FWC rejects application to vary redundancy pay for employer’s failure to provide adequate redeployment offer

Applications by Ozland Mining Services Pty Ltd [2024] FWC 1439 and 1440

On 31 May 2024, the Fair Work Commission (FWC) declined to vary the redundancy pay for two fly-in fly-out (FIFO) workers, determining that the offers of redeployment were not ‘other acceptable employment’ due to insufficient time given to assess roster changes which would have decreased their time spent at home.

Ozland Mining Services Pty Ltd (the employer), had applied to the FWC pursuant to section 120 of the Fair Work Act 2009 (Cth) (FW Act) to vary its obligation to pay two dump truck operators’ redundancy pay from six and four weeks respectively to nil. The applications failed on the basis that Commissioner Lim was not satisfied that the employer had obtained other acceptable employment for the employees.

Overview of section 119 and 120 FW Act

Section 119 of the FW Act states that an employee is entitled to be paid redundancy pay by an employer if the employee’s employment is terminated because:

• the employer no longer requires the job done by the employee to be done by anyone; or
• the employer has become insolvent or bankrupt.

The FW Act sets out the amount of redundancy pay, which is calculated on the employee’s period of continuous service with the employer on termination.

However, section 120 of the FW Act states that there may be a variation in the redundancy pay if an employer obtains other acceptable employment for the employee. An employer may make an application to the FWC to determine whether a reduction in redundancy pay is appropriate. This is determined objectively.

Circumstances of employees’ employment and redeployment offer

First employee – Mr Hawkins

Mr Hawkins commenced employment with the employer in December 2021. At the time, he lived in Perth but was based at the Mirgala Creek mine in Western Australia (WA). The employee was on a two-weeks on, one-week off roster (2/1).

In September 2022, he relocated to the Gold Coast. The change in location meant that the 2/1 roster was no longer viable. His supervisor arranged for him to move to a three-weeks on, two-weeks off roster (3/2).

In mid-February 2024, Mr Hawkins was notified that his role was being made redundant. Between 19-20 February 2024, the employer made the employee a redeployment offer on a 2/1 roster based in Coolgardie in WA. Mr Hawkins declined the redeployment offer on 22 February 2024. On 1 March 2024, his employment with the employer ceased.

Mr Hawkins contended that the redeployment offer was not suitable as the 2/1 roster:

• increased frequency of travel and associate travel expenses; and
• meant more time away from his family.

Second employee – Ms Ball

Ms Ball commenced employment with the employer in January 2023. Ms Ball resided in Perth and was also based at the Mirgala Creek mine. Her role was on an eight-days on/ six-days off roster.

In mid-February 2024, Ms Ball was notified of her redundancy. On 19 February 2024, the employer made Ms Ball a redeployment offer for an identical role at the Coolgardie site but on a 2/1 roster. Ms Ball rejected this offer. Her employment with the employer ended on 1 March 2024.

Consideration and determination

The FWC found that both redeployment offers failed to constitute other acceptable employment due to the increased time away from family.

For both employees, Commissioner Lim placed significant weight on the change in rosters for FIFO workers, who spend extended time away from their families.

The FWC was not satisfied that the employees were given enough time between the redeployment offers and the date their redundancies took effect to consider the offers. The FWC found that there was insufficient time for the employees to consider to make suitable arrangements for family life given the impact of the roster change.

Notably, Commissioner Lim gave minimal weight to the fact that Mr Hawkins’ redeployment offer contained an increase of hours and salary, as ultimately a portion of his salary would have been spent on the increased travel expenses to accommodate a 2/1 roster.

The employees were therefore entitled to be paid four and six weeks redundancy pay, respectively.

Lessons for employers

Based on the FWC’s ruling on redundancy pay and roster changes, the key lessons for employers are:

1. Redeployment offers: When offering redeployment to employees facing redundancy, employers should ensure that the offered roles are comparable to the original roles in terms of roster patterns and other key conditions. Significant changes, such as increased time away or increased work hours, may render the redeployment offer unacceptable.
2. Financial and practical considerations: Employers should take into account additional costs and logistical challenges employees may face due to changes in roster patterns, such as increased travel expenses and the need for additional accommodation.
3. Adequate time for consideration: Employers must provide sufficient time for employees (especially FIFO workers) to consider and adapt to substantial roster changes that affect their personal circumstances. In this case, the FWC ruled that 10 to 11 days notice before implementing new rosters was insufficient.

Contact us

If you are an Australian business or individual requiring advice on any aspect of redundancy or redeployment obligations, please contact a member of our Workplace Relations team.