Fair Work Act 2009

s.120 - Redundancy pay

O'Brien Group Australia Pty Ltd Trading AS O'Brien Group Australia

Variation of redundancy pay Variation of redundancy pay

• [1] This decision concerns one of eight related applications made by O'Brien Group Australia Pty Ltd (O'Brien's) under s.120(2) of the Fair Work Act 2009 (Cth) (the Act) to have the Fair Work Commission (the Commission) reduce the redundancy entitlements of their employees whose positions have become redundant as a result of O'Brien's unsuccessful bid to renew their catering contract with AAMI Park Stadium (AAMI Park) at Melbourne Olympic Park (MOP). GEMA Group (GEMA) was successful in their bid for the AAMI Park contract. I have decided to issue separate decisions in each matter. The eight decisions are necessarily very similar.

• [2] Mr David Gellion worked for O'Brien's from 1 December 2022 to 31 December 2024 (2 years and a few weeks). At the time he was made redundant, he was employed on a full-time basis as the Retail Manager at AAMI Park. Pursuant to s.119 of the Act and the related award, Mr Gellion is entitled to 6 weeks' redundancy pay. On 24 December 2024, O'Brien's filed an application to reduce the amount to nil.

• [3] Mr Gellion opposes the application and asserts that O'Brien's has not obtained but rather merely facilitated alternative employment for him.

• [4] O'Brien's is a company with diverse businesses, including the significant provision of hospitality services to major venues. O'Brien's provided catering services at AAMI Park and was not successful in its tender for the renewal of the contract. GEMA, the successful tenderer, was announced to the public via an online news source on 24 September 2024.

• [5] On 25 September 2024, Ms Brittany Christy (Human Resources Manager at O'Brien's) emailed employees and referred to a 'recent announcement' (the result of the AAMI Park tender), a discussion employees had with O'Brien's Chief Operating Officer (Mr Daniel Smith) on the previous Friday, and pending decisions concerning employment pathways. The email stated that 'one-on-one' meetings would be scheduled to discuss these pathways.

• [6] In October 2024, Ms Christy emailed employees with an invitation and link for 'one-on-one' Microsoft Teams meetings. O'Brien's conducted 'transition discussions' from 10 to 14 October 2024. Mr Gellion's discussion took place on 11 October 2024.

• [7] From 15 to 18 October 2024, GEMA attended AAMI Park for an onsite visit which included in-person introductions.

• [8] On 15 November 2024, Ms Christy emailed employees, including Mr Gellion, to advise that there was still no result on the Marvel Stadium tender. The letter also stated that O'Brien's was working with GEMA and MOP to expedite the process to secure employment offers. Ms Christy advised employees that:

'Whilst this is largely out of our control, we are working with Gema Group and MOP to expedite the process to secure employment offers. We urge you to direct any questions to Gema Group regarding these new offers and lean into their processes'.

• [9] O'Brien's performed 'check-in calls' from 19 to 20 November 2024. Mr Gellion's call took place on 20 November 2024.

• [10] On 22 November 2024, Mr Smith emailed Mr Gellion regarding the potential redundancy of positions, redeployment within O'Brien's, and employment at GEMA. The letter detailed Mr Gellion's balance of entitlements as projected for 31 December 2024.

• [11] On 25 November 2024, Mr Smith emailed employees, including Mr Gellion, to advise that the Marvel Stadium tender was not successful, and employees were to be given redeployment opportunities. Ms Christy emailed Mr Gellion three redeployment opportunities for his consideration. These positions were within the business and based at Suncorp Stadium in Brisbane.

• [12] On 17 December 2024, Mr Gellion signed an employment contract with GEMA. On the same day, Mr Gellion also received a letter from O'Brien's titled 'Termination of Employment: Redundancy', which again confirmed redeployment options remained open for his consideration. The letter states that Mr Gellion would be notified when O'Brien's files an application with the Commission, and explains that Mr Gellion may be entitled to receive redundancy pay in accordance with the Act.

• [13] On 23 December 2024, GEMA provided O'Brien's with a summary of O'Brien's employees that it had hired, including their positions and salaries.

• [14] On 24 December 2024, O'Brien's applied to the Commission to vary Mr Gellion's redundancy to nil under s.120 of the Act.

• [15] O'Brien's existing contract to provide catering services at AAMI Park ended on 31 December 2024. Accordingly, on 31 December 2024, employees were terminated from O'Brien's and this included Mr Gellion.

• [16] Having accepted GEMA's offer, Mr Gellion commenced employment with GEMA on 1 January 2025, and at the date of the hearing was still actively employed in this position.

• [17] On 16 January 2025, Ms Christy emailed Mr Gellion advising of final pay and leave entitlements processed, including a note of an upcoming conference with the Commission, and with his employment reference attached.

• [18] On 22 January 2025, a conference for this matter was held. I caused directions to be issued, and the matter proceeded to an in-person hearing on 25 March 2025, and all but one of the related matters were heard consecutively, but not concurrently. Ms Christy and Mr Smith gave evidence for O'Brien's and Mr Gellion gave evidence as the Respondent.

• [19] The first question in contention that I need consider is whether O'Brien's 'obtained' other acceptable employment for Mr Gellion, and if so whether I should exercise my discretion to reduce the amount of Mr Gellion's redundancy pay.

• [20] In support of their application that they obtained other acceptable employment for Mr Gellion, O'Brien's submissions include the following.

• [21] O'Brien's submits that they took reasonable and positive steps to obtain employment for Mr Gellion, and the other employees, and therefore his redundancy entitlement ought be reduced to nil.

• [22] O'Brien's submits that they engaged in collaborative work with GEMA, actively facilitating employee introductions with them, providing background information for each position including salary levels. O'Brien's submits that all employees, including Mr Gellion, were provided with sufficient opportunities to interview and consult throughout the process. O'Brien's submits that they engaged in regular consultations with employees via emails, meetings, and discussions with GEMA.

• [23] In support of their application that they obtained employment for Mr Gellion with GEMA, O'Brien's submits that his position was not advertised and that he was not required to attend a formal interview or provide references.

• [24] O'Brien's submits that on 24 September 2024, a meeting was held with GEMA to facilitate the changeover of the AAMI Park catering contract, and there was an agreement to generally work collaboratively together and arrange meetings with employees.

• [25] Further, a meeting was held on 3 October 2024 regarding the organisational structure of the business, and employee transitions between O'Brien's and GEMA. O'Brien's submits that they lobbied GEMA to employ O'Brien's employees, and that GEMA invited all but one existing employee to be considered for employment with GEMA.

• [26] On 9 October 2024, O'Brien's announced that it would be facilitating an onsite visit by GEMA to AAMI Park to consult with employees. Prior to GEMA's onsite visit, O'Brien's held internal 'transition discussions' that took place from 10 to 14 October 2024. Further, that Mr Gellion's discussion was on 11 October 2024, and he agreed for his contact details to be to be referred to GEMA.

• [27] From 15 to 18 October 2024, GEMA attended AAMI Park for an onsite visit and in-person introductions with employees.

• [28] On 15 November 2024, Ms Christy sent an email to employees acknowledging the delay in offers, and advising of pending correspondence regarding employment pathways and entitlements.

• [29] From 19 to 20 November 2024, O'Brien's submits that it performed 'check-in' calls with employees to keep them informed on discussions about the Marvel Stadium tender and offers from GEMA. O'Brien's submits that it was their 'absolute priority' to ensure employees received an offer from GEMA as a safety net, in the event that the Marvel Stadium tender was not successful. Mr Gellion's check-in call took place on 20 November 2024.

• [30] On 22 November 2024, Mr Smith emailed individual employees, including Mr Gellion, about potential employment at GEMA, redeployment within O'Brien's, and redundancy of positions. The letter detailed Mr Gellion's balance of entitlements as projected for 31 December 2024.

• [31] On 25 November 2024, Mr Smith advised employees by email that the Marvel Stadium tender was not successful and that employees were to be given redeployment opportunities. Mr Gellion was offered three redeployment opportunities within O'Brien's, at Suncorp Stadium in Brisbane, but he rejected the offers.

• [32] On 28 November 2024, a transition meeting was conducted between O'Brien's and GEMA, and on 3 December 2024 O'Brien's provided GEMA with a summary of leave entitlements.

• [33] By 23 December 2024, an email from GEMA confirmed that Mr Gellion and other employees from O'Brien's had been employed by GEMA.

• [34] O'Brien's contends that it obtained other 'acceptable' employment for Mr Gellion within the meaning of s.120 of the Act. O'Brien's says that Mr Gellion was offered a position at GEMA, with the title of Retail Manager, for more pay doing the same work and with the same responsibility at the same location (AAMI Park) but employed by GEMA as opposed to O'Brien's.

• [35] Mr Gellion's submissions to oppose the application include the following.

• [36] Mr Gellion submits that O'Brien's did not 'obtain' employment for him at GEMA. Mr Gellion's evidence is that it was he who initiated discussions with GEMA on around 11 October 2024, and that this was prior to any formal introductions. He further submits that he independently met with Mr Dwane Goodman (Chief Operating Officer at GEMA) on 15 October 2024, where he was advised that if GEMA was interested, they would extend an offer of employment to him and request information regarding his salary expectations.

• [37] Mr Gellion submits that O'Brien's did not 'obtain' employment for him at GEMA because, amongst other things, O'Brien's was not a 'strong moving force behind the creation of alternative employment opportunity' but instead simply facilitated the process. O'Brien's did not take positive steps to ensure the employment was secured for Mr Gellion. Further, that obtaining employment requires an employer to 'take proactive and decisive steps to secure a role for the employee' and there must be a binding offer, ensured by the employer, and not just assistance in the application process.

• [38] Mr Gellion submits that O'Brien's failed to discharge its burden under s.120(1)(b)(i) of the Act, and have the means to pay him full redundancy entitlements pursuant to the Act. Further, that Mr Gellion is entitled to full redundancy pay of $10,961.54.

• [39] Mr Gellion submits his employment with GEMA is not other 'acceptable' employment.

• [40] Mr Gellion submits that he is getting paid $5,000 less than he was earning at O'Brien's and that his scope of responsibility has changed as it does not include broader management responsibilities and his current role is more 'hands on'.

• [41] Section 119 of the Act provides a statutory right to redundancy pay in amounts calculated based on an employee's continuous service with the employer.

• [42] Section 120 of the Act provides as follows:

(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.

• [43] Section 120 of the Act confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise have been entitled under s.119 of the Act. Section 120(1) states that the section applies if an employee is entitled to be paid an amount of redundancy pay under s.119, and the employer 'obtains other acceptable employment' for the employee. These are the jurisdictional facts that must be established before the Commission may exercise its discretion. Section 120(2) then states that the Commission 'may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate'. If the Commission makes an order under s.120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination.

• [44] The Full Bench of the Fair Work Commission in Australian Commercial Catering Pty Ltd v Powell and Togia; Powell v Australian Commercial Catering Pty Ltd [2016] FWCFB 5467, outlines the approach that I intend to follow in considering O'Brien's application to reduce Mr Gellion's redundancy pay:

[35] In considering an application made by an employer under s.120, the Commission must first consider whether either of the circumstances set out in paragraphs (a) or (b) of s.120(1) applies. Consideration under s.120 is enlivened upon an application being made by the employer for a reduction in the amount of redundancy pay otherwise payable under s.119. In dealing with such an application, the Commission must first determine whether the pre-conditions for the application of the section set out in s.120(1) are satisfied - that is, that the employee the subject of the application has an entitlement under s.119 to redundancy pay, and that the employer has either obtained other acceptable employment for the employee or cannot pay the redundancy entitlement.

[36] As was pointed out in the Full Court decision, "The origin of s 120 lies in the decision of the Full Bench of the Conciliation and Arbitration Commission in Termination, Change and Redundancy Case (1984) 8 IR 34 to introduce an entitlement to severance pay for all employees under federal awards whose [2021] FWC 3593 employment had been terminated because of redundancy". Cases decided in relation to award provisions established pursuant to those test case provisions are therefore relevant in the consideration of s.120.

[37] In relation to s.120(1)(b)(i), whether alternative employment obtained by the employer is "acceptable" is to be determined objectively, not by reference to whether the employment is subjectively acceptable to the employee. The determination of whether alternative employment is acceptable requires an assessment and value judgment on the part of the decision-maker. The employer "obtains" other acceptable employment when it acquires or gets the employment by its conscious, intended acts.

[38] Once it is concluded that the preconditions in s.120(1) are satisfied so that s.120 is applicable, it will be necessary for the Commission to determine under s.120(2) whether the employee's entitlement to redundancy pay under s.119

should be reduced and, if so, by how much. This requires the exercise of a broad discretionary power. Any determination by the Commission for a reduced amount of redundancy pay then becomes the employee's entitlement under s.119: s.120(3).

Section 119(1)(a) of the Act

• [45] There is no dispute that Mr Gellion's position with O'Brien's is redundant and therefore, he would ordinarily be entitled to redundancy pay pursuant to s.119(1) of the Act. His employment was terminated by O'Brien's because it no longer held the contract for AAMI Park, and accordingly no longer required Mr Gellion's employment as Retail Manager at AAMI Park.

Section 120(1)(b)(i) of the Act

• [46] As to whether O'Brien's 'obtained' other acceptable employment for Mr Gellion, I am not satisfied O'Brien's acquired or 'got' the employment for Mr Gellion with GEMA by its own conscious, intended acts. However, O'Brien's did make representations to GEMA on behalf of Mr Gellion and his colleagues at AAMI Park and facilitated employees' meetings with GEMA. They encouraged employees to, 'lean into their [GEMA's] processes'. As Ms Christy observed in her email to employees on 15 November 2024, the matter of employment offers from GEMA was 'largely out of our [O'Brien's] control'. I accept that O'Brien's followed up enquiries with GEMA about Mr Gellion's employment, provided assistance, advocacy, and positive references, but I am not satisfied that this amounts to procuring employment for Mr Gellion with GEMA. It is assistance, but falls short of procurement.

• [47] Similarly, I am not convinced by Mr Gellion's evidence that O'Brien's was essentially irrelevant in the employment process with GEMA.

• [48] O'Brien's opened the door and provided important employee information to GEMA. However, the roles available at GEMA were within their gift. They interviewed Mr Gellion and other O'Brien's employees and made employment offers directly to them. There is no evidence that they advised O'Brien's beforehand.

• [49] O'Brien's attempted to facilitate a number of employment options for employees including those that may have arisen out of the Marvel Stadium tender. O'Brien's was hoping employees would be offered employment at GEMA, but interestingly also kept the option open to potentially redeploy them at Marvel Stadium.

• [50] Having found that O'Brien's did not obtain Mr Gellion's employment with GEMA, it is not necessary to determine the issue of whether this employment was 'other acceptable employment'.

• [51] With regard to O'Brien's offer to Mr Gellion of three different positions in Brisbane that were clearly outside his area of expertise and for which he was not qualified, I do not consider this satisfies the requirement of 'other acceptable employment', the legal principles of which are well established.

• [52] The application seeks an order to reduce the amount of redundancy to nil on the basis that O'Brien's obtained other acceptable employment for Mr Gellion. As I am not satisfied that O'Brien's obtained other acceptable employment, I decline to reduce the redundancy pay to which Mr Gellion is entitled to under s.119 of the Act and dismiss the application.

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