We have recently restructured and several positions were made redundant. All affected staff were offered redeployment to other positions. One employee refuses to sign their new contract. They claim they are being disadvantaged in terms of pay because other employees who were on a lower salary have been redeployed into roles at the same pay level as this employee. This employee’s pay would actually increase with the redeployment – it seems the objection is to other employees’ pay also increasing. If they refuse to sign their new contract, do they become redundant and are we required to pay them redundancy pay?
Generally, if an offer of redeployment is rejected, the employee will become redundant, and you will be required to give that employee redundancy pay. Under the Fair Work Act 2009 (Cth), it is possible to apply to the Fair Work Commission to vary (potentially to nil) the amount of redundancy pay, provided that the redeployment offer is deemed to be a ‘suitable’ or ‘acceptable’ alternative employment offer.