Redundancy and Alternative Acceptable Employment In order to meet the threshold for a genuine redundancy and minimise any liability for redundancy payments, it will be necessary for an employer to explore opportunities for redeployment. In the event that an employer finds other acceptable employment for the employee, the employer will be able to make an application to the Fair Work Commission to have the redundancy payment reduced. This raises the question: what will be deemed to be other acceptable employment? Whether an alternative position is acceptable employment will take into account things like: Income; Employment category (Full Time, Part Time or Casual); Skills and experience of the employee; Seniority of the role; Location of employment. Two recent decisions of the Fair Work Commission have provided further guidance on what will be considered acceptable employment, and the necessary level of involvement that an employer must have in finding employment for an employee. The case of Children s Services Support Unit (CSSU) Inc [2014] FWC 7503 (24 October 2014), concerned a government employer that made a childcare manager redundant. It was found that the employer had failed to find alternative acceptable employment for the employee, as a regional and remote coordinator, on the basis that the new position possessed a: 19% reduction in income; Loss of seniority; and Increase in housing costs (in the location of the new position). As a result the application to reduce the redundancy payout was rejected, and the employee was entitled to the full amount. In the case of Orthotic & Prosthetic Centre Pty Ltd v Mr Jeff Philp [2014] FWC 7651 (28 October 2014), an employer sought to have an employee s redundancy payment reduced on the basis that they had found them acceptable employment through a placement with another business. While an employer may apply for a reduction on this basis, in this instance the employer only planted a seed by suggesting to the other business that they consider hiring their redundant employee. The Fair Work Commission held that the employer did not: Make any arrangements for contact between employee and business;
Arrange an interview; Supply resume; Assist with creating an employment contract; or Secure continuity of service of employee. On that basis, the employer had no meaningful role in finding other acceptable employment for their employee and was not successful in having the redundancy payment reduced. What does this mean for members? These cases indicate that employers seeking to make applications to have redundancy payments reduced will need to make significant efforts in finding an acceptable position that does not lead to an employee being worse off. How can the VANA Employment Relations Team help? The VANA has a team of expert consultants that can assist with assessing and managing a Fair Work Commission application to have redundancy payments reduced. For more information of your obligations regarding redundancy and to explore whether an application would be suitable, please contact the VANA Employment Relations Team on (03) 8540 7000. Judge sends strong warning to hair and beauty industry: It does not pay to underpay workers A recent Federal Circuit Court decision will have far-reaching implications for the hair & beauty industry and potentially other industries as well. The case, brought by the FWO after it conducted its own initial investigation saw a hairdressing chain and two of it directors receive maximum order fines for breaches relating to underpayment ($50,160 for the company and $10,032 for each director). The breaches were numerous including the failure to pay an apprentice the minimum hourly award rate, plus lower percentage payments for overtime, penalty rates as well as annual leave. Federal Circuit Court Judge Heather Riley was damning in her comments, saying that it was important to send a message to both the directors and the wider industry that the failure to pay workers their correct entitlements is not economic", and issuing such penalties to businesses and directors was necessary in order to deter employers from continuing to merely pay employees the monies they were prepared to accept. This case serves as a reminder to all retailers that they must be compliant with their employment law obligations and to be in control of their internal book-keeping and payroll arrangements to avoid any potential for inadvertent legal breaches.
This can be done through an internal payroll audit conducted either by yourself or the VANA Employment Relations Team. This may include checking: - pay rates are up-to-date; - overtime rates, penalty rates and all leave entitlement calculations are being applied correctly; - superannuation contributions are adequately recorded; and - time and wages are adequately recorded. For more information of your obligations regarding redundancy and to explore whether an application would be suitable, please contact the VANA Employment Relations Team on (03) 8540 7000. Fair Work Ombudsman v Cuts Only The Original Barber Pty Ltd & Ors [2014] FCCA 2381 Lack of Evidence and Failure to Afford Due Process Leads to Unfair Dismissal Decision A recent decision by the FWC has reaffirmed the need for employers to follow the standard and complaint processes when it comes to terminating employees. In this case, the employee alleged that he was unfairly dismissed because of his absence from work, as a result of the unexpected premature birth of his child and the need for him to provide primary care for his four other young children while his wife was in hospital. The employee returned to work around 2 weeks after the employer had expected him to and queried the employer about certain elements of his pay and leave during the time he was away. The employer claimed that the employee had abandoned his employment by not returning to work after his approved leave entitlements ran out and further asserted that the employee was not entitled to paid personal/carer s leave as the circumstances relating to his wife s hospitalisation did not amount to an unexpected emergency within the terms of the Fair Work Act 2009 (Cth) ( the Act ). The Commission found that the reason for the dismissal was not sufficiently valid in that in the circumstances it was not sound, defensible or well founded. Accordingly, the Commission further found the employer did not comply with the procedural requirements of the Act that relate to dismissal. That is, the employer did not: notify the employee of the full reasoning for his dismissal; offer the employee the opportunity to respond to the decision; offer the employee a support person to assist them in a performance consultation meeting; give the employee requisite waring of the performance related issue;
follow appropriate procedures in the handling of the performance related issue. What the decision means for VANA Members This decision emphasises that members must strictly adhere to the performance management and dismissal procedures contained the Act. Members should bear in mind that in all cases, terminating an employee is about minimising the risk to your business. When seeking to terminate an employee, members should always ask themselves what kind of risk am I exposed to and accordingly remember process...process...process. For more information regarding the unfair dismissals please contact the VANA Employment Relations Team on (03) 8540 7000. David Johnston v The Trustee for The MTGI Trust T/A Macquarie Technology Group International (U2014/345) Award coverage dispute win for Coles The full bench of the Federal Court of Australia has upheld a decision that the General Retail Industry Award 2010 applies to delivery drivers employed by the online store of Coles, dismissing the Transport Workers Unions ( TWU ) argument that these employees fell within the transport industry. Justices Siopis, Buchanan and Flick held that Judge Driver of the Federal Circuit Court was correct in classifying the customer service agents ( CSAs ) under the Retail Employee Level 1 classification of the General Retail Industry Award. The CSAs primary role is the delivering of goods to customers, however they also undertake some in-store duties. The Federal Court overturned Judge Driver s finding that the Road Transport and Distribution Award did not capture the role of the CSAs, with the bench deeming his application of the substantial character test inappropriate. Instead, the full bench determined the objective meaning of the words used, finding that the employment in question fell comfortably within the coverage of the Road Transport and Distribution Award. However, the bench did uphold the finding that the retail award was the more relevant industry award to cover the duties of the CSAs. In doing so, the full bench dismissed the TWU s argument that it was intended that the work of a Retail Employee Level 1 be performed either within the four walls of a shop, or at least at a retail establishment. The bench went on to clarify that it is sufficient if a retail establishment is the base or location of the employment, even if work is performed away from the retail establishment e.g. driver and door-to-door salesperson. In dismissing the TWU s appeal, the full bench also found that Judge Driver was correct in rejecting arguments by Coles that either the 2008 or 2011 Enterprise Bargaining Agreements applied to the employment. The full bench supported his reasoning that the CSAs didn t exist when the 2008 agreement was made, and the 2011 agreement had specifically excluded the CSAs.
What does this mean for VANA Members? This decision reinforces the potential for employees undertaking roles outside the retail premises to fall within the retail industry. Members should be reminded of the importance in determining the appropriate classifications and levels of pay under the applicable industrial instrument. We strongly recommend that you contact the VANA Employment Relations team to discuss any issues in regards to the interpretation of awards and determining the appropriate coverage and classification for award covered employees. For further assistance with the challenges presented with award coverage and compliance, please do not hesitate to contact the VANA Employment Relations Team on (03) 8540 7000. Transport Workers' Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148