GM+JE Walker Pty Ltd T/A Gateway Regional Property Services v Shirley Gunningham(C2014/4543) [2014] FWC 4335.  Gregory, C

Tis “redundancy” matter the employer made application to the FWC, seeking to avoid paying redundancy pay.  The matter had already been investigated by the Fair Work Ombudsman in the redundant employee’s favour.

The company claimed it is currently insolvent and in danger of financial collapse due to the current highly competitive trading conditions within the cleaning industry. This has resulted in a material contraction of the Applicant’s business (with the loss of a dozen contracts in the last 12 months) with the reduction in the viability. With the Applicant’s bank facility being fully drawn the Applicant is now only able to continue trading with the added support of its family backers.

In finding against the company, the Commissioner stated “the amount involved, given Ms Gunningham only worked part time on the relatively low hourly pay rates contained in the Award, is not an excessive amount…equates to an entitlement equivalent to 8 weeks pay.”

The Commissioner commented:

“It is also clear that Employers generally have obligations under Awards and Agreements which are to be observed and complied with. I also accept they may take issue with the rationale for why some of those obligations exist, as Mr Walker has done in the present matter, but these are issues for another time. For the time being they continue to be part of the costs of “doing business. (My emphasis)”.

Commentary

The first case was a simple transfer of business proposition, with the employee obviously looking to sweeten the pie with a bit of redundancy payout.  The employer called her bluff and won, because it had followed all the rules required of it under the FWA.

The second case found that the FWC had little sympathy for a company that did not account for redundancy pays for lost contracts.  It is very hard for businesses when tendering for work to factor all matters, but clearly contingencies ought to have been made for the workers.

Greg Reiffel Industrial Relations & Human Resources Consulting has been providing the following services to businesses for over 30 years:

 

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