Fair Work Australia (FWA) has held that an employee was not offered “acceptable alternative employment” after his position was made redundant, because both proposed positions were paid at lower rates and one of them was not of a “like nature” and would not have properly utilised his skills.

The employer advised the employee that his position would be made redundant. The employer obtained what it considered to be “an equivalent position” for the employee at another company, but on a lesser wage. The employer also offered the employee a lower paid position within its own business. It was not disputed that the employee was entitled to redundancy pay, however, the employer applied to FWA to have the redundancy pay reduced to zero on the grounds that it had obtained “acceptable employment” for the employee.

FWA dismissed the application on the basis that the position at the other company was not “acceptable employment” because it:

  • was lower paid and “of a different character” to the work performed by the employee;
  • involved work the employee “was not trained to do” which did not utilise his skills; and
  • would have involved a “significant career change”.

FWA noted (perhaps controversially) that it did not consider the phrase “acceptable employment” included employment with the employer, but even if it did, the alternative position with the employer was not acceptable employment “as it was at a substantially lower rate of pay”.

Hi-Class Composites Pty Ltd [2012] FWA 7814