Redundancy and Obtaining Alternative Employment

When an employer was making some employees redundant, it worked with another business to obtain offers of employment for those employees. As a result of those efforts, some of the redundant employees were offered employment with that other firm.

So the employer made an application under the Fair Work Act for relief from redundancy payment obligations on the basis it had ‘obtained other acceptable employment for the employee’.

But one employee objected, saying that she was offered a job by the new employer but that the actual decision to employ her was made by that company’s CEO not her old employer, so she should be paid her redundancy. This was despite the fact the job offer to the employee included a 15% higher salary, higher superannuation and a longer term than her old job. She finished work with her old employer on 31st July and started with the new employer on 2ndAugust.

Further, she indicated that her old employer did not offer her suitable alternatives within its structure but merely indicated that vacancies existed. She said none of them were suitable.

But FWC said the relevant provision of the Act meant that obtaining alternative employment “is not limited to redeployment opportunities within the business of the employer making the application. Rather ‘obtained’ extends to employment offers secured by the employer with other employers.”

The FWC found the old employer had been involved in considerable efforts to find alternative work for the employees affected and had succeeded in a number of cases.

The evidence which impressed the FWC to waive redundancy pay obligations completely was that the old employer approached the new employer well before the employee’s discussions with the new employer. It urged the new employer to not focus on the logistics of placements but to make employment offers based on merit, indicating that to be a more efficient way of proceeding. The new employer was persuaded by these efforts and made the job offers.

In this case, the old employer corresponded with the affected employees to inform them that it was trying to secure alternative employment for them. But it did not elaborate on some of the details of its discussions with the new employer, leading the employee into the false assumption that the new employer had initiated the offer of employment.

Employers are entitled to claim exemptions from redundancy pay obligations if “the employer (has) procured an offer of employment whether or not it is accepted by the employee”. The employer undeniably did that in this case; it was not merely a token gesture, or introduction. But it did not make the extent of its endeavours known to the employee. The lesson here is the clearer such efforts are to the affected personnel, the less likely will be doubt about who did the heavy lifting.

Chamber of Commerce & Industry (WA) v Dogello [2021] FWC 6033 (19 October 2021)


By Ross Clarke and Shane Coyne