Redundancy promise must be honoured, court rules

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Redundancy promise must be honoured, court rules

An employer that recruited two workers from a company in the same sector has been ordered to recognise prior industry service for redundancy purposes.

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A magistrate has ruled that Qube underpaid two workers’ redundancy benefits, in a recent decision in the Industrial Relations Court of South Australia.

The Maritime Union of Australia alleged Qube underpaid two workers after they were made redundant in August 2014. MUA lawyers argued the redundancy compensation should have been 70 weeks’ pay, not 44.76 weeks’ pay.

The dispute revolved around Qube’s agreement to employ the two workers on terms “generally no less favourable” than their previous job (which was with Hobart Ports), which recognised prior industry service for redundancy purposes, but capped redundancy benefits at 70 weeks.

Recognition of prior industry service


Qube argued its promise to employ on terms ‘generally no less favourable” than those the workers were working under at their previous job could not include the recognition of prior industry service for redundancy purposes because it had no actual knowledge of that term, and could not reasonably have known about it when hiring the pair in April 2008.

Additionally, Qube said the MUA had not proven any agreement to recognise prior industry service due to a lack of admissible evidence. 

They also said newer contracts with Hobart Ports in 2004 and 2008 (the workers were hired there in 2000) failed to mention that prior service was considered in awarding redundancy benefits.

The judgment of Industrial Magistrate Stephen Lieschke concluded in favour of the workers.

“I conclude that the respondent agreed to recognise the period of industry service of Mr J and Mr P when it employed them on terms that specifically included recognition of prior industry service for redundancy purposes,” he wrote.

“The respondent remains bound by its contractual obligation to pay the full redundancy entitlement.” 
 
This article was written by Ian Ackerman of Lloyd's List Australia and is re-published here with permission.

 
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