Not acceptable alternative employment, so redundancy entitlements apply

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Not acceptable alternative employment, so redundancy entitlements apply

The AIRC found that job offers of new employment failed to satisfy the test of acceptable alternative employment, so the employees in issue were entitled to redundancy benefits as provided in their award.

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The AIRC found that job offers of new employment failed to satisfy the test of acceptable alternative employment, so the employees in issue were entitled to redundancy benefits as provided in their award.
 
Commissioner Spencer did not accept that the offers were comparable due to a number of changes including the variation in the hours of night work and loss of the full-time permanent status.
 
Background
 
The employer, Tasman Sheepskin Tannery Pty Ltd (TST), operated as Queensland’s only sheep and lamb skin tannery for the last 27 years. On 28 April 2008 a serious fire destroyed most of the finishing equipment, stock and work in progress, and severely damaged the premises. At the time of the fire, the employer had 24 employees.
 
The employer stated that all full-time employees were paid for the first month, and some employees were employed for a longer period on salvage work. The employer had endeavoured to find all full-time employees alternative employment and stated it was successful in achieving this with many of the staff. This application relates only to four employees.
 
Alternative employment
 
The relevant award clause provided that an employer, in a particular redundancy case, may make application to the Commission to have the general severance pay prescription varied, if the employer obtains acceptable alternative employment for an employee.
 
Evidence
 
The employees submitted that the work offered was completely different from the current work. Some new positions entailed more technical work utilising ‘a modern and completely different process than producing wool-on sheepskin’. The new positions utilised computer-run equipment, for which most employees had little experience or confidence.
 
Other differences include: the new work entailed night work and, in some cases, very different work generally and the loss of the full-time permanent status.
 
Some employees gave evidence that they would lose overtime and penalty rates.
 
It was clear from the evidence that the employer kept the employees gainfully employed and remunerated for as long as possible in the difficult circumstances, where the fire had caused the discontinuation of the tannery operations. The commission continued:
‘However, each of these employees had an expectation of continuing their employment with the Respondent and some had significant years of employment, experience and skills with the employer. It was not in contention that each of the employees had been made redundant …
 
The alternative positions did not provide reasonable options of ongoing employment. Three of these employees had considerable years of service and all have had difficulty in finding alternative employment. The obligation to pay redundancy pay in accordance with the Award provision cannot in the circumstances be set aside.
 
A case to have the redundancy obligation varied was also not made out, no material was progressed to vary the general prescribed rate of severance payments.
 
For the aforementioned reasons the application is dismissed and the Respondents are entitled to receive their respective redundancy payments as per the Award obligation.’
 
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