Redundancies are often challenging for both employers and employees. But under Australia’s Fair Work Act 2009 (Cth), a redundancy won’t be considered genuine if there’s a reasonable opportunity for the employee to be redeployed elsewhere within the organisation or its associated entities.
If an employee declines the offer of redeployment, the employer can ask the Fair Work Commission (FWC) to reduce or even reduce the requirement to pay redundancy to nil.
However, what if the employee had been working with a work-from-home role, which has now changed to an in-office role?
An interesting question especially in the context of redundancy pay.
What Makes a Role “Reasonable”?
Determining whether an alternative role is “acceptable” is not a one-size-fits-all assessment. The Commission will weigh up a range of factors, including:
- Pay and conditions;
- Working hours;
- Level of responsibility;
- Location and commute;
- Job security;
- Workload.
This is a practical test based on the totality of the circumstances and, in particular, not the personal preferences of the employee.
The Case That Has Set the Tone: Mater Misericordiae Ltd Trading AS Mater v Robyn Tyler [2025] FWC 1396 (21 May 2025)
This recent decision from the FWC is a strong reminder of how this principle works in practice.
An employee working part-time as an educator was informed that her role would be made redundant due to internal restructuring. She had six (6) years of service, entitling her to eleven (11) weeks of redundancy pay.
Her employer offered her a comparable role:
- same title,
- same pay,
- same hours,
- same seniority, and in the
- same location.
However there was one key difference, the new role did not allow her to work from home, something she had previously been doing.
She declined the offer, citing a disruption to her work life balance, including impacts on her sport and postgraduate study commitments. The employer, in turn, applied to the FWC to have her redundancy entitlement reduced to zero.
The Fair Work Commission agreed. It found the new role was, objectively, a suitable match. Her prior ability to work from home had not been a formal entitlement under the Fair Work Act 2009, an industrial instrument or her employment contract. Personal scheduling preferences, while important to the individual, were not enough to render the redeployment offer unreasonable.
What Employers Need to Know
This decision reinforces several important points:
- Preference vs Entitlement: Employees may have preferences, but unless those are backed by right under an employment contract, industrial instrument or legislation, the Fair Work Commission are reluctant to override a reasonable and other acceptable employment offer.
- Objective Standard: The test is not about what the employee wants, but whether the offer stacks up on its merits and would be considered other acceptable employment.
- Due Process Matters: Employers must follow correct consultation procedures and be able to clearly demonstrate that the alternative role is substantially similar in key respects. This process will likely be found in an industrial instrument such as a modern award obligation and potential in an employment contract or policy or procedure.
Put simply, if an employee walks away from a reasonable offer (of other acceptable employment), they may also be walking away from their redundancy pay.
Our Employment Lawyers at South Geldard Lawyers have essential expertise in advising on redundancies and restructures. Feel free to reach out on 07 4936 9100 or via email to Jonathan Mamaril, Director at jmamaril@southgeldard.com.au. All Employers receive an obligation free consultation.
