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A recent Fair Work Commission decision highlights a concept that often surprises employees: you may not be entitled to redundancy pay if you are offered acceptable alternative employment.
Under section 120 of the Fair Work Act, the Fair Work Commission (FWC) may reduce or eliminate redundancy pay if an employer obtains other acceptable employment for the affected employee. This is assessed objectively, meaning the role does not need to be identical or preferred by the employee.
Civmec Construction and Engineering Pty Ltd [2026] FWC 599, saw the FWC rule that an electrical engineer who rejected an alternative role has no entitlement to a redundancy payment, finding Civmec adequately explained its offer despite its "clumsy and at times misguided approach.
In early November 2025, Civmec notified the employee that the two projects he was working on would be ending, meaning his role was no longer needed. At the time, he was also informed that another role was available, with the same responsibilities and remuneration, and located approximately 15 minutes from the existing position.
The FWC examined whether the alternative role offered was sufficiently comparable to the employee's previous position and found it acceptable.
What counts as acceptable alternative employment?
When determining whether an employer has offered suitable alternative employment, the FWC assesses comparability across several factors, including:
- Remuneration
- Duties and responsibilities
- Working hours
- Job security
- Seniority of the employee and impact on their career
- Location and travel requirements.
Alternative employment can still be acceptable even if it involves inconveniences or some detrimental alteration to the terms and conditions of employment. It is a matter of degree rather than exact equivalence.
If the FWC finds that the employer obtained another role for the employee and that the role is objectively acceptable, it may reduce redundancy pay - in this case, to nil.
Subtle differences can be legally acceptable, so employees should carefully assess whether the alternative role is genuinely comparable and seek advice if unsure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
