The AFAP has had an important win in the Fair Work Commission in a recent redundancy matter.
The AFAP v Becker Helicopter Pty Ltd concerned a part of the Fair Work Act that had not previously been explored by the Commission or a Court.
In summary, Commissioner Spencer ruled that a pilot (or any employee) employed under a ‘Maximum Term’ contract is entitled to redundancy pay if their employment ends on redundancy grounds before the final end date of that contract. This is the case even if the contract in question attempts to remove redundancy entitlements.
For these purposes, a maximum term contract is similar to a fixed term contract, in that it has an end date. However the key difference is that it also includes a term allowing for termination by either side prior to that end date.
In this instance, a number of pilots at Becker Helicopters had entered into contracts with fixed end dates, but which also allowed for termination for any reason on the provision of 4 weeks’ notice. These contracts also included a clause purporting to remove access to redundancy pay, even where employment ended on redundancy grounds.
In July last year, as a result of changes to operational requirements, some pilots were given notice that their employment would end and that this would occur prior to the end date of their maximum term contracts.
When it became apparent that redundancy payments would not be made, the AFAP commenced proceedings in the Fair Work Commission, arguing that section 119 of the FW Act (redundancy pay) applied in these circumstances.
In response, Becker argued that the pilots were employed for a specified period of time and/or a specified task, and were therefore excluded from receiving redundancy pay in accordance with section 123 of the FW Act.
Commissioner Spencer found that this was not the case. Specifically, the ability to terminate employment prior to the contract end date meant that it was not for a ‘specified period of time’, and the fact that pilots were employed to train students did not mean they were employed for a ‘specified task’.
Beyond the specific issues referred to in this case, this is useful reminder of the key principle that parties are unable to contract out of minimum conditions of employment (for example those in the NES, the Award or in EBAs).