The Fair Work Commission has held that an employer’s offer to relocate an employee to a remote town in northern Western Australia in a lower paid position with less seniority was not acceptable alternative employment.
Implications for employers
When considering what constitutes acceptable alternative employment, an employer should consider, among other things, the employee’s skills/experience and job security. If relevant, employers should also take into account the reasonableness of any reduction in salary, changes in the number of hours required to be worked, and variations in the employee’s seniority. Additionally, if the new position requires relocation of the employee, it is important to consider costs associated with the relocation and extra travel time.
The respondent, Ms Margaret McEniery, was employed by Children’s Services Support Unit Inc (CSSU) as a Regional and Remote Coordinator of Wickham’s out-of-school care program. Among other things, Ms McEniery’s contract provided that she would relocate to other CSSU services as required. Ms McEniery’s employment was terminated because the CSSU ‘no longer required the job she was doing to be done by anyone’.
Upon being made redundant, the CSSU offered Ms McEniery an alternative position as the Contact Coordinator 2IC at the Dampier Early Learning Centre. This would require Ms McEniery to relocate to Karratha in northern Western Australia, approximately 20 kilometres from Dampier Early Learning Centre.
Additionally, Ms McEniery’s hourly rate of pay in the alternative position would decrease by 19%. The redundant position involved caring for children between ages five and 12, whilst the alternative position would involve dealing with children under five years of age. The duties and responsibilities of the two positions were similar.
Pursuant to section 120 of the Fair Work Act (FW Act), the CSSU applied for orders varying the redundancy pay Ms McEniery was entitled to. The Commission was required to determine whether the offer of alternative employment was acceptable and if so, whether the amount of redundancy pay payable to Ms McEniery should be reduced.
Commissioner Williams did not accept that the Contact Coordinator 2IC position was acceptable alternative employment for the purposes of section 120 of the FW Act. Among other things, Commissioner Williams held that;
- a 19% reduction in pay was sufficiently significant, particularly given there were no other benefits to offset this;
- it was likely there would be an increase in net housing costs which would have a negative impact on Ms McEniery; and
- the reduction in Ms McEniery’s seniority was a significant negative consequence of the alternative position.
Commissioner Williams found that the requirement to move to Karratha did not of itself result in the alternative position being unacceptable, particularly given that Ms McEniery’s contract of employment stipulated that she may be required to relocate if necessary. In addition, the fact Ms McEniery would be dealing with children of a different age group was not enough to indicate that the alternative employment was not acceptable.
Commissioner Williams noted that whether alternative employment is suitable should be determined objectively and not from the subjective perspective of the employer or employee. Ms McEniery was entitled to the full benefits of her redundancy pay.