Redeployed employees were not made redundant

In a recent decision the Australian Industrial Relations Commission (AIRC) has held that 3 employees who were redeployed to another worksite were not made redundant and therefore had no entitlement to redundancy pay.

In August 2008 a Melbourne company (Company) closed down its warehousing/logistic services operation at a site in Melbourne's eastern suburbs.  The Company redeployed 28 of its employees to its other operations in Melbourne's eastern suburbs.  However, 3 remaining employees were redeployed to operations in the western suburbs of Melbourne.

The Company offered the 3 employees each a payment of $5,000 to defray travel costs associated with the new work location.  It also undertook to give the 3 employees priority if appropriate positions in the eastern suburbs became available.  

The Union representing the 3 employees claimed that the Company, by transferring the 3 employees to the western suburbs, was effectively making the 3 employees redundant because the time spent travelling to the new site was substantially more than they currently undertook.  The Union said that the western suburbs work was not reasonable alternative work and claimed a redundancy payment for each employee.

The AIRC however dismissed the application for redundancy payments.  In doing so, the AIRC found that the 3 employees were being offered essentially the same employment with a $5,000 payment to ameliorate their added travel costs to the western suburbs site.

It is well accepted that if an employee is offered and refuses a reasonable alternative role with similar terms and conditions to that which they currently enjoy, the employee cannot claim to have been made redundant. 

Whilst comparison of salary and terms can be a basis of assessment between different working conditions, the relocation of an employee to an alternative place of work is not often the determinant.  This AIRC decision however shows that other relevant considerations are not only the distance to a new work site but also what process the employer puts in place to compensate the employee for additional travel getting to work.  Whilst each case will depend on its own facts, this case does give assistance to realistic and pragmatic alternatives offered by employers in potential redundancy situations.

If you require further information on this please contact either Ian Curlewis 9288 6756 / or Michael Jensen 9288 6944 /

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.