Fair Work Act 2009

s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Frameworks International Pty Ltd Trading AS Frame Today

• [1] Frameworks International Pty Ltd Trading AS Frame Today (Applicant) applied under s.120 of the Fair Work Act 2009 (Act) seeking to reduce the redundancy pay entitlement of its former employee, Ms Beatriz Gardeazabal (Respondent). The Applicant is seeking for the varied obligation to be nil on the ground that it obtained other acceptable employment for the Respondent.
• [2] The Applicant operates a number of stores providing custom picture and photo framing. Ms Gardeazabal worked at a store in Caringbah in Sydney, NSW as a Retail Assistant/Picture Framer. She commenced working for the Respondent on 7 February 2023 on a full-time basis in accordance with a contract entitled Full Time (Award) Employment Contract. In July 2023 Ms Gardeazabal hours were reduced to 20 per week to accommodate her working visa restrictions.
• [3] In July 2025, due to a downturn in business, the Applicant reduced the number of full-time employees at the Caringbah store. The respondent's position was to be made redundant. The Respondent consulted with Ms Gardeazabal about the redundancy. In order to mitigate the impact on Ms Gardeazabal the Respondent offered two alternative employment arrangements a reduction in hours at her current location at Caringbah to 12 hours per week, or a transfer to a nearby store in Alexandria. The role in Alexandria maintained the same hours, days, pay rate, and role. Ms Gardeazabal decline both options. At the time of Ms Gardeazabal dismissal she was working 20 hours per week.
• [4] The National Employment Standards provide that in circumstances of redundancy an employee is entitled to a severance payment. The amount of severance payment payable is set out in s. 119. In Ms Gardeazabal's case the amount is 6 weeks' pay. Section 120 allows an employer to apply to the Commission seeking that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the Commission considers appropriate. The employer may make an application if it obtains other acceptable employment for the employee.
• [5] The factors to be taken into account when considering whether alternative employment is "other acceptable employment" are set out in a decision of Deputy President Easton in Transport Workers' Union of Australia v Toll Holdings Pty Limited [2024] FWC 2738. They include where an offer of a similar or same job is made but in a different location and whether that location is not an unreasonable distance from the initial employment including changes to travel arrangements.
• [6] Ms Gardeazabal explained that she did not accept the first offer because was not financially feasible. She would need to find a second job and due to her visa restrictions, she cannot work more than 20 hours a week. Consequently, it would be difficult to find a second job for only 8 hours per week. She pointed to the low paid nature of the work and the difficulty of living on less than half the minimum wage.
• [7] As for the second option, Ms Gardeazabal was also unable to accept it as she only travels by public transport and not only would it take approximately twenty minutes extra to get to the Alexandria store but the cost of public transport for her would double.
• [8] On balance, I consider that the offer made to Ms Gardeazabal to work at the Alexandria store meets the description of other acceptable employment. The added time and cost of getting to Alexandria is a factor however I do not consider it made the offer unreasonable. Consequently, I may reduce the amount of severance pay payable to Ms Gardeazabal under s. 120. The amount of the reduction is a matter of discretion. The Commission may reduce the amount payable, or it may not. If it does it must be to an amount that the Commission considers appropriate. That amount may be nil.
• [9] I consider that the Applicant made genuine attempts to offer Ms Gardeazabal alternative employment. I am however cognizant of the purpose of severance pay in redundancy situations. That purpose is to provide financial support for employees who lose their job due to operational changes introduced by their employer. It acts as a financial bridge to help employees manage the period between losing their job and finding new employment. Beyond financial loss, redundancy pay also compensates for; loss of job security, loss of non-transferable benefits such as personal leave, and the emotional and social impacts such as diminished status or job satisfaction. In this case Ms Gardeazabal was, due to her visa restrictions, and the nature of her employment, on low pay. The impact of losing her job would be significant to her. The loss of a job, albeit a low paying job, that suited her situation was a significant impost on her.
• [10] Consequently, I have decided in this case not exercise my discretion to reduce the severance pay due to Ms Gardeazabal.
• [11] The application is dismissed.

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