Western Australian Industrial Relations Commission

If it looks and sounds like a redundancy, it’s a redundancy

The Industrial Magistrate upheld a claim for redundancy by an ex-employee of a company which managed facilities for the Perth Theatre Trust.  The claimant’s employment was terminated because the Trust did not renew the company’s service contract.  The company argued that there was no redundancy because the contract simply came to predetermined end.  Or alternatively, if there was a redundancy, the claimant was not entitled to a redundancy payment because she rejected a position offered by the Trust and took a position with another of the Trust’s contractors. 

The company said the contract of employment specifically provided for the employment to end if the company’s management contract was not renewed.  His Honour found that the contract of employment was ongoing and not for a specified period of time.  The contract simply provided a particular mechanism for termination in the event that the management contract was not renewed.  The company was not able to maintain the claimant’s position because its management contract was not renewed.  It followed ‘that the position became redundant’. 

The company said the claimant was not entitled to a redundancy payment because she withdrew from a recruitment process after being recommended for a position with the Trust.  Therefore, the claimant rejected an offer of employment and is not entitled to redundancy.  His Honour found against the company, noting that a formal recommendation to a public sector position is not an offer of employment because it is not capable of acceptance and provides no guarantee of employment. 

The company also argued that when the claimant took up employment with her new employer, there was a transfer to an associated entity, and therefore the claimant was not entitled to redundancy.  The company said it and the new employer are associated entities because they both ultimately receive funding from the government through the Trust, and they are both associated entities of the Trust.  The Industrial Magistrate said the claimant’s new employer is not an associated entity, and contractual arrangements between the Trust and its management companies cannot change employees’ redundancy entitlements. 

The Industrial Magistrate noted that the Fair Work Act codifies the law of redundancy for national system employees, and therefore common law and equitable principles may not apply.  His Honour also noted that when a former employer alleges a claimant is not eligible for a redundancy payment, they bear the onus of proving that. 

The decision can be read here.

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