The issue of redundancy looms where
an employer loses work to a competitor as part of a tender process.
Often what occurs is that the
employees of the employer, which has lost the work can apply and are accepted
as employees of the employer, which has won the work.
Where an employer is able to
redeploy an employee either within its business or obtain work for the employee
with another employer, and the employee does not co-operate in that process,
the employee may not be entitled to a redundancy payment if employment is
ultimately terminated.
This much is demonstrated in the decision
of the Fair Work Commission in Cleandomain
Pty Ltd [2014] FWC 5243.
Christine Flavell was a cleaner
employed by Spotless at Fountain Gate Shopping Centre. In May 2013 Spotless
lost the contract to clean there. At the time Ms Flavell was on extended sick
leave, which did not finish until mid-June 2013.
Spotless representatives contacted
Ms Flavell by phone and letter to advise her of the change and that she could
apply for a job with the new cleaning contractor by attending an interview or
be redeployed at another Spotless site.
Ms Flavell did not respond
meaningfully until after the new contractor had filled positions at Fountain
Gate. By that time Spotless did not have any positions that suited the hours Ms
Flavell wanted to work and were in easy travel of Fountain Gate.
On 16 July 2013 Ms Flavell received
a letter from Spotless stating that she had been terminated due to retrenchment
and citing her lack of co-operation that “has the consequence that you declined
offers of acceptable alternative employment with the incoming contractor … and
the absence of a suitable alternative position being available at another Spotless
site”.
The Commission found that Ms
Flavell was more interested in being paid out rather than continuing in
employment. Because of her period of service she was entitled to eleven weeks as
a redundancy. Her lack of co-operation was her failure to attend an interview
with the new contractor. All other Spotless employees at Fountain Gate who
attended interviews with the new contractor were given jobs. The fact that she
was on sick leave when the interviews took place did not count in her favour as
she was fit enough to return to work five days after the interviews had taken
place.
Cleandomain (which had been taken
over by Spotless) successfully argued that section 120(1)(b) of the Fair Work
Act applied and because it had done all it could to obtain other acceptable employment
for Ms Flavell its obligation to pay her redundancy on termination of
employment could be reduced to nil.
The lessons are:
1. Employers should attempt
to redeploy employees to minimise their obligation to pay redundancy; and
2. Employees should not
assume that a redundancy will be paid to them if there is other work to be had.
or employment and workplace relations matters.
