s.120 - Redundancy pay

Australian Footwear Pty Ltd Trading AS Munro Footwear Group

Application for variation of redundancy pay - application granted

• [1] On 1 August 2025, Australian Footwear Pty Ltd (company) applied for an order under s.120 of the Fair Work Act 2009 (the Act) to reduce the redundancy entitlement of Miss Rebekah Hughes. Miss Hughes was employed full-time in the position of Store Manager at the company's 'Mathers' store in Orange NSW, which ended on 9 July 2025.

• [2] Miss Hughes will have worked for the company for one year and four months and will be entitled to 4 weeks redundancy pay pursuant to s.119 of the Act.

• [3] The company has applied to reduce Miss Hughes' redundancy entitlement amount to $1,227.30 because it offered her an alternative role as 'Second-in-Charge (2IC)' in its 'Williams' store in Orange. It contends that this is "other acceptable employment' for the purposes of s 120(1)(b)(i). Miss Hughes accepted the offer and does not oppose the application.

• [4] Section 120 of the Act gives the Commission the discretion to vary a redundancy entitlement to which an employee would otherwise be entitled to under s.119 of the Act. Section 120 applies if the employee is entitled to an amount of redundancy under s.119 (s.120(1)) and the employer either obtains 'other acceptable employment' or cannot pay the amount of the redundancy (s.120 (1)(b)). The Commission's discretion in s.120(2) to vary the redundancy pay to a specified amount (including a nil amount) that it considers appropriate, can only be exercised if the conditions of s.120(1) are met. Where an order under s.120(2) is made, the reduced redundancy to which the employee is entitled, will be the amount specified in the determination (s.120(3)).

• [5] In this matter, I need to consider whether the company obtained 'other acceptable employment' for Miss Hughes, and if so, whether I should exercise my discretion to reduce the amount of her redundancy pay.

• [6] Miss Hughes is currently employed by the company at the 'Mathers' store in Orange NSW. As a consequence of the company's lease on this property expiring on 9 July 2025, discussions were held on 23 May 2025 before Miss Hughes and the company. These discussions involved an offer by the company for redeployment to its 'Williams' store in Orange NSW as a part time Second-in-Charge (2IC). On 10 June 2025 Miss Hughes informed the Applicant that she formally accepted the offer to transfer to work at the Williams store in Orange NSW.

• [7] The company submitted that it obtained acceptable employment for Miss Hughes within the meaning of s.120 of the Act. It said it offered Miss Hughes a suitable role as Second-in-Charge in its store in Orange. They submit that the four weeks redundancy amount to which Miss Hughes is entitled should be reduced by an amount that reflects the difference in the annual salary she receives in her current position as Store Manager and the salary she will receive in her new position at the Williams store. That is, they submit that the redundancy amount of $4,909.23, to which Miss Hughes is entitled, should be reduced to $1,227.30. Miss Hughes does not object to this submission.

• [8] It is not in dispute that the company obtained other employment for Miss Hughes. It offered her employment at its Williams store in Orange. The offer was made in good time before the employment at Mathers Orange store was to end. This is relevant because s.120 applies only where the employer obtains 'other acceptable employment for the employee'; that is, Miss Hughes must have been an employee when the offer was made.

• [9] Miss Hughes agreed to the company's offer of redeployment. The question of whether the other employment is 'acceptable' is an objective assessment. The 'other employment' will necessarily be different in some regard to the existing employment. In assessing whether other employment is acceptable, it is relevant to consider the differences between the existing employment and the role that has been offered and accepted by Miss Hughes.

• [10] The location of the current employment is in Orange and the new role is in Orange. The distance between the two locations is approximately 350 metres. Further, the distance to the Williams store is 800 metres further than the Mathers store from Miss Hughes' residence. The roles differ in that in her current employment, Miss Hughes is the Store Manager (full time) and she is moving to a position where she is effectively the deputy Store Manager (part time) with a reduced remuneration of $16,797.01 per annum.

• [11] The 'other employment' offered does not need to be the same as Miss Hughes' current job. The question I need to answer is whether the other employment offered by the company to Miss Hughes was objectively acceptable; that is, capable of being agreed to or suitable. The work offered is somewhat less challenging and remuneration is about 26% lower than her current salary, but it is in the same industry, the same field of work and in a location close to the current place of employment. On balance, I find that the company did obtain 'acceptable other employment' for Miss Hughes for the purposes of s.120(1)(b)(i) of the Act.

• [12] Having satisfied the requirements of s.120(1), I must now consider whether to exercise my discretion to reduce Miss Hughes' redundancy pay. In my view, and taking all the relevant matters into consideration, it is appropriate to reduce Miss Hughes' redundancy pay.

• [13] I am satisfied that the company obtained other acceptable employment for Miss Hughes, and that in the circumstances I should exercise my discretion to reduce the redundancy pay to which she is entitled to 1 week pay.

• [14] An order will be issued separately reflecting this decision.

Ms P. Preston, People Services Manager (Applicant)

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