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Considering what is acceptable employment in an application to reduce redundancy pay

The case of Real Property WA Pty Ltd ATF Real Property WA Trading Trust T/A Real Property WA 2020 FWC 2013 concerned an application by the employer, Real Property WA Pty Ltd, for an order pursuant to section 120 of the Fair Work Act 2009 (Cth) to reduce the redundancy pay to be paid to Ms Lau on the grounds that the employer had found other acceptable employment.

The employer decided to restructure its business, resulting in the redundancy of Ms Lau. As per the applicable Award and the Fair Work Act 2009 (Cth), Ms Lau was entitled to 6 weeks’ redundancy pay. The order sought by the employer was to reduce the amount of redundancy pay from 6 weeks to 2 weeks.

The Fair Work Commission (FWC) considered the circumstances of the affected employee and the nature of the alternative employment they had secured. As cited by the FWC “In this case Ms Lau was expected to work the same hours of work performing duties she had previously performed for a salary much lower than what she had previously been paid to perform those duties. The reduction in salary would also have had a consequential adverse impact on other benefits such as her accumulation of superannuation savings. Her job security until she completed her probationary period was less secure. The scope of duties which she could be required to perform was reduced. Her position title was changed to one which suggested lesser seniority.”

The FWC did not grant the request to reduce the redundancy payment for Ms Lau as the FWC was not satisfied that the position that was offered to Ms Lau was acceptable employment.

The case showed that employers can apply to reduce redundancy payments if an employee obtains other acceptable employment within a certain timeframe. However, the FWC will assess each case on its merits and make a decision based on the specific circumstances of the case.

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