Frameworks International Pty Ltd Trading as Frame Today v Ms Beatriz Gardeazabal

[2025] FWC 2847

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Frameworks International Pty Ltd Trading AS Frame Today
v

Ms Beatriz Gardeazabal

(C2025/6536)

DEPUTY PRESIDENT SLEVIN

SYDNEY, 26 SEPTEMBER 2025

Variation of redundancy pay

Frameworks International Pty Ltd Trading AS Frame Today (Applicant) applied under s.120 of the Fair Work Act 2009 (Act) seeking to reduce the redundancy pay entitlement of its former employee, Ms Beatriz Gardeazabal (Respondent). The Applicant is seeking for the varied obligation to be nil on the ground that it obtained other acceptable employment for the Respondent.
The Applicant operates a number of stores providing custom picture and photo framing. Ms Gardeazabal worked at a store in Caringbah in Sydney, NSW as a Retail Assistant/Picture Framer. She commenced working for the Respondent on 7 February 2023 on a full-time basis in accordance with a contract entitled Full Time (Award) Employment Contract. In July 2023 Ms Gardeazabal hours were reduced to 20 per week to accommodate her working visa restrictions.
In July 2025, due to a downturn in business, the Applicant reduced the number of full-time employees at the Caringbah store. The respondent’s position was to be made redundant. The Respondent consulted with Ms Gardeazabal about the redundancy. In order to mitigate the impact on Ms Gardeazabal the Respondent offered two alternative employment arrangements a reduction in hours at her current location at Caringbah to 12 hours per week, or a transfer to a nearby store in Alexandria. The role in Alexandria maintained the same hours, days, pay rate, and role. Ms Gardeazabal decline both options. At the time of Ms Gardeazabal dismissal she was working 20 hours per week.
The National Employment Standards provide that in circumstances of redundancy an employee is entitled to a severance payment. The amount of severance payment payable is set out in s. 119. In Ms Gardeazabal’s case the amount is 6 weeks’ pay. Section 120 allows an employer to apply to the Commission seeking that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the Commission considers appropriate. The employer may make an application if it obtains other acceptable employment for the employee.
The factors to be taken into account when considering whether alternative employment is “other acceptable employment” are set out in a decision of Deputy President Easton in Transport Workers' Union of Australia v Toll Holdings Pty Limited[2024] FWC 2738. They include where an offer of a similar or same job is made but in a different location and whether that location is not an unreasonable distance from the initial employment including changes to travel arrangements.
Ms Gardeazabal explained that she did not accept the first offer because was not financially feasible. She would need to find a second job and due to her visa restrictions, she cannot work more than 20 hours a week. Consequently, it would be difficult to find a second job for only 8 hours per week. She pointed to the low paid nature of the work and the difficulty of living on less than half the minimum wage.
As for the second option, Ms Gardeazabal was also unable to accept it as she only travels by public transport and not only would it take approximately twenty minutes extra to get to the Alexandria store but the cost of public transport for her would double.
On balance, I consider that the offer made to Ms Gardeazabal to work at the Alexandria store meets the description of other acceptable employment. The added time and cost of getting to Alexandria is a factor however I do not consider it made the offer unreasonable. Consequently, I may reduce the amount of severance pay payable to Ms Gardeazabal under s. 120. The amount of the reduction is a matter of discretion. The Commission may reduce the amount payable, or it may not. If it does it must be to an amount that the Commission considers appropriate. That amount may be nil.
I consider that the Applicant made genuine attempts to offer Ms Gardeazabal alternative employment. I am however cognizant of the purpose of severance pay in redundancy situations. That purpose is to provide financial support for employees who lose their job due to operational changes introduced by their employer. It acts as a financial bridge to help employees manage the period between losing their job and finding new employment. Beyond financial loss, redundancy pay also compensates for; loss of job security, loss of non-transferable benefits such as personal leave, and the emotional and social impacts such as diminished status or job satisfaction. In this case Ms Gardeazabal was, due to her visa restrictions, and the nature of her employment, on low pay. The impact of losing her job would be significant to her. The loss of a job, albeit a low paying job, that suited her situation was a significant impost on her.
Consequently, I have decided in this case not exercise my discretion to reduce the severance pay due to Ms Gardeazabal.
The application is dismissed.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Frameworks International Pty Ltd Trading as Frame Today applied to the Fair Work Commission to reduce the redundancy pay entitlement of its former employee, Ms Beatriz Gardeazabal. The applicant sought a nil obligation on the ground that it had obtained other acceptable employment for the respondent. The dispute centred on whether the alternative employment offered by the applicant was acceptable, and if so, whether the redundancy pay should be reduced accordingly. The case was heard by Deputy President Slevin in Sydney.

The key legal issue before the court was whether the alternative employment offered to Ms Gardeazabal constituted "other acceptable employment" under section 120 of the Fair Work Act 2009. The court needed to consider the factors outlined in the decision of Transport Workers' Union of Australia v Toll Holdings Pty Limited [2024] FWC 2738, which include the nature of the alternative job, its location, and whether it was reasonable for the employee to accept the offer. Additionally, the court had to balance the purpose of severance pay in providing financial support to employees in redundancy situations against the employer's right to seek a reduction in pay.

Deputy President Slevin found that the offer made to Ms Gardeazabal to work at a nearby store in Alexandria constituted other acceptable employment. Although the commute would take an extra twenty minutes and the cost of public transport would double, the court did not consider these factors to render the offer unreasonable. However, the court decided not to reduce the severance pay due to Ms Gardeazabal. The Deputy President noted that Ms Gardeazabal was on low pay due to her visa restrictions and the nature of her employment. The loss of her job, although low-paying, would have a significant impact on her. Given the purpose of severance pay to provide financial support and compensate for the various losses associated with redundancy, the Deputy President chose not to exercise their discretion to reduce the severance pay. The application was dismissed.

The final order of the Fair Work Commission was that the application by Frameworks International Pty Ltd Trading as Frame Today to reduce the redundancy pay entitlement of Ms Beatriz Gardeazabal was dismissed. Ms Gardeazabal was entitled to receive the full severance payment as set out in the National Employment Standards.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established