Fair Work Act 2009

s.120 - Redundancy pay

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

Application for variation of redundancy pay - other acceptable employment not obtained - application dismissed.

• [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] Ms Pan was employed from December 2016 by O'Brien's, originally on a casual basis and from 7 December 2022 on a full-time basis. At the time she was made redundant she was employed as a Sous Chef. Pursuant to s.119 of the Act and the related award, she is entitled to 6 weeks' redundancy payment. On 24 December 2024, O'Brien's filed an application to reduce the amount to nil.

• [3] ‑‑Ms Pan opposes the application and asserts that O'Brien's has not obtained but rather merely facilitated alternative employment for her.

• [4] O'Brien's is a company incorporating a range of businesses including the provision of hospitality services to major venues. It provided catering 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] Ms Pan was overseas on leave from 14 September to 12 October 2024. Ms Pan was still on leave when the announcement of the AAMI tender was made. Ms Pan's direct report, Mr Richardson contacted her shortly afterwards to advise her that O'Brien's had not succeeded in renewing their contract at AAMI Park.

• [6] On 15 November 2024, Brittany Christy emailed employees, including Ms Pan, to advise that there was still no result on the Marvel Stadium tender. The letter stated that O'Brien's were led to believe that offers of employment from GEMA would have been received by that time. Further, that they were working with GEMA and MOP to expedite the process to secure employment offers. O'Brien's also advised the 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.

• [7] On 22 November 2024, O'Brien's emailed individual employees including Ms Pan, regarding potential employment at GEMA, redeployment within O'Brien's, and redundancy of positions. The letter advised of the opportunity for redeployment opportunities, and detailed Ms Pan's balance of entitlements as projected at 31 December 2024.

• [8] 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. Ms Pan was offered redeployment opportunities with O'Brien's in Brisbane at Suncorp Stadium but rejected the offer.

• [9] On 17 December 2024, Ms Pan received a letter titled, 'Termination of Employment: Redundancy', which again confirmed that redeployment options remained open for her consideration. The letter stated that Ms Pan would be notified when O'Brien's files a s.120 application with the Commission, and explained that Ms Pan may be entitled to receive a redundancy payment in accordance with the Act.

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

• [11] On 24 December 2024, O'Brien's applied to the Commission to vary Ms Pan's redundancy to nil under s.120 if the Act.

• [12] 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 Ms Pan.

• [13] Ms Pan accepted the role of Sous Chef at GEMA, and commenced employment on 1 January 2025, and at the date of hearing was still actively employed in this role.

• [14] On 16 January 2025, final pay and leave entitlements were processed, and employment references provided, including a note of an upcoming conference with the Commission.

• [15] This matter was subject to a Microsoft Teams conference before me on 22 January 2025. 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.

• [16] Ms Brittany Christy and Mr Daniel Smith gave evidence for O'Brien's and Ms Pan gave evidence as the Respondent.

• [17] The question for consideration in the present matter is whether O'Brien's 'obtained' other acceptable employment for Ms Pan, and if so whether I should exercise my discretion to reduce the amount of Ms Pan's redundancy pay.

• [18] In support of their application that they obtained acceptable employment for Ms Pan, O'Brien's submissions include the following.

• [19] O'Brien's submits that they took reasonable and positive steps to obtain employment for Ms Pan and the other employees and therefore the redundancy entitlement ought be reduced to nil.

• [20] O'Brien's submits that on 24 September 2024, a meeting was held with GEMA to facilitate the changeover of the AAMI catering contract and it was agreed to work collaboratively together and arrange employee meetings, transitions, as well as formal employee discussion meetings. During September 2024, announcements were made within O'Brien's about the new provider at Melbourne Olympic Park (GEMA). O'Brien's submits that whilst Ms Pan was away overseas on leave, she was updated about the unsuccessful tender and was conveyed briefing details given to other staff.

• [21] 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 staff and that GEMA invited all but one existing employee to be considered for employment with GEMA.

• [22] 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. O'Brien's held 'transition discussions' and these were held with employees at AAMI Park, from 10 to 14 October 2024. Ms Pan's discussion took place via telephone call on 10 October 2024. On this call, O'Brien's submits that Ms Pan agreed for her contact details to be to be referred to GEMA.

• [23] Mr Smith gave evidence that he corresponded with Mr Goodman from GEMA about salaries and performance of individual team members, on 26 October 2024, and then followed up with GEMA on 6 November 2024 about the status of employment offers.

• [24] 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.

• [25] In support of their application that they obtained employment for Ms Pan with GEMA, O'Brien's submits that her role was not advertised and that she was not required to attend a formal interview or provide references.

• [26] From 19 to 20 November 2024, O'Brien's submits that they 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 tender was not successful. Ms Pan's check-in call took place on 19 November 2024.

• [27] On 25 November 2024, O'Brien's emailed employees including Ms Pan, and advised that O'Brien's Marvel Stadium tender was not successful. The letter advised Ms Pan about the possibility of redeployment opportunities, and detailed the balance of her leave entitlements projected to 31 December 2024.

• [28] 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.

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

• [30] O'Brien's contends that it obtained other acceptable employment for Ms Pan within the meaning of s.120 of the Act. O'Brien's submit that Ms Pan's employment with GEMA was acceptable because essentially her conditions and location of employment have not changed. Ms Pan received remuneration for all accrued annual and long service leave entitlements at the time of termination. Ms Pan interviewed for and accepted her role at O'Brien's recommendation.

• [31] Ms Pan made submissions to oppose the application including the following.

• [32] Ms Pan submits that O'Brien's did not obtain employment for her at GEMA because together with her colleagues, Ms Kaur and Mr Richardson, she approached and negotiated with GEMA without direct involvement from O'Brien's and was required to apply for a position and negotiate her own salary and employment terms.

• [33] Ms Pan submits she took responsibility for the interview process, had conversations with Mr Craig O'Shaughnessy (Executive General Manager of GEMA at AAMI Park) and sent a letter to Mr Dwayne Goodman (Chief Operating Officer of GEMA). Further that this was followed with a series of emails back and forth between Ms Pan and GEMA, initiated independently of O'Brien's.

• [34] Ms Pan submits that O'Brien's did not 'obtain' employment for her 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 Ms Pan. 'Further, that obtaining employment requires an employer to take proactive and decisive steps to secure a role for the employee'. Ms Pan submits that O'Brien's failed to establish that it 'actively obtained alternative employment for Ms Pan'. Ms Pan submits that providing her with tender updates, information about GEMA, facilitating a meeting, and providing position descriptions and salary guidance does not satisfy the statutory requirement under s.120. There must be a binding offer, ensured by employer, not just assistance in the application process'.

• [35] Further that O'Brien's did not ensure continuity of service, Ms Pan's evidence is that GEMA offered her employment on 29 November 2024, and that she signed the contract on 3 December 2024.

• [36] Ms Pan submits that O'Brien's failed to discharge its burden under s.120(1)(b)(i) of the Act, and that O'Brien's have the means to pay the redundancy entitlements pursuant to the Act'. Further, that Ms Pan is entitled to a full redundancy payment of $10,211.54.

• [37] Ms Pan submits that her employment with GEMA is not 'other acceptable' employment because amongst other things, her new roles differs significantly and that she has lost the benefits of continuity.

• [38] Ms Pan further submits that O'Brien's offer of redeployment in Brisbane is not 'other acceptable' employment because it involved uprooting and relocating her family.

• [39] 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.

• [40] 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

• [41] 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.

• [42] 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, outlines the approach that I intend to follow in considering O'Brien's application to reduce Ms Pan'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] CthArbRp 284; (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

• [43] There is no dispute that Ms Pan's position with O'Brien's is redundant and therefore, she would ordinarily be entitled to redundancy pay pursuant to s.119(1) of the Act. Her employment was terminated by O'Brien's because it no longer held the contract for AAMI Park, and accordingly no longer required Ms Pan's employment as a Sous Chef at AAMI Park.

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

• [44] As to whether O'Brien's 'obtained' other acceptable employment for Ms Pan, I am not satisfied O'Brien's acquired or 'got' the employment for Ms Pan with GEMA by its own conscious, intended acts. However, O'Brien's did make representations to GEMA on behalf of Ms Pan and her colleagues at AAMI Park and facilitated employees' meetings with GEMA. They encouraged employees to, lean into 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 Ms Pan's employment, provided assistance, advocacy, and positive references, and facilitated a meeting with GEMA but I am not satisfied that this amounts to procuring employment for Ms Pan with GEMA. It is assistance, but falls short of procurement.

• [45] Similarly, I am not convinced by Ms Pan's evidence that she was 'solely' responsible for obtaining employment with GEMA. O'Brien's opened the door and provided important employee information to GEMA.

• [46] The roles available at GEMA were within GEMA's gift. They interviewed Ms Pan and other O'Brien's employees and made employment offers directly to them. There is no evidence that they advised O'Brien's beforehand.

• [47] 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 options open for potential redeployment at Marvel Stadium.

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

• [49] With regard to O'Brien's offer to Ms Pan of a position based in Brisbane, I do not consider the offer satisfies the requirements of 'other acceptable employment', the legal principles of which are well established.

• [50] 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 Ms Pan. As I am not satisfied that O'Brien's obtained other acceptable employment, I decline to reduce the redundancy payment to which Ms Pan is entitled to under s.119 of the Act and dismiss the application.

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