When is another childcare role ‘acceptable employment’? FWC decision offers guidance for providers

A recent Fair Work Commission decision involving Sparrow Early Learning has provided a useful reminder for early childhood education and care employers about what may constitute “acceptable alternative employment” when a role is made redundant.

In Sparrow Group Management Pty Ltd trading as Sparrow Early Learning Thornlie v Yun Chen [2026] FWC 3149, the Commission considered whether an alternative role offered to an educator was sufficiently comparable to allow the employer to reduce an eight-week redundancy entitlement to zero.

The decision offers practical guidance for ECEC providers navigating service sales, restructures, closures and other organisational changes where employees may be offered positions at another service.

Ms Yun Chen commenced employment with Sparrow Group in November 2021 and, at the time her employment ended, was working as a permanent part-time Trainee Educator at Sparrow Early Learning Thornlie in Western Australia.

On 5 June 2026, Sparrow Group sold the Thornlie business.

While a number of employees were offered employment with the new owner, Ms Chen was not.

Before her employment at Thornlie ended, Sparrow Group instead offered Ms Chen an alternative position at Sparrow Early Learning Seville Grove.

Importantly, the new position provided continuity of employment and did not reduce Ms Chen’s classification, remuneration or overall terms and conditions.

The principal change was the location of her employment.

According to the decision, the Thornlie service was approximately an eight-minute drive from Ms Chen’s home, while Seville Grove was approximately 15 minutes away, increasing her commute by around seven minutes.

Sparrow Group applied to the Fair Work Commission under section 120 of the Fair Work Act 2009 to have Ms Chen’s redundancy entitlement reduced from eight weeks of her base rate of pay to zero.

The employer argued that it had obtained other acceptable employment for Ms Chen.

Ms Chen advised the Commission that she consented to the order sought by Sparrow Group.

Under section 120 of the Fair Work Act, the Commission may reduce an employee’s redundancy entitlement, including to nil, where an employer obtains other acceptable employment for the employee.

But what makes another role “acceptable”?

The decision provides an important reminder that determining whether alternative employment is acceptable requires an objective assessment of the individual circumstances.

The Commission outlined a range of factors that may be relevant, including:

• rate of pay
• hours of work
• seniority
• fringe benefits
• workload
• job security
• work location and travel time
• continuity of service and accrued benefits
• caring responsibilities and family circumstances
• whether a new probationary period applies
• the employee’s skills, seniority, experience and capacity to perform the new role.

The list is not exhaustive, and the significance of each consideration will depend on the circumstances of the individual employee.

The Commission also noted that simply rejecting an alternative position does not automatically make that position unacceptable.

Similarly, a new role does not have to be identical to the employee’s previous role to qualify as acceptable employment.

Some inconvenience or changes to employment conditions may still be compatible with a finding that the alternative employment is acceptable.

In Ms Chen’s case, Sparrow Group submitted that the Seville Grove position maintained her continuity of employment and involved no reduction in classification, remuneration or overall employment conditions.

The primary difference was an additional seven minutes of travel time.

After considering the circumstances, and noting that Ms Chen did not object to the application, the Commission determined that the position constituted “other acceptable employment” under section 120 of the Fair Work Act.

As a result, the Commission exercised its discretion to reduce Ms Chen’s redundancy entitlement from eight weeks to zero.

The decision is particularly relevant for larger early childhood providers operating multiple services, as well as organisations navigating acquisitions, service sales, closures or restructures.

Offering an employee another position within an organisation does not automatically remove an obligation to pay redundancy.

Instead, providers need to consider whether the alternative position can objectively be regarded as acceptable in the circumstances of the particular employee.

That assessment can extend well beyond whether the job title and salary remain the same.

Location, travel requirements, hours, employment security, continuity of service, responsibilities and an employee’s individual circumstances can all be relevant.

The Commission also made clear that the onus rests with the employer to establish that the alternative employment is acceptable.

For ECEC organisations managing workforce change across multiple services, the decision reinforces the importance of carefully considering the terms of any alternative role, and documenting how the position compares with the employee’s existing employment, before assuming a redundancy entitlement can be reduced.

The Sparrow decision ultimately demonstrates that “acceptable alternative employment” does not have to mean identical employment, but whether a role meets that threshold will depend on the totality of the circumstances.

Read the full FairWork decision here.