Application by Gazzard P/L & C+A Guerrera Holdings P/L [2016] FWC 3375 (25 May 2016) [2016] FWC 3375 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s 120 - Application to vary redundancy pay for other employment or incapacity to pay Gazzard Pty Ltd, C+A Guerrera Holdings Pty Ltd & BMG on Norton Pty Ltd (C2016/3254) DEPUTY PRESIDENT SAMS SYDNEY, 25 MAY 2016 Applications to vary redundancy pay for other employment [1] This decision deals with five applications made by Gazzard Pty Ltd and C+A Guerrera Holdings Pty Ltd t/as Norton St Grocer Bondi Junction (the ‘first applicant’ or ‘Norton St Grocer Bondi Junction’) and four applications made by BMG on Norton Pty Ltd t/as Norton St Grocer (the ‘second applicant’ or ‘Norton St Grocer Leichhardt’) (collectively, the ‘applicants’), to vary redundancy pay, in accordance with s 120 of the Fair Work Act 2009 (the ‘Act’) in relation to nine of its former employees (collectively, the ‘respondent employees’), being: Ms Rosanna Berroya; Mr Sompup Chaphuphoung; Ms Adibe Donna; Ms Puja Hamal; Mr Joshi Kushal; Mr Youssef Mouawad; Ms Benedetta Squadrito; Mr Sumarto Sumarto; and Mr Alex Widjaja. [2] In the Form F45A applications, which were all in relatively similar terms, Ms Anne Gonzalez explained that the applicants seek that the redundancy pay, otherwise payable to the respondent employees pursuant to the National Employment Standards (NES) for redundancy pay at s 119 of the Act, be reduced to nil on the basis that, following the sale of the applicants’ businesses to Harris Farm Markets, the respondent employees had been offered acceptable alternative employment with the new owner of the applicants’ business, which the respondent employees had declined. [3] On 28 April 2016, I conducted a conference of the parties in respect to this application. Ms Gonzalez appeared for the applicants and Ms Donna, Ms Hamal, Mr Widjaja, Ms Berroya, Mr Sumarto and Mr Chanphupuong appeared as unrepresented respondent employees. Each of the employees acknowledged that they had been offered alternative employment with the new owner on the same terms and conditions and the same location. However, for various reasons including pursuing studies, other employment, wishing to take a break from employment and not wanting to work for Harris Farms, the respondent employees had declined to accept the offers of ongoing employment. The Commission explained the statutory basis for applications of this kind and the likely impact on their prima facie entitlement to redundancy pay. After considering the practicality of opposing the application, they all informed the Commission that they did not wish to do so. [4] This left three respondent employees who had not attended the Conference and had not communicated at all with the Commission. On 3 May 2016, I directed my Associate to write to Mr Kushal, Mr Mouawad and Ms Squadrito, the respondents who did not attend, in the following terms: ‘As a consequence of your non-attendance at the listing of the above matter for conference on 28 April 216, His Honour has asked me to advise you as follows: As you are aware, your former employer, Norton St Grocer, has applied to the Fair Work Commission seeking to be relieved of paying redundancy pay to you following the sale of the business to Harris Farm Markets. The application has been made under s 120 of the Fair Work Act 2009 , which is set out below: … In short, s 120 allows Norton St Grocer to make an application to have any prima facie redundancy pay entitlement to you reduced (including to nil) when the employer obtains acceptable alternative employment for you with the new employer. Where an employee declines an offer of acceptable alternative employment, it is highly unlikely that redundancy pay would be payable. At the conference on 28 April 2016, involving six of your former colleagues and Ms Gonzalez from Norton St Grocer, His Honour Deputy President Sams, explained the requirements of s 120 of the Act. After each of your colleagues gave their reasons for declining their offers of re-employment, it was clear that the offers were at the same location, under the same Award classifications and the same pay and conditions. None of your colleagues decided to take their matter further and accordingly their file will be closed with no orders made that no redundancy pay is due. The purpose of writing to you is to ensure that you wish to challenge Norton St Grocer’s application, you have a further opportunity to do so. This means that if you decide to dispute the employer’s application to reduce your prima facie redundancy pay entitlement to nil, you must advise my Chambers by close of business 13 May 2016 of your intention and provide reasons for doing so. You are strong advised to seek advice should you decide to do so, as further Commission proceedings may be necessary. Alternatively, if you do not intend to take your matter further by disputing the application, you do not need to do anything. That is, if no response is received from you by close of business 13 May 2016, the Commission will conclude that you either agree to the employer’s application or you do not wish to dispute it. Orders will then be made, without any need for your input or comment. His Honour stresses that you need not respond to, or take any further action, if you do not intend to take the matter further.’ No further correspondence or communication has been received by the Commission from Mr Kushal, Mr Mouawad or Ms Squadrito. I am satisfied that those remaining respondent employees do not intend to oppose the applications. The statutory context and relevant authorities [5] The legislative provisions relevant to this application are to be found in ss 119 and 120 of the Act as follows: 119 Redundancy pay Entitlement to redundancy pay (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. Amount of redundancy pay (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: Redundancy pay period Employee’s period of continuous service with the employer on termination Redundancy pay period 1 At least 1 year but less than 2 years 4 weeks 2 At least 2 years but less than 3 years 6 weeks 3 At least 3 years but less than 4 years 7 weeks 4 At least 4 years but less than 5 years 8 weeks 5 At least 5 years but less than 6 years 10 weeks 6 At least 6 years but less than 7 years 11 weeks 7 At least 7 years but less than 8 years 13 weeks 8 At least 8 years but less than 9 years 14 weeks 9 At least 9 years but less than 10 years 16 weeks 10 At least 10 years 12 weeks 120 Variation of redundancy pay for other employment or incapacity to pay (1) This section applies if: (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. [6] Having considered the applications and materials filed by the applicants and the discussions had with the parties in the conference of 28 April 2016, I am satisfied that the applicants obtained ‘acceptable employment’ for the affected employees, pursuant to s 120(1)(b) of the Act. In the exercise of the Commission’s discretion under s 120(2) , I consider it appropriate that any redundancy entitlement otherwise due to the employees, be reduced to nil. A determination to that effect will be issued contemporaneously with this decision. DEPUTY PRESIDENT Printed by authority of the Commonwealth Government Printer <Price code A, PR580807>