In an interesting decision, a Full Bench of the Fair Work Commission has held that the power vested in the Commission to vary statutory redundancy entitlements provided for by sec 119 of the Act, is not available to an employer when the redundancy pay entitlements are provided for by an award, and therefore, presumably too, by an enterprise agreement.
“The Commission’s power to reduce redundancy entitlements arises under s 120 of the FW Act. Section 120 only applies if the employee is entitled to be paid redundancy pay under s 119 of the FW Act. If s 119 is not the source of an employee’s redundancy entitlement, then there is no power under s 120 to reduce that entitlement.
As earlier stated, there was no dispute in the proceedings before the Commissioner that Mr Fraser’s redundancy entitlement arose under clause 17 of the Award. JFM’s own application identified the Award as the source of the entitlement. The Commissioner found that Mr Fraser’s employment with JFM was covered by the Award, and no party took issue with that finding in the appeal. That being the case, s 119 did not apply to Mr Fraser, and he did not derive a redundancy entitlement from it, because the effect of s 123(4)(b) was that Subdivision B of Division 11 of Part 2-2, which contains s 119, did not apply to him. Consequently s 120 also did not apply (both because Mr Fraser was not entitled to a redundancy payment under s 119 as required by s 120(1)(a) and because s 123(4)(b) rendered s 120 inapplicable to him). There was therefore no power under s 120 to reduce Mr Fraser’s redundancy entitlement.
The Commissioner appears to have erroneously conflated Mr Fraser’s redundancy entitlement under clause 17 of the Award with the redundancy entitlements provided for by s 119. In paragraph  of the decision, the Commissioner recognised that Mr Fraser had a redundancy entitlement under clause 17 of the Award, but in the next paragraph the Commissioner referred to Mr Fraser’s redundancy entitlement as being eight weeks’ pay “in accordance with s 119 of the Act”. However, the Commissioner subsequently expressed her satisfaction that JFM “had an obligation to pay redundancy pursuant to the industry specific redundancy scheme”. This involved a failure to recognise that the relevant effect of s 123(4)(b) is that, where an employee is entitled to redundancy pay under an industry-specific redundancy scheme in a modern award, the redundancy entitlements provided for in s 119 do not apply.
The effect of the error described was that the Commissioner acted beyond power in reducing Mr Fraser’s redundancy entitlement under clause 17 of the Award pursuant to s 120 of the FW Act. JFM has not identified any alternate source of power for the order made by the Commissioner. Clause 17 of the Award does not itself contain any provision analogous to s 120 which would empower the Commission to reduce the entitlements arising under the provision.
Because the Commissioner’s decision and order were beyond power, and the decision disturbed the well-settled position established in previous single-member decisions, we consider that the grant of permission to appeal would be in the public interest. Permission to appeal must therefore be granted in accordance with s 604(2). For the reasons stated above, we have decided to uphold the appeal and quash the decision. JFM’s application pursuant to s 120 of the FW Act must also be dismissed as incompetent.”
Fraser and another v JFM Civil Contracting Pty Ltd (2020) FWCFB 4866 delivered 15 September 2020 per- Hatcher VP, Asbury DP and Gostencnik DP