s.120 - Application to vary redundancy pay for other employment or incapacity to 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 the 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 Bhupinder Kaur worked for O'Brien's from 19 March 2018 to 31 December 2024 (6 years and 9 months).[1] At the time she was made redundant she was employed on a full-time on a full-time basis as a Corporate Suites Administrator. Pursuant to s.119 of the Act and the related award, she is entitled to 11 weeks' redundancy payment.[2] On 24 December 2024, O'Brien's filed an application to reduce the reduce the amount to nil.[3]

• [3] ‑‑Ms Kaur opposes the application and asserts that O'Brien's has not obtained but rather merely facilitated alternative employment for her.[4]

• [4] O'Brien's is a company incorporating a range of businesses including the provision of hospitality services to major venues.[5] O'Brien's provided catering at AAMI Park and was not successful in its tender for the renewal of the contract.[6] GEMA, the successful tenderer was announced to the public via an online news source on 24 September 2024.[7]

• [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), and a discussion the employees had with O'Brien's Chief Operating Officer (Mr Daniel Smith) on the previous Friday about pending decisions concerning employment pathways.[8] The email stated that one-on-one meetings would be scheduled to discuss these pathways.[9]

• [6] In early October 2024, Ms Christy emailed employees with an invitation and link for 'one-on-one' Microsoft Teams meetings.[10] O'Brien's conducted 'transition discussions' with employees from 10 to 14 October 2024.[11] Ms Kaur's discussion took place on 14 October 2024.[12]

• [7] From 15 to 18 October 2024, GEMA attended AAMI Park for an onsite visit which included in-person introductions.[13]

• [8] On 15 November 2024, Brittany Christy emailed employees including Ms Kaur, to advise that there was still no result on the Marvel Stadium tender.[14] The letter also stated that that they were working with GEMA and MOP to expedite the process to secure employment offers and were led to believe that offers of employment from GEMA would have been received by that time.[15] O'Brien's also advised employees that:[16]

'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'.[17]

• [9] On 22 November 2024, O'Brien's emailed individual employees including Ms Kaur, regarding potential employment at GEMA, redeployment within O'Brien's, and redundancy of positions.[18] The letter advised of the opportunity for redeployment opportunities, and detailed Ms Kaur's balance of entitlements as projected at 31 December 2024.[19]

• [10] 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.[20] Ms Christy emailed Ms Kaur with 3 redeployment opportunities within the business for her consideration based at Suncorp Stadium in Brisbane.[21] One position was that of Corporate Coordinator and the remaining two were a Chef de Partie and a sous chef positions that were deemed by O'Brien's to be unsuitable.[22]

• [11] On 26 November 2024, Ms Kaur received a letter titled 'Termination of Employment: Redundancy', which again confirmed that redeployment options remained for her consideration.[23] The letter stated that Ms Kaur would be notified when O'Brien's files a s.120 application with the Commission, and explained that Ms Kaur may be entitled to receive a redundancy payment in accordance with the Act.[24]

• [12] On 28 November 2024, Ms Kaur signed an employment contract with GEMA.[25]

• [13] On 23 December 2024, GEMA provided O'Brien's with a summary of the former O'Brien's employees that it had hired, including their roles and salaries.[26]

• [14] On 24 December 2024, O'Brien's applied to the Commission to vary Ms Kaur's redundancy to nil under s.120 if the Act.[27]

• [15] O'Brien's existing contract to provide catering services at AAMI Park ended on 31 December 2024.[28] Accordingly on 31 December 2024, employees were terminated from O'Brien's and this included Ms Kaur.[29]

• [16] Ms Kaur commenced employment with GEMA on 1 January 2025, and at the date of hearing was still actively employed in this role.[30]

• [17] 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.[31]

• [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.

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

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

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

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

• [23] In their written submissions, 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.[32] O'Brien's submits that all employees, including Ms Kaur, were provided with sufficient opportunities to interview and consult throughout the process.[33] O'Brien's submits that they engaged in regular consultations with employees via email, meetings, and discussions with the Human Resources team at GEMA.[34]

• [24] Mr Smith claims that the employees including Ms Kaur were not required to attend a formal interview or provide evidence and that the position offered by GEMA were not advertised.[35]

• [25] O'Brien's submits that on 24 September 2024, a meeting was held with GEMA to facilitate the facilitate the changeover of the AAMI catering contract, and there was an agreement to generally work collaboratively together and arrange meetings with employees.[36]

• [26] 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 employeesm, and that GEMA invited all but one existing employee to be considered for employment with GEMA.[37]

• [27] 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.[38] Prior to GEMA's onsite visit, O'Brien's held internal 'transition discussions' and these took place with employees at AAMI Park, from 10 to 14 October 2024. Ms Kaur's discussion took place via telephone call on 14 October 2024.[39] On this call, O'Brien's submits that Ms Kaur agreed for her contact details to be to be referred to GEMA.[40] She advised that her preference is to 'go where Brett goes'.[41]

• [28] From 15 to 18 October 2024, GEMA attended AAMI Park for an onsite visit and in-person introductions with employees.[42]

• [29] 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.

• [30] 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.[43]

• [31] In support of their application that they obtained employment for Ms Kaur 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.[44]

• [32] 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.[45] 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.[46] Ms Kaur's check-in call took place on 19 November 2024.[47]

• [33] On 25 November 2024, O'Brien's emailed employees including Ms Kaur, and advised that O'Brien's Marvel Stadium tender was not successful.[48] The letter advised Ms Kaur about the possibility of redeployment opportunities, and detailed the balance of her leave entitlements projected to 31 December 2024.[49]

• [34] 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.[50]

• [35] By 23 December 2024, an email from GEMA confirmed that Ms Kaur and other employees from O'Brien's had been employed by GEMA.[51]

• [36] O'Brien's contends that it obtained other acceptable employment for Ms Kaur within the meaning of s.120 of the Act.[52] It says that Ms Kaur's employment with GEMA was acceptable because essentially her conditions and location of employment have not changed.[53] Ms Kaur received remuneration for all accrued annual and long service leave entitlements at the time of termination.[54] Ms Kaur interviewed for and accepted her role at O'Brien's recommendation.[55]

• [37] Ms Kaur made submissions to oppose the application including the following.

• [38] Ms Kaur submits that O'Brien's did not obtain employment for her at GEMA because together with her colleagues, Ms Pan and Mr Richardson, she approached GEMA.[56] Further, that she interviewed for the position and negotiated her own salary and employment terms with GEMA without direct involvement from O'Brien's.[57]

• [39] Ms Kaur 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.[58] O'Briens did not take positive steps to ensure the employment was secured for Ms Kaur.[59] Further, Ms Kaur submits that obtaining employment requires an employer to take proactive and decisive steps to secure a role for the employee.[60] Ms Kaur submits that O'Brien's failed to establish that it 'actively obtained alternative employment for the Ms Kaur'.[61]

• [40] Ms Kaur 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.[62] There must be a binding offer, ensured by employer, not just assistance in application process'.[63]

• [41] Ms Kaur 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'.[64] Further, that Ms Kaur is entitled to a full redundancy payment of 11 weeks at $16,144.62.[65]

• [42] Ms Kaur's submits that her employment with GEMA is not 'other acceptable' employment because there is a significant change in her responsibility, her job security has changed materially with fewer leadership responsibilities, the role lacks continuity of service, and it does not provide comparable benefits.[66]

• [43] Ms Kaur submits that her work environment changed materially and now her position of corporate suites administrator changed significantly because she is no longer is engaged in any work relating to the GMHBA stadium.[67] Ms Kaur also submits that the work O'Brien's offered by way of redeployment in Brisbane is not 'other acceptable' employment because it involved uprooting and relocating her family.[68]

• [44] 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.[69]

• [45] 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.[70]

• [46] 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.

• [47] 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,[71] outlines the approach that I intend to follow in considering O'Brien's application to reduce Ms Kaur'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".[72] 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.[73] The determination of whether alternative employment is acceptable requires an assessment and value judgment on the part of the decision-maker.[74] 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.[75]Any determination by the Commission for a reduced amount of redundancy pay then becomes the employee's entitlement under s.119: s.120(3).[76]

Section 119(1)(a) of the Act

• [48] There is no dispute that Ms Kaur'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 Kaur's employment as Corporate Suites Coordinator at AAMI Park.

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

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

• [50] Similarly, I am not convinced by Ms Kaur's evidence that she was 'solely' responsible for obtaining employment with GEMA. It is not disputed that O'Briens facilitated communication and provided relevant employee information to GEMA.

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

• [52] 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.

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

• [54] With regard to O'Brien's offer to Ms Kaur of a choice of three different positions based in Brisbane, I do not consider these to satisfy the requirements of 'other acceptable employment', the legal principles of which are well established. In addition to requiring Ms Kaur to update her family and relocate 1,770 km away, two of the three positions offered were deemed by O'Brien's to be unsuitable.[77]

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

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[1] Digital Hearing Book (DHB) 298, 332.

[2] Fair Work Act 2009 (Cth) s.119‑‑‑‑‑‑-123 (the Act); Hospitality Industry (General) Award [MA000009] cl 42; Digital Hearing Book 298 (Form F53), 332 (Respondent Witness Statement).

[4] Ibid 332 (Respondent Witness Statement).

[59] Digital Hearing Book 349; Re Clothing Trades Award 1982 (1).

[71] [2016] FWCFB 5467.

[72] [2015] FCAFC 189 [12].

[73] Clothing & Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226; Clothing Trades Award 1982(1) [1990] AIRC 980; (1990) 140 IR 123.

[74] [2015] FCAFC 189 [45].

[75] [2015] FCAFC 189 [21]; [2015] FCAFC 189 [42], [60].

[76] FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90 [20].

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