In a recent decision the Fair Work Commission reduced the redundancy amount payable to an engineer to nil even though the employer’s process was clumsy.
The Facts
The employee was employed by a construction and engineering business as an Electrical Projects Engineer at a site in Henderson, Western Australia.
In early November 2025, the employee was told that the projects he was working on would be ending, and his role was no longer needed at Henderson.
He was also told that there was an Electrical Projects Engineer role available at the employer’s operations at a nearby site.
When he was contacted by the Project Manager for the new site, he said he did not want to work there because he was comfortable where he was and would only accept the position if offered an additional $50,000.
On 18 November 2025 the employee met with the employer’s HR adviser who raised with him the role at the new site.
On 19 November 2025 some emails ensued in which:
- The employee stated his understanding of the meeting the previous day, that if he did not accept the new role he would need to resign as there were no other positions available.
- The HR adviser replied with information about the role at the new site, including the location, that it was the same role with the same responsibilities and remuneration, and about an additional project completion bonus. The email also stated, “I am trying to establish whether you intend to resign…”
- The employee affirmed he was not willing to resign.
- The employer replied to acknowledge that he was not resigning and notified that it would proceed with a transfer to the new role, and that there was no redundancy option.
On 21 November 2025 the employee emailed the employer advising that his role had been made redundant, he did not accept a transfer to the new site, he remained available to work, and that he was not resigning.
The employer replied the same day stating that redundancy was not applicable as there was a suitable redeployment option that was the same role, the same compensation, had an additional 10% project completion bonus, and was only 12 km away from the current site, and it would take his actions as confirmation of his resignation from the role.
On 27 November 2025 the HR adviser emailed the employee notifying that his employment was redundant “effective today”, that the company had obtained other acceptable employment at the nearby site, and asking him to accept it.
The HR adviser’s email also notified that if he did not accept the offer, the employer would apply to the Fair Work Commission to vary any redundancy pay to nil.
On 28 November 2025 the HR adviser wrote to the employee noting that he had not replied and notifying that his employment was terminated.
On 1 December 2025 the employee wrote to the HR adviser saying that he was unable to assess suitability of the role without further information, providing a list of questions about the role and the site, and requesting confirmation of his redundancy entitlements.
On 5 December 2025 the employer replied answering the questions about the role and the site, affirming that it was a suitable alternative role and the employer would be applying to the Fair Work Commission to reduce his redundancy payment to nil.
On 8 December 2025 the employee replied disputing that he had refused a suitable alternative role and that the employer had not fully explained the duties, risks or working conditions, and stating that “at all times, [he] was awaiting written clarification to properly determine whether the role was genuinely suitable.”
The employer applied to the Fair Work Commission for an order to reduce the employee’s redundancy pay entitlement of 6 weeks to nil.
About the Act
Section 120 of the Fair Work Act allows an employer to apply to the Fair Work Commission to reduce an employee’s redundancy pay entitlement if the employer obtains other acceptable employment for the employee. The Commission must also decide if it is “appropriate” to make an order to reduce the redundancy pay.
The Decision
The Commissioner reduced the redundancy pay to nil, finding that the role at the new site was “other acceptable employment” because:
- The only differences between the employee’s role at Henderson and the new site were the location, and that the new role would have required him to work on a construction project, as opposed to two manufacturing projects.
- The new site was only a further 4 minutes away from the employee’s home than the Henderson site.
- His duties and responsibilities as an Electrical Projects Engineer at the new site would have been the same.
- He provided no evidence or submissions as to why the role at the new site was not suitable.
The Commissioner also found that it was “appropriate” to reduce the redundancy entitlement because:
- On 19 December 2025 the employer informed the employee about the role at the new site, including the location, that it was the same role with the same responsibilities and remuneration, and about the additional project completion bonus.
- The employee explicitly rejected the role in his email of 21 November 2025 and did not seek further information at that time. He was more concerned about whether the employer required him to resign.
- Although the employer’s handling of his concern was clumsy and at times misguided, it had explained what the new role was and gave him multiple opportunities to accept it, and the employee’s further questions about the role only came well after he had already rejected it.
Implications
In redundancy situations, an employer that is offering an alternative role should provide helpful detail about the new role and explain why it considers the role an acceptable alternative, and an employee should ask any questions about the role before deciding whether to accept or reject the role.
Employers should also take care with their language and approach in redundancy situations.
Although ultimately the employer’s incorrect references to ‘resignation’ did not affect the outcome of the employer’s application, they complicated it, and could have had other adverse consequences if the employee had brought a different kind of legal proceeding, such as an application for unfair dismissal alleging a failure to consult according to the requirements of an applicable modern award or enterprise agreement.
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