater corporate influence leading strategic planning for significant property transactions. 44

[73] The removal of supervisory responsibilities appears to have been the key factor driving Mr Krstic’s rejection of the new role. It is the case that an increase in supervisory responsibilities is often associated with increased seniority and career progression. However, it is not always the case and in fact in many businesses the more senior the leader the less direct reports they have. There is limited evidence before me to determine objectively to what extent supervisor responsibilities formed part of his day to day duties as the Property Team Leader. Mr Krstic and Mr Boots evidence falls at opposite extremes. I do note that over time the volume of Mr Krstic’s supervisory responsibilities in his role as Property Team Leader was declining rather than increasing given the decrease in the number of subordinates reporting to him from an initial five to two at the time his position was made redundant. Given that supervisory responsibility is only one of the eleven key accountabilities in the position description for the Property Team Leader and given the decrease in the number of direct reports it appears likely the actual extent of Mr Krstic’s supervisory responsibilities more closely aligns with Mr Boot’s evidence than Mr Krstic’s.

[74] Mr Krstic relies on the absence of Delegated Financial Authority in the new position as evidence that the new role is of lower status. 45 Western Power deny that Mr Krstic held a Delegated Financial Authority in his former role as at the date his position was made redundant.

[75] The evidence of both Mr Boots and Ms Cattach is that the Western Power Board determine the roles to which financial authority will be delegated on a year by year basis and those delegations are set out in the Delegation of Financial Authority Approvals Matrix for each year. The Delegation of Financial Authority Approval Matrices for 2018 and 2019 do not list Property Team Leader as a role to which financial authority is delegated. It is unclear whether Mr Krstic was included on the list of individual employees in the Nominated General Group as at the date his position was made redundant because Western Power does not retain these records. 46

[76] I do note however that Ms Cattach says that on 30 May 2017 she was specifically instructed to update the value of the amounts Mr Krstic’s role could approve for contract expenditure or variations in contract expenditure to zero. 47

[77] Western Power submit that any evidence that Mr Krstic approved invoice payments is not evidence of the exercise of delegated financial authority. Western Power instead submit that it is evidence of Mr Krstic fulfilling his administrative duty to ensure transactions previously authorised by someone with delegated financial authority was actioned and implemented.  48

[78] Furthermore, Western Power says that delegated financial authority is not a measure of seniority or status but is rather linked to duties associated with a particular role. It cites as an example a repair man issued with a credit card to purchase diesel for his truck as a person with relatively low seniority but with delegated financial authority.

[79] The evidence as to whether Mr Krstic possessed delegated financial authority in his role as at the date the role was made redundant is not conclusive. However, the evidence is clear that delegated financial authority is granted by reference to whether the employee requires such authority in the ordinary discharge of their duties and that employees in far less senior roles are in possession of delegated financial authority. In these circumstances even if it were the case that Mr Krstic did possess delegated financial authority at the time his position was made redundant, I am not satisfied that the absence of such authority of itself makes the new role inferior.

[80] Mr Krstic submits that the new role would have had a negative impact on his career trajectory because his career trajectory was towards a F2 managerial role. Mr Krstic asserts that transferring to a different work stream would deny him he opportunity to act in F2 roles or to gain experience performing duties typically performed by employees in the Formal Leadership workstream such as exercising Delegated Financial Authority. In the absence of such opportunities he says the likelihood of a secure F2 managerial role would be decreased.

[81] Western Power say that the new role would have broadened his skillset and experience and therefore would have enhanced, rather than detracted, from his promotional prospects. For example, Mr Boots asserts that the new role would have improved Mr Krstic’s career progression because it would have required Mr Krstic to routinely attend strategy meetings with leaders of Western Power in order to formulate the business property strategy going forward. According to Mr Boots this would have exposed Mr Krstic to the most senior leaders in the business increasing their awareness of his skill set and his potential for promotion. 49

[82] The evidence is that it is not unusual for employees to transfer between workstreams during the course of their career. As in fact Mr Krstic did without objection when he transferred from the Professional Other to the Formal Leadership workstream when accepting his appointment to the Property Team. 50

[83] As Mr Krstic acknowledged each workstream provides an opportunity for career progression and that the opportunity for career progression existed in the new role. 51 Depending on his aptitude for leadership roles and his capacity to grow his technical expertise it may have in fact been the case that a career in the Professional Other workstream might have resulted in a higher ultimate career trajectory than remaining in the Formal Leadership workstream. Certainly, other evidence of career growth such as a higher Paypoint and a higher Hay Evaluation was present in the new role as compared to his former F1 role.

[84] There is no evidence to suggest that transferring out of the Formal Leadership workstream would have prevented Mr Krstic subsequently transferring back at a later date to a F1 or F2 role. For example, if he acquired enhanced technical skills which equipped him to supervise a broader range of employees in technical roles. Greater visibility of his technical expertise amongst organisational leaders also potentially provided Mr Krstic with an opportunity to increase their confidence in his suitability for a more senior leadership role in the organisation. The evidence is that in his former role and in the new role Mr Krstic was Mr Boot’s 2IC and heir apparent. Mr Krstic’s natural career path before and after the restructure would have been a promotion into the role occupied by Mr Boots. This role falls within the Leadership stream. 52

[85] Mr Krstic also asserts that the new role would have led to a reduction in training opportunities and would therefore limit or slow his career progression. Mr Krstic says that it was his understanding that employees must be in the Formal Leadership workstream to be eligible for leadership training. He also says that the absence of leadership duties in the position description for the Senior Property Specialist role would preclude him from inclusion in leadership training programs. 53

[86] Mr Boots gave evidence that he had intended, had Mr Krstic accepted the role of Senior Property Manager, to coach Mr Krstic to develop the additional skills he would need to undertake the expanded strategic and leadership responsibilities in his new role. Mr Boots also asserted that Mr Krstic was expressly informed at the August Meeting that extensive leadership training would also be made available to him. 54

[87] In the course of endeavouring to cast doubt on the credibility of Mr Boots evidence that the new role would lead to improved training opportunities Mr Krstic unhelpfully extracted from Mr Boots in cross examination evidence that training opportunities Mr Krstic had sought in his current role had not eventuated. 55 In light of this evidence it is difficult to accept Mr Krstic’s assertion that he would receive less training in the new role.56

Conclusions

[88] The question of what constitutes ‘other acceptable employment’ in the context of section 120(1)(b) of the FW Act was summarised by Deputy President Sams in Spotless Services Australia Ltd57 as follows:

“…

•  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’.”

[89] The test of acceptability of the alternative employment involves consideration of matters such as the nature of the work, necessary skills and relevant duties, work load, pay levels, hours of work, job location, seniority, fringe benefits, loss of entitlements/accruals and job security. 58

[90] The FWC is required to have regard to the totality of the circumstances. No one factor will be determinative for the purposes of the discretionary judgement as to whether or not the alternative employment is acceptable. 59

[91] It is agreed by the parties that the position Mr Krstic was offered as a Senior Property Specialist has the same hours, work location, service accruals/entitlements, travel time and salary, as the Property Team Leader role he previously held. 60

[92] Western Power have demonstrated similarities in the required skillset, the nature of the work, Mr Krstic’s upward reporting structures and the availability of internal and external training. Western Power also asserted that acceptance of the new role would have carried with it potentially significant advantages for Mr Krstic including the opportunity for the acquisition of relevant experience, routine interaction with senior management and increased levels of responsibility. I accept this evidence.

[93] There is no evidence that the workload would have differed between the two roles.

[94] The fact that the proposed role was not ‘acceptable’ to Mr Krstic nor that it was not identical to his previous role does not make the proposed role not ‘acceptable’ for the purposes of section 120 of the FW Act. In fact, as was explained by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia at [89] 61:

“…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.”

[95] As noted by Deputy President Coleman in Manheim Pty Ltd v Cordiner [2019] FWC 534 at [19]:

“Logically, in the context of s 120 the work associated with ‘other employment’ with the same employer will be different from that of the position that has become redundant, at least to some degree. If there were no differences, the old role would presumably still exist.”

[96] Whilst Mr Krstic made submissions that a number of different elements of the new role were in his view inferior Mr Krstic has relied most heavily on the removal of supervisory responsibilities as demonstrating that the new role was not objectively ‘acceptable’.

[97] In his submissions Mr Krstic cited a number of decisions in which the FWC determined that an alternative position was not ‘acceptable’ because the employee’s seniority had been reduced. In almost all of those cases the decrease in supervisory responsibilities was accompanied by significant decreases in renumeration or capacity to earn renumeration and can be differentiated on that basis.

[98] In Re the ORS Group Pty Ltd [2018] FWC 4820 the employee’s salary was maintained however the new position was with a different employer. The purpose and key responsibilities of the two roles were very different, the redundant position as the site manager of a rehabilitation provider and the new position as an employment consultant for a business seeking employment for the disabled. Relevantly the new position was classified under the relevant Award two classifications below the relevant Award classification of the redundant position.

[99] Supervisory duties are only one of eleven key duties identified in the Property Team Leader position description. I am not satisfied that Mr Krstic’s supervisory functions dominated his daily work to the extent which he suggests or in a way that makes the new role so alien to his existing role that the new role is not objectively acceptable. It appears that performing technical tasks formed a significant portion of his duties as Property Team Leader. The new role contemplated him performing technical tasks of the same or more complex nature for the same employer at the same location during the same hours of work for the same pay in a role assessed at a higher Pay Point and Hay Evaluation. His career trajectory as Mr Boot’s heir apparent appeared to be undisturbed by the transfer between workstreams. Given Mr Krstic’s assertion that he received limited leadership training in his pre existing role I am not satisfied that the new role could reasonably be considered as unacceptable based on a reduction in training opportunities.

[100] At the earliest stages of the process it appears that Mr Krstic formed the view that the new role was in fact his subordinates’ role, concluded that it constituted a demotion and determined that he would not accept the role. Regrettably it appears he did not objectively assess the new role as a whole. Having commenced a grievance process to ventilate his concerns unfortunately he did not engage in a meaningful way with his employer to give proper consideration to information they sought to provide to him to address those concerns.

[101] Whether as a consequence of stubbornness, or a preference for a severance payment, Mr Krstic steadfastly declined the new role. Instead, through a variety of forums, he has sought an entitlement to severance pay.

[102] In P&R Electrical Wholesalers Pty Ltd, the Commission expressly cautioned employees against unreasonably refusing offers of alternative employment in order to be paid redundancy entitlements: 62

“[27] It is also clear that acceptable employment does not mean identical employment and that employees should not unreasonably refuse offers of alternative employment merely because they wish to access the benefits of redundancy pay: See also Spotless Services Australia Limited [2013] FWC 4484 per Sams DP.”

[103] In all of the circumstances I am satisfied that the position offered to Mr Krstic was acceptable employment and that in the circumstances it is appropriate to grant the Order sought and reduce his redundancy pay to nil.

[104] An order to this effect will issue with this decision.

DEPUTY PRESIDENT

Appearances:

The Applicant appeared for himself.
Mr R Wade, Ashurst, for the respondent.

Hearing details:

2020.
Perth:
25 February.

Printed by authority of the Commonwealth Government Printer

<PR716415>

 1   Statement of Agreed Facts filed 20 February 2020.

 2   Exhibit A3 at [21]-[22].

 3   Ibid at [23].

 4   Ibid at [24]-[25].

 5   Statement of Agreed Facts filed 20 February 2020.

 6   Ibid.

 7  ,Exhibit A3 at [22].

 8   Ibid at [22].

 9   Applicant’s Exhibit Book at Attachment 5 and Exhibit R1 at [6]-[7] and Attachment 10.

 10   Exhibit A3 at [19].

 11   Ibid at [29]-[33].

 12   Ibid at [34]-[37].

 13   Applicant’s Exhibit Book at Attachment 7.

 14   Exhibit R1 at Attachment 12.

 15   Ibid.

 16   Exhibit R1 at Attachment 13.

 17   Ibid.

 18   Ibid.

 19   Applicant’s Exhibit Book at Attachment 13.

 20   Ibid.

 21   Ibid.

 22   Applicant’s Exhibit Book at Attachment 14.

 23   Exhibit A3 at [69]-[82].

 24   Exhibit R1 at Attachment 17.

 25   Exhibit A3 at [65].

 26   P&R Electrical Wholesalers Pty Ltd [2016] FWC 1730 at [26]-[27].

 27   FBIS International Protective Services (Aust) Pty Ltd v MUA and Fair Work Commission [2015] FCAFC 90.

 28  Western Power’s Outline of Submissions filed 23 January 2020 at [20]-[22], Exhibit A3 at [41]-[42].

 29   Statement of Agreed Facts filed 20 February 2020 at [l].

 30   Respondent Submissions at [14].

 31   Exhibit R1 at Attachment 2 and 4 and 6.

 32   Respondents submissions at [5], [35] - [37].

 33   Exhibit R1 at [41].

 34   Ibid.

 35   Ibid.

 36   Ibid.

 37   Ibid.

 38   Exhibit R1 at [44]-[47].

 39   Ibid.

 40   Ibid.

 41   Applicant’s Closing Submissions at [6].

 42   Ibid.

 43   Exhibit R1 at [44]-[45], [48]-[50].

 44   Western Power’s Outline of Submissions filed 23 January 2020 at [20]-[24], Exhibit A3 at [42]-[44].

 45   Exhibit R1 at [57]-[67].

 46   Exhibit A3 at [47]-[56] and Exhibit A1.

 47   Exhibit A1.

 48   Exhibit A3 at [57]-[58].

 49   Ibid at [42].

 50   Ibid at [24]-[25].

 51   Transcript at PN425.

 52   Transcript at PN260-PN262.

 53   Exhibit R1 at [54].

 54   Transcript at PN256.

 55   Transcript PN319-PN339.

 56   Exhibit A3 at [45]-[47], See also Exhibit R1 at [54]- [56].

57 Spotless Services Australia Limited T/A Alliance Catering [2016] FWC 4505 at [65].

 58   Clothing and Allied Trade Unions of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226 at [230]; Australian Chamber of Manufacturers v Derole Nominees Pty Ltd (1990) 140 IR 123; Vicstaff Pty Ltd v May [2010] FWA 3141; Central Norseman Gold Corporation Ltd v Kempton [2010] FWA 5316; UXC Connect v Moore [2012] FWA 4296; Australian Commercial Catering Pty Ltd v Powell and Togia, Powell v Australian Commercial Catering Pty Ltd [2016] FWCFB 5467; DRW Investments Pty Ltd t/a Wettenhalls v Richards & Others [2016] FWC 461; Children's Services Support Unit (CSSU) Inc [2014] FWC 7503; Forster Tuncurry Golf Club Ltd t/a Forster Golf Club v Crew [2016] FWC 170; P&R Electrical Wholesalers Pty Ltd [2016] FWC 1730; Smith v Onesteel Ltd [2013] NSWDC 18; Spotless Services Australia Ltd [2013] FWC 4484 and Sodexo Australia Pty Ltd T/A Sodexo [2016] FWC 4012.

 59   Datamars (Australia) Pty Ltd T/A Datamars [2015] FWC 1269 at [28].

 60   Statement of Agreed Facts filed 20 February 2020 at [l].

 61   Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia - PR974699 [2006] AIRC 737.

 62   P&R Electrical Wholesalers Pty Ltd [2016] FWC 1730 at [27].