Removing flexibility can undermine redeployment offers, says FWC

The Fair Work Commission recently ruled that reducing an employee’s work-from-home arrangements contributed to a redeployment offer being unacceptable. What does this mean for employers making redeployment decisions in the age of flexibility?

In a recent decision, the Fair Work Commission (FWC) found that removing an employee’s long-standing flexible work arrangement contributed to a redeployment offer being “not objectively acceptable”.

The employee, a compliance officer at a disability services organisation, was made redundant as part of a business restructure earlier this year. The organisation applied to the FWC to reduce her redundancy payment from seven to two weeks on the basis that it had offered to redeploy her to a similar role.

However, closer examination by the FWC called the similarity of the alternative role into question.

Before the restructure, the employee had worked four days per week, with three days from home and one day in the organisation’s Ballarat office. The proposed alternative role narrowed her responsibilities, cut her hours to two days per week and required both days to be spent in the office. 

Together, these changes represented significant shifts in pay, duties and work arrangements, and were enough to persuade the FWC to reject the employer’s bid for a reduced redundancy payout.

While the commission has traditionally focused on pay, duties and location when assessing whether redeployment is acceptable, this case shows that flexible work practices – even informal ones – are starting to carry more weight.

“The commission took into account discretionary work-from-home arrangements when comparing the role that had been made redundant and the alternative that was proposed,” says Will Snow, Director at Snow Legal. 

“A lot of employers think working from home is at their discretion, and they can give it and take it away [at will]. But the commissioner is saying, ‘Your actual work arrangement included those agreed work-from-home arrangements, and that’s what we’ll weigh up in the balance.’”

Below, Snow unpacks what the commission can look for when deciding whether an alternative role is truly “acceptable”, and how flexible work arrangements can sway these decisions.

What makes alternative employment ‘acceptable’?

Under the Fair Work Act, redundancy pay can be reduced if an employer “obtains other acceptable employment” for the employee. 

This is assessed objectively, meaning it’s not about whether the individual wants the job, but whether the new role fairly compares to the old one in substance and conditions.

But what does the FWC look at when determining whether an alternative offer of employment is comparable to the original role?

“They’re looking at the nature of the work and the location – for example, if it means relocating to [a different city], that might not be acceptable,” says Snow. “It’s [also] got to be the same or similar pay, the same or similar level of seniority, and the same or similar education requirements.”

While employers generally know to match an employee’s current pay in a redeployment offer, he notes that they often overlook the seniority factor. If an alternative role involves fewer direct reports or reduces decision-making authority, this can also be grounds for the FWC to deem it unacceptable.

As this case demonstrates, employers should not stop at paperwork when assessing whether an alternative role is suitable. The practical realities of work, including work-from-home arrangements, can form part of what the commission considers the ‘actual role’, and may tip the balance on whether redeployment is acceptable.

“To me, the biggest takeaway from this case is [the importance of] understanding what discretionary flexibilities somebody has in their role,” says Snow.

“If you want them to accept an alternative, or to convince the commission that they should have accepted it, then you’ve got to try and match them.”

Read HRM’s article on what a reasonable redeployment offer looks like.

Redundancy and redeployment considerations for the age of flexibility

This ruling is one of many signals that flexibility is shifting from a discretionary benefit to a core element of how roles are defined and assessed.

Since 2023, certain employees – including carers and those living with a disability – have had the right to formally request flexible work arrangements. Recent AHRI research shows more than three-quarters of respondents (made up of key HR and business decision-makers) would like to see this entitlement extended to all employees.

Naturally, a formally documented flexible working arrangement would make it even harder to remove flexibility in a redeployment offer. Even if redundancy is not the initial intention, winding back a formalised agreement could inadvertently open that door.

“If there is a concrete agreement that [somebody’s] role is remote, and they can do their work from anywhere, and then [the employer says], ‘Hold on, we want to change your role and bring you back into the office,’ that could give rise to redundancy discussions,” says Snow. 

“In that situation, the employee might be able to say ‘Look, that’s not my role – my role is a work-from-home role only.”

However, as this case demonstrates, non-documented arrangements can still shape how the commission views redundancies and redeployment.

“[The informality] didn’t matter at all,” says Snow. “The commissioner said, ‘That’s what you granted to her, so that’s what we’re going to consider,’ even though it wasn’t in the [employment] contract.

“It’s still worthwhile to consider how employers are documenting work-from-home arrangements or agreements. But [keep in mind that] even if you don’t document them, and you continually reiterate that they are discretionary, you still might need to justify them [to the FWC].”

The lesson HR should take from this case, he says, is to scrutinise redeployment offers through the same lens as the FWC. That means looking beyond pay and position descriptions to include reporting structures, seniority and the informal flexibilities that shape how the role is actually performed.

“[Employers need to] unpick all those assumptions and flexibilities when thinking about what’s going to be an attractive, comparable or acceptable role,” he says.

All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.

Learn more about evolving employer obligations around restructuring, redeployment and redundancy at this AHRI webinar on 2 October.

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