Reducing redundancy pay

 

Conducting workplace investigations

Sec 120 of the Fair Work Act provides that an employer may apply to the Fair Work Commission that it be relieved of an obligation to pay NES statutory redundancy pay, or have the amount reduced, if it “obtains other acceptable employment” for the employee concerned. This is not as easy as some may think because the Commission requires the employer to demonstrate that it was responsible in a meaningful way for the employee obtaining the other acceptable employment.

“Consideration

[40] By appeal ground one, Ready Workforce contends that the Commissioner did not apply s 120 of the FW Act in the manner explained by the Full Court in FBIS. In the context of this ground of appeal, the circumstances arising in FBIS necessitate some explanation.

[41] FBIS was a labour hire company. Following the loss of a contract for the provision of security services to Asciano Executive Services Pty Ltd, employees of FBIS were offered and accepted employment with ACG National Pty Ltd (ACG), which had been successful in replacing FBIS as the security services contractor. Of the 49 relevant employees, 48 were offered and accepted employment with ACG in the same position, and on the same terms and conditions of employment. One employee was offered and accepted employment in a lesser position. In all cases, ACG did not recognise the relevant employees’ previous service with FBIS. FBIS made an application to the Commission under s 120 of the FW Act on the basis that it had obtained other acceptable employment for each of the employees who were offered and had accepted employment with ACG.

[42] The first instance decision-maker determined that FBIS had obtained, for the purposes of s 120(1)(b)(i) of the FW Act, the alternative employment for the relevant employees with ACG. Further, the Commissioner was satisfied that the employment with ACG was essentially the same as the relevant employees’ employment with FBIS. In the case of 48 of the relevant employees, the Commissioner reduced the redundancy payable to nil. The redundancy payable to one employee was reduced by 50 per cent. 45

[43] The Maritime Union of Australia lodged an appeal against the decision and orders in that matter. 46 The Full Bench determined, on appeal, that FBIS had not obtained acceptable employment for the relevant employees with ACG and dismissed the s 120 application. The Full Bench considered that the limited actions of FBIS did no more than facilitate the entry of its employees into the recruitment processes of ACG, and this fell “well short” of action which “causes acceptable alternative employment to become available to the redundant employee.” The Full Bench concluded that FBIS was not a “strong moving force towards the creation of the available opportunity.”47

[44] The reference by the Full Bench to the requirement for an employer to be a “strong moving force” was drawn from a decision of the Full Bench of the Australian Industrial Relations Commission in The Australian Chamber of Manufactures v Derole Nominees Pty Ltd; Re Clothing Trades Award 1982 48 (Clothing Trades). The Full Bench in Clothing Trades considered what is required by the word “obtains” under analogous provisions,49 and determined that the word does not mean to “obtain” in the fullest sense possible, noting that the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the new employer, and not the outgoing employer. Rather, the Full Bench concluded:50

“… the employer’s ability to ‘obtain’ alternative employment…refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.”

[45] FBIS applied to the Federal Court for judicial review of the decision of the Full Bench. 51 The Full Court unanimously dismissed the application. Relevantly, the Full Court disapproved of the Clothing Trades test which had considered whether the employer was “a strong moving force towards the creation of the available opportunity.” In this respect, the Full Court stated:52

“Returning to Clothing Trades, the actual outcome in that case demonstrated that there could be cases in which an exemption was granted from the operation of the standard award provision notwithstanding that an alternative employment relationship did not come into existence at all. In its reasons, the Full Bench characterised an outcome of this kind as implying a particular connotation of the word ‘obtains’. However, we would regard such an outcome as an instance of the reality that any new state of employment could only come about by the agreement of the new employer and the employee concerned. In this respect, we agree with Marshall J, in [Allman v Teletech International Pty Ltd], that to obtain employment for an individual means to procure another employer to make an offer of employment, which the individual may or may not accept as a matter of his or her choice. If the employment is not accepted, the question whether that employment was ‘acceptable’ will then arise.”

(underlining added, references omitted)

[46] The Full Court regarded the “strong moving force” test from Clothing Trades to be “a distraction” which would “introduce unnecessary complications into the connotation of an ordinary word.” 53

[47] The Full Court determined that FBIS had merely facilitated the employment opportunities with ACG, which fell short of obtaining offers of employment which the employees could accept or decline as a matter of choice. The Full Court concluded that the term “obtain” means the following: 54

“With respect to the Full Bench’s reliance on the Shorter Oxford, the present might be one of those rare occasions on which it is useful to refer to the corresponding full entry in the Oxford English Dictionary itself. Relevantly, that reads:

To come into the possession or enjoyment of (something) by one’s own effort, or by request; to procure or gain, as the result of purpose and effort; hence, generally, to acquire, get.

We would not regard the references to ‘effort’, and to ‘purpose and effort’ in this meaning as implying the existence of some kind, much less a strong kind, of ‘moving force’ in bringing about the new state of possession referred to. They imply, rather, that the possession must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance. Moreover, we cannot perceive any reason why what is described as the ‘general’ connotation of the word – ‘to acquire, get’ – should not be regarded as a perfect fit for the purposes sought to be achieved by the relevant provision in the standard award clause before this provision became the subject of legislation.”

[48] Before us, Ready Workforce contends that the Commissioner did not apply the test in FBIS, set out above. Ready Workforce points to the test of “procurement” espoused in FBIS and submits that the Full Court rejected the use of a further stricter test such as a requirement for the former employer to be the moving force in the process. 55

[49] At the outset, it is appropriate to record that we do not accept Ready Workforce’s construction of FBIS to be correct insofar as it contends that the “strong moving force” test is stricter than the test of procurement set out in FBIS. We are of the view that the requirement to procure something outright imposes a higher threshold test than simply being a “strong moving force” in respect of it. As identified by the Full Court in FBIS, an employer “obtains” other acceptable employment when it acquires or gets the employment by its conscious, intended acts. 56 It is against this construction that we turn now to consider the steps taken by Ready Workforce in our assessment of the matters raised by appeal ground one.

[50] The uncontested factual findings disclose that Ready Workforce relevantly communicated with the impacted employees on three occasions following the loss of the contract at the Mount Arthur Coal Mine. The first communication was issued on 30 September 2021. It relevantly informed the employees that they would have an opportunity to apply for roles with Programmed. The correspondence advised the times and dates upon which Programmed would be conducting information sessions. The second employee communication was issued on 1 October 2021. It relevantly provided a link to the Programmed website and stated, “we have been advised of a landing page on the Programmed website where you can access the range of roles that they will have available and where you will be able to express your interest.” 57

[51] The Chief People Officer at Ready Workforce, Mr Graham, gave evidence that these two employee communications were similar in that they notified the relevant employees of the Programmed-arranged information sessions, the available times and contained a general encouragement to attend. 58 Mr Graham accepted that these emails established the extent to which Ready Workforce provided assistance to the relevant employees.59

[52] The third employee communication was issued by Ready Workforce on 15 October 2021 advising permanent employees of their notice provisions. 60 The communication also advised that Ready Workforce was strongly committed to working with Programmed, “so that you will obtain an offer of permanent employment at the same classification and at the same, or higher, pay rate.” It is therefore apparent that as of 15 October 2021, Ready Workforce was unaware that Programmed had already offered employment to the second respondent employee,61 the third respondent employee,62 the fourth respondent employee,63 and the tenth respondent employee64 on 12 October 2021, and that each of these respondent employees had accepted the offers on 14 October 2021.65

[53] The 15 October 2021 employee communication further advised that Ready Workforce had “engaged extensively” with Programmed and would continue to do so. The extent of Ready Workforce’s engagement with Programmed to that date, however, cannot be described as extensive, in our view. The discussions that took place directly between Ready Workforce and Programmed in the relevant period were set out by the Commissioner in the decision at [14] to [16]. The first of these discussions occurred on 1 October 2021 between the respective Chief Executive Officers for Ready Workforce and Programmed. This conversation involved reaching agreement that a meeting would be convened between Mr Graham and his counterpart at Programmed, Mr Kevin Cameron.

[54] On 5 October 2021, Mr Graham telephoned Mr Cameron to advise that he sought to endorse Ready Workforce’s employees performing work at the Mount Arthur Coal Mine and had a “goal of obtaining employment for them with Programmed.” 66 Following the telephone call, Mr Graham sent a list to Mr Cameron of the names of Ready Workforce’s permanent employees performing work at the Mount Arthur Coal Mine. Mr Graham gave evidence that he was not personally aware of the capability or otherwise of the identified employees.67 Accordingly it can be inferred that this list, which is not in evidence, simply identified the relevant employees by name only.68 Further, it is not in dispute that Ready Workforce did not provide letters of recommendation to Programmed in respect of any of its onsite employees.69

[55] On 11 October 2021, Mr Graham sent an email to Mr Cameron in which he sought to ascertain the status of Programmed’s recruitment process. 70 Mr Graham emphasised the 12 respondent employees to this application by name, identifying them as “our more experienced people.”71 Mr Cameron responded to this email on 12 October 2021. In respect of the respondent employees, Mr Cameron advised that he had “asked about the particular individuals” and hoped to provide a timely response.72

[56] On 14 October 2021, Mr Graham sent further correspondence to Mr Cameron seeking an update, “especially for the more experienced employees.” Mr Graham invited information about Programmed’s selection process so that Ready Workforce could “provide tailored assistance to our people.” Mr Graham also offered the provision of a letter of recommendation to Programmed, detailing the employment history, skills and performance of its employees. 73

[57] As earlier stated, the second to twelfth respondent employees received offers of employment with Programmed around 12 to 20 October 2021. 74 It is not in dispute that these offers were accepted and each of those employees commenced employment with Programmed.

[58] It is against this background that the Commissioner concluded that the evidence did not disclose that the actions of Ready Workforce “operated as the primary means by which the alternative employment of the respondent employees with Programmed was secured.” Nor did it demonstrate that Ready Workforce had “negotiated and secured any assurances from Programmed regarding any aspect of the employment of the respondent employees with Programmed.” 75

[59] Further, the Commissioner stated that “evidence must be provided upon which to establish that the employer did more than facilitate and assist employees to participate in a recruitment process in the hope that they receive offers of employment.” The Commissioner concluded that “Programmed clearly maintained the unfettered option to engage or not engage any of the employees” 76 of Ready Workforce.

[60] Ready Workforce contends that in reaching the conclusions set out at [58] and [59] above, the Commissioner applied four tests which are inconsistent with the position in FBIS. However, for the reasons that follow we do not accept this contention. Rather, it is apparent from these findings of fact, which are not challenged on appeal, that Ready Workforce did not procure the employment with Programmed in the manner explained by the Full Court in FBIS.

[61] The employee communications issued by Ready Workforce on 30 September and 1 October 2021 simply advised employees of the date and time at which Programmed would be facilitating information sessions and directed the employees to the Programmed website to identify for themselves the available roles and the manner in which they could express an interest in being considered for these roles. There is no evidence to support a finding that Ready Workforce was aware of whether the respondent employees had been offered employment by Programmed, or the terms and conditions which attached to any such offer, being matters necessary to establish that the employment had been relevantly procured. The 14 October 2021 enquiry from Mr Graham, at a time when the second, third, fourth and tenth respondent employees had already been offered and accepted roles with Programmed, bears this out.

[62] Furthermore, Ready Workforce did not adduce any evidence that demonstrated that it conferred with Programmed about any of the respondent employees such that it could be said that its actions procured or acquired their employment. While Mr Graham offered to provide Programmed with a letter detailing the relevant employment history, skills and performance of its employees, such invitation was not taken up by Programmed and, on the evidence, never provided. The action taken by Ready Workforce to merely produce a list of employee names, together with the transition of certain training records and medical information to Programmed is, of itself, entirely insufficient to found a conclusion that Ready Workforce had procured the relevant employment.

[63] In light of the above matters, the material advanced by Ready Workforce in support of its position was insufficient to satisfy the test of procurement established by the Full Court in FBIS. Ready Workforce did not obtain the employment with Programmed in the sense that it did not acquire or get the employment by its conscious, intended acts. 77

[64] It follows that we discern no appealable error in the Commissioner’s conclusion that the actions of Ready Workforce did not satisfy the test in s 120(1)(b)(i) of the FW Act as it relates to any of the respondent employees. To the extent that the Commissioner appears to have applied the “strong moving force” test in his consideration of the circumstances, the Commissioner employed a test more favourable to Ready Workforce’s position than the test of procurement espoused by the Full Court in FBIS. We therefore reject the contention that the Commissioner employed a “further stricter test”.

[65] We accept, as the Commissioner did, that Ready Workforce may have assisted and facilitated the potential for the respondent employees to secure employment with Programmed. Ready Workforce submits that the Commissioner’s finding at [49] of the decision in this respect was a sufficient basis for concluding that it had obtained other acceptable employment for the respondent employees. 78 However, Ready Workforce has not identified how such a conclusion is available in circumstances where, as the Full Court in FBIS made clear, the mere facilitation of employment is insufficient to satisfy the statutory test. It follows that this contention cannot be sustained.

[66] We are satisfied that the answer which the Commissioner gave to the question raised by s 120(1)(b)(i) of the FW Act was correct. For the reasons given, no appealable error is disclosed in respect of the Commissioner’s conclusion that the statutory test had not been met. It follows that appeal ground one fails.

[67] In light of our conclusion regarding appeal ground one, the appeal cannot succeed on the basis of appeal ground two, as Ready Workforce accepted……………”

Appeal of decision – Ready Workforce (A Division of Chandler Macleod) Pty Ltd T/A Chandler Macleod v Lowe and others (2022) FWCFB delivered 30 September 2022 per Hatcher VP, Clancy DP and Millhouse DP