Full-time to part-time — redundancy pay entitlement?

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Full-time to part-time — redundancy pay entitlement?

A substantive change to an employee’s conditions of employment can give rise to redundancy entitlements, and this issue can arise when an employee is redeployed from full-time to part-time employment.

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A substantive change to an employee’s conditions of employment can give rise to redundancy entitlements, and this issue can arise when an employee is redeployed from full-time to part-time employment.
 
This question was recently sent to our editorial team.
 
We have a clerical position which, due to a downturn in our business, is no longer required as a full-time position but could continue as a part-time position.
 
If the employee accepts an offer of part-time employment for this position, is she entitled to redundancy pay (we employ more than 15 employees) or do we just agree to reduce her ordinary weekly hours and provide the appropriate notice prior to doing so?
 
In this case, the relevant obligations are provided by the National Employment Standard (NES) as well as the applicable modern award, in this case the Clerks — Private Sector Award 2010
 
The modern award requires the appropriate period of notice be given to the employee (or payment in lieu thereof) as if the employee were being terminated.
 
Whether the employee is entitled to redundancy pay in this circumstance is then determined by the NES.
 
Under s389(2) of the Fair Work Act 2009, a redundancy is not genuine if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or the enterprise of an associated entity of the employer. This circumstance could be described as a redeployment within the organisation.
 
Reasonableness of any proposed redeployment
 
The factors taken into account about the reasonableness of any proposed redeployment in relation to a redundancy are the same as with an employer’s offer of other acceptable employment.
 
Over the years, industrial courts and tribunals have considered several factors when determining the suitability of an employer’s offer of other acceptable employment to an employee whose original position has become redundant.
 
The factors Fair Work Australia (FWA) would consider in this circumstance include: pay levels, hours of work, nature of the employment, employment status seniority, skills and qualifications, location of new position, loss of fringe benefits, job security.
 
A substantial drop in salary, for example, involved in the part-time position could be regarded as unreasonable, as well as a reduction in benefits associated with part-time employment. Job security may also be an issue if the part-time position is expected to be of a temporary nature.
 
See also Other acceptable employment, for more detail. 
 
In making a claim for redundancy pay in this circumstance, the Act allows FWA to make an adjustment to the total of redundancy pay (graded down to nil) where the employer arranges other acceptable employment.
 
Source: Paul Munro, IR Consultant.
 
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