‘Alternative employment’ and the employment protection act

News

‘Alternative employment’ and the employment protection act

The principles applying to an employer’s ability to remove or modify the obligation to make severance payments under the Employment Protection Act 1982 where the employer has secured for the employee alternative employment was recently discussed by a Full Bench of the Industrial Relations Commission of NSW.

WantToReadMore

Get unlimited access to all of our content.

The principles applying to an employer’s ability to remove or modify the obligation to make severance payments under the Employment Protection Act 1982where the employer has secured for the employee alternative employment was recently discussed by a Full Bench of the Industrial Relations Commission of NSW.

In the matter before the Full Bench (Cahill VP, Marks J and Cambridge C), the appellant/employee sought to appeal Glynn J’s decision at first instance refusing the employee’s application for severance payments pursuant to the Employment Protection Act 1982.

The Full Bench (De Lisle v Rose Bay Private Hospital Pty Ltd, IRC 5490/96) stated:

"In this regard, we point out that ‘in principle’ cases determined by this Commission and its predecessors in regard to severance payments upon termination because of redundancy have not adopted the test of 'acceptable alternative employment’ as a determinant for eligibility for severance payments.

"In the most recent of those cases, Re Application for Redundancy Awards (1994) 53 IR 419, the Full Commission did not rule on employer applications, in terms set out at 439, for relief for employers from liability to make severance payments where alternative employment for employees is obtained.

"Rather, the matter appears to be comprehended in the following passage from the Commission’s decision (at 444):

'We are conscious of a number of other issues, many of them having been addressed in the 1987 Clerks case and raised by parties, and some said to be susceptible to discussion and re-negotiation. We consider that this includes Notice. Consequently, the parties are directed to confer on all outstanding matters.’

"We nevertheless consider that a claim may legitimately be made by an employer in an individual case that its action in securing alternative employment for a retrenched employee should remove or modify its prima facie obligation to make severance payments to the employee concerned.

"The member of the Commission hearing and determining the matter may properly take into consideration the circumstances and outcome of the employer’s actions in that regard when exercising his or her discretion as to whether severance payments should be awarded and, if so, in what amount.

"In relevant circumstances, the fact that the employer had obtained acceptable alternative employment for an employee may be determinative in a refusal to exercise discretion in granting severance pay.

"However, in the context of the wide discretion which is created by s14(1) of the Employment Protection Act1982 there may be, as we have said, other determining factors."

Facts relevant to appeal

In the matter before the Full Bench, the employee, when notified of redundancy, volunteered to take a part-time position which was of a different and lesser status to her former full-time position.

The employee consequently did not participate in any further discussions with the employer about alternative employment.

At first instance, Glynn J rejected the employee’s claim for severance pay on the basis that the employee had obtained the part-time position of her own volition, and that she had voiced no later discontent with that position.

On appeal, the employee submitted (among other things) that the only reason she took the part-time position was that there was no other suitable employment positions offered to her by the employer. The Full Bench rejected this submission stating:

"The difficulty about this submission is that she specifically sought [the part-time] position about four weeks before the [employer’s] hospital was to close and that the circumstances in which she did so foreclosed any attempt by the [employer] to secure for her any alternative employment."

The Full Bench dismissed the appeal.

 
Post details