An employer may apply to the Fair Work Commission to have an employee’s redundancy pay reduced to a specified amount (which may be nil) in circumstances where it has obtained “other acceptable employment” for the employee.
An employer may apply to the Fair Work Commission (FWC) to have an employee’s redundancy pay reduced to a specified amount (which may be nil) in circumstances where it has obtained “other acceptable employment” for the employee.
An assessment of whether the employer has obtained “other acceptable employment” will depend on a variety of objective factors, including but not limited to the nature of work, salary or pay rates, level of seniority, working hours, travel time and location (noting that the FWC will now have regard to the requirement to work from home or in the office).
In the decision of Australian Cabling Solutions Pty Ltd T/A Australian Cabling Solutions [2024] FWC 2591, the FWC was required to consider an application made by Australian Cabling Solutions (the Employer) to reduce the redundancy pay of an employee who refused to accept its offer of alternate employment.
The Employer provided electrical and cabling services to builders on projects across Queensland and New South Wales. In or around November 2021, the employee was employed to work on a contract to perform electrical work at the Tweed Valley Hospital in Northern New South Wales.
When the contract reached an end, the Employer offered the employee redeployment at the Wacol Correction Facility in Queensland. The Wacol Correction Facility was located 101km from the employee’s residence, compared to the Tweed Valley Hospital which was only 13km away from his residence.
The employee ultimately rejected the redeployment option due to the increase in commute. As a result, the employee’s position was made redundant on the basis that there was no other work available.
The FWC found that the position at the Wacol Correction Facility was not other acceptable employment as there was a significant and detrimental alteration in the travel time imposed on the employee.
In coming to this view, the FWC had regard to the fact that the employee would have been required to travel approximately 2 hours and 40 minutes a day by train or 1 hour and 16 minutes a day by car had he accepted the redeployment offer. The FWC considered these travel requirements to be far more extensive than what the employee had previously been required to commute when working at Tweed Heads.
The FWC further noted that while the Employer may ask its employees to work in other regions, the employee had only worked in one location throughout of his employment and the nature of his role was not one where he would frequently travel to different locations or projects.
Finding the redeployment option to not be “other acceptable employment”, the FWC refused to reduce the redundancy pay of the employee and dismissed the application.
Lessons for employers
An assessment of whether an employer has obtained “other acceptable employment” for an employee will depend on the individual circumstances. As demonstrated in this decision, the FWC will have regard to a variety of objective factors including the nature of work, the location of work and the travel time required of the employee.
If employers are looking to apply to the FWC to secure a variation in redundancy pay, it must ensure that any alternative roles offered to the employee during the redundancy process are reasonable in the circumstances.
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