Fair Work Act 2009

s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Usher and Co Construction Pty Ltd trading as Usher and Co Construction

• [1] This decision concerns an application by Usher and Co Construction Pty Ltd trading as Usher and Co Construction (Usher/The Applicant) under section 120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay owing to an employee Mr Hayden Smith.

• [2] The application states that Mr Smith is entitled to redundancy pay under the Building and Construction General On-site Award 2020 (the Award). The application further states that Usher had offered other acceptable employment for Mr Smith, and that Usher do not have the financial capacity to pay Mr Smith's redundancy entitlements.

• [3] Mr Smith advised my Chambers that he opposed the variation in redundancy payment. I subsequently issued directions to the parties to file and serve submissions and materials on which they sort to rely.

• [4] Having considered the materials filed, I wrote to Usher on 12 March 2025, advising that the Award includes Clause 41 - Industry Specific Redundancy Scheme which is the source of the entitlement for Mr Smith's redundancy pay. The correspondence explained that because this clause includes an Industry Specific Redundancy Scheme the provisions of the National Employment Standards (NES) in the Act do not apply and as a result section 120 of the Act, which otherwise would allow an employer to make an application to reduce an employee's redundancy pay where the employer argues they cannot pay the amount, does not apply.

• [5] I explained it was my preliminary view that the application cannot proceed and would be dismissed. I invited the parties to make any submissions concerning these matters.

• [6] On 14 March 2025, Usher responded with the following email:

"Thank you for your email. We would like to thank you for the update on the Commissioners preliminary view on the case.

The advice that was given to us from Fairwork (sic) and from a HR consultant was to submit the Form F45A for this matter.

When the redundancy entitlement was bought to our attention our only option was to offer Hayden to continue to work; to which he declined, and he then proceeded to resign from his position on the 13th of December 2024. We were advised that he technically resigned from his position and he would not be entitled to a redundancy payout as he did not serve out his term of notice. However, at this point we had already submitted the F45A application. We understand that the timing and possible delivery of this news about James needing to shut down the business was not ideal for all parties involved. Hence why we made multiple financial offers of a lower amount (between $2000 and $4000 on a payment plan) to Hayden all of which he has also declined.

We do wish to proceed with the application, in hope that the Commissioner may understand that we are not a big construction company and that we have truly tried our best to keep Hayden employed. Usher and Co Construction has been struggling financially for over 18months (sic), we put every spare dollar we had from the sale of our own personal house into covering the employee wages, tax and super. Usher and Co Constuction (sic) are no longer trading, the current profit and loss statement is -$86,380.66, there is less than $1,100 in the bank account, and we still have outstanding ATO bills that we will be arranging payment plans for. Please see attached screenshot of accounts and attached P/L statement.

We will patiently wait for the Commissioners final decision."

• [7] Per the material provided from both parties, I note that on 3 December 2024, Mr Smith was advised verbally that his position was redundant. Subsequently on 10 December 2024, a redundancy letter dated 6 December 2024 was provided to Mr Smith. This letter confirmed that Mr Smith's employment had been terminated by way of redundancy. In any event this application would not be able to proceed as it barred from doing per section 123 of the Act and clause 41 of the Award.

• [8] Section 123 of the Act states that sections 119 to 122 of the Act do not apply to an employee to when an Industry Specific Redundancy Scheme in a Modern Award applies, as is the case in this instance. Mr Smith is entitled to redundancy pay by virtue of clause 41 of the Award not by virtue of section 119 of the Act and consequently Usher is not able to make an application to vary the redundancy pay amount.

• [9] Consequently, my decision is that this application must be dismissed. There is no variation to the amount of redundancy pay to which Mr Smith is entitled under the Award.

• [10] An order to that effect will be issued in conjunction with this decision.

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