Redundancy: What makes alternative employment ‘acceptable’?

Under the Fair Work Act 2009 (Cth) (FW Act), a redundancy will not be genuine if it would have been reasonable in the circumstances for the person to be redeployed within the employer’s enterprise or that of an associated entity. If an employer offers acceptable alternative employment and the employee refuses, the employer may be entitled to apply to the Fair Work Commission (FWC) to vary the employee’s redundancy pay.

Determining whether employment is acceptable

The test for acceptable employment requires consideration of the totality of the circumstances, including:

pay levels;
hours of work;
seniority;
workload;
job security;
location; and
travel.

Putting alternative employment to the test

In Mater Misericordiae Ltd v Robyn Tyler (2025), the FWC considered the test of acceptable employment. The employee had been engaged as a part-time educator. As a result of structural changes within the employer’s education and training division, the employee’s role was to be made redundant. She had been employed for approximately 6 years, which entitled her to 11 weeks of redundancy pay in accordance with the FW Act.

The employer offered her an alternative position as an educator, on the same rate of pay, with the same number of hours to be performed at similar times, and at the same level of seniority. The employee declined the role as it did not allow her to work from home, which she had been doing in her redundant position. She stated that the new role would negatively affect her work–life balance, and would not accommodate her extracurricular sporting activities and related postgraduate study.

The employer advised the employee that it would apply to the FWC to reduce the employee’s redundancy entitlement if she did not accept the alternative role. The employee did not accept the role, and the employer applied to the FWC to reduce her redundancy entitlement to zero.

In making its application, the employer stated that the alternative role offered the same rate of pay, hours, location, seniority, fringe benefits, job security and workload as her previous role. It also submitted that the employee’s concerns regarding the new position related to her inability to continue working flexibly, but that personal scheduling preferences do not constitute a valid reason to refuse reasonable alternative employment. The employee also did not have an approved flexible work arrangement under the FW Act, nor did she have a contractual entitlement to remote or flexible working conditions.

Ruling whether the alternative employment was acceptable

The FWC held that the employer had complied with all consultation requirements and had offered the employee an alternative role that she was more than capable of performing. When assessed objectively, the FWC was satisfied that, given the same pay, level of seniority and location as the previous role, the alternative position met the test of acceptable employment. In relation to the employee’s argument that she could no longer work from home in the new position, the FWC noted there was no formal requirement or entitlement to work from home under the previous arrangement and that this had been at the employer’s discretion. As such, the FWC found it appropriate to reduce the employee’s redundancy entitlement to zero.

Examining the lessons for you

This case demonstrates to employers that an employee’s preference for flexible work arrangements, lifestyle balance, or study and sporting commitments will not make an objectively acceptable offer unreasonable. If an employee does not have a contractual or legislated right to work from home or flexibly, the loss of that informal arrangement will not justify rejecting a redeployment offer. It also highlights the importance of ensuring that employers follow the consultation processes and clearly document the equivalence of the roles.

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