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An Offer You CAN Refuse – Increasing Travel Time Held to be an UNREASONABLE Offer of Redeployment

The Fair Work Commission (Commission) has recently ruled that travelling an additional 20 minutes each way to a job is unreasonable for an employee. This was decided by the Commission in the context of considering whether an employee had been offered reasonable redeployment during a business restructure.

The Facts

Eagers Automotive made an application to the Commission to reduce the required amount of redundancy pay from 12 weeks to zero for a former employee. The employer argued that the employee had unreasonably refused an alternative offer of employment in the same organisation which was located 40 minutes’ drive from the previous place of employment.

Eagers Automotive had offered two alternatives to the employee, Mr Varcoe, at related dealerships. For one of those options, the employer offered to pay for a work car and fuel which would cover the additional 20 minutes each way of travel time.

The second option was to remain in the same position but with the knowledge that it would only be for a further three months, after which time the position would no longer be available to Mr Varcoe. There was no guarantee that Mr Varcoe would be offered a permanent position at the end of the three-month period.

The employee declined both of these options. The employee did not want to incur further travel time or the uncertainty of obtaining ongoing employment.

The Decision

The Commission rejected the application made to reduce the redundancy pay to nil, and ordered that Eagers Automotive pay Mr Varcoe redundancy totalling 4 weeks. In coming to their decision, the Commission restated the following employment law principles:

  1. The test used to establish whether employment is acceptable is an objective one. Meaning, it is not simply what might be acceptable to the employee.
  2. In deciding what is acceptable, the individual circumstances of the employee have to be considered.
  3. An employee’s redundancy pay may be at risk if they do not accept an objectively acceptable alternative role with the employer.

The Commission clarified that regardless of whether the alternative options are objectively acceptable or not, “It does not automatically follow that a finding that the other employment obtained by Eagers for Mr Varcoe was acceptable will result in the redundancy pay being reduced to nil.”

The Commission found that the first option would, in the circumstances, include additional travel time for the employee that “would have been inconvenient and onerous”. Interestingly, the second, temporary, option in contrast, was found to be “other acceptable employment.”

This decision is important for employers. It reiterates the importance of considering the range of factors that can impact whether the offer is reasonable. In this case, 20 minutes of travel time added to each end of a work day, despite the offer of a vehicle and fuel, was not considered acceptable.

If you are an employer looking to restructure and offer alternative employment options to your workers, please contact one of our experienced employments lawyers at Taurus Legal Management on (03) 9481 2000 or info@tauruslawyers.com.au.

Posted by Taurus Legal Management