Relocation and Redundancy

In the dynamic landscape of Australian employment law, businesses sometimes ask their employees to relocate from one workplace to another. If you are considering relocating operations or relocating specific employees, it is important to be aware of your legal obligations when doing so. This page deals with the laws surrounding relocation and redundancy in Australia.

Contractual obligations when relocating

Relocation of a business can be driven by various factors, including economic conditions, operational needs, or strategic goals. However, moving a business isn’t as simple as packing up and setting up shop elsewhere; it involves several legal considerations, especially concerning employees.

Contractual obligations and employment contracts

The first step in considering a relocation is to review existing employment contracts. Many contracts include terms that address the possibility of relocation. For example, some contracts might specify the employee’s place of work or include a clause on the employer’s right to relocate the business. Employers should ensure that any relocation complies with these contractual terms.

Consultation requirements

Under section 145A of the Fair Work Act 2009, employers have an obligation to consult with employees about changes to their roster or hours of work. Although this provision does not explicitly extend to relocation, it is prudent to discuss any relocation that is being contemplated with employees who are likely to be affected, as the relocation may affect their ability to continue working the same hours. Employers should notify employees of the proposed move and consult with them about how it will affect their roles and explore any possible alternatives.

Relocation and employee rights

Employees who are adversely affected by relocation have certain rights. If the new location makes it impractical for an employee to continue working (for example, because it is too far to commute), the employee may be entitled to redundancy if no suitable alternative position is available.

Where relocation request is unlawful

In cases where an employment contract does not make any explicit provision for relocation, there are a number of factors that need to be considered in determining whether requesting that an employee start working from a different location is reasonable.

The factors that will be taken into account include:

• the amount of notice the worker has been given
• how easy it is to access the new location
• efforts that have been made to accommodate the worker in transitioning to the new location
• the amount of additional travel time
• any likely disruption or inconvenience to the worker’s personal life as a result of the relocation.

Redundancy due to relocation

In cases where it is not reasonable to relocate an employee, the situation may result in a redundancy. Redundancy occurs when a position is no longer required and the employee cannot reasonably be redeployed in another role. If there are other suitable positions available within the company, employees must be given the opportunity to apply for these roles before their redundancy is finalised.

Employers are required to consult with affected employees about the redundancy. This consultation process must include discussing the reasons for the redundancy, potential alternatives, and ways to mitigate the impact. Redundancy pay is calculated based on the employee’s length of service and is subject to minimum entitlements, which are outlined in the National Employment Standards.

Case law

A number of court decisions are instructive in understanding when relocation is likely to be deemed reasonable.  

Han Jian Liu v NHP Electrical Engineering Products Pty Ltd 

In the 2004 Australian Industrial Relations Commission (AIRC) decision of Han Jian v NHP Electrical Engineering, the AIRC found that the request that an employee relocate from Richmond to Laverton was unreasonable as the employment contract stated that his work was to be performed at Richmond.

The employee had a school-aged child and an elderly mother for whom he had caring responsibilities.  

The decision was made because the contract was for work at Richmond and work at Laverton was not comparable or acceptable to the employee. The relocation was not reasonable in spite of the fact that the employer was going to pay his relocation costs and was offering flexible working arrangements. This was in part due to the employee’s familial duties.

Kweifio-Okai v RMIT University

In the 1999 Federal Court decision of Kweifio-Okai v RMIT University, an employee of RMIT University was required to relocate from the Bundoora campus to the Melbourne campus after his relationships with other staff at the Bundoora campus had become strained. The employee argued this amounted to a breach of his contract, which provided that he would be based at the Bundoora campus. As the contract of employment stated, ‘Bundoora campus with the possibility to work at others’, the court found that the employer had the right to relocate the employee.

If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.