How Employers Can Offer Suitable Alternative Employment in Australia

When roles change or your business needs to restructure, offering suitable alternative employment can help you retain good people and reduce legal risk.

But what actually counts as “suitable”, when do you have to consider it, and how do you run a fair, compliant process in Australia?

In this guide, we break down what suitable alternative employment means under Australian employment law, the factors to weigh up, and a step-by-step approach you can follow. We’ll also cover the key documents you should have in place to make changes cleanly and lawfully.

What Is “Suitable Alternative Employment” In Australia?

Suitable alternative employment is a different role you offer an employee whose current job is changing or disappearing. If the role is “suitable”, it’s a genuine option for the employee to keep working for you on reasonable terms, rather than being dismissed or made redundant.

There’s no single definition in the Fair Work Act, but in practice a role is more likely to be “suitable” if it broadly aligns with the employee’s skills, qualifications and experience, and the overall package (duties, pay, hours, location and seniority) is reasonable in the circumstances.

Why it matters: for a redundancy to be “genuine”, you must consult where required and consider redeployment to any available suitable roles within your business (and in some cases associated entities). If you skip that step, you risk unfair dismissal claims and additional costs.

When Do You Need To Consider Suitable Alternative Employment?

You should actively consider suitable alternatives whenever you’re proposing to change or end someone’s employment for business reasons, including:

• Restructures and role redesign (duties move, teams merge, layers of management change)
• Technology or process changes that reduce the need for certain positions
• Closing or relocating a site, or consolidating locations
• Cost-saving measures that reduce headcount or rostered hours

If the employee is covered by a modern award or an enterprise agreement, you’re usually required to consult about major workplace change. That consultation should include whether there is a viable redeployment option into another position, even if it’s at a different level or in a different location, provided it’s reasonable to offer.

Bear in mind that suitable alternative employment can sometimes be created rather than discovered. For example, you might redesign duties, adjust rosters or offer different hours. If you do that, ensure any change to terms is handled via a lawful variation rather than an imposed change. Our guide on changing employment contracts explains how to do this safely.

Where redundancy can’t be avoided, you’ll still need to follow the correct process. That may include notice (or payment in lieu of notice) and redundancy pay, depending on service, size and any exemptions. If you’re budgeting, this redundancy calculator is a useful starting point.

How Do You Decide If A Role Is “Suitable”?

Suitability isn’t an exact science. The Fair Work Commission looks at the whole picture. Use these criteria as your checklist:

Skills, Qualifications And Experience

Ask whether the employee can perform the inherent requirements of the role, either immediately or with reasonable training. You don’t need a perfect match, but it shouldn’t set them up to fail.

Pay And Overall Conditions

Ideally, the remuneration is comparable. A lower salary doesn’t automatically make it unsuitable, but large reductions can be problematic unless agreed and offset by other benefits (e.g. shorter hours or a more senior title). Check the applicable award or agreement to ensure minimums, classifications and loadings are met.

Hours, Flexibility And Rosters

Consider whether proposed hours are reasonable for the employee’s circumstances. Where you’re reducing or varying hours to create a role, ensure you follow a lawful process and consider alternatives like job sharing. For more on this, see reducing employee working hours.

Location And Travel

Relocation can be reasonable if it’s within commuting distance, or if you can support it with remote or hybrid arrangements. If relocation is substantial, consider offering relocation assistance or a trial period.

Status And Job Security

Moving from permanent to casual, or from senior to junior roles, can still be suitable if the overall offer is fair and the change is genuinely available long-term. Be transparent about any fixed-term or project-based limitations.

Training And Support

If a short training period will close a skills gap, build that into your offer. A reasonable training plan can turn a “maybe” into a suitable option.

Associated Entities And Group Companies

If you operate through multiple entities, it’s prudent to consider vacancies across the group. Where you redeploy between related entities, formalise the move properly. Our guide to transferring employees within group companies covers the key steps.

A Fair, Compliant Redeployment Process: Step By Step

A clear process helps you make good decisions, keep records and reduce disputes. Here’s a practical approach you can scale up or down for your business.

1) Identify Proposed Change And Trigger Consultation

Map why the current role is changing or no longer required. If an award or enterprise agreement applies, issue a written change notice and start consultation early. Share information about the change, invite feedback and keep minutes of meetings.

2) Audit Vacancies And Potential Roles

List current vacancies, upcoming roles, and roles you could reasonably create by adjusting teams or rosters. Consider roles across associated entities where appropriate.

3) Assess Suitability Against Clear Criteria

For each role, assess skills match, pay and conditions, hours, location and status. Document your reasoning. If a gap can be bridged through reasonable training, include that in your plan.

4) Offer The Role In Writing (With Enough Detail)

Provide a written offer with a position description, hours, classification/level, pay, location and start date. Include any training, trial or review period, and give the employee a fair timeframe to consider and ask questions.

5) Vary The Contract Properly

If the employee accepts, confirm the change in a short variation letter or updated Employment Contract. Avoid unilateral changes: they can breach contract or trigger claims. If you need structural updates, this is a good time to align your templates with your current award coverage and policies.

6) Manage The Transition

Schedule handovers, training and check-ins. Consider whether garden leave or a short pause between roles is appropriate for the business or the employee; if so, ensure your policy and the contract support garden leave.

7) If No Suitable Role Exists, Finalise Lawfully

If there is genuinely no suitable alternative, proceed with a lawful termination or redundancy. Issue the right notices, consider redeployment up until the termination date, and ensure you calculate entitlements correctly. If needed, we can assist with redundancy advice and provide an Employee Termination Documents Suite so your letters and checklists are consistent and compliant. Where immediate cessation is necessary, consider payment in lieu of notice.

Documentation Tips

• Keep a running redeployment log: roles considered, suitability assessments, offers made, outcomes.
• Record consultation steps and employee feedback.
• Retain copies of offers, acceptance/decline letters and contract variations.

Common Pitfalls To Avoid

• Rebadging the same role with a new title but identical issues (the Commission looks at substance).
• Offering a role with materially worse conditions without genuine justification or consent.
• Skipping consultation where an award/EA applies.
• Failing to check group-wide options where this is reasonable.

Contracts And Documents To Get Right

Well-drafted, up-to-date documents make redeployment smoother and reduce disputes. Depending on your situation, consider the following:

• Employment Contract: Confirm role, duties, classification, pay, hours and location. Keep your base contract current so variations are straightforward. If you’re updating templates, consider a fresh Employment Contract that reflects your award coverage and policies.
• Variation Letter: A short letter both parties sign to amend role title, duties, hours, location or pay.
• Position Description: Clearly sets out inherent requirements; useful when assessing suitability and planning training.
• Policies (Flexible Work, Leave, Performance): Helps manage new arrangements (e.g. hybrid work, training periods, reviews) consistently.
• Termination And Redundancy Pack: Where redeployment isn’t possible, letters, checklists and releases help you close out properly; an Employee Termination Documents Suite keeps things consistent.

Where hours or duties will change significantly, align your process with award/EA rules and use a clean contract variation rather than informal emails. If the change is substantial or long-term, updating and reissuing the full agreement can be the better option.

What If The Employee Declines A Suitable Role?

Employees aren’t forced to accept, but if the offer was genuinely suitable and fairly made, a refusal can affect the outcome. In a redundancy context, refusal of a suitable role may mean redundancy pay is not owed under certain instruments. This is a nuanced area-get advice before making final decisions or processing payments.

Can “Suitable” Include Reduced Hours Or Different Patterns?

Yes, provided the new arrangement is reasonable and lawfully agreed. A reduction in hours can be part of a genuine alternative role if it’s sustainable and meets minimum entitlements. When exploring these options, make sure your process aligns with the rules for reducing employee working hours.

How Do Trials Or Secondments Fit In?

Short trials or secondments can help both sides test suitability. Document the trial period, objectives, supervision and review date. If the trial is successful, lock it in with a variation letter; if not, continue the redeployment search or move to finalisation.

What About Moves Within A Group?

Redeployment to an associated entity can be a suitable alternative if it’s a real, available role. Structure the move properly-either through a transfer of employment or a new engagement-and align service recognition and entitlements appropriately. Our article on transferring employees within group companies outlines the key points.

If Redeployment Isn’t Possible

Where no suitable role exists, proceed with a lawful termination or genuine redundancy. Factor in notice requirements (or payment in lieu) and any redundancy entitlements. If you need to sanity-check your calculations, this redundancy calculator is a handy tool, but be mindful of award/EA specifics and small business exemptions.

Key Takeaways

• Suitable alternative employment is about offering a reasonable, practical role that aligns with an employee’s skills and overall conditions when their current job changes or ends.
• Before you finalise a redundancy or restructure decision, consult where required and genuinely assess redeployment options across your business (and associated entities where relevant).
• Assess suitability holistically: skills match, pay and conditions, hours, location, seniority, and whether reasonable training could bridge gaps.
• Run a clear process-identify change, audit roles, assess suitability, make written offers, and vary contracts properly-to reduce legal risk.
• If there’s no suitable role, complete termination or redundancy lawfully, including notice or payment in lieu and any applicable redundancy pay.
• Up-to-date contracts, clear variations and a consistent suite of termination documents will make changes cleaner and more defensible.

If you’d like a consultation on suitable alternative employment and redeployment options for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.