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) (Act) seeking to vary the redundancy pay of Ms Jenna McArdle. Ms Jenna McArdle objects to the application.

• [2] In its Form F45A - Application to vary redundancy pay (Form F45A), IA sought to vary Ms McArdle'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. 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 Christies Beach, South Australia.

• [5] Ms McArdle was employed as a Recruitment Partner at 3/33 Christies Beach Road, Christies Beach, South Australia. IA says that it identified a suitable redeployment opportunity for Ms McArdle, being the Employment Consultant role, located at 420 Main North Road, Blair Athol, South Australia (Enfield Office). Ms McArdle says the role offered is not suitable alternate employment because of the increased travel time between Christies Beach and the Enfield Office, and her caring responsibilities of her young children and elderly parents.

• [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 McArdle. 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 McArdle'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 McArdle?

• [11] IA says that it obtained other acceptable employment for Ms McArdle, within the meaning of s.120 of the Act, in that it offered her a redeployment opportunity as an Employment Consultant. 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 McArdle's current role is between 8 to 12 minutes one way and that the redeployment role has a proposed travel time, according to Google Maps, of between 46 to 50 minutes one way.

• [13] IA says that during the consultation phase, flexible work options such as different start and finish times, the option to work from home, where feasible, and the option to work from the Maz National Office on Poultney Street, Adelaide CBD was discussed with Ms McArdle. However, while these options were discussed, nothing was agreed or formalised.

• [14] Ms McArdle 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. Ms McArdle's husband is employed in fly-in-fly-out work, and she is solely responsible for parenting duties 50% of the time. She is required to drop off and pick up her children from Outside School Hours Care (OSHC). Ms McArdle says that the redeployment opportunity would require her to leave home for work for a start time of 8:30am at approximately 6:20am every second week whilst her husband is away to drop off her children at OSHC. Additionally, she would not arrive home until approximately 6:30pm or 6:40pm - an hour or less before her youngest child goes to bed.

• [15] Ms McArdle does not accept the travel time asserted by IA. She submits that the redeployment role has a proposed travel time of between 50 minutes to 1 hour and 40 minutes given the current road works in South Australia. Ms McArdle says the increased travel time would increase her commute by approximately 2 hours and 40 minutes, or up to 3 hours each day. She says that the travel time associated with the new role is unreasonable and too significant given her caring responsibilities for her children, and elderly parents.

• [16] At Hearing, Ms McArdle's representative drew my attention to a recent decision of Commissioner Panopoulos, [2025] FWC 3554, in which she dismissed IA's application to vary the redundancy pay due to caring responsibilities. Ms McArdle says her caring responsibilities are similar to those in that Decision.

• [17] Ms McArdle worked for IA for three years and six 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 McArdle's hourly rate of pay is $32.89 per hour.

• [18] It is not disputed that IA obtained the employment for Ms McArdle 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.

• [19] I do not consider the alternate employment at the Enfield Office location is 'acceptable'. While the additional travel time is disputed, I have chosen a figure between the two, being approximately one hour each way. I consider the additional travel time is unreasonable because of Ms McArdle's' caring responsibilities, especially as she has sole parenting responsibilities for 50% of the time. For these reasons, I am not satisfied that the other employment was acceptable.

• [20] As I am not satisfied that IA obtained other acceptable employment for Ms McArdle, the application is dismissed.

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