s.120 - Redundancy pay

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

Application for variation of redundancy pay - 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] Mr Michael Hollander worked for O'Brien's from 4 May 2015 to 31 December 2024

(9 years and 7 months). At the time Mr Hollander was made redundant, he was employed on a part-time basis as Venue Logistics and Compliance Coordinator at AAMI Park. Pursuant to s.119 of the Act and the related award, Mr Hollander is entitled to 16 weeks' redundancy pay. On 24 December 2024, O'Brien's filed an application to reduce the amount to nil.

• [3] Mr Hollander opposes the application and asserts that O'Brien's has not obtained 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] On 10 October 2024, Ms Christy emailed Mr Hollander an invitation and link for a 'one-on-one' Microsoft Teams meeting. O'Brien's conducted 'transition discussions' from 10 to 14 October 2024. Mr Hollander's discussion took place on 10 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 Hollander, to advise that there was still no result on the Marvel Stadium tender. The email 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 Hollander's discussion took place on 19 November 2024.

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

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

• [12] On 26 November 2024, Mr Hollander 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 Hollander would be notified when O'Brien's files an application with the Commission, and explains that Mr Hollander 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 Hollander'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 Hollander.

• [16] Having accepted GEMA's offer, Mr Hollander 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 Hollander 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 this matter proceeded to an in-person hearing on 17 April 2025, and the other related matters were heard consecutively, but not concurrently, on 25 March 2025. Ms Christy and Mr Smith gave evidence for O'Brien's and Mr Hollander 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 Hollander, and if so whether I should exercise my discretion to reduce the amount of Mr Hollander's redundancy pay.

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

• [21] O'Brien's submits that they took reasonable and positive steps to obtain employment for Mr Hollander, 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, and providing background information for each position including salary levels. O'Brien's submits that all employees, including Mr Hollander, 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 Hollander 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 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, Mr Hollander's discussion took place on 10 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. O'Brien's submits Mr Hollander's in-person discussion, that went for over 45 minutes, took place at AAMI Park on 19 November 2024.

• [30] On 22 November 2024, Mr Smith emailed individual employees, including Mr Hollander, about potential employment at GEMA, redeployment within O'Brien's, and redundancy of positions. The letter detailed Mr Hollander'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. Ms Christy emailed Mr Hollander three redeployment opportunities for his consideration. These were positions within the business and based at Suncorp Stadium in Brisbane. Mr Hollander rejected these 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 Hollander 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 Hollander within the meaning of s.120 of the Act. O'Brien's says that Mr Hollander was offered a position at GEMA, with an increased salary, a position that is 'like-for-like' and if not better off overall.

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

• [36] Mr Hollander submits that O'Brien's did not 'obtain' employment for him at GEMA. Mr Hollander's evidence is that the only documented correspondence which demonstrated O'Brien's involvement in negotiations with GEMA, is Mr Smith's email dated 14 October 2024 to Mr Dwane Goodman (Chief Operating Officer at GEMA) regarding a meeting.

• [37] Mr Hollander submits that O'Brien's did not transition his employment, and if they had done so, he would have kept his personal leave entitlements, maintained long service leave accruals, been able to take annual leave at his choosing and without being subjected to a probationary period. Further, Mr Hollander submits that, as a consequence of the 'payout', his predicted superannuation, accrued during annual or long service leave, was lost.

• [38] Mr Hollander submits that he attended an informal interview with GEMA on 15 October 2024. The meeting was 'casual' but a typical interview with a prospective employer. Mr Hollander considers that the interview gave GEMA insight into his 'abilities and integrity' and thus he was considered for a position. Mr Hollander submits that he believes GEMA's offer of employment was based on his integrity and reputation, and noted that not all of O'Brien's employees were offered positions after their 'discussions' with GEMA.

• [39] Following his interview, Mr Hollander submits GEMA consulted with him about his salary preference, and he requested the salary he received at O'Brien's. This was accepted by GEMA and his salary remains unchanged. Mr Hollander submits that negotiations with GEMA proceeded independently and without any consultation or intervention from O'Brien's.

• [40] Mr Hollander submits that he formally accepted an offer, and signed the employment contract with GEMA on 27 November 2024, based on the salary as per his position at O'Brien's.

• [41] Mr Hollander 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 Hollander. 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.

• [42] Mr Hollander 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 Hollander is entitled to full redundancy pay of $20,612.92.

• [43] Mr Hollander submits his employment with GEMA is not other 'acceptable' employment.
• [44] Mr Hollander submits that his new position, as Logistics Coordinator with GEMA, requires further training, involves new 'technical processors', with new relationships, changes to procedures, and the performance of additional, minor support for external events. The administrative aspect of his position has varied with an increase in the required liaison with suppliers regarding invoices and payments.

• [45] Mr Hollander submits that O'Brien's offers for redeployment were not suitable because he was either overqualified or did not meet the qualifications required, and this was acknowledged in O'Brien's letter of 25 November 2024.

• [46] 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.

• [47] 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.

• [48] 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.
• [49] 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 Hollander'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

• [50] There is no dispute that Mr Hollander'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 Hollander's employment as Venue Logistics and Compliance Coordinator at AAMI Park.

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

• [51] As to whether O'Brien's 'obtained' other acceptable employment for Mr Hollander, I am not satisfied O'Brien's acquired or 'got' the employment for Mr Hollander with GEMA by its own conscious, intended acts. However, O'Brien's did make representations to GEMA on behalf of Mr Hollander 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 Hollander's employment, provided assistance, advocacy, and positive references, but I am not satisfied that this amounts to procuring employment for Mr Hollander with GEMA. It is assistance, but falls short of procurement.

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

• [53] 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 Hollander, and other O'Brien's employees, and made employment offers directly to them. There is no evidence that they advised O'Brien's beforehand.

• [54] 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.

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

• [56] With regard to O'Brien's offer to Mr Hollander of three different positions in Brisbane, that were clearly unsuitable and were described as such by O'Brien's, I do not consider this satisfies the requirement of 'other acceptable employment', the legal principles of which are well established.

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

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