Advanced Veterinary Care Pty Ltd v Nicole Tate [2023] FWC 2999

1 Fair Work Act 2009 s.120—Redundancy pay Advanced Veterinary Care Pty Ltd v Nicole Tate (C2023/6323) DEPUTY PRESIDENT COLMAN MELBOURNE, 16 NOVEMBER 2023 Application to vary redundancy pay under s 120 [1] Advanced Veterinary Care Pty Ltd (company) has made an application under s 120(2) of the Fair Work Act 2009 (Act) to have the Commission reduce the redundancy entitlement of a former employee, Ms Nicole Tate. Ms Tate was employed as a part-time hydrotherapy nurse from November 2016 until 21 May 2023, when her employment ended for reason of redundancy. As she had 6 years of service, Ms Tate was entitled to 11 weeks’ redundancy pay under s 119 of the Act. The company asks the Commission to reduce this entitlement to nil because it procured alternative employment for her. Section 120 confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise be entitled under s 119 if the employer ‘obtains other acceptable employment’ for the employee. Section 120(2) then states that the Commission ‘may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate’. If the Commission makes an order under s 120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination (see s 120(3)). [2] The parties filed written submissions in accordance with my directions. I heard the application on 13 November 2023. Mr Sam Snelling appeared for the company. Ms Tate advised the Commission that she would not be attending the proceeding. The questions for determination in this matter are whether the company ‘obtained’ other employment for Ms Tate, whether that employment was ‘acceptable’, and if so whether I should exercise my discretion to reduce the amount of her redundancy pay. [3] The background to this matter is as follows. Ms Tate was employed by the company to undertake hydrotherapy work at one of its veterinary practices. In April 2023, the company decided to transfer this work to Melbourne Animal Physiotherapy (MAP), another veterinary business operating at the same premises. On 11 April 2023, Mr Snelling sent a message to Ms Tate advising her of the transfer and stating that it was giving her five weeks’ notice of the termination of her employment. The letter also told Ms Tate that MAP would be in contact with her regarding ongoing employment. On 14 April 2023, Ms Tate replied, asking whether her position was redundant. Mr Snelling responded, stating that her employment with the company would end, but that MAP would continue the hydrotherapy service and that she should discuss matters with Ms Lauren Elliot from MAP. [2023] FWC 2999 DECISION -- 1 of 5 -- [2023] FWC 2999 2 [4] At the hearing, Mr Snelling said that the company had decided to allow MAP to take over its hydrotherapy work for no fee, but on condition that it would employ the company’s three employees who undertook this work, including Ms Tate. Mr Snelling said that he discussed these matters with Ms Elliot, and that she agreed to the condition. There was no arrangement about the terms and conditions of employment that would apply to the three employees at MAP. Mr Snelling said that he had assumed that employees would not be disadvantaged, and noted that the Animal Care and Veterinary Services Award 2020 (Award) had applied to Ms Tate during her employment. [5] The company submitted that it had obtained other acceptable employment for Ms Tate within the meaning of s 120 of the Act because it had made the transfer of its hydrotherapy work to MAP subject to a condition that it offer employment to Ms Tate. MAP had then offered Ms Tate a role that was a continuation of her old job. Ms Tate was now doing the same work at the same location. There was no indication that she had suffered any detriment. The new employment was therefore acceptable. The company contended that the requirements of s 120 had been met and that the Commission should reduce Ms Tate’s redundancy pay to nil. [6] In her written submission to the Commission, Ms Tate said that when she learned about the transfer of the company’s hydrotherapy work to MAP, she was concerned about losing her long service leave accruals. On 13 April 2023, she received a letter from MAP offering her a part-time position, however there was no reference to her long service leave or to any arrangement between the company and MAP about her ongoing employment. Nevertheless, on 16 April 2023, she signed a contract of employment with MAP. Ms Tate said that Mr Snelling’s message of 14 April 2023 suggested to her that her position was not being made redundant and that she was being transferred to the new business, which she found confusing, so she contacted the Fair Work Ombudsman and was told that she was redundant. On 24 May 2023, Ms Tate received an email from Mr Snelling, stating that the company had found her a new position by arranging for the hydrotherapy business to be transferred to MAP together with staff. Ms Tate said that she had assumed that the entitlements that were not paid out to her at the end of her employment with the company would be recognised by the new employer. By this she appeared to mean that she believed her long service leave accruals would be formally recognised by MAP. However, she had received no confirmation from MAP of this matter. She had also believed that all of the other conditions that applied to her employment with the company would also apply at MAP, but that this was not the case because now when she works on Saturdays she receives ‘time pay until 1 pm then double time for 1.5 hours and not time and a half pay’. [7] Ms Tate said in her submission that she should receive her full redundancy pay because she had not been ‘formally’ transferred to MAP, and because she had been financially disadvantaged in her new employment with MAP given the apparent loss of her long service leave accruals with the company. This was a significant matter, as she had been on the point of reaching seven years of service, which would have allowed her to take pro rata long service leave. She was also less well-off in relation to work she performed on Saturdays. Ms Tate queried whether the company had really ‘obtained’ alternative employment for her, and submitted that in any event it was not ‘acceptable’, and that the Commission should decline to make an order varying her redundancy pay. [8] At the hearing I noted that MAP appeared to be obliged under the Long Service Leave Act 2018 (Vic) (LSL Act) to recognise Ms Tate’s service with the company for long service -- 2 of 5 -- [2023] FWC 2999 3 leave purposes (see further below), although it was arguable that the absence of an acknowledgement of this from MAP could be seen as a detriment which could call into question whether the new employment was ‘acceptable’. Mr Snelling said that it was the company’s view that Ms Tate’s service should be recognised by MAP, even if the company needed to pay MAP an amount towards the relevant cost. It asked for an opportunity to discuss the matter with MAP after the hearing and to provide the Commission with further information. I agreed. That evening, Mr Snelling sent an email to the Commission stating that he had discussed the question of Ms Tate’s long service leave entitlements with MAP, and that both the company and MAP agreed that Ms Tate’s service with the two employees had been ‘continuous between the two employers’ and that when Ms Tate became eligible to claim long service leave, the two businesses ‘will ensure that it is paid in accordance with the applicable legislation’. The correspondence was copied to Ms Tate. Consideration [9] I accept Mr Snelling’s statement that the company made the transfer of its hydrotherapy work to MAP conditional on MAP’s employing Ms Tate and her colleagues, and that Ms Elliot from MAP agreed to this condition. MAP proceeded to offer Ms Tate employment and she accepted the offer. The company therefore ‘obtained’ other employment for Ms Tate. The question then is whether the other employment was ‘acceptable’. That Ms Tate accepted the role with MAP is not determinative. Similarly, the fact that an employee might not accept other employment does not mean that it is not acceptable. The section is concerned with whether the other employment is objectively acceptable. [10] In her written submissions, Ms Tate raised several matters which she believed to be detriments that rendered the new employment unacceptable. First, Ms Tate said that on Saturdays she now receives ‘time pay’ (which I understand to mean ‘ordinary time’) until 1.00pm and then double time for one and a half hours, rather than (as I understand her submission) time and a half for all time worked. However, even if Ms Tate now receives less pay for working on a Saturday, whether this constitutes a substantive detriment would depend on the circumstances, including how often she works on a Saturday, and whether this work is ordinary time or overtime. I note that under the Award, which applied to Ms Tate’s employment with the company and seems clearly to apply also to her employment at MAP (see the coverage provision in clause 4), overtime payments apply to time worked outside of ordinary hours from Monday to Saturday at the rate of 150% for the first 3 hours and 200% thereafter. If the hours to which Ms Tate refers are overtime hours on a Saturday, she is entitled to these loadings. Ms Tate’s submission does not demonstrate that she has suffered a substantial detriment in relation to Saturday work or in relation to her overall conditions of work. [11] Secondly, Ms Tate was understandably concerned about what would happen to her long service leave accruals. However, s 11 of the LSL Act sets out numerous situations where an employee is taken, for long service leave purposes, to have been employed by one employer despite having been employed during the relevant period by more than one employer. For example, s 11(3) states that if the ownership of a business employing an employee changes, but the employment of the employee continues, then the employee is taken to have started employment with the new owner on the date on which the employee started employment at that business, and the new employer must not refuse to recognise long service leave accrued by the employee before the change in ownership. There are various bases on which it may be -- 3 of 5 -- [2023] FWC 2999 4 concluded that MAP is obliged by s 11 of the LSL Act to recognise Ms Tate’s service with the company for long service leave purposes. The absence of any recognition from MAP of this obligation might perhaps have constituted a detriment to Ms Tate, if it meant that she would be required to bring legal proceedings to enforce her rights. However, in light of the company’s confirmation that MAP will recognise Ms Tate’s long service leave accruals, this question is now moot. I accept Mr Snelling’s undertaking that both businesses will ensure that Ms Tate’s long service leave is paid. I note that if for some reason this does not occur, Ms Tate could apply to the Commission under s 603 to revoke the order that I am proposing to make. [12] Ms Tate suggested that there had not been a ‘formal transfer’ of her employment to MAP, and that it was not the case that all of her previous conditions had been recognised by MAP. It is not clear what Ms Tate means by a formal transfer, nor has she referred to any other conditions of her employment with the company that have not been recognised by MAP. I would note however that it is not a requirement of ‘acceptable’ alternative employment that the other employment provide the same terms and conditions. If that had been intended, the section could simply have said so. Instead, the Commission is required to consider whether the new employment is acceptable. The only question in my mind about the acceptability of the other employment concerned the long service leave matter but this has now been resolved. [13] I am satisfied that the company obtained ‘acceptable other employment’ for Ms Tate for the purposes of s 120(1)(b)(i) of the Act. It is appropriate then to weigh in the balance any factors telling against the exercise of the discretion in this case. One consideration here is that the application was made several months after Ms Tate’s employment with the company ended. It is not a requirement that an application under s 120 be made before the employment of the relevant employee ends; indeed, the section only applies if an employee has an entitlement to redundancy pay under s 119, and that can only be the case once the relevant employment ends. Once this happens however, applications should generally be made in good time. [14] Nevertheless, I consider that the company acted in good faith and sought to do the right thing by Ms Tate. She continues to work at the same site, in the same role, on much the same conditions. She has kept her job, and her employment continues to be underpinned by the Award. In my view, this is the type of situation that the legislature had in mind in providing a mechanism for the Commission to vary redundancy pay under s 120. I consider that it is fair and reasonable in the present circumstances to reduce the redundancy entitlement to nil. [15] I am satisfied that the company obtained other acceptable employment for Ms Tate, and that in all the circumstances it is appropriate that I should exercise my discretion to reduce her redundancy pay to nil. An order will be issued separately reflecting this decision. DEPUTY PRESIDENT -- 4 of 5 -- [2023] FWC 2999 5 Appearances: S. Snelling for the applicant No appearance from the respondent Hearing details: 2023 Melbourne 13 November Printed by authority of the Commonwealth Government Printer <PR768328> -- 5 of 5 --