An employer has been ordered to pay full redundancy entitlements to employees despite offering them other employment arrangements.
The recent decision of Lee Crane Hire Pty Ltd v Sneek and Ors  FWC serves as an important example of when an employer will be required to pay redundancy entitlements to employees, despite offering them alternative means of employment.
Section 120 of the Fair Work Act provides a mechanism for employers to apply to vary the amount redundancy pay owing to an employee (which may be reduced to nil) in circumstances where the employer obtains other acceptable employment for the employee (and they reject it) or the employer simply cannot pay the amounts owing.
If an employer is able to prove that it offered an employee other acceptable employment and the employee rejected such employment and sought payment of their redundancy entitlements instead, an employer could request the Fair Work Commission reduce the redundancy pay potentially to nil.
The onus of proving that the alternative employment is acceptable rests with the employer. There is a body of case law which has set the bar particularly high and involves consideration of a range of non-exhaustive factors including, pay levels, hours of work, seniority, fringe benefits, workload, job security, work location, continuity of service, accrual of benefits, probationary periods, as well as the employee’s skills, experience and physical capacity. The location of the other employment must also not be unreasonably distant from the employee’s original place of work.
Lee Crane v Sneek is a prime example of how the Fair Work Commission assesses ‘other acceptable employment’ and is a cautionary tale for employers, particularly those who may wish to offer casual or far away employment to soon-to-be redundant employees. Here’s what happened:
What’s the lesson?
Employers need to tread very carefully when navigating redundancies and further, they need to ensure that any offers for other employment are indeed ‘acceptable’ based on the Fair Work Commission’s assessment criteria.
It goes without saying that if you are wondering if your redundancy process is correct or you are wishing you had some expert assistance to ensure your redundancy alternatives are not labelled “the devil’s alternative”, do not hesitate to contact Enterprise Legal’s Principal Workplace Relations Advisor, Amie Mish-Wills:
☎️ (07) 4646 2425
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Casual employment has been a hotly contested topic for quite some time, particularly following the controversial decision in WorkPac Pty Ltd v Rossato (‘Rossato’), which was handed down on 20 May 2020.
In a nutshell, the decisions of Workpac Pty Ltd v Skene  FCAFC 131 and Workpac Pty Ltd v Rossato  FCAFC 84 found that casual employees who work regular, consistent hours with a firm advance commitment to work, may be owed leave and other entitlements such as redundancy pay even where they have received a 25% casual loading (double dipping drama).
There will be no easing of casual employment controversy in 2021 as the Rossato decision is off to the High Court and further, the Australian Government recently introduced the Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) Bill 2020 (the Bill) to Parliament.
If the Bill passes Parliament, it will bring about various changes to casual employment, including certainty to employees and employers regarding the rights and obligations of both parties and the definition of a casual employee is proposed to be amended to where an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
Relevant factors to whether there is a firm advanced commitment to work include: the ability to accept or reject work; whether the employee will work only as required; and whether a casual loading is paid;
Relevant factors to whether there is a firm advanced commitment to work include:
assessed at the time the engagement is entered into.
If the Bill is successful and in good news for employers, employers will also have the ability to set off any claim for annual leave, personal leave and redundancy pay against the 25% casual loading in an attempt to reduce the potential for “double dipping”.
The laws are currently proposed to work retrospectively, however, there are no guarantees that this will be held to be valid. The Bill also proposes a number of changes to provisions regarding casual conversion, flexible work directions and enterprise agreements – important but less controversial topics.
It is recommended that employers continue to stay up to date with the developments in the casual employment sphere and be prepared for changes in the future. At this stage, the Bill is only proposed and may change before coming into force.
For advice and support with managing your casual workforce, contact our Workplace Relations team at Enterprise Legal today for a complimentary introductory consultation:
☎️ (07) 4646 2621