Relocation required — is redundancy payable?

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Relocation required — is redundancy payable?

Does an employer have to pay redundancy pay to employees who reject offers of alternative employment at a different location much further away?

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Does an employer have to pay redundancy pay to employees who reject offers of alternative employment at a different location much further away?

This question was recently sent to WorkplaceInfo.

Q  We have a number of employees employed in administrative positions currently working on a site in central Queensland. However, because of a downturn in the company’s business, these positions will become redundant at the end of the financial year. We intend to offer to relocate them to our Brisbane head office where similar positions are available. The majority of these employees are long-time residents of the local town and, in all likelihood, will not accept a position offered in Brisbane. If any of these employees refuse to relocate to Brisbane, would there be an entitlement to redundancy pay in these circumstances?

A  The location of where an employee carries out their duties is regarded as a condition of the contract of employment. An employee who is transferred by the employer to another locality may be a sufficient change to the employment contract that the employee’s position is redundant.

Generally, the following factors have been considered by Fair Work Australia (and its predecessors) to be relevant when determining an employee entitlement to redundancy pay. These factors are not exhaustive nor is any particular factor a greater determinant than the other:
  • similar alternative employment is offered at the new location (ie similar remuneration and employment status)
  • the amount of notice given by the employer to employees of the planned relocation
  • whether or not there is a total rejection of the relocation or whether some employees accept the alternative offer
  • whether the new location offers similar or improved public transport facilities
  • the additional time taken and the number of kilometres travelled by employees to the new location.

In the above circumstance, because the distance between the current location and the offered new location would require each employee to relocate their place of residence to Brisbane, the positions offered at head office would not appear to be regarded as acceptable alternative employment and, consequently, the employees would be entitled to redundancy pay.

Source: Paul Munro, IR Consultant.
 
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