Redundancy principles; obtaining alternative employment

Sec 120 of the Fair Work Act permits an employer to apply to the Fair Work Commission for permission to reduce the amount of statutory redundancy payable to an employee whose employment has terminated as a result of redundancy if the employer obtains other acceptable employment for the employee.

From the following extract from a recent decision of the Fair Work Commission several principles, one of which I had not previously encountered, are stated.

They are that (a) the test can be met by the alternative employment being from within the employer’s operations (b) the acceptable alternative employment must be offered to the employee while he or she is still employed (which I have not previously seen stated, although it makes sense) and (c) the issue of whether the alternative employment is “acceptable” is tested objectively and not just from the perspective of either the employer or the employee.

“Many of the cases that come before the Commission under s.120 of the Act concern efforts that have been made by the applicant-employer to obtain ‘other acceptable employment’ for the employee with another employer. However, it is also possible for the employer to ‘obtain’ other employment within its own organisation. It is clear that in the present case, Electricity Wizard ‘obtained’ other employment for the respondent. But when did it obtain this employment for him? During the meeting on 9 March 2018 the company gave Mr Tauiliili a good indication of the alternative role that would be available. It told him that the role would be customer-facing with a leadership element, and that the position title and remuneration would be the same. However, the alternative role discussed at this meeting lacked important details. The position description and the information about the bonus and commission structure were not provided to Mr Tauiliili until the meeting on 20 March 2018, after his employment with the company had ceased. 1 In my view, for an employer to avail itself of s.120, the other acceptable employment must be ‘obtained’ and offered to the employee while she or he is still employed by that employer. The section speaks of an employer obtaining other acceptable employment for the employee. This cannot occur once the relevant employment relationship has come to an end. In the present case, the other employment was not obtained until after Mr Tauiliili’s employment with Electricity Wizard ended.

This conclusion is sufficient to dispose of the application. However, I will briefly address the question of whether the employment was ‘acceptable’. It is clear that Mr Tauiliili did not accept the other employment. However, whilst relevant, this is not determinative of whether the employment was ‘acceptable’ for the purposes of s.120. ‘Acceptable’ means ‘able to be agreed to’, but it also means ‘suitable’. A person might not accept objectively ‘acceptable’ employment.

It is well-settled that the question of whether other employment is ‘acceptable’ is to be approached objectively, and with regard to all the circumstances, including the terms and conditions of employment and duties.2 In the present case, the alternative role offered the same salary and hours of work. The role had the same title, and involved leadership. It required assistance to be provided to agents, as well as coaching. However, Mr Tauiliili would have been required to go onto the phones, deal directly with clients and work on sales. The alternative role was essentially sales-based, with a leadership element; it was not primarily supervisory. It was therefore of a different nature. Further, the possibility of earning commissions was diminished. These two considerations together, on balance, lead me to conclude that the alternative employment was not ‘other acceptable employment’ for the purposes of s.120(1)(b)(i).”

Application to vary redundancy pay – Electricity Wizard Pty Ltd v Tauiliili (2018) FWC 4556 delivered 2 August 2018 per Colman DP