Redundancy Pay Fights: One Worker Wins, One Loses

The Fair Work Commission has dismissed a mining contractor’s bid to reduce a Tasmanian fitter’s redundancy pay to nil. The contractor argued it had offered the fitter acceptable alternative employment. However, the Commission found the role required around a day’s travel, came with significant extra costs and left the fitter “worse off” despite receiving the same pay.

In this article, we look at the events of this Fair Work case: Application by Redpath Contract Services Pty Ltd [2026]. Later, we look at a second Fair Work case where a worker’s bid for more redundancy pay was dismissed because he had not followed the correct dispute procedure.

Case summary: Application by Redpath Contract Services Pty Ltd [2026]

• Jurisdiction: Fair Work Commission Queensland
  
  
• Key employer argument: It had obtained other acceptable employment for the worker by offering him a fitter role. Sought to have his redundancy pay reduced to nil.
  
  
• Key employee argument: The offered role was not acceptable due to loss of his local allowance, the shift to a FIFO arrangement and additional costs imposed on him.
  
  
• Fair Work outcome: The alternative role did not constitute other acceptable employment. The worker retained his full entitlement to six weeks’ redundancy pay.

Employer’s bid to strip redundancy pay fails at Fair Work

Jacob Papworth was employed as a fitter at Redpath Contract Services, working at the Rosebery lead mine in Tasmania. He lived around twenty minutes’ drive from the site and commuted there daily as a residential employee. Redpath subsequently lost its contract to operate at Rosebery mine, leaving it without an ongoing need for Mr. Papworth’s services there. In September 2025, the company notified him of this by way of a consultation letter.

Redpath subsequently discussed alternative roles with Mr. Papworth, but only one formal offer was made. This was an ongoing position as a fitter at the Olympic Dam uranium mine in South Australia. The role was one classification level higher than his current position, with the same hourly rate of pay.

What was different about the Olympic Dam role?

The offer required Mr. Papworth to move from a residential role to a FIFO arrangement. He would have to work 14 days on, 14 days off rather than his previous 7 on, 7 off pattern. Under Redpath’s proposed travel arrangements, Mr. Papworth would need to spend over three hours driving from his home to Launceston airport. This was despite two airports being significantly closer to his home. He’d then need to get a flight to Adelaide, before transferring to another charter flight to get to Olympic Dam.

Mr. Papworth would also incur extra costs. This included “$255 for 7 days and $36 per day every day thereafter” in parking fees at Launceston airport, along with higher fuel costs. He would also lose the allowance he received at Rosebery. Mr. Papworth was given just over three days to respond to the offer. On 3 October 2025, he emailed Redpath raising concerns about the contract. Redpath proceeded to terminate his employment on 9 October 2025.

Why did Redpath try to reduce the redundancy payout?

Mr. Papworth was entitled to six weeks’ redundancy pay. However, Redpath applied to the Fair Work Commission to have that entitlement reduced to nil. Redpath argued:

• The Olympic Dam role was acceptable other employment despite differences in travel, roster, climate, camp arrangements and production.
  
  
• The role had the same pay and duties as Mr. Papworth’s former position. It was  permanent, full-time and sat at a higher classification level.
  
  
• Mr. Papworth’s continuity of service would not have been broken had he accepted the position.

Mr. Papworth argued the role was not acceptable due to the loss of his local allowance, the desert climate and the shift from residential to FIFO work. He also highlighted the additional fuel, time and parking costs tied to the Launceston airport requirement, as well as the risk to his car left there unattended. At the Fair Work hearing, he also raised concerns about radioactivity risks at a uranium mine and argued the timeframe to accept the offer was unreasonably short.

Why did Fair Work reject Redpath’s bid to cut the redundancy pay?

The Fair Work Commission heard Redpath’s application to vary redundancy pay in June 2026. It dismissed the application for the following reasons:

• The conditions of the new role were “very different” to that of the former role, and “significantly less favourable” to Mr. Papworth. It therefore did not constitute other acceptable employment.
• Mr. Papworth had been a residential worker, whereas the new role was FIFO and involved “significantly greater fees and costs.” This left him “worse off” even though the hourly rate would be the same.
• The imposition on Mr. Papworth’s time was much greater under the new role, as were the “climate conditions” under which he would have to work.
• Factors weighing in favour of acceptability included that both roles were in the same trade with the same core duties.

30-year worker’s redundancy pay bid fails due to technicality

In Graham Michael Clarke v AKD Victoria Pty Ltd [2026], the Fair Work Commission dismissed the worker’s application to have his redundancy pay dispute arbitrated. He argued he was covered by a collective enterprise agreement entitling him to 60 weeks’ redundancy pay, rather than the 44 weeks he was paid. The Commission found he was not covered by the agreement at all, and that, in any case, he had not properly raised the dispute before his employment came to an end.

Case summary: Graham Michael Clarke v AKD Victoria Pty Ltd [2026]

• Jurisdiction: Fair Work Commission Victoria
  
  
• Key employee argument: He was covered by a collective enterprise agreement and entitled to 60 weeks’ redundancy pay, rather than the 44 weeks he was paid.
  
  
• Key employer argument: The worker was not covered by the collective agreement. Even if he was, he had not raised his dispute before his employment ended.
  
  
• Fair Work outcome: Application dismissed. Mr. Clarke was not covered by the collective agreement.

Worker’s bid for larger redundancy pay fails at Fair Work

Graham Michael Clarke’s employment at the Yarram Sawmill in regional Victoria dated back to 1995. Across the following three decades, the mill passed through a number of different owners, but his continuity of service remained. In October 2015, Mr. Clarke signed an individual employment contract and moved into the role of environmental, health, safety and risk coordinator at the site.

When AKD Victoria acquired the Yarram Sawmill in March 2018, Mr. Clarke remained in his role with the same terms and conditions. His three decades of service were formally marked by AKD on 17 October 2025.

Why was the worker made redundant?

Barely a month after that milestone, on 18 November 2025, staff at the sawmill were told the site would close with immediate effect. Mr. Clarke was told a consultation process would follow, and that unless a suitable alternative arose, his employment would conclude in ten days’ time. He was issued a formal redundancy letter that same day.

That letter said that his redundancy pay would be calculated according to the contract he had entered into in 2015, rather than the AKD Yarram Collective Enterprise Agreement 2023. This resulted in 44 weeks’ redundancy pay rather than the 60 weeks he would have received under the collective agreement. It also excluded payment for his accrued but unused sick leave.

What happened after the redundancy letter was issued?

Two days later, Mr. Clarke texted AKD’s HR to ask for a copy of his employment contract and details of the company’s redundancy policy. HR said AKD had no standalone redundancy policy and had instead relied on that of the previous owner of the sawmill. On 26 November 2025, Mr. Clarke’s solicitors wrote to AKD’s chief executive challenging the figure he had been offered.

AKD responded saying that his redundancy pay would remain the same. Mr. Clarke’s solicitors pointed to clause 4 of the collective enterprise agreement, which they said bound AKD “upon all employees employed at the Site.” On 28 November 2025, Mr. Clarke received his final payslip. His lawyers again disputed the figure with AKD and pressed for an urgent reply. His employment came to an end at close of business that day.

The two sides continued exchanging correspondence without reaching agreement. AKD maintained that clause 4 was limited to employees who would otherwise fall under the Timber Industry Award 2020, a category it said did not extend to Mr. Clarke’s position.

Why did Fair Work dismiss the redundancy pay application?

Mr. Clarke lodged an application to deal with a dispute with the Fair Work Commission, which was decided in May 2026. The Commission needed to work out whether:

• Mr. Clarke fell within the coverage of the collective enterprise agreement.
  
  
• The Commission could hear a dispute under an agreement that no longer applied to someone who was no longer an employee.
  
  
• Mr. Clarke had followed the agreement’s dispute procedure while he still had rights under it.

The Commission’s findings on each issue were as follows:

• Clause 4’s reference to “all employees” needed to be read together with the rest of the agreement. This included its adoption of the Timber Industry Award 2020 and that award’s classification structure, which contained no administrative or managerial roles like Mr. Clarke’s.
  
  
• Mr. Clarke had never completed the competency requirements attached to any classification under the award. He was therefore not covered by the award nor the collective agreement.
  
  
• The Commission has no power to arbitrate a dispute under an enterprise agreement that no longer binds a former employee. This is unless the dispute was properly raised while that person was still employed.
  
  
• The agreement’s dispute procedure required “initial formal discussions” between the employee and management before arbitration could be sought.
  
  
• Mr. Clarke’s texts to the HR lead did not meet this requirement, as the messages made “no reference to a dispute” and fell short of raising a formal grievance.

The Commission acknowledged Mr. Clarke’s “persistence” to rectify what he thought was an “injustice.” But ultimately, it found this could not substitute for compliance with the agreement’s requirements. On this basis, the redundancy pay application was dismissed.

Fair Work redundancy FAQs

1. Do you have to accept suitable alternative employment?

No. Under the Fair Work Act 2009, an employee is not legally obliged to accept an offer of alternative employment made in response to a redundancy. However, if an employer offers the employee other acceptable employment, the employer may apply under the Fair Work Act to have the employee’s redundancy pay reduced. This is regardless of whether the employee ultimately accepts the offer.

This was the issue in Application by Redpath Contract Services Pty Ltd [2026]. Mr. Papworth did not accept an offer of an alternative role. That decision did not put his redundancy pay at risk, however. The Fair Work Commission found the role fell well short of other acceptable employment, given the substantial differences in travel, cost and working conditions compared with his former position.

2. Can my employer refuse to pay redundancy?

Generally, no. Employers are required to pay redundancy entitlements owed to eligible employees under the National Employment Standards, or under any applicable enterprise agreement or contract that provides for a greater entitlement. However, under the Fair Work Act 2009 an employer can apply to the Fair Work Commission to vary an employee’s redundancy pay if it has obtained other acceptable employment for the employee, or cannot afford to pay.

This is what happened in Application by Redpath Contract Services Pty Ltd [2026]. Having offered the worker an alternative role, Redpath sought to have his redundancy pay reduced to nil. The Fair Work Commission rejected the application, finding the role did not amount to other acceptable employment as it was “worse” than his previous role. Mr. Papworth kept his full six weeks’ redundancy pay.

Read More: Boss Spends $2,500 on Birthday Cakes Instead of Paying Redundancy

Have you been made redundant or offered an unsuitable alternative role?

We at Australian Workplace Discrimination Representatives help employees across Australia understand their rights during redundancies, restructures and terminations of employment. If your employer has offered you alternative work you consider unsuitable, or you believe your redundancy entitlements have not been properly calculated, getting advice early is essential.

With our employee-only representation model and over 40 years of combined experience, our team knows what it takes to hold employers to account. Your initial consultation with us is free and confidential. Contact us seven days a week on 1300 333 666.