Australia: When is a "job" no longer required to be performed for the purposes of redundancy pay and what is "other acceptable employment"?

In the recent case of Szanto v ISS Facility Services Pty Ltd [2013] FWC 3270, the Fair Work Commission (FWC) has provided some clarification of when a "job" is no longer required to be performed by anyone for the purposes of determining the entitlement to redundancy pay under section 119 of the Fair Work Act 2009 (Cth) (Act). The case also provides guidance about when an employer has obtained "other acceptable employment" for a redundant employee for the purposes of section 120 of the Act, which gives the FWC the power to vary the amount of redundancy pay that is payable by the employer.

Facts

Mr Szanto was a 69 year old man who had worked for his employer for over 11 years at four different sites. Most recently, Mr Szanto was working in a reception/concierge role at the "Telstra House" site, with fixed afternoon shifts. Before that, he performed a broad range of tasks related to the work of a Security Guard.

The employer lost the contract to provide security services at Telstra House and advised Mr Szanto that he would be re-assigned to work at a new site, which would involve a mix of security guard duties (i.e. patrol work) and shift work pursuant to a rotating roster. Mr Szanto declined to take up the offer of work at the new site "due to his personal situation" in light of the changed working hours, and asserted that he was entitled to redundancy pay. He claimed he had not been offered suitable alternative employment.

Despite a warning that a refusal to attend work may lead to the termination of his employment, Mr Szanto did not attend for work at the new site as rostered and his employment was subsequently terminated. Mr Szanto then applied to the FWC to deal with a dispute about his claim to redundancy pay in circumstances where the employer maintained that the work at the new site was suitable alternative employment.

Decision

What was Mr Szanto's "job"?

The employer submitted that Mr Szanto's "job" was not redundant because it was broader than the role he performed at Telstra House and his job was not linked to any specific location or any other specific terms, such as his hours of work or the actual tasks involved.

Commissioner Cambridge accepted that a Security Officer's terms of employment would generally permit a reassignment (subject to being reasonable). However, Commissioner Cambridge was not satisfied in this case that the reassignment was part of Mr Szanto's "job", stating that the term "job" is a "more specific notion than the broader generic concept of employment as a "Security Officer"" who could be assigned from "job to job".

Commissioner Cambridge said a "Security Officer is a generic description and a "job" involves the specific terms that apply to particular employment. Accordingly, he concluded that Mr Szanto was employed as a Security Officer and he worked in the Telstra House concierge job, which had particular terms attached to it in relation to hours of work and the tasks performed. As a result, when the employer lost the contract, it no longer required that job to be performed by anyone and Mr Szanto was entitled to redundancy pay. That is, the dismissal was a direct result of the redundancy of Mr Szanto's "job".

Had the employer obtained "other acceptable employment" for Mr Szanto?

The question was then whether the employer had obtained "other acceptable employment" for Mr Szanto by directing him to work at the new site. Commissioner Cambridge stated that "acceptable" is not a "subjective notion involving an option available to a redundant employee". He said further:

"It is not a matter of choice for the redundant employee to either accept or reject alternative employment. Acceptable alternative employment is determined by way of an objective analysis involving a comparison between the terms and conditions that applied to the job that became redundant, and those terms and conditions applicable to the alternative employment.

In simple terms, if the comparison between the redundant job and the alternative employment identified terms and conditions which were not comprehended by the employment and represented changes that had some significant impact on the employee, the alternative employment would be unacceptable. Conversely, if the terms and conditions of the alternative employment were comprehended by the employment which governed the redundant job or if the changed terms and conditions had little detrimental impact on the employee, then the alternative employment would be acceptable."

When comparing Mr Szanto's "job" at Telstra House with the alternative employment offered, Commissioner Cambridge found that although there were significant differences regarding the hours of work (i.e. fixed afternoon shifts vs rotating roster) and the tasks to be performed (i.e. concierge duties vs security guard duties), Mr Szanto's employment was clearly established on the basis that shift work and a broad mix of security guard duties may be required from time to time. This is demonstrated by the fact that Mr Szanto had previously worked shifts and performed security guard duties. The new and different terms and conditions at the new site "were comprehended by the particular employment circumstances" of Mr Szanto. Accordingly, the employer had obtained "other acceptable employment" for Mr Szanto and was under no obligation to make any redundancy payment to him.

Implications

This case demonstrates that:

• An employee's "job" involves the specific tasks and terms that apply to the particular position and not the broader employment category specified in the employment agreement. Accordingly, if the specific job is no longer required to be performed by anyone, that job may be redundant and the employee may be entitled to redundancy pay. For example, if a person is employed as a travel agent at a particular store working weekdays only, their job is narrower than simply that of a "travel agent". Applying the reasoning in this case, if their job at the particular store is no longer required because the store is shut down, they could not be transferred to another location as part of doing the same job. This is because it would be a different job. If they are offered work at a different store working days that include weekends, then an assessment will need to be made as to whether it is "other acceptable employment" and therefore whether there is an entitlement to redundancy pay.
• The narrow reading in this case of the term "job" in section 119 of the Act does pose some practical difficulties for employers, including in respect of how this interpretation works with the broader term "other acceptable employment". This decision also takes a different view to the decision in Hi-Class Composites Pty Ltd [2012] FWA 7814 concerning whether "other acceptable employment" must be a job with a different organisation altogether. This means that the full scope of the operation of section 120 of the Act and its interaction with section 119 has not yet been finally or fully determined.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.