Redundancy pay not required, FWC rules

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Redundancy pay not required, FWC rules

A company has been granted permission by the Fair Work Commission to not make a redundancy payment after they found the employee suitable alternative employment.

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A company did not make a redundancy payment because it found the employee suitable alternative employment, the Fair Work Commission has ruled. 
 

Facts and Background


Kristina Fleming began casual employment with the Australian Insurance Repairs in May 2015. She became full time in December that year.

A notice of redundancy was provided to the employee before Australian Insurance Repairs ceased operations in February 2018. Because Ms Fleming had been employed for more than two years, she was entitled to six weeks redundancy pay under s119(2) of the Fair Work Act 2009.

The company arranged for a third party employer to offer her a full time job in a similar type of position and in a similar location, with the same pay rate and entitlements as her previous role.

Ms Fleming began her new job after a two-week holiday.

 

The law


S120(1)(b)(i) of the FWA says redundancy pay may be varied by the Fair Work Commission if an employer is able to offer another similar position for the employee. Under s120(2), the Commission may even allow zero payment if the company’s offer is reasonable.
  

Arguments of the parties


The company applied to the Fair Work Commission to vary the amount of redundancy pay it was expected to provide to Ms Fleming as it had found her another job. In response, Ms Fleming argued that she had gotten the role on her own initiative and it should not have any effect on her entitlement for redundancy pay.
 

Considerations of the tribunal


The commission had to decide whether the company had secured alternative employment for Ms Fleming. Commissioner Spencer also had to consider whether the alternative position was “acceptable”. Factors to be taken into account by the commission when looking at an application to vary redundancy entitlements include the status of the job, the rate of pay, location, employment hours, duties, whether the applicant obtained the employment, and whether the alternative was, or was not, acceptable and why.
 

The Decision


Commissioner Spencer found the company had obtained acceptable alternative employment for Ms Fleming. It was appropriate to vary the redundancy pay entitlement for Ms Fleming to nil.

 

Read the judgment


Australian Insurance Repairs Pty Ltd v Ms Kristina Fleming [2018] FWC 1553
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