Fair Work Act 2009

s.120 - Redundancy pay

Stanley International College Pty Ltd T/A Stanley College

[1] This decision concerns an application by Stanley International College Pty Ltd T/A Stanley College (the Applicant or Stanley College) to reduce the amount of redundancy pay to which an employee, Ms Nazia Akhter (the Respondent or Ms Akhter), is entitled under section 119 of the Fair Work Act 2009 (the Act).

[2] The parties were directed to provide submissions and witness statements regarding this matter.

[3] The Respondent was employed as an Accounts Officer.

[4] In June 2018 a number of employees of the Applicant were advised that Stanley College was reviewing its operations, support functions and departments as a consequence of their having been a significant decrease in international student numbers. The employees were advised that some positions may be made redundant.

[5] Later that month the Respondent was advised that her position as an Accounts Officer, part-time, working 30 hours over four days per week would be made redundant.

[6] Stanley College also advised the Respondent that they would offer her alternative employment in the same role as an Accounts Officer, part-time, but working only 15 hours over two days per week.

[7] The Respondent accepted this alternative employment commencing from 11 July 2018.

[8] Ms Akhter had been employed with the Applicant for one year and seven months at the time her position was made redundant.

[9] Sections 119 and 120 of the Act are relevant for the purposes of this decision and are set out below.

(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.

(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:

Employee's period of continuous service with the employer on termination

120 Variation of redundancy pay for other employment or incapacity to pay

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(i) obtains other acceptable employment for the employee; or

(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."

[10] Considering the facts above the issue to be determined by the Commission is whether the alternative position as an Accounts Officer working 15 hours per week over two days per week was "other acceptable employment". Only if it was other acceptable employment must the Commission then consider whether to exercise its discretion to reduce the amount of redundancy pay payable and if so by what amount.

[11] As noted by the Full Bench in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd[1] at 124:

"What constitutes "acceptable alternative employment" is a matter to be determined as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provisions would be without practical effect.

Yet the use of the qualification "acceptable" is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elections of such a standard including the work being of like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others."

[12] As was explained by Watson SDP in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia[2] at [89]:

"...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."

[13] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd[3] a Full Bench of the Commission found that the determination of whether alternative employment is acceptable will involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters including the location of the employment and travelling time.

[14] In National Union of Workers v Linfox Australia Pty Ltd[4] Watson VP considered the following criteria to be relevant when determining whether alternative employment is acceptable:

(a) the employee's skills, experience and physical capacity;

(b) the rates of pay, hours of work, duties and conditions of employment associated with the proposed job;

(c) whether or not continuity of employment is provided to the employee;

(d) the extent of any additional travel distances from home to the new place of work and whether the employee has to substantially alter their method of travelling to and from work in order to attend to duty; and

[15] In my view the term "acceptable alternative employment" considered in this case law should be taken to have the same meaning as the term "other acceptable employment" which is used in section 120 of the Act and hence the case law is directly applicable in this matter.

[16] The alternative position that Stanley College obtained for the Respondent is the same Accounts Officer role but with the working hours and number of days per week reduced.

[17] The only difference between the redundant position and the other employment obtained is that the redundant position was for 30 hours worked over four days per week whereas the other employment is only 15 hours worked over two days per week.

[18] The other employment obtained for the Respondent reduces the hours and days per week she works and her resulting remuneration by 50%.

[19] Where an employer has obtained other employment for an employee whose position has been made redundant but the employee will then only be paid half the remuneration they had been receiving in the redundant position that other employment objectively is not "other acceptable employment". The fact the 50% reduction in remuneration is because that employee will only be required to work 50% of the hours and days per week of the redundant position does not change this conclusion.

[20] In all the circumstances here Stanley College has not obtained other acceptable employment for Ms Akhter. Consequently the application to reduce the redundancy payment that would otherwise be payable to her will be dismissed.

[21] An order [PR610070] to that that effect will now be issued.

[22] There will be no change to the amount of redundancy pay that Ms Akhter is entitled to be paid.

[1] [1990] AIRC 980; (1990) 140 IR 123.

[4] [2008] AIRC 647.

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