Section 119(1)(a) of the Fair Work Act 2009 (Cth) states that an employee is entitled to be paid redundancy pay by the employer if the employment is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour (the Exception).
The Exception was most recently considered by a Full Bench of the Fair Work Commission in December 2015 in Compass Group (Australia) Pty Ltd v National Union of Workers and another [2015] FWCFB8040 (Compass) in the context of employees whose employment was terminated as a result of the employer no longer holding a particular client contract, which those employees were specifically employed to service. The employer, Compass, provided fire rescue services to the Department of Defence and in the circumstances of this case, had made a commercial decision not to tender for a replacement contract in respect of those services. Compass relied on the Exception and withheld redundancy pay from the terminated employees.
The Full Bench said that in order to determine whether the Exception applies in a given case it is necessary to:
- Consider the normal features of the business; and
- Then determine whether the relevant terminations are properly described as falling within the ordinary and customary turnover of labour in that particular business.
