The new jobs paid less per hour - and the overtime excuse backfired spectacularly
A landscaping employer that made two workers redundant then tried to wipe out their redundancy pay has had its bid thrown out by the Fair Work Commission.
Creative Image Landscapes Pty Ltd (CIL) applied to reduce the redundancy entitlements of both workers to zero, arguing it had lined up new jobs for them with another company, APS Drainage and Civil Pty Ltd.
The Commission accepted that CIL was the driving force behind the job offers. But that was only half the test.
Under section 120 of the Fair Work Act 2009, an employer can apply to reduce redundancy pay where it has found other acceptable employment for the worker. Both words matter - the employment has to be objectively acceptable, not just available.
The first worker had nine years of service and was owed 14 weeks' redundancy pay - $28,280. His hourly rate at CIL had been $50.50. At APS, it dropped to $45.00.
CIL called the pay cut "only a slight reduction." The Commission did not agree.
Over a 40-hour week, that gap added up to $11,440 a year. CIL argued more overtime at APS and a shorter commute to the depot would make up the difference. Neither held up.
The worker's new role was site-based. His APS conditions document listed his primary location as "onsite as required of each project" - meaning he travelled to different job sites across Melbourne regardless of where the depot sat. The commute argument fell flat.
As for overtime, the Commission found the evidence did not support a conclusion that overtime was more available at APS than it had been at CIL. But even if it were, the reasoning was blunt: the extra earnings only came through extra work. The worker would have to work harder and would still be financially behind at the end of the following year.
The second worker had been with CIL for one year and was owed four weeks' redundancy pay totalling $6,020. His story had an extra wrinkle.
After being made redundant, he had started a two-day-a-week tattoo apprenticeship. When APS offered him a permanent role, he asked to go casual instead - so he could keep pursuing his new career.
CIL seized on that, arguing the Commission should assess the permanent role the worker turned down, not the casual one he accepted. But CIL produced no direct evidence of the terms of the permanent offer actually made to the worker.
The worker's own evidence was that the permanent role paid the award rate and was a labouring position - a step down from his previous work. Even on the most generous reading, the base rate was more than $4.00 an hour below what he had earned at CIL - roughly $8,000 less over a year of full-time work.
The Commission noted the casual arrangement suited the worker's apprenticeship plans. But convenience did not make the employment objectively acceptable when the pay was significantly lower.
Both workers had raised other concerns - loss of seniority, reduced job security, having to buy their own tools - but the Commission said those carried little weight. The pay gap alone was enough.
The application was dismissed in full on September 16, 2026. Both workers keep their redundancy entitlements.
For HR teams, the decision is a practical reminder: finding a redundant worker a new job does not automatically cancel the redundancy bill. The alternative has to be objectively comparable - and telling someone they can make up the shortfall with overtime is not the answer.
