Redundancy and relocation

The relocation of a workplace does not inherently trigger the redundancy of an employee’s position. 

However, in circumstances where the relocation of an employee’s position does trigger a redundancy, the specifics of the relocation can impact on the amount of redundancy pay an employer may be obligated to pay the employee.

If an employee refuses to accept an offer to relocate to the new location of work, the employer can make an application under section 120 of the Fair Work Act 2009 (Cth).  The Fair Work Commission can make an order that either reduces or eliminates the requirement to pay redundancy pay, provided that the employer can demonstrate:

1. That the employer has obtained acceptable employment for the employee; or
2. That the employer cannot pay the amount (of redundancy pay).

Many factors can be considered when determining if the role obtained for the employee constitutes ‘acceptable employment’.  Some of those factors include:

• the terms of the employee’s contract in regard to where work will be performed;
• the amount of notice given by the employer to the employees of the planned relocation;
• public transport availability to the new site;
• the increased time and distance the employee will be required to travel from home to the new site;
• an employee’s carer responsibilities restricting their ability to travel or relocate, such as a requirement to pick up children from childcare by a certain time;
• whether any financial assistance has been offered to employees to alleviate any financial burden of the relocation; and
• the offering of flexible working practices to accommodate an employee’s extra travelling time.

Applications relating to multiple employees will consider each employee on a case-by-case basis.  This can result in situations where some employees have their redundancy payments reduced, while others do not.