Redundancy Pay Cut to Zero for Refusing Alternative Employment

A Queensland worker who refused redundancy alternative employment because of an intellectual property clause in his contract has had his redundancy pay cut to zero. The Fair Work Commission found the clause was identical to the one he agreed to when he first joined his employer. It also found that the role offered was acceptable given it didn’t reduce his pay and aligned with his skills and experience.

In this article, we look at the events of this Fair Work redundancy pay case, Alliance Airlines Pty Limited [2026]. Later, we explore a recent case where a worker secured redundancy pay after the court ruled that an alternative employment offer made just one day after her termination came too late.

Case Summary: Alliance Airlines Pty Limited [2026]

• Jurisdiction: Fair Work Commission QLD
  
  
• Key employee argument: Offered redundancy alternative employment, but the new contract had an intellectual property clause that would have “substantially elevated” his legal risk. He had not refused redundancy redeployment, but had sought clarification of outstanding issues.
  
  
• Key employer argument: The company obtained acceptable redundancy alternative employment. The worker’s failure to sign the new contract amounted to refusal.
  
  
• Fair Work outcome: The clause was identical to the one the worker had signed before. The employer had offered acceptable alternative employment, therefore redundancy pay was reduced from four weeks to zero.

Refusal of redundancy alternative employment leads to zero pay

Brett Morley started working for Alliance Airlines in June 2024. The company offers charter flights to FIFO employees in the mining sector. Before joining Alliance, he had developed a “command development” training program. Some elements of the program originated externally and were not owned by him outright. The program was raised informally with Alliance during 2025, however it was never formally adopted. By October 2025, a manager had said it “would not continue in its current form.”

In November 2025, Alliance underwent a restructure and Mr. Morley was told he was at risk of redundancy. During consultation, Alliance considered redundancy redeployment options. The company identified the role of flight training manager, which matched Mr. Morley’s skills, qualifications and experience. The duties of the role aligned to his current one, and it paid the same too.

Trainer wanted his IP excluded from redundancy redeployment contract

In late November 2025, Mr. Morley was given a draft contract and position description for the flight training manager role. He signed the position description, but told HR that he would “like the ‘command development’ program expressly excluded.” Mr. Morley stated that the material “was developed independently by me” prior to joining Alliance. He proposed that the clause should state: “the Company does not claim intellectual property rights over this program.”

Alliance amended the contract with different wording. It required him to disclose any pre-existing intellectual property in writing and confirm he held the necessary rights. It also required him to grant Alliance a “perpetual, irrevocable, royalty-free licence to use, modify, and exploit” it. Mr. Morley rejected that approach. He told Alliance that the program had never been formally adopted by the company. He also said that he could not warrant rights over material that contained externally sourced elements.

HR said accepting IP clause was a requirement of redundancy alternative employment

A final contract for the alternative redundancy alternative employment was issued in January 2026. Alliance maintained that “the IP clause is a standard provision” included in its employment contracts. The company told Mr. Morley that it was unchanged from his original contract and that accepting the IP clause was a requirement of employment.

On 4 February 2026, Mr. Morley wrote that he had not resigned and had not accepted the proposed employment contract. He also highlighted that he had not declined the redundancy alternative employment. Alliance treated his non-acceptance as a refusal of redundancy redeployment and issued a redundancy letter the same day. A few weeks later, the company applied to the Fair Work Commission to have his redundancy pay reduced from four weeks to zero.

Why did the airline argue redundancy pay should be cut to zero?

Alliance argued to the Fair Work Commission:

• The redundancy alternative employment offered was closely aligned with Mr. Morley’s skills and experience. It was at an appropriate level of seniority, and offered the same pay and terms.
  
  
• It had engaged in genuine consultation and given Mr. Morley multiple opportunities to consider and accept the role.
  
  
• Earlier Fair Work cases supported reducing redundancy pay to zero where an employer offers redundancy alternative employment aligned with the employee’s skills, seniority and pay.

Why did the trainer argue the redundancy alternative employment was unacceptable?

Mr. Morley argued to the Fair Work Commission that:

• The redundancy alternative employment was not a continuation of his existing employment as he had to sign a new contract. Therefore, acceptability had to be judged on the contract offered, not a comparison of the old and new roles.
  
  
• The new contract carried an unresolved intellectual property clause concerning pre-employment material containing elements he did not own.
  
  
• Signing the contract would substantially increase his legal risk by reaffirming Alliance’s ability to “assert ownership and broad licence rights” over material that had never been properly adopted as the company’s intellectual property.
  
  
• A reasonable person in his position would regard that increase in risk as rendering the offer unacceptable.
  
  
• He had not refused redundancy redeployment. He remained employed, sought clarification and disputed Alliance’s characterisation of his non-acceptance as a refusal.

Why did Fair Work cut the redundancy pay to zero?

Alliance’s variation of redundancy pay claim was heard by the Fair Work Commission in May 2026. It ruled that Alliance had obtained acceptable alternative employment for Mr. Morley, and the offer had not been accepted. It chose to reduce Mr. Morely’s redundancy pay from four weeks to zero for the following reasons:

• The redundancy alternative employment involved no reduction in pay, was at the same location, and carried duties aligned with Mr. Morley’s skills and experience.
  
  
• Alliance had engaged in genuine consultation with Mr. Morley throughout the process.
  
  
• The clause in the new contract was identical to the clause in the contract Mr. Morley had originally accepted when he commenced employment with Alliance.
  
  
• On that basis, the offer “did not change the status quo on that issue” prior to his existing position becoming redundant.
  
  
• The Commissioner was “not satisfied” this was a basis to render the redundancy alternative employment as unacceptable.
  
  

Employer forced to pay after offering redundancy alternative employment one day late

Another recent case that involved a redundancy pay dispute is Kalapakdee v B.I.C. Services Pty Ltd [2026]. Sydney cleaning company B.I.C Services was ordered to pay a former cleaner more than $4,300 in redundancy pay and interest. The Industrial Court of New South Wales found her employment had already ended by the time the company tried to offer her another job. The court rejected the company’s argument that she remained employed. It also rejected its plan to ask the Fair Work Commission to wipe out the payment.

Case Summary: Kalapakdee v B.I.C. Services Pty Ltd [2026]

• Jurisdiction: Industrial Court of New South Wales
  
  
• Key employee argument: Her employment was terminated when the contract at her worksite ended, entitling her to redundancy pay. The alternative job offers made after her termination did not change that entitlement.
  
  
• Key employer argument: The worker remained employed and was not made redundant. Alternatively, any redundancy pay should be reduced to nil because she was offered other acceptable employment.
  
  
• Court outcome: Found the cleaner’s employment ended via redundancy, that the later job offers were immaterial. Awarded $4,304.37 in redundancy pay.

Redundancy alternative employment offer lands one day after deadline

Malinee Kalapakdee had worked as a part-time cleaner for B.I.C. Services since July 2022, assigned to a client site in the Sydney CBD. On 12 November 2024, the company sent her a letter advising that cleaning services at the site would cease. HR told her that if they could not find redundancy alternative employment, her last day would be 15 December 2024. Ms. Kalapakdee worked her last shift on 13 December 2024 and was paid her accrued entitlements on 15 December 2024, with no redundancy payment.

At 3.27pm on 16 December 2024, the day after her stated termination date, Ms. Kalapakdee received an offer of alternative cleaning work in the Sydney CBD. The position offered the same hours but starting and finishing 30 minutes earlier. Ms. Kalapakdee replied that the offer had come only after her employment ended. She said that she had already made other arrangements and that she wanted redundancy pay instead. A second, similar offer of redundancy alternative employment followed on 30 December 2024, with no response recorded.

Why did the cleaner argue she was entitled redundancy pay?

Represented by the United Workers’ Union, Ms. Kalapakdee commenced proceedings in the Industrial Court of New South Wales on 1 October 2025. She sought redundancy pay and a declaration that B.I.C. Services contravened the Fair Work Act 2009.

Ms. Kalapakdee argued to the Industrial Court that:

• Her employment was terminated on 15 December 2024. Her termination letter stated her position would “no longer be available” from that date unless the company relocated her services beforehand.
  
  
• She was not approached or contacted by the company about relocating her services prior to or on 15 December 2024.
  
  
• The termination occurred because the cleaning job she was doing was no longer required by the client. This therefore entitled her to redundancy pay under the Fair Work Act 2009.
  
  
• The redundancy alternative employment offered on 16 December 2024 came after her employment had ended, so it could not change her entitlement to redundancy pay.
  
  
• She had already made alternative arrangements based on her employment having ended, and was therefore unable to accept that offer.

In its response, B.I.C. Services contended that Ms. Kalapakdee was not entitled to redundancy pay because she remained employed by the company. It claimed that she had been rostered to work on 16 December 2024, when she was offered redundancy alternative employment. B.I.C. Services argued that if her employment had ended on 15 December 2024, redundancy pay should be reduced to nil because she had been offered other acceptable employment.

Why did the court rule the worker was entitled to redundancy pay?

The Industrial Court of New South Wales heard Ms. Kalapakdee’s redundancy pay claim in April 2026. It rejected each of the company’s positions and found in favour of Ms. Kalapakdee for the following reasons:

• The letter of 12 November 2024 was a valid notice of her termination on 15 December 2024 unless alternative work was offered before that date, which it was not.
  
  
• The company’s own payslip recorded 15 December 2024 as Ms. Kalapakdee’s date of termination and provided for the cashing out of her entitlements as at that date.
  
  
• There was no evidence she had been told before the end of 15 December 2024 that she was rostered on a shift the next day.
  
  
• The redundancy alternative employment offered was “immaterial” as Ms. Kalapakdee’s employment had already been terminated.
  
  
• The termination occurred because the cleaning job was no longer required to be done by anyone, entitling Ms. Kalapakdee to redundancy pay.
  
  
• The company contravened section 44 of the Fair Work Act 2009 by failing to pay that redundancy entitlement.
  
  
• No application to reduce the redundancy entitlement had ever been made to the Fair Work Commission.

The Industrial Court of New South Wales ordered B.I.C. Services to pay Ms. Kalapakdee $4,304.37 in redundancy pay. This was equivalent to six weeks’ ordinary pay, along with interest.

Fair Work redundancy pay FAQs

1. What qualifies as suitable alternative employment in Australia?

Suitable alternative employment is a role an employer offers a redundant employee that is genuinely comparable to their existing position. It takes into account factors such as pay, location, seniority, hours and the nature of the duties involved. If the Fair Work Commission is satisfied that an employer has found this kind of role for an employee, it can reduce or remove that employee’s redundancy pay entitlement.

In Alliance Airlines Pty Limited [2026], the Commission found the role offered to the employee was suitable redundancy alternative employment because it involved no reduction in pay, was at the same location, and was  aligned with his skills and experience. The Commission also took into account that Alliance had engaged in genuine consultation with him before making the offer.

2.  Can I refuse suitable redundancy alternative employment?

An employee can refuse an offer of alternative employment, but doing so does not automatically protect their right to full redundancy pay. If the Fair Work Commission finds the role offered was objectively suitable, it can still reduce or remove that entitlement.

In Alliance Airlines Pty Limited [2026], the employee argued he had not actually refused the role, but had sought clarification of a clause in his employment contract. The Commission found that, because the disputed clause was identical to one he had already agreed to in his original contract, his objection did not make the offer unacceptable. His redundancy pay was reduced to zero.

Read more: WFH Row Sees Worker Lose Redundancy Payout

Have you been denied redundancy pay you are entitled to?

If your employer has reduced your redundancy pay, dismissed you, or you believe you have not been offered genuinely acceptable alternative employment, it is important to get advice quickly. We at Australian Workplace Discrimination Representatives help employees across Australia with redundancy, unfair dismissal, general protections and forced resignation claims.

Your initial consultation with us is free and confidential. Strict time limits can apply to Fair Work claims, so contact Australian Workplace Discrimination Representatives today on 1800 333 666.