For employers seeking to understand their obligations around redundancy and redeployment, it is often difficult to determine what is “other acceptable employment” under the Fair Work Act. While each case will turn on its own facts, a recent decision of the Fair Work Commission highlights some of the issues around this question.
The employee was a car salesperson with more than 19 years’ service. As a result of the COVID-19 pandemic, the employer could no longer sustain the number of salespeople and sought to make some of the sales roles redundant.
The employee was given the choice of two redeployment options, both involving an almost identical role with the same pay and conditions:
- Working in a location which would have increased the employee’s daily commute by around 40 minutes; or
- Working in an almost identical location, but in a temporary capacity as a replacement for another salesperson who was absent for around 3 months due to an injury.
The employee rejected both options on the grounds that they were not “other acceptable employment”. He then found another job.
The employer made an application under s.120 of the Fair Work Act, seeking to reduce the statutory redundancy pay to nil on the basis that the redeployment options were “other acceptable employment”.
In considering this case, the Commission reiterated that:
- Whether or not a redeployment is “other acceptable employment” is an objective fact to be determined by reference to a number of factors. It is not a question of what the employer or employee consider to be “acceptable”.
- “Acceptable” employment does not have to be identical to the old role
- Factors such as pay, hours, seniority, fringe benefits, workplace, job security, carer’s responsibilities, family circumstances and location can all be included in the objective assessment, along with many other factors.
- Acceptance by other employees of redeployment will not necessarily make a role “acceptable”. Each employee’s individual circumstances must be taken into account.
The Commission decided that Option 1 was not “acceptable” employment because the additional travel time would have been inconvenient and onerous in the circumstances of this employee. In reaching this decision, the Commissioner took into account that this employee was driving a considerable distance already, and that the car and travel costs were paid for by the employer. In all other respects, the Commissioner noted that this redeployment option would have been “acceptable”.
This decision does not mean that additional commuting time must be less than 20 minutes each way in order for the employment to be “acceptable”. In this particular case, this factor had a greater weighting than other factors.
The Commission also found, however, that the second option was “other acceptable employment” even though the employment could have been only for 3 months, with no certainty at all that it would continue. The Commission’s reasoning here was that even if the employment did not continue, the employee would have then been entitled to redeployment or redundancy pay anyway. The Commission also noted that the redeployment option was superior to a new role with an alternative employer, because the employee would continue to accrue entitlements such as long service leave, whereas his long service leave accrual would start form scratch if he went to a new employer.
Lesson for employers
This decision highlights that, while the various factors affecting “acceptable” employment are relatively certain, the weight that might be applied to each of these factors is not. The particular circumstances in each case are critical.
If you are uncertain about any aspects of a proposed redundancy, make sure you get advice early in the process to help avoid problems down the track.
If you would like to discuss these or other workplace issues please contact Andrew Bland or call 02 9412 3077.