The Fair Work Commission has dismissed a Queensland employer’s appeal to reduce an employee’s redundancy pay. The employer argued that it was operating at a financial loss and had significant outstanding debts. However, the Commission noted its “extraordinary amount of frivolous expenditure,” which included spending $2,500 on office birthday parties over a two-month period. The employer was also called out for its “recklessness” in hiring new staff while arguing it was struggling financially.
Sometimes, employers will try to cheat workers out of their redundancy pay by creating a sob story about their financial difficulties. But in this Fair Work case – Freeway Family Doctors Pty Ltd Trading AS Medsana and My Rehab Team [2026] – the Commission quickly worked out the truth. Let’s look at the events of the case.
Suzanne Oram was employed as a senior speech pathologist for Brisbane-based Freeway Family Doctors. The company was NDIS registered and provided medical and neurological rehabilitation services via its Medsana and My Rehab Team practices. Ms. Oram was made surplus to requirements and was entitled to a redundancy payment of $10,384.64. However, in November 2025, Freeway Family Doctors filed an application with the Fair Work Commission to vary her redundancy payment. The company sought to reduce Ms. Oram’s payment from four weeks to one.
Freeway Family Doctors said that it could not pay the amount as it was facing a dire financial situation. The company argued that paying the full amount would jeopardise the business as it was operating at a loss. The company said that it had incurred a deficit of $30,015.28 for the quarter ending September 2025 and a further loss of $71,399.54 for the two months ending November 2025. Freeway Family Doctors also highlighted its significant outstanding debts. This included a Business Activity Statement bill of nearly $50,000 and an American Express credit card balance exceeding $17,000.
In response to the Fair Work redundancy variation claim, Ms. Oram challenged the notion that Freeway Family Doctors was unable to pay. She noted that the company was still actively trading and continued to pay its other staff members. She pointed to “frivolous expenditure” within the company’s accounts.
This included $2,500 spent over two months on “staff wellbeing,” which was explained as money spent on birthday cards, cakes and catering. Ms. Oram also argued that Freeway Family Doctors could reduce its reliance on virtual assistants, which represented a large cost to the business. She also suggested it could sell off part of its $173,349.01 vehicle fleet to meet its legal obligations.
During Fair Work Commission proceedings, Freeway Family Doctors said that it had tried to free up capital by switching to lower-cost subscriptions. It argued that further suggestions from Ms. Oram, such as selling company vehicles or changing administrative structures did not make “business sense.” Specifically, Freeway Family Doctors argued that increasing its debt base by hiring a car rather than owning one would be counter-productive to the business’s health.
Freeway Family Doctors redundancy pay variation claim was heard by the Fair Work Commission in January 2026. It noted that the test for redundancy pay to be reduced is whether an employer “cannot pay the amount” rather than whether they would prefer not to.
The Commission observed that the company’s trading income remained high. Freeway Family Doctors’ income had reached $914,785.77 for the quarter ending September 2025 and $697,572.62 for the two months ending November 2025.
The Commission also found that Freeway Family Doctors’s cash flow issues were “self-imposed.” It also said that it was “unusual” for the company to seek to reduce the redundancy pay based on an argument of its incapacity to pay. This was because the company was still paying its employees and hiring new workers.
Regarding the discretionary spending on office birthday celebrations, the Fair Work Commission remarked the company had racked up an “extraordinary amount of frivolous expenditure” while also claiming to be facing financial dire straits. The Commission noted that Freeway Family Doctors had “made some attempts” to reduce its expenses, including by reducing the cost of subscriptions. However, it said that this made up a “very small” amount of its expenses. The Commission also agreed with Ms. Oram that Freeway Family Doctors was racking up huge costs by using virtual assistants to handle its admin.
It found that the company had not “made serious attempts” to renegotiate its high-cost business agreements. It said that “there is nothing preventing” the company from selling one of the vehicles and paying an employee mileage to use their own vehicle instead. The Commission said that this would have freed up money to pay Ms. Oram’s redundancy entitlements. The Commission rejected Freeway Family Doctors’ argument that Ms. Oram’s suggestion to sell its cars did not make business sense. It said that the company was “past the point of making decisions based on ‘business sense'” and should be “concerned with avoiding insolvency.” The Commission said
The Fair Work Commission noted that Freeway Family Doctors had continued to hire new staff after Ms. Oram’s redundancy. It described this move as “recklessness” given the company knew that it had to honour her redundancy pay. The Commission said that other employees therefore benefited from Ms. Oram’s redundancy. It concluded that it would “cause unfairness” to reduce her entitlement when the business was still choosing to expand its workforce.
Ultimately, the Commission could not agree that Freeway Family Doctors could not pay Ms. Oram’s redundancy entitlements when it was generating income and had opportunities to liquidate assets and reduce expenses. It therefore found that the employer failed to meet the jurisdictional prerequisites to reduce the payment. Freeway Family Doctors’ claim was dismissed, and the employer remained legally required to pay Ms. Oram the full redundancy amount.
Another recent attempt by an employer to deny redundancy pay was detailed in the general protections case Jewell v Magnium Australia Pty Ltd (No 2) [2025]. Dr. Daniel Jewell joined metal processing firm Magnium Australia as chief technology officer in November 2021. As a chemical engineer, Dr. Jewell previously worked at the CSIRO and provided expertise for the company’s chemical reaction process used by its technology team. His annual salary was around $346,000 per annum.
Between July 2022 and April 2023, Dr. Jewell made 30 formal and informal complaints to his employer. He complained about the management of the technology team and safety issues related to chemical processes. Dr. Jewell also complained that his feedback about safety and technical issues had created a hostile workplace environment for him. On 21 April 2023, Dr. Jewell was made redundant. In his dismissal letter drafted by the chief operating officer, Magnium Australia said that the chief technology officer role was being made redundant due to a business “restructure.”
Dr. Jewell lodged a Fair Work general protections claim with the Fair Work Commission, arguing unlawful termination. He alleged that he had been dismissed because he had exercised workplace rights by making numerous complaints to Magnium Australia. He also claimed his dismissal was influenced by his temporary absence from work due to illness.
Dr. Jewell also contended that the company failed to settle his financial entitlements concurrently with his redundancy. He claimed that he was not paid for his notice period, redundancy nor his accrued leave, all of which amounted to approximately $70,000. Dr. Jewell did not receive his full redundancy pay and financial entitlements until August 2023, more than three months after his dismissal.
In Fair Work general protections cases involving dismissal, a “reverse onus of proof” applies. This meant that Magnium Australia had to prove, on the balance of probabilities, that the reason for the dismissal did not include the prohibited reasons alleged by Dr. Jewell. The company argued that his dismissal was a genuine redundancy necessitated by the commercial requirements of a start-up. It said the decision was made independently of his workplace complaints or his period of illness.
Magnium Australia admitted that it had contravened the National Employment Standards by paying entitlements late. However, the company argued that the nature of these breaches should be viewed through a “spectral” concept of deliberateness. Regarding the failure to pay notice and annual leave, the employer argued that the chief operating officer “did not know” that the law required the payments to be made no later than the date of dismissal. Magnium Australia claimed the intention was always to pay, with the funds eventually being processed in the “next pay run” on 3 May 2023.
The company’s argument for the delayed redundancy payment was more complex. Magnium Australia argued that it “did not then believe it legally had to pay” redundancy pay. This was because the company believed it was “on the cusp of being a ‘small business employer’” and thus exempt. It was not until July 2023 that the company accepted the exemption did not apply. Magnum Australia maintained that this was not a “deliberate flouting” of the law but a result of being “insufficiently careful” in making sure it legally had to honour the redundancy pay.
Dr. Jewell’s Fair Work general protections claim was heard by the Federal Circuit and Family Court of Australia. It first convened in February 2025 to issue a liability judgment, followed by a penalty judgment in May 2025. On the primary issue of unlawful termination, the Court found in favour of Magnium Australia. It was satisfied that the employer had successfully discharged its burden of proof. It concluded that the decision to dismiss Dr. Jewell was based on genuine commercial and structural needs rather than his complaints or illness.
However, the Court was far less lenient regarding the denied termination and redundancy payments. It noted that the non-payment resulted in an “abrupt loss” of income and asserted that “lack of care and ignorance of the law is no excuse.” Even though Magnium Australia had settled the redundancy pay by August 2023, the Court determined that a penalty was necessary for general deterrence.
The company was ordered to pay a penalty of $6,200 for each payment denied to Mr. Jewell; that is, for his notice, redundancy and accrued leave payments. The total penalty of $18,600 was ordered to be paid directly to Dr. Jewell. The judge concluded that this amount was appropriate under the “totality principle,” sending a clear signal to the Australian community that all employers have an obligation to understand their duties under the Fair Work Act 2009.
Read more: WFH Row Sees Worker Lose Redundancy Payout
These cases show that employers can’t simply avoid paying redundancy or termination entitlements by claiming financial stress or confusion about the law. The Fair Work Commission and the Courts look closely at the facts — including spending decisions, hiring practices and whether proper legal obligations were met. If you have ve been made redundant, denied redundancy pay, or short-paid your final entitlements, you may have stronger rights than you realise.
We at Australian Workplace Discrimination Representatives help employees across Australia with redundancy disputes, unpaid entitlements, unfair dismissal, general protections claims, forced resignation matters and sexual harassment complaints. We can help you get what you deserve via Fair Work action.
We operate across Australia and our lines are open 7 days per week. Contact us today on 1800 333 666 for a free, confidential initial consultation.
