How far is too far when offering alternative employment?

The Fair Work Commission's (FWC) recent decision of Spotless Services Pty Ltd has provided some clarity in determining what constitutes acceptable alternative employment when an employee's position becomes redundant.

Facts

Spotless Services Pty Ltd made an application to the FWC to vary the redundancy pay of two employees who had been offered (and rejected) alternative employment. The two employees had been advised that their current roles in Tomago, NSW were redundant, however alternative employment had been identified for them, on the same hours and rates of pay in Eraring, NSW.

The respective employee's contracts of employment contained a clause providing for relocation of employment.

The employees declined the offer of alternative employment due to the additional time and distance to travel to work. The alternative employment involved an increase in distance of approximately 33.7km and an extra 25-30 minutes of travel time each way per day.

Consideration

The FWC considered that there were a number of principles involved in determining this matter as follows:

• acceptable alternative employment should be determined on its facts;
• rejection by the employee of alternative employment does not make it unacceptable;
• equivalent/comparable rates of pay, including hours of work and continuity of service are important and relevant considerations;
• to be acceptable, the new employment needs to take into account the employee's skills, seniority, experience and capacity to perform the job;
• location and additional travel times to and from work are a consideration. For instance, offer of employment in another state would not ordinarily be acceptable employment;
• acceptable employment need not be identical employment; and
• employees should not unreasonably refuse offers of alternative employment merely because they wish to access the benefits of a redundancy payment.

Findings

The FWC found that even though the employees would have incurred extra cost and inconvenience, this did not constitute a sufficient basis for refusing the offer of alternative employment at Eraring. The alternative employment was found as acceptable employment and the employees were not entitled to redundancy pay.

Summary

This case provides some guidance to employers in the consideration and the management of an offer of alternative employment to employees where their position has become redundant and in what circumstances an employee's refusal of acceptable alternative employment may result in reduction to their redundancy payment.

Special provisions apply to the offer of alternative employment and redundancy generally. We recommend that employers seek legal advice prior to implementing redundancies.

If you would like more information about the case, or implementing redundancies generally, please contact National Workplace Lawyers on +61 2 9233 3989. 

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.