Fair Work Act 2009

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

Metcash Trading Limited trading as Independent Hardware Group

Application to vary redundancy pay - other acceptable employment - amount of reduction

• [1] Metcash Trading Ltd (Applicant) has made an application under s.120 of the Fair Work Act 2009 (Cth) to vary the redundancy pay that would otherwise be payable to its former employee, Mr. Adam McClure (Mr. McClure or Respondent), under the National Employment Standards contained in the Act.[1] On the basis of the Respondent's length of service with the Applicant of in excess of 10 years, the Respondent would ordinarily be entitled to receive a redundancy payment equivalent to 12 weeks' pay. The Applicant has asked that the amount be reduced to nil on the basis that they obtained other acceptable employment for Mr. McClure.[2]

• [2] The Respondent did not appear at the initial directions hearing and directions were made for him to file and serve a response to the application. The Respondent did not file any material in response to the directions. The Applicant provided a written submission, a witness statement and various documents in support of its application. The parties were advised that the matter would be determined on the papers. In determining this matter, I have not had the benefit of any material provided by the Respondent.

• [3] According to the uncontested material from the Applicant, the Respondent was previously employed by them since 2006. The Respondent's most recent role with the Applicant was in the position of Systems Administrator. A position description for that role was provided. As a result of a restructuring of the Applicant's operations, the Respondent's position was made redundant.

• [4] A consultation process for that redundancy commenced on or about 3 April 2025. At that time, the Respondent was offered redeployment to a different position with the Applicant. That position was for the role of Retails Systems - Support Desk Analyst. A position description for that role was also provided. The second position was located at Heatherton in Victoria which is approximately 21.5 kilometres from the Respondent's previous workplace in Richmond. The Respondent resides in Richmond in close proximity to his previous workplace. In his previous position, on occasions when he was required to travel to the Applicant's stores, the Applicant would be provided with a company vehicle.

• [5] The Respondent was advised that if he accepted the alternative position he would only be required to attend the Heatherton premises in the new role for three days per week. He was also advised that the position would involve a rolling roster of start and finish times and an occasional requirement to be on-call. The Respondent was told that he would be able to make a request for flexible working arrangements to suit his circumstances, including varied hours and/or location of work. Those arrangements were to be subject to discussions with and approval by his new line manager. The Respondent was told he would have the opportunity for a delayed change to the new position for 6 weeks to allow him to work out alternatives for his outside of work commitments. The remuneration that was offered to the Respondent if he were to accept the alternative position was the same as his previous position.

• [6] On 29 April 2025 the Respondent formally declined the offer of alternative employment. The Respondent's employment with the Applicant ended on 30 April 2025. At or about that time, the Respondent was advised that an application would be made to the Fair Work Commission to vary the amount of his redundancy entitlement.

• [7] The Respondent's reasons for rejecting the offer of the alternative position are set out in an email to the Applicant dated 16 April 2024. He said in that correspondence that the new position involved a significantly larger scope of work and the need to learn new systems without any corresponding adjustment in pay. The email goes on to provide:

....the role requires a change to rostered (sic), rolling start and finish times, whereas my current position offers flexibility in my work hours. This is a notable shift in my schedule and lifestyle.

Additionally, the new role requires on-call availability, including after hours and weekends. This was not a requirement in my previous position, and there is no additional compensation offered for this.

Another concern is the shift to an in-office requirement, even if it is only for a few days a week. Currently, my role is fully remote and does not require any in-office attendance.

The new role also involves increased commuting time. The commute from my previous workplace to the new location is 30 minutes by car, assuming a vehicle is available. My previous position provided access to a company vehicle, and for a times, a car was even provided in my name. However, the new role does not offer a company vehicle, so I would have to rely on public transport. According to Google Maps, the travel time is 1 hour and 32 minutes, compared to my current 10-minute walk. This change also brings increased travel costs, both for fuel and public transport.

Finally, delaying the transition by six weeks would not affect the situation, as the new role is not a direct replacement of my current position within the company. While both roles involve working with similar systems, the roles are quite different in terms of responsibilities.

The new role demands more work, more travel, increased costs, and less flexibility, without offering compensation for after-hours or weekend duties.

• [8] Section 120 of the Act provides:

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.

• [9] The question of whether an employer has obtained "other acceptable employment" for an employee in a redundancy situation is an objective question to be answered by reference to objective factors. The other acceptable employment does not have to be employment that is personally acceptable to the employee.[3] In Australian Chamber of Manufacturers v Derole Nominees Pty Ltd[4] in relation to the expression 'acceptable alternative employment' the Full Bench said:

What constitutes 'acceptable alternative employment' is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification 'acceptable' is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.

• [10] It is also well-established that other acceptable employment does not necessarily mean identical employment.[5] The Commission will generally have regard to a range of factors to determine whether the employment is acceptable employment. These might include the duties and the nature of the work, pay, hours, seniority and location.[6]

• [11] Having considered the available evidence I am satisfied that the position that was offered to Mr. McClure was other acceptable employment within the meaning of s.120(1)(b)(i). I note in particular that there would have been no reduction in pay and there does not appear to be reduced seniority attached to the role but rather the position involved, as the Respondent described it, a larger scope of work.

• [12] A conclusion that the employer has obtained other acceptable employment for the employee does not necessarily mean that the redundancy pay will be reduced to nil. The Commission has a broad discretionary power[7] to determine whether there should be a reduction and if so, what the appropriate amount of such a reduction should be.

• [13] In this instance I consider that it is appropriate to reduce the redundancy pay that is payable to the Respondent. In doing so I have taken into account all of the available evidence including evidence relating to the steps taken by the Applicant to provide alternative employment with commensurate remuneration within the vicinity of the Applicant's premises and the Respondent's private residence. However, even though I have not had the benefit of evidence from and submissions by the Respondent, it appears to me on the documentary material that there were significant differences in the two roles that would warrant a reduction which was less than the 100% reduction of the Respondent's entitlements as sought by the Applicant.

• [14] The position description for the alternative position refers to a requirement for the employee filling the position to be able to provide support for a range of operating technology systems that are not referred to in the position description for the Respondent's previous position. The Respondent described the role as working with similar systems but with different responsibilities but also said that he would be required to 'learn multiple new systems'. Mr. Haase, the Applicant's Group Commercial Manager, provided a brief statement outlining the reasons for the redundancy and suggesting that certain work with different systems would not be part of the Respondent's remit. However, it appears to me on the evidence that the Respondent could have been required to learn and exercise additional skills in the alternative role.

• [15] Further, the position description for the alternative position refers to "24x7 after hours support on rotational basis" for certain stores and on-call support, whereas the description for the previous position refers to after hours and weekend/public holiday support for some system users. According to the Respondent's correspondence there was no additional remuneration offered for the requirement for on-call availability. Rolling start and finish times was also a different requirement to the previous position.

• [16] There is also the requirement for in-office attendance with the alternative position, subject to requests for flexibility, whereas the Applicant described his previous position as remote with no minimum required office attendance.

• [17] The Respondent also pointed out in his correspondence that as he did not have a vehicle and the Applicant was not proposing to supply a work vehicle, the commuting time by public transport would be one hour and 32 minutes as opposed to the 10-minute walking distance to the Respondent's previous workplace. I note that the position description for the alternative position also required employee availability for interstate travel for periods of up to a week, a matter not referred to in the position description for the Respondent's previous position.

In short, although there was other acceptable employment offered to the Respondent, I am of the view that there were sufficient differences between the two positions to warrant a reduction of the Respondent's entitlements to 25% of the amount to which he would be entitled under the NES. An order to this effect will accompany this decision.

[1] See s119.

[2] See s.120(1)(b)(i).

[3] Sodexo Australia Pty Ltd [2016] FWC 4012 at [127].

[4] [1990] AIRC 980; (1990) 140 IR 123

[5] Sodexo Australia Pty Ltd op cit and Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia, 21 November 2006 [PR974699] at [89].

[6] See for example Oscar Oscar Group Services Pty Ltd v Lees [2012] FWA 3901 at [19], Vicstaff Pty Ltd T/A Stratco [2010] FWA 3141

[7] FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90 at [21].

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