Redundancy pay varied due to offer of alternative employment

The Case

Man to Man Pty Ltd T/A Man to Man v Adele Sleiman (2016)

Ms Sleiman was employed as a part-time sales assistant at Man to Man’s Epping Store in Victoria for more than 5 years. In October 2015, Man to Man closed the store and offered Ms Sleiman what it considered to be “acceptable alternative employment” at its other store in Craigieburn. Ms Sleiman refused the offer because of the extra distance she would be required to travel to work. She sought 10 weeks’ redundancy pay under the National Employment Standards (NES).

Man to Man refused to pay Ms Sleiman 10 weeks’ pay and offered her 4 weeks’ pay instead, given its offer of alternative employment.

The Verdict

The FWC found that Ms Sleiman’s travel costs would increase from $50 to $80 per week and that she would be required to travel an additional 60 km per day (an increase from 90 minutes to 3 hours of daily travel). Given that Ms Sleiman worked from 1pm–6pm, this represented more than half of her actual work hours.

The FWC accepted that Ms Sleiman chose to drive a further distance than was required to avoid toll roads, which she indicated she could not afford to pay.

Nevertheless, the FWC gave credit to Man to Man for offering Ms Sleiman the only redeployment option it had open to it, and hence reduced the NES redundancy payment payable to Ms Sleiman from 10 weeks’ pay to 7 weeks’ pay.

The Lesson

It is very important to consider redeployment options for any employees you choose to make redundant. Not only is it required for most award-covered employees, it can also assist you to:

defend any unfair dismissal claim; and
reduce (if not eliminate) any redundancy payment that might otherwise be payable to the employee.

You will need to check if your business has a more generous severance payment entitlement than the NES under a workplace redundancy policy or employment contract. If it does, you will need to consider whether the relevant policy or contract allows you to reduce the redundancy pay payable if you offer the employee acceptable alternative employment.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.