Fair Work Act 2009

s.120 - Redundancy pay

Interact Australia Ltd Trading AS Interact Australia

• [1] Interact Australia Ltd (IA) has filed an application pursuant to s.120 of the Fair Work Act 2009 (Cth) (the Act) seeking to vary the redundancy pay of Ms Fiona O'Connell. Ms O'Connell objects to the application.

• [2] In its Form F45A - Application to vary redundancy pay (Form F45A), IA sought to vary Ms O'Connell's redundancy pay to nil on the basis that it had obtained other acceptable employment for her.

• [3] I issued Directions to the parties, and the parties filed material in compliance with the Directions. The matter progressed to a Determinative Conference on 22 December 2025. Ms O'Connell, Mr Jamie Barden, CEO of IA, and Mr Jeremy Gomeze, Senior ER Specialist of IA gave evidence.

• [4] On 1 November 2025, the Australian Government's new Inclusive Employment Australia (IEA) program replaced the Disability Employment Services (DES) program. IA was not successful in its tender submissions for the IEA program and as a result, required redistribution of its employment services locations, including the Plenty region, Victoria.

• [5] Ms O'Connell was employed as a Workforce Partner at the Preston location. IA says that it identified a suitable redeployment opportunity for Ms O'Connell, being the In-Work Support Specialist role, located at Ringwood. Ms O'Connell says that the role offered is not suitable alternate employment because of the increased travel time between Preston and Ringwood, and her caring responsibilities of her elderly parent.

• [6] Section 120 of the Act outlines as follows:

120 Variation of redundancy pay for other employment or incapacity to pay

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(i) obtains other acceptable employment for the employee; or

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.

• [7] Section 120 of the Act confers on the Commission a discretion to reduce the amount of redundancy pay to which an employee would otherwise have been entitled under s.119 of the Act.

• [8] Section 120(1) states that the section applies if an employee is entitled to be paid an amount of redundancy pay under s.119, and the employer 'obtains other acceptable employment' for the employee. These are the jurisdictional facts that must be established before the Commission can exercise its discretion. Section 120(2) of the Act states that the Commission 'may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate'. If the Commission makes an order under s.120(2), the amount of redundancy pay to which the employee is entitled is the reduced amount specified in the determination (s.120(3)).

• [9] IA is not seeking to reduce the payment of redundancy pay to the affected employees because it cannot pay the amount owed. It is not contested that IA 'obtained' employment for Ms O'Connell. The key question to be determined is whether this employment can be considered 'other acceptable employment'. If so, then I must decide whether to exercise my discretion to reduce the amount of Ms O'Connell's redundancy pay.

• [10] The Full Bench of the Commission in _Australian Commercial Catering Pty Ltd v Powell and Togia; Powell v Australian Commercial Catering Pty Ltd_2 outlined the approach to be considered in s.120 applications:

"[35] In considering an application made by an employer under s.120, the Commission must first consider whether either of the circumstances set out in paragraphs (a) or (b) of s.120(1) applies. Consideration under s.120 is enlivened upon an application being made by the employer for a reduction in the amount of redundancy pay otherwise payable under s.119. In dealing with such an application, the Commission must first determine whether the pre-conditions for the application of the section set out in s.120(1) are satisfied - that is, that the employee the subject of the application has an entitlement under s.119 to redundancy pay, and that the employer has either obtained other acceptable employment for the employee or cannot pay the redundancy entitlement.

[36] As was pointed out in the Full Court decision, "The origin of s 120 lies in the decision of the Full Bench of the Conciliation and Arbitration Commission in Termination, Change and Redundancy Case [1984] CthArbRp 284; (1984) 8 IR 34to introduce an entitlement to severance pay for all employees under federal awards whose employment had been terminated because of redundancy". Cases decided in relation to award provisions established pursuant to those test case provisions are therefore relevant in the consideration of s.120. In relation to s.120(1)(b)(i), whether alternative employment obtained by the employer is "acceptable" is to be determined objectively, not by reference to whether the employment is subjectively acceptable to the employee. The determination of whether alternative employment is acceptable requires an assessment and value judgment on the part of the decision-maker. The employer "obtains" other acceptable employment when it acquires or gets the employment by its conscious, intended acts.

[38] Once it is concluded that the preconditions in s.120(1) are satisfied so that s.120 is applicable, it will be necessary for the Commission to determine under s.120(2) whether the employee's entitlement to redundancy pay under s.119 should be reduced and, if so, by how much. This requires the exercise of a broad discretionary power. Any determination by the Commission for a reduced amount of redundancy pay then becomes the employee's entitlement under s.119: s.120(3)."

• Acceptable employment is not identical employment, as no two jobs could be exactly the same.
• An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.
• An employee's prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively 'acceptable.'

Has IA 'obtained' other acceptable employment for O'Connell?

• [11] IA says that it obtained other acceptable employment for Ms O'Connell within the meaning of s.120 of the Act in that it offered her a redeployment opportunity as an In-Work Support Specialist. IA submits that the redeployment opportunity is like for like in all aspects of the role except for the working location and the change in title.

• [12] IA says that the travel time for Ms O'Connell's current role is 30 minutes one way and that the redeployment role has a proposed travel time of 51 minutes one way - as according to Google Maps, when leaving home at 8.30AM. IA says that during the consultation phase, flexible work options such as different start and finish times and the option to work from home where feasible, was discussed with Ms O'Connell. However, while options were discussed nothing was agreed or formalised.

• [13] Ms O'Connell says that the employment obtained cannot be considered 'other acceptable employment'. She submits her personal circumstances, and caring responsibilities are relevant to the consideration of whether other employment offered is acceptable.

• [14] Ms O'Connell does not accept the travel time asserted by IA and submits that Google Maps is not always accurate. She says that when she recently undertook the commute, leaving home at 7.55AM it took 1 hour and 17 minutes. She says that in addition to the office being located in Ringwood, the servicing of clients for this new region extends beyond the Ringwood location, which potentially adds more travel time, whereas previously the most time she has had to travel is 35-40 minutes. Ms O'Connell says that the travel time associated with the new role is very unreasonable and too significant as she needs to be nearby and work in the current region due to her mother's declining health.

• [15] Ms O'Connell worked for IA for three years and ten months. There is no dispute, and I am satisfied that she is entitled to seven weeks of redundancy pay pursuant to s.119 of the Act. Ms O'Connell's hourly rate of pay is $34.0789.

• [16] It is not disputed that IA obtained the employment for Ms O'Connell within the organisation and that the role offered had the same remuneration (including the use of a vehicle), and seniority as her redundant role. While I note that the title of the role obtained was different, the duties were the same, and as such I do not consider this to be material.

• [17] I consider the alternate employment at the Ringwood location is not 'acceptable' as I consider the additional travel time to be unreasonable because it adds, at a minimum approximately 47 minutes, each way. This additional travel time and distance also impact Ms O'Connell's ability to manage her caring responsibilities. I have taken into consideration the discussions about flexible work options, however, they were not formalised and did not adequately address the concerns raised by Ms O'Connell in relation to managing her caring responsibilities. For these reasons, I am not satisfied that the other employment was acceptable.

• [18] As I am not satisfied that IA obtained other acceptable employment for Ms O'Connell, the application is dismissed.

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