Catering Industries NSW Pty Ltd has been refused an order reducing a part-time worker’s redundancy pay to nil, even though the aged care facility whose catering contract it lost offered him a four-day-a-week role at the same site. Deputy President Wright dismissed the company’s application under s.120 of the Fair Work Act 2009 in [2026] FWC 3855, leaving the worker’s entitlement of seven weeks’ pay intact.
Section 120 allows an employer to apply to the Commission to reduce redundancy pay, potentially to nil, where it either obtains other acceptable employment for the employee or cannot pay the amount. Under the first limb, the Commission considers both whether the employer obtained the job and whether the job was acceptable.
(1) This section applies if: (a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and (b) the employer: (i) obtains other acceptable employment for the employee; or (ii) cannot pay the amount. (2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.
The worker had been employed since 30 November 2022 on a permanent part-time basis of 28 hours a week at Highfields Manor Aged Care Facility in Port Macquarie, where Catering Industries provided catering to residents. He was covered by the Hospitality Industry (General) Award 2020 and paid $25.85 an hour. He has a disability, and Catering Industries had accommodated it with reasonable adjustments arranged through a disability employment provider.
On 7 April 2026 the company told staff its contract with Highfields Manor would end on 5 May 2026, and that the client wanted staff to apply to it directly. The worker applied for an advertised Kitchen Hand role, attended what turned out to be a group interview, and was offered four days a week. He declined, finding the role did not suit his hours or caring responsibilities. His employment ended on 5 May 2026. Catering Industries filed its application on 20 May 2026. It was not disputed that he was entitled to seven weeks’ redundancy pay under s.119.
through its National Human Resources Manager that it obtained the employment by facilitating the Highfields Manor offer. It pointed to its 7 April letter inviting staff into the client’s recruitment process, a detailed list of site employees it gave Highfields Manor on or about 13 April 2026, regular liaison with the client on recruitment, and an 8 May 2026 email from the client confirming the four-day offer.
that the company had produced no evidence it obtained the employment, relying on the Full Court of the Federal Court’s decision in FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90 and the Full Bench decision in Ready Workforce [2022] FWCFB 173.
that the company’s role was limited to the employee list and liaison. The worker applied for an advertised role, submitted a resume and was interviewed, and Catering Industries “was not involved in any of these steps , or in selecting” him. The company learned of the offer only from the 8 May email, after the employment had ended.
Under the FBIS test, endorsed by the Full Bench in Ready Workforce, obtaining employment means procuring another employer to make an offer the employee can accept or decline. Deputy President Wright found there was no evidence Catering Industries “acquired or got the employment by its conscious, intended acts”.
Although that finding disposed of the application, the Deputy President also found the offer was not acceptable. The test is objective, but the Deputy President said that “does not mean that the specific circumstances” of the worker “should be disregarded”. Highfields Manor made no reasonable accommodations in how it ran the interview, did not invite a support person, and there was no evidence of ongoing support in the new role. The contract was not put before the Commission, and the worker’s evidence suggested hours of 11:00am to 6:00pm, a different pattern from his existing roster.
Highfields Manor was also not prepared to count his time with Catering Industries. Had he taken the job, he would have lost 30 hours of untaken sick leave and 3.5 years of long service leave accrual, and would have had to serve a new minimum employment period before gaining unfair dismissal protection.
At a glance
- Parties: Catering Industries NSW Pty Ltd (applicant) and a former part-time catering worker
- Citation: [2026] FWC 3855, Deputy President Wright, Sydney, 13 October 2026
- Section: Fair Work Act 2009, s.120 (variation of redundancy pay)
- Outcome: Application dismissed; seven weeks’ redundancy pay stands
- Who it affects: Contractors whose staff are offered work directly by a client after a contract ends
The decision applies the FBIS and Ready Workforce procurement test to a loss-of-contract transition in which the incoming employer was the client itself, and treats lack of service recognition and the absence of disability adjustments as relevant to whether an offer is objectively acceptable.
Source: [2026] FWC 3855
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