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March 17, 2021

Question from Kay Macsween ([email protected])

We have recently restructured and several positions were made redundant. All affected staff have been offered redeployment to other positions. One employee is refusing to sign their new contract, citing being disadvantaged in terms of pay because other redeployees who were on a lower salary are all now on the same pay level. This employee’s pay has not been reduced and is in fact several hundred dollars more p.a. than current salary.

If they refuse to sign their new contract, do they become redundant and are we required to pay them redundancy pay?

Hi Kay,

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, 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.  Whether such variation would be made in this circumstance cannot be said, given that this determination is made by the Commission.

Kind regards,

Matthew Gough

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