In recent proceedings before the Supreme Court of New South
Wales, Tooheys Limited has been held to redundancy offers made to
six brewery workers. The offers were collectively overstated by
Production changes being implemented at Tooheys' Auburn
Brewery led to eleven brewery technician positions being identified
as surplus to requirements. The employees in those positions were
offered the choice of redundancy or a transfer to Tooheys'
packaging department at a lower wage.
Discussions between Tooheys and the affected employees occurred
over some 10 months. During that period, Tooheys sent the employees
several letters – three of which attached various
calculations of the employees' applicable redundancy payment.
The last letters, sent in January 2008, attached calculations that
were published by mistake. The calculations had been made using an
Excel spreadsheet and were not checked by anyone at Tooheys. There
was no correlation between the basis for calculation of redundancy
entitlements and the figures contained in the schedule. In each
case, the redundancy component of the calculation had been made on
the basis that each employee had completed 32.68 years of
When Tooheys became aware of the miscalculation it attempted to
rescind the offers. However, by this time, six of the employees had
returned signed forms electing to take redundancy. A number of
other employees had not yet returned their elections.
The Court held that, by inviting employees to indicate their
acceptance of the redundancy package, it was making an offer in
accordance with the attached calculations. Tooheys had not placed
any relevant qualifications on its offer in the letters. In
particular, it had not stated that any redundancy payment would be
in accordance with any industrial award or policy. It had also used
the term "redundancy package", which, the Court found,
suggested that Tooheys was offering something more than that to
which the employees would otherwise be entitled.
The Court ruled that Tooheys was bound to make the offered
payments to the six employees who had returned their signed
election forms. Those employees each received somewhere between
A$54,000 to A$163,000 in excess of their actual entitlement.
Tooheys, however, was not required to make the offered payments to
the employees who had not signed and returned their elections
before the offer was rescinded.
Implications for employers
In light of this decision, employers should take extra care to
make sure that any calculations provided to employees are correct.
Where the calculations are estimates, employers should ensure that
they are clearly qualified and that the basis on which the
calculation is being made is clear. In addition, care must be taken
with any correspondence to ensure that the terminology used
properly conveys the intent of the writer.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Treasurer Scott Morrison recently announced changes to a number of 2016 Budget superannuation contribution measures.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).