Federal Court of Australia

Commissioner of Taxation v Baya Casal [2026] FCAFC 11

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The Appellant pay the Respondent’s costs of the appeal, as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

HESPE AND BUTTON JJ:

1    We have had the advantage of considering the draft reasons of Younan J. For the reasons set out below, we agree with the orders proposed by Younan J.

2    This is an appeal by the Commissioner from a decision of the primary judge, allowing Ms Casal’s appeal against an objection decision made on an objection against a private ruling.

3    The objection decision had disallowed Ms Casal’s objection, affirming the correctness of the Commissioner’s ruling that s 83-175(1) of the Income Tax Assessment Act 1997 (Cth) (1997 Act) did not apply to the scheme specified in the ruling. The Commissioner had ruled that, based on the scheme, Ms Casal’s position with her employer was not genuinely redundant with the result that the payment made to Ms Casal on the termination of her employment was not a genuine redundancy payment. On appeal, the primary judge concluded that, based on the scheme set out in the ruling, Ms Casal’s position had become genuinely redundant.

Private rulings

4    The legislative scheme governing private rulings is set out in Div 359 of Schedule 1 to the Taxation Administration Act 1953 (Cth). The predecessor to that division was found in former Part IVAA of the Administration Act.

5    The private ruling system has been explained in a number of decisions of this Court, including Eichmann v Commissioner of Taxation [2020] FCAFC 155; (2020) 280 FCR 10 at [9], [15]-[16] (McKerracher, Steward and Stewart JJ); Bellinz Pty Ltd v Commissioner of Taxation [1998] FCA 615; (1998) 84 FCR 154 at 160 (Hill, Sundberg and Goldberg JJ); CTC Resources NL v Commissioner of Taxation [1994] FCA 76; (1994) 48 FCR 397 at 400-402 (Gummow J, Jenkinson J agreeing); Commissioner of Taxation v McMahon [1997] FCA 1087; (1997) 79 FCR 127 at 132-4 (Lockhart J), 134-8, 140-5 (Beaumont J), 148-51 (Emmett J). 

6    As the authorities make clear, a ruling is an expression of the way in which, in the Commissioner's opinion, a tax law applies to the applicant in respect of a specified scheme for a specified period: ss 359-1 and 359-25. The scheme is “but a complex of assumed or identified facts”: McMahon at 132 (Lockhart J). When making a private ruling the Commissioner does not make findings of fact, but simply identifies facts and then states his opinion about the way in which the relevant tax laws apply to the applicant in relation to those identified facts: McMahon at 133 (Lockhart J).

7    On appeal to the Federal Court or review by the Administrative Review Tribunal, the subject matter of that appeal or review is the scheme as identified by the Commissioner in the private ruling. The Court or Tribunal is not dealing with actual facts, but with hypothetical facts. A private ruling is a statutory advisory opinion as to how the tax legislation would apply to a person in respect of an income year in relation to a specified “arrangement” or “scheme”: McMahon at 140-1 (Beaumont J).

8    The Court or Tribunal on review does not make findings of fact but reviews the correctness of the opinion as to how the taxation law applies to the scheme or arrangement as identified by the Commissioner in the ruling. The Court (or Tribunal) can have regard only to the scheme as described in the ruling itself, supplemented by any documentation referred to in it: Bellinz at 160 (Hill, Sundberg and Goldberg JJ). Where the language used in the ruling is general or vague, “the Tribunal or the Court may need to construe the language used, in the context of the ruling, to give the ruling a workable meaning in order to allow the Tribunal or Court to discharge its function of determining whether the Commissioner's application of the law to the stated facts is correct”: Eichmann at [15] (McKerracher, Steward and Stewart JJ).

The private ruling in this case

9    The private ruling given to Ms Casal was based on the facts stated in the following description of the scheme:

1. You were employed by Ivanhoe Grammar School (Employer) in the Buckley House Early Learning Centre, starting on 28 January 2014 as an early learning centre (ELC) assistant.

2. You were employed on a part-time basis of 34.56 hours per week

3. On 5 October 2021, the Employer notified you that the ELC structure was to be remodelled with the part time hours to decrease and working days changed. The skills and duties for the role are similar.

4. The Employer was proposing three new ELC roles. As an example, Role 1 consisted of 28.5 hours to be worked over four days a week.

5. You were advised that you were eligible to be redeployed to the remodelled ELC role or you could take a redundancy.

6. The days and number of hours you were offered were not acceptable to you and you opted to accept the redundancy.

7. The Employer provided 13 weeks pay in consequence of your termination of employment.

8. On 9 December 2021 you received an employment termination payment (ETP) of $15,326.96.

9. When you queried the taxation and classification of the payment as an ETP, the Employer maintained that ‘The tax office distinguishes between ‘genuine’ (tax-free) and ‘non-genuine’ (taxable) when it comes to the tax treatment of redundancy payments. If the duties, functions and responsibilities of the departing employee are still required to be done by another employee then the redundancy is considered to be non-genuine. Such payment is taxed as an Employment Termination Payment’.

10    The views expressed by the Commissioner in the ruling were as follows:

Question 1

Is the payment of $15,327 made to you a genuine redundancy payment in accordance with section 83-175 of the [1997 Act]?

Answer

No

Question 2

Is the payment of $15,327 made to you an employment termination payment in accordance with section 82-130 of the [1997 Act]?

Answer

Yes

Decision of the primary judge

11    The description of the facts in the ruling was far from adequate. The primary judge construed the scheme as described in the ruling as supplemented by the documentation that accompanied Ms Casal’s application for the ruling. The primary judge concluded that scheme included the following:

(1)    The fact of reduced hours involved a material reduction in remuneration: PJ [31].

(2)    The fact that one of the new positions was to involve 28.5 weekly hours and the other two 21.5 hours. In concluding that the scheme included this fact, the primary judge had regard to the contents of the letter of 5 October 2021. The letter was expressly referred to in the scheme description set out in the ruling. The letter included an attachment setting out the total hours of work per week, the day and hours to be worked each day and the annualised salary attached to each of three proposed new positions: PJ [33]-[36].

(3)    The fact that Ms Casal had been working 34.56 hours per week. In concluding that the scheme included this fact, the primary judge had regard to a payslip dated 9 December 2021 that had been provided to the Commissioner as part of the ruling application which disclosed Ms Casal’s remuneration: PJ [43] and [47]. The primary judge inferred from the payslip that the new roles would have resulted in a reduction in Ms Casal’s remuneration of 20% to 40%: PJ [48].

(4)    The fact that had she accepted one of the positions she was offered, Ms Casal’s working days were to change, but the manner and extent of that change was not known: PJ [60].

12    Based on the scheme, the primary judge concluded that the three roles offered to Ms Casal involved a reduction in both hours and remuneration of between approximately 20% and 40% and that this was a material reduction in both Ms Casal’s hours and her remuneration: PJ [61].

13    The primary judge concluded that a dismissal for redundancy is one that occurs because the employer no longer wishes the job the employee has been doing to be done by anyone: PJ [73]. The primary judge considered that a “job” for these purposes means a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee: PJ [74].

14    The primary judge considered that there is no redundancy where “the duties in an alternative post-restructure role are not ‘too dissimilar from the duties that [the employee] had been carrying out’, where they ‘closely approximate’ those of the pre-restructure role, where there are ‘no significant changes to the work performed’, or where there are only ‘some changes’”: PJ [77] (citations omitted). By contrast, a job does become redundant where the post-restructure job involves “materially fewer hours of work to be performed and hence materially less remuneration to the employee”: PJ [78].

15    The primary judge accepted that different hours on changed days means (subject to the question of materiality) that a position is different: PJ [81]. The primary judge accepted that the concept of duties and responsibilities is wide enough to incorporate days and hours of work: PJ [83]. The primary judge also accepted that if an employee’s remuneration is materially reduced, the employee is no longer working in the same position: PJ [82].

16    The primary judge concluded that, in the present case, Ms Casal’s position had become genuinely redundant given the reduction in her hours: PJ [94].

Issue on appeal

17    The Commissioner appeals the judgment of the primary judge. The Commissioner relied upon six grounds of appeal:

(1)    The primary judge erred in holding that Ms Casal’s position was genuinely redundant for the purposes of s 83-175(1) of the 1997 Act (at PJ [94] and [106]).

(2)    The primary judge erred in law by adopting the wrong test of genuine redundancy for the purposes of s 83-175(1) of the 1997 Act in treating (at PJ [78]-[83], [90]-[93] and [104]-[105]):

(a)    a material reduction in remuneration as determinative of, or central to, an assessment of whether an employee’s position is genuinely redundant;

(b)    the remuneration under an employment contract as relevant to the test of genuine redundancy of a position; and

(c)    a material alteration to the days and hours of work as determinative of, or central to, an assessment of whether an employee’s position is genuinely redundant.

(3)    The primary judge erred in law by misapplying the test of genuine redundancy in finding that a reduction in hours of approximately 20% or, alternatively, 40% means that the employer no longer desires the employee’s position to be performed by anyone (at PJ [105]-[106]).

(4)    The primary judge erred in law by treating a reorganisation of work as, of itself, or alternatively, when coupled with a reduction in remuneration or change in hours or days, determinative of whether there has been a genuine redundancy (at PJ [84]-[85]).

(5)    The primary judge erred in law by treating the “appropriateness” of a post-restructure position from the employee’s perspective when compared with their pre-restructure position as potentially relevant to the test of genuine redundancy (at PJ [107]-[108]).

(6)    The primary judge should have found that Ms Casal’s position was not genuinely redundant for the purposes of s 83-175(1) of the 1997 Act.

18    Although expressed as six separate grounds, the essential issue is whether the primary judge was correct to conclude that Ms Casal’s position was genuinely redundant for the purposes of s 83-175(1).

19    The Commissioner submits that the primary judge erred by incorrectly focussing on a material reduction in remuneration and on a material alteration to the days and hours of work as central in determining whether an employee’s position is genuinely redundant. The Commissioner contends that the proper focus should be on the job or position itself. It was submitted that a job or position is the collection of functions, duties and responsibilities and not the remuneration paid for performance of those functions and duties.

20    The Commissioner submits that the primary judge further adopted a “mathematical” approach and erred in concluding that material changes to days and hours of work were determinative of whether a position had become redundant. There was no basis for finding that there had been a material change in the days worked given the description of the scheme. The Commissioner contended that the scheme as described in the ruling was that the new positions had similar skills and duties to Ms Casal’s former position. Any reduction in hours did not reflect a change in duties. There was no support in the authorities for a mathematical approach to the question of redundancy based on percentage reduction in hours of work.

21    The Commissioner submits that a reorganisation which does not result in a reduction in the total number of employees or which does not result in an employee being left with no duties to perform does not result in an employee’s position becoming redundant. Pointing to a reorganisation does not address the statutory question. Nor is that question addressed by considering whether alternative positions offered to Ms Casal were “appropriate”.

22    Ms Casal submits that there was no error in the primary judge’s conclusion. The Commissioner erroneously conflates the concept of position with the tasks performed by the holder of that position. A position can be redundant where the tasks and duties attached to that position are redistributed to the holders of other positions: Ulan Coal Mines Ltd v Howarth [2010] FWAFB 3488; (2010) 196 IR 32 at [17]-[18] (Boulton SDP, Drake SDP and McKenna Commr). A position should be properly understood as a particular collection of functions, tasks and responsibilities with the consequence that a change in that collection should be regarded as a change in the position with the old position becoming redundant and being replaced by a new position. Ms Casal submitted that the primary judge was correct to conclude that the reduction in hours, and hence pay, meant redundancy.

Statutory regime

23    Part 2-40 of the 1997 Act is entitled “Rules affecting employees and other taxpayers receiving PAYG withholding payments”.

24    Division 82 in Part 2-40 sets out the income tax consequences of employment termination payments. An employment termination payment is defined in s 82-130. Relevantly, an employment termination payment is a payment received by a taxpayer in consequence of the termination of his or her employment, and received no later than 12 months after that termination. Section 82-130 excludes payments mentioned in s 82-135 from being employment termination payments. Relevantly, the part of the payment which is a genuine redundancy payment is excluded from being an employment termination payment. Generally, a payment is not assessable to the extent a payment is a genuine redundancy payment, up to a capped amount: s 83-170.

25    The term “genuine redundancy payment” is defined in s 83-175, which provides:

83-175 What is a genuine redundancy payment?

(1)    A genuine redundancy payment is so much of a payment received by an employee who is dismissed from employment because the employee’s position is genuinely redundant as exceeds the amount that could reasonably be expected to be received by the employee in consequence of the voluntary termination of his or her employment at the time of the dismissal.

(2)    A genuine redundancy payment must satisfy the following conditions:

(a)    the employee is dismissed before the earlier of the following:

(i)    the day the employee reached *pension age;

(ii)    if the employee’s employment would have terminated when he or she reached a particular age or completed a particular period of service—the day he or she would reach the age or complete the period of service (as the case may be);

(b)    if the dismissal was not at *arm’s length—the payment does not exceed the amount that could reasonably be expected to be made if the dismissal were at arm’s length;

(c)    at the time of the dismissal, there was no *arrangement between the employee and the employer, or between the employer and another person, to employ the employee after the dismissal.

(3)    However, a genuine redundancy payment does not include any part of a payment that was received by the employee in lieu of *superannuation benefits to which the employee may have become entitled at the time the payment was received or at a later time.

Payments not covered

(4)    A payment is not a genuine redundancy payment if it is a payment mentioned in section 82-135 (apart from paragraph 82-135(e)).

Note:    Paragraph 82-135(e) provides that the part of a genuine redundancy payment or an early retirement scheme payment worked out under section 83-170 is not an employment termination payment.

26    The following observations are made in relation to the definition of genuine redundancy payment in s 83-175:

(a)    A payment is a genuine redundancy payment only if it is received by an employee who is dismissed from employment. This requires the cessation of the employment relationship: see further s 80-10.

(b)    The reason for the employee’s dismissal is that the employee’s position is genuinely redundant. Section 83-175(1) applies only where a dismissal is attributable to a limited type of redundancy. It is the position, not the employee as a person, that must be the subject of the genuine redundancy: Weeks v Commissioner of Taxation [2013] FCAFC 2; (2013) 209 FCR 264 at [18] (Dowsett, Besanko and Robertson JJ). Section 83-175 does not apply to a payment made to an employee who is dismissed because that employee’s services can no longer be effectively utilised in the employee’s current job, but the employee’s job was still required to be performed. A particular employee may thus cease to meet the employer’s requirements (and in that sense be “excess” to requirements) but the employee’s position not be genuinely redundant.

(c)    The genuine redundancy payment is the amount of the payment received by the employee that exceeds the amount that could reasonably be expected to be received by the employee had the employee voluntarily resigned: s 83-175(1).

(d)    A payment is not a genuine redundancy payment if at the time of the dismissal there was an arrangement between the employer and the employee (or between the employer and another person) to employ the employee after the dismissal: s 83-175(2)(c).

27    It is the dismissal and not the payment which must be attributable to genuine redundancy. The concept of a genuine redundancy payment looks to the reason why an employment relationship has come to an end.

28    The phrase “genuinely redundant” is not defined in the 1997 Act.

Consideration

Concept of redundancy

29    The concept of redundancy in an employment or industrial relations context has been the subject of judicial consideration. In considering those authorities, it is important to bear in mind that the concept of redundancy in that context can take its meaning from the statutory, industrial award or contractual provisions in the particular case.

30    The industrial relations authorities can assist in understanding how parties have approached the question of redundancy in particular industries in agreeing the terms of employment or the terms of an industrial award. However, not every observation made in a particular case will necessarily translate to Div 83 of the 1997 Act. Each authority must be read in its particular factual and legislative context. The question of whether an employee’s position is genuinely redundant for the purposes of s 83-175 is not necessarily determined by whether an employee’s employment may be lawfully terminated pursuant to the terms of an industrial award or a contract of employment. Nor is it determined by whether a particular contractual entitlement to a payment described by the parties as a “redundancy payment” has been triggered.

31    With that caution in mind, cases decided in the employment and industrial context can be relevant to considering whether a person’s position has become genuinely redundant for the purposes of s 83-175 of the 1997 Act. What is apparent from the industrial or employment authorities is that the question of redundancy is a question of the continued utility of the job performed by the employee: Dibb v Commissioner of Taxation [2004] FCAFC 126; (2004) 136 FCR 388 at [40], [43]-[44] (Spender, Dowsett and Allsop JJ); Weeks at [24]-[25] (Dowsett, Besanko and Robertson JJ). There is no redundancy where an employee is dismissed for reasons relating to the personal competence of the individual employee; the concept of redundancy connotes an employee becoming redundant where (and for whatever reason), the employer no longer desires to have performed that job which the employee was doing: R v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-Operative Ltd (1977) 16 SASR 6 at 26-7 (Bright J); Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-3 (Beazley J). A dismissal for redundancy is not a dismissal on account of any personal act or default of the employee or any consideration peculiar to the employee but because the employer no longer wishes to have the job the employee has been doing to be done by anyone: Adelaide Milk Supply at 8 (Bray CJ) cited in Dibb at [40] (Spender, Dowsett and Allsop JJ). These features of redundancy in employment or industrial law are applicable to the concept of the genuine redundancy of a taxpayer’s position in Div 83 of the 1997 Act.

32    This concept of redundancy is reflected in the current Fair Work Act 2009 (Cth) in ss 119(1)(a) (the national employment standard relating to an employee’s entitlement to redundancy pay) and 389(1)(a) (in the context of an exception from unfair dismissal for a case of genuine redundancy) which respectively provide:

119 Redundancy pay

Entitlement to redundancy pay

(1)    An employee is entitled to be paid redundancy pay by the employer if the employee's employment is terminated:

(a)    at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

…

389 Meaning of genuine redundancy

(1)    A person’s dismissal was a case of genuine redundancy if:

(a)    the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

…

33    Section 83-175 of the 1997 Act uses the term “position” rather than “job”, likely reflecting the fact that its context extends beyond employees to office holders: s 80-5. Whether a position has become redundant is a question of fact and degree: Bampton v Viterra Ltd [2015] SASCFC 87; (2015) 123 SASR 80 at [217] (Blue J, Vanstone J agreeing); see also UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436; (2014) 246 IR 320 at [132] (Sackville AJA, Emmett JA and Adamson J agreeing). It is not a question that involves bright line tests but is a matter of impression based on the totality of the facts and circumstances.

34    To determine whether a position has become redundant, it is necessary to identify the “position” in question: Dibb at [40] (Spender, Dowsett and Allsop JJ). The issue requires the identification of the attributes of a position, a change to which results in the position becoming redundant.

35    The attributes of a position are matters of substance, not form. It is not the position title or job number which is relevant to the issue of redundancy. A position involves a collection of functions, duties and responsibilities entrusted as part of a scheme of the employer’s organisation to a particular employee: Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308 (Ryan J). A position encompasses the type and nature of the tasks, functions and duties to be performed, the location at which those tasks and functions are to be performed, the scale of the tasks, functions and duties and the scope of responsibilities.

36    A position may become redundant notwithstanding that the tasks carried out by the holder of that position continue to be carried out by others. A different distribution of work across positions can result in a particular position becoming redundant: Dibb at [44] (Spender, Dowsett and Allsop JJ); Jones at 308 (Ryan J). An employee’s position may become redundant in circumstances where the functions, duties and responsibilities attached to that position are redistributed among holders of other positions, including newly created positions. An example in which the redistribution of tasks and responsibilities may give rise to a redundancy is where the duties of a single full time employee are distributed to several part time employees. See for example, Broadlex Services Pty Ltd v United Workers’ Union [2020] FCA 867; (2020) 296 IR 425 where it was common ground that the replacement of a full time position with a part time position resulted in the full time position being made redundant. The Commissioner’s approach erroneously focusses too narrowly on the specific tasks an employee performs, and suggests that there can be no genuine redundancy of a position if those same tasks continue to be performed by someone within the employer’s organisation.

37    The mere fact that termination follows a reorganisation or restructure does not determine the issue of whether the reason for the termination was that the employee’s position had become redundant. It is necessary to consider the particular changes made to the position previously held by the employee to determine whether the role has so changed that the previous position can be said to no longer exist: Foster’s Group Ltd v Wing [2005] VSCA 322; (2005) 148 IR 224 at [47] (Habersberger AJA, Maxwell P and Nettle JA agreeing). The degree to which the original role has been changed must be sufficient to conclude that for “all practical purposes” the role no longer existed: Foster’s Group at [67] (Habersberger AJA, Maxwell P and Nettle JA agreeing).

38    The Commissioner contended that a reduction in an employee’s hours could properly be taken into account as part of the holistic analysis, but that same holistic analysis did not permit regard to be had to a change to an employee’s remuneration. On the Commissioner’s argument, remuneration is only the “price” an employer pays for the performance of the employee’s duties and responsibilities and in analysing whether a position has become redundant, a reduction in remuneration could constitute no more than a “trigger”, causing one to examine whether there has been a change to the duties, functions and responsibilities making up the position itself.

39    We accept that a reduction in remuneration may not of itself demonstrate that a position has become redundant. Remuneration is one factor, amongst others, that falls to be considered as part of the holistic analysis, not merely as a “trigger” for the consideration of other factors. A redundancy does not arise merely because the same job may be performed for a lower price: Foster’s Group at [46] (Habersberger AJA, Maxwell P and Nettle JA agreeing). The circumstances in which a reduction in remuneration may support a conclusion that a position has become redundant include where the reduction in remuneration results from a change to the scope of the responsibilities or duties to be performed, the scale of the tasks to be carried out or the location of the role.

40    The importance of a reduction in remuneration in the holistic analysis of whether a position has become redundant will vary depending on the circumstances. For an employee remunerated by performing work on an hourly basis, a reduction in remuneration that results from a reduction in the hours of work performed may support a conclusion that the employee’s position has become redundant. In other circumstances, such as where a person occupies a position not remunerated on an hourly basis, the significance of a change to remuneration in the analysis of redundancy may well differ. Equally, where other aspects of a person’s role change, but remuneration does not change, the fact that remuneration remains unchanged is likewise relevant to the holistic analysis (see, eg Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [137] in which Callinan J referred to the fact of an executive’s remuneration remaining unchanged as a factor in his Honour’s conclusion that the executive’s position had not become redundant; and Bampton at [57] and [222] in which Blue J (Vanstone J agreeing) had regard to there being no change to an employee’s remuneration as a factor in concluding that Mr Bampton’s position had not been made redundant).

41    Contrary to the Commissioner’s contention, there is no hard and fast principle that remuneration is always outside the proper field of analysis. The observations made in the industrial cases must be understood in their context. For example, the Commissioner relied heavily on the observation of Sackville AJA in UGL Rail Services at [151] that “[t]he fact that the remuneration attached to the position is reduced may be a reason to examine closely whether the position has in truth been retained”. But that observation is to be understood in the factual context of an executive position in respect of which responsibilities for some projects were removed but in respect of which the remuneration was unchanged (despite an initial proposal that it would be reduced by 20%). His Honour further observed that a reduction in remuneration “cannot be determinative” of the question of redundancy. That is an observation with which we agree.

42    Not every change to a relevant attribute of a position will result in a position becoming redundant. The change must be of such a degree as to result in the old position ceasing to exist, whether replaced by a new position or by no position at all. For an employee remunerated by performing work on an hourly basis, a reduction in remuneration that results from a reduction in the hours of work performed may point to a conclusion that the employee’s position has become redundant where the reduction in hours is sufficiently significant to support a conclusion that the scale of the role has been so materially reduced as to result in the former position becoming no longer required by the needs of the employer.

43    It has been said that what is critical for the purposes of identifying a redundancy is whether the holder of the former position has any duties left to discharge: Jones at [308] (Ryan J). However, it does not follow that an employee’s position has not become redundant merely because some aspect of an employee’s duties is still required to be performed by somebody: Dibb at [44] (Spender, Dowsett and Allsop JJ). For example, an employee’s position may be made redundant where the duties attached to that position are redistributed and combined with other duties and functions to be performed by a holder of a more general or wider position: Jones at 308 (Ryan J).

44    The nature of the role and the manner in which the holder of the role is remunerated can be important. In the case of the holder of an executive position remunerated in the form of a total salary package, it has been said that even if the role was reduced to 20 or 25% of the total working time, the position could not be said to have become redundant in circumstances where significant efforts continued to be made to obtain a replacement for the terminated executive: Foster’s Group at [67]-[69] (Habersberger AJA, Maxwell P and Nettle JA agreeing).

45    An employee’s dismissal may be attributed to his or her position being redundant notwithstanding that the employee may have been offered and declined another position if the alternative position is substantially different, or on substantially different terms and conditions.

Application to the present case

46    The description of the arrangement in the private ruling was far from ideal for the purposes of determining a question of fact and degree. As the primary judge and the Commissioner in making the decision on objection found, it was necessary to look to the documents provided to the Commissioner in the application for the private ruling. As mentioned above, there was no challenge before this Court to the correctness of the primary judge’s approach to the construction of the arrangement the subject of the ruling. Nor did either party contend that this Court should remit the matter to the Commissioner on the basis that the description of the scheme in the ruling was inadequate so as to preclude the primary judge (or this Court) from determining the correctness of the ruling.

47    The question of redundancy is a question of fact and degree, which is to be determined having regard to the particular circumstances. In the present case, Ms Casal was employed to perform duties and tasks as an assistant in an early learning centre. Ms Casal was not engaged to discharge responsibilities and perform a role for which she was paid a fixed salary. Having regard to the nature of an early learning centre, the running of such a centre will necessarily involve somebody performing tasks and duties relating to the care of children. The issue of whether Ms Casal was dismissed because her position had become redundant is not determined by whether other employees continued to perform similar tasks involving similar skills to those of Ms Casal, or that Ms Casal would have continued to perform similar tasks involving similar skills had she accepted one of the alternate positions.

48    In the circumstances of this case, the primary attributes of Ms Casal’s role were not limited to the precise tasks she was to carry out but extended to the scope and scale of her tasks and duties. Ms Casal’s position was to perform duties and tasks on an hourly basis and she was remunerated according to her hours worked. The changes made to Ms Casal’s role involved a reduction of 20% or 40% in her working hours. Contrary to the Commissioner’s criticisms, to refer, as we have, and as the primary judge did, to the reduction in hours (and, consequently, remuneration) in percentage terms is not to determine the question of redundancy by use of a mathematical formula but to illustrate the significance of the change. In Ms Casal’s case, the scope and scale of her role were significantly diminished. The issue of redundancy is a matter of fact and degree. Based on the description of the scheme, the Court is satisfied that the scope of Ms Casal’s part time role had diminished to a degree to which her position had become redundant.

49    This conclusion does not rest on the fact that Ms Casal’s remuneration would have been reduced had she accepted one of the new positions but the fact that, having regard to the nature of her employment, her total hours of work had diminished to a point where for practical purposes it may be said that the reason for her dismissal was because her position had become redundant. As a worker being remunerated based on hours worked, the reduction in Ms Casal’s remuneration flowed from a reduction in her working hours. The reduction in Ms Casal’s remuneration was not a consequence of the same job being performed at a lower cost to the employer, as may occur, for example if an employer terminated one employee and then engaged a replacement to perform the same tasks, functions and duties over the same hours at a lower hourly rate. Rather, the reduction in Ms Casal’s remuneration was a consequence of a reduction in the scope of her position to a point at which it is to be concluded that her former position had become redundant.

50    In reaching this conclusion, we have had regard as part of the holistic analysis to the fact that the new positions offered to Ms Casal would have involved similar tasks that are necessarily associated with caring for children in an early learning centre. We also treated the fact that the scheme involved a change to Ms Casal’s working days as a neutral factor because the nature and extent of those changes are unknown. As we have explained above, given the nature of Ms Casal’s position, the reduction to Ms Casal’s working hours (and, consequently, her remuneration) was such as to show that her former position had become redundant.

51    The appeal is to be dismissed.

Associate:

Dated:    20 February 2026

REASONS FOR JUDGMENT

YOUNAN J:

INTRODUCTION

52    By notice of appeal filed on 17 March 2025, the appellant appeals from the decision of McEvoy J in this Court allowing an appeal by the respondent, Ms Florencia Baya Casal: Baya Casal v Deputy Commissioner of Taxation [2025] FCA 87 (Primary Judgment or PJ). Ms Casal brought an appeal under s 14ZZ of the Taxation Administration Act 1953 (Cth) against a decision of the Deputy Commissioner of Taxation made on 1 December 2022, which upheld a private ruling that a payment made to Ms Casal was not a “genuine redundancy payment” within the meaning of s 83-175(1) of the Income Tax Assessment Act 1997 (Cth) (1997 Act).

53    There is one issue on appeal: what is a “genuine redundancy” for the purposes of s 83-175 of the 1997 Act?

54    The question arises in the context of a proposed corporate restructure and redeployment where the respondent, who was working part-time on certain days in an early learning centre (ELC), was offered one of “three new ELC roles” with “similar” skills and duties (to her previous role), but with “part time hours to decrease and working days changed” (Scheme [3]-[4]), resulting in a 20% (at best) or 40% (at worst) reduction in hours and remuneration.

55    The facts stated in the description of the Scheme set out in the private ruling for the year ending 30 June 2022, are not in contest (nor can they be). The inferences drawn by the primary judge from those facts, albeit controversial at first instance, were not contested on appeal.

56    The complexity in this case arises in the absence of a definition of the term “genuine redundancy”, with the same or cognate expressions used in industrial legislation, and given the limited ruled facts of the Scheme.

57    This proceeding has been described by the parties as a “test case”. Given the evaluative nature of the assessment involved, this may not be an apt description.

BACKGROUND

58    The background to this matter is summarised at paragraphs [3] to [10] of the Primary Judgment. Those aspects salient to the present appeal are outlined below.

59    The respondent’s employment as a part-time ELC assistant at Ivanhoe Grammar School between 2014 and 2021 was terminated following a restructure of the school’s ELC. Ms Casal elected to take a redundancy, rather than to accept one of the “three new co-educator [part-time] roles” offered to her by letter dated 5 October 2021, each of which involved decreased hours and a change in working days, although the actual change in days is unknown (i.e., not a ruled fact).

60    On 21 December 2021, the respondent sought a private ruling from the appellant as to whether the payment she had received on termination was properly characterised as an employment termination payment (ETP) as defined by s 82-130 of the 1997 Act (as the school had treated it), or a “genuine redundancy payment” within the meaning of s 83-175 of the 1997 Act. Genuine redundancy payments receive more beneficial tax treatment than ETPs (PJ at [4]).

61    In a notice of private ruling issued on 26 April 2022, the appellant found the payment was properly characterised as an ETP and was not a “genuine redundancy payment”. The relevant facts and circumstances stated in the description of the Scheme, upon which the decision was based, is set out at [6] of the Primary Judgment, as follows:

1.     You were employed by Ivanhoe Grammar School (Employer) in the Buckley House Early Learning Centre, starting on 28 January 2014 as an early learning centre (ELC) assistant.

2.     You were employed on a part-time basis of 34.56 hours per week

3.     On 5 October 2021, the Employer notified you that the ELC structure was to be remodelled with the part time hours to decrease and working days changed. The skills and duties for the role are similar.

4.     The Employer was proposing three new ELC roles. As an example, Role 1 consisted of 28.5 hours to be worked over four days a week.

5.     You were advised that you were eligible to be redeployed to the remodelled ELC role or you could take a redundancy.

6.     The days and number of hours you were offered were not acceptable to you and you opted to accept the redundancy.

7.     The Employer provided 13 weeks pay in consequence of your termination of employment.

8.     On 9 December 2021 you received an employment termination payment (ETP) of $15,326.96.

9.     When you queried the taxation and classification of the payment as an ETP, the Employer maintained that ‘The tax office distinguishes between ‘genuine’ (tax-free) and ‘non-genuine’ (taxable) when it comes to the tax treatment of redundancy payments. If the duties, functions and responsibilities of the departing employee are still required to be done by another employee then the redundancy is considered to be non-genuine. Such payment is taxed as an Employment Termination Payment’.

62    The respondent objected against the private ruling on 10 June 2022, which was disallowed by the appellant on 1 December 2022 (Objection Decision). The respondent successfully appealed the Objection Decision in the Federal Court of Australia on 18 February 2025, with the primary judge finding that the appellant’s position was “genuinely redundant” within the meaning of s 83-175(1) of the 1997 Act. The Commissioner now appeals that decision.

Findings of fact by the primary judge

63    The notice of private ruling states in relation to the ruled facts recited at paragraph [61] above, that “[i]f your circumstances are different from these facts, this private ruling has no effect and you cannot rely on it.”

64    As indicated above, there is no contest as to the facts stated in the Scheme, or the inferences drawn by the primary judge, who accepted that:

(1)    the respondent’s remuneration in the new roles would be reduced (on account of decreased working hours) (PJ at [31]);

(2)    the new roles would have reduced the respondent’s working hours by approximately 20% to 40%, with a corresponding reduction in remuneration (PJ at [47], [48] and [61]);

(3)    the reduction in hours and remuneration was “material” in circumstances where the respondent is working and being paid by the hour (PJ at [31], [49] and [61]);

(4)    the reference to the 5 October 2021 letter in the ruled facts was sufficient to allow “the court to have regard to the letter itself with a view to drawing factual inferences”, in “uncontroversial ways” regarding “the change in the [respondent’s] working hours and remuneration in each of the new roles offered to her” (PJ at [36]); and

(5)    the respondent’s payslip dated 9 December 2021 (which was not mentioned in the ruling itself, but was listed as one of the documents considered by the appellant in the Objection Decision) “and its stated remuneration of $50,698.88 is something to which the court may have regard in order to construe the parts of the scheme regarding the roles offered to the [respondent] on 5 October 2021 by the school” (PJ at [48]).

65    The primary judge did not accept that it was possible to draw an inference:

(1)    that there were other similar or suitable roles for the respondent within the school (PJ at [41]-[42]); or

(2)    as to the days on which the respondent was working in her existing position prior to the restructure. The facts of the Scheme are “that the [respondent’s] working days were to change, and no more” (PJ at [60]).

66    While the appellant did not take issue on appeal with the primary judge’s finding of materiality, the appellant maintains that the primary judge should have taken into account the ruled fact that the new roles involved skills and duties “similar” to those of the respondent’s former role, such that on a qualitative assessment, the reduction in hours and therefore remuneration was not such as to strip the respondent’s former role of its functions. It is the step taken from a finding of materiality based on a percentage reduction in remuneration, to a conclusion of redundancy, with which the appellant takes issue. As will be seen, the appellant oversimplifies the primary judge’s reasoning.

Adequacy of the ruled facts

67    That the Court must take the facts as stated in the Scheme was not in dispute: Commissioner of Taxation v Eichmann [2019] FCA 2155 at [22].

68    The appellant referred the Court to the reasons of Hill J in the decision of the Full Court in CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 at 432, where his Honour found that “[t]he Court is not empowered in exercising its jurisdiction to find facts and if the facts were inadequate would be obliged to refer the matter back to the Commissioner to exercise the power given to him”. In the present case, the limited facts make the task of evaluation difficult, but not impossible. The reference to “similar” skills and duties begs the question of the degree of similarity, and a comparative description of skills and duties may have assisted the evaluative task. Nonetheless, neither party has put the adequacy of the ruled facts in issue, and I infer from the ruled fact (Scheme at [3]) that any change in the skills and duties was not material.

WAS THE EMPLOYEE’S POSITION GENUINELY REDUNDANt?

Genuine redundancy payment

69    The statutory regime is outlined at paragraphs [13] to [24] of the Primary Judgment. That outline demonstrates the concessional tax treatment that ensues from the classification of a payment as a “genuine redundancy payment”, as compared with an “early termination payment”. Those matters are not in dispute.

70    The point of contention lies in what it means for an employee’s “position” to be “genuinely redundant”, within the definition of a “genuine redundancy payment” in s 83-175 of the 1997 Act, which relevantly provides:

83-175 What is a genuine redundancy payment?

(1)     A genuine redundancy payment is so much of a payment received by an employee who is dismissed from employment because the employee’s position is genuinely redundant as exceeds the amount that could reasonably be expected to be received by the employee in consequence of the voluntary termination of his or her employment at the time of the dismissal.

(2)     A genuine redundancy payment must satisfy the following conditions:

(a)     the employee is dismissed before the earlier of the following:

(i)     the day the employee reached *pension age;

(ii)     if the employee’s employment would have terminated when he or she reached a particular age or completed a particular period of service—the day he or she would reach the age or complete the period of service (as the case may be);

(b)     if the dismissal was not at *arm’s length—the payment does not exceed the amount that could reasonably be expected to be made if the dismissal were at arm’s length;

(c)     at the time of the dismissal, there was no *arrangement between the employee and the employer, or between the employer and another person, to employ the employee after the dismissal.

…

71    Subsection 83-175(2) stipulates the conditions that a “genuine redundancy payment” must satisfy (as distinct from the definitional clause in s 83-175(1)). One such condition is found in s 83-175(2)(c), which provides that, at the time of the dismissal, there was no arrangement between the employee and the employer, or between the employer and another person, to employ the employee after the dismissal. That does not shed light on the reason for dismissal, being the redundancy of the employee’s “position”. In other words, the “position” may be redundant even if there is an arrangement in place for the redeployment of the employee (to another position). However, the consequence is that there is no “genuine redundancy payment” for the purposes of s 83-175.

Relevance of industrial legislation

72    The term “genuine redundancy” is not defined in the 1997 Act. In the absence of a statutory definition, the parties drew the Court’s attention to the same or cognate terms in industrial legislation, notably the Fair Work Act 2009 (Cth), which relevantly provides:

119 Redundancy pay

Entitlement to redundancy pay

(1)     An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a)     at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b)     because of the insolvency or bankruptcy of the employer.

…

389 Meaning of genuine redundancy

(1)     A person’s dismissal was a case of genuine redundancy if:

(a)     the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b)     the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2)     A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a)     the employer’s enterprise; or

(b)     the enterprise of an associated entity of the employer.

73    Like s 83-175 of the 1997 Act, the significance of a finding of “redundancy” in s 119 of the Fair Work Act is that it warrants a certain redundancy payment, which is worked out in accordance with the table at s 119(2): Construction, Forestry, Mining and Energy Union v Spotless Facility Service Pty Ltd [2015] FWCFB 1162; (2015) 248 IR 34 at [59]-[60]. The significance of a finding of “genuine redundancy” in s 389 of the Fair Work Act is that it forms one of the bases of an unfair dismissal (s 385(d)).

74    The primary judge held that the core meaning of “redundancy” is the same in the industrial and income tax context (PJ at [101]-[102]). That is not a finding that the terms are the same, but that there is a common core meaning.

75    There was no suggestion by either party that the industrial law context engendered a different meaning, so as to challenge the primary judge’s finding of a “core meaning” of redundancy. In fact, the notion of a core meaning was embraced by the parties directly or indirectly by reliance on the cognate expressions in the industrial law cases.

76    Insofar as the appellant cautioned “against uncritical transposition” in applying those cases, I take the suggested approach to be no more than cognisance of the relevant statutory (and factual) context of those cases. While the respondent submitted that the only relevant context for the term “genuine redundancy” is the termination of employment, that is not a substitute for the statutory context: Spotless at [66].

A core concept of redundancy

77    Both parties proceeded on the basis that, to identify a circumstance of redundancy (or “genuine redundancy”) for the purposes of s 83-175 of the 1997 Act, it was necessary to determine whether the employer required the respondent’s former position to be occupied by anyone. This is the “widest form” of the concept of “redundancy” in the industrial context: R v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-operative Ltd (1977) 16 SASR 6 at 27 (Bright J; Bray CJ agreeing at 8; Mitchell J at 34).

78    It cannot be assumed that “redundancy” (or “genuine redundancy”) must have a uniform meaning regardless of context, or the circumstances in which the term has to be construed: UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436; (2014) 246 IR 320 at [116] (Sackville AJA). However, those cases that have considered the meaning of “redundancy” in the context of taxation legislation have relied on the industrial cases: e.g., Dibb v Commissioner of Taxation [2004] FCAFC 126; (2004) 136 FCR 388 at [40]-[43]. The favour has been returned: e.g., Foster’s Group Ltd v Wing [2005] VSCA 322; (2005) 148 IR 224 at [34].

79    In the 1997 Act, like the Fair Work Act, the concept of “genuine redundancy” is used to describe a payment that is received by an employee who is dismissed from employment because the employee’s “position” is “genuinely redundant”. The advantage to the employee (by way of concessional tax treatment) that ensues from the classification of a “genuine redundancy payment” may support a beneficial interpretation of the term, and therefore one that embraces its potential breadth: see IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1 at 12 (Brennan CJ and McHugh J; Gummow J at 39). Nevertheless, the relevant term must be construed in the context in which it appears.

80    Neither party sought to draw, or rely upon, any distinction between the term “redundancy” (used in the fair work legislation) and “genuine redundancy” (emphasis added) (used in both the fair work and taxation legislation). The appellant submitted that the phrase used in the legislation is a composite phrase that reflects the common law test. That, of course, begs the question.

81    In the industrial context, there is both a commonality and a distinction between the terms “redundancy” and “genuine redundancy” in ss 119(1) and 389(1), respectively, of the Fair Work Act. The commonality is the requirement that the employer no longer requires the job to be performed by anyone. The distinction is the reason for that. In the case of a “redundancy”, the reason is at large with one exception (viz., the ordinary and customary turnover of labour). In the case of “genuine redundancy”, the reason is prescribed (viz., changes in the operational requirements of the employer’s enterprise). In that regard, a case of “genuine redundancy” may be narrower in scope than that of a mere “redundancy”. This gives complexion to the nature of the change required to effect a “genuine redundancy” for the purposes of the fair work legislation.

82    While this does not deny a “core meaning” (as between the terms “redundancy” and “genuine redundancy” in the fair work legislation, and as between the terms “genuine redundancy” in both the fair work legislation and the 1997 Act), it calls for attention to the reason the employer no longer requires the position to be performed by anyone. This is why the fact of redeployment will not be enough, in the fair work legislation, to engender a “genuine redundancy”.

83    Furthermore, s 389(2) of the Fair Work Act imposes a further constraint on the concept of a “genuine redundancy” by introducing the notion of reasonableness of redeployment. Insofar as that consideration is extraneous to the determination of whether the employer requires the job to be performed by anyone, and is akin to the assessment of the “appropriateness” of alternative positions for the purposes of s 120(1)(b)(i) of the Fair Work Act, it narrows the concepts of “genuine redundancy” (as distinct from “redundancy” simpliciter) under the fair work legislation.

Statutory criterion: the employee’s “position”

84    Section 83-175 of the 1997 Act defines “genuine redundancy payment” by reference to the employee’s “position” (i.e., it is the employee’s “position” that is subject to the “genuine redundancy”). The 1997 Act does not define the term “position”.

85    Both parties proceeded on the basis that the “position” is the collection of functions, duties and responsibilities entrusted to the employee: Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308. However, the parties disagreed on the characterisation of the “functions, duties and responsibilities”. The appellant submitted that one looks at whether the “position” has been stripped of its functions. The respondent submitted that the emphasis was on the collection of functions, duties and responsibilities, which included hours worked and remuneration paid, and which required an evaluative assessment of fact and degree, where one analyses what was required to be performed beforehand, and what was required to be performed afterwards.

86    In the absence of a statutory definition of a term, and given the common law exposition of the meaning of that term, it is often the case that the words used by courts to expound the term are interpreted as though they have definitional significance. This is so in the present case, where the appellant sought to prescribe the meaning of “functions, duties and responsibilities”, and to exclude consideration of remuneration on the basis that it is the price paid for performing the “functions, duties and responsibilities” that comprise the “position”. As the respondent argued, they are not the words of the statute, and not an exhaustive list of things that are relevant to consider.

87    The articulation of the notion of “redundancy” in Adelaide Milk Supply does not identify the “position” (or the “job”), or the duties associated with the “job”, which may be crucial in an individual case: UGL Rail Services at [115] (Sackville AJA).

88    The parties did not seek to draw a distinction between “job” (as used in the Fair Work Act) and “position” (as used in the 1997 Act). They were treated as synonymous by Kourakis CJ in Bampton v Viterra Ltd [2015] SASCFC 87; (2015) 123 SASR 80 at [40], who observed that both terms refer to the collection of duties which constitute the “position” or “job” (rejecting a submission that the “position” is the totality of the service by that employee).

89    For the purposes of identifying the attributes of the “job” or “position”, the nomenclature may not be material. I see no reason in the statutory context for the reference to “position” to be viewed narrowly so as to exclude any particular attributes of the work that is performed. There may be a reason to view a particular “job” or “position” as a severable collection of duties, but it is not necessarily so, and I note that Blue J in Bampton (at [57], [145], [220] and [222]-[224]) considered whether the proposed division of responsibilities would involve any change in Mr Bampton’s remuneration, working hours, status, seniority or reporting line. In the present case, a focus on duties or functions (in the narrow sense) alone would be to ignore the basis upon which the “position” is offered and performed. Furthermore, as the primary judge acknowledged (PJ at [83]), the ordinary concepts of “duties” and “responsibilities” are wide enough to incorporate days and hours of work.

90    While it is insufficient to make an arithmetic quantitative comparison of an employee’s situation before and after a change, that is not what the primary judge did in the present case. Rather, his Honour determined that the new situation was sufficiently different such that, for all practical purposes, the former role no longer existed. This is reflected in the finding that the employer no longer desired to have the job performed by anyone (PJ at [106]). This is the correct approach. As Blue J said in Bampton, the question whether the nature and degree of change in the job is such that the decision to make the change is to be viewed as the employer no longer requiring the job to be performed by anyone, “will involve an evaluative assessment of fact and degree” (Bampton at [217]).

91    In determining whether a “position” had become redundant, in which case the employee was entitle to certain benefits, the High Court in Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 examined factors including the terms and conditions of the work (at [14] per Gleeson CJ and McHugh J; [52] per Gummow, Hayne and Heydon JJ); accrued entitlements (at [14] per Gleeson CJ and McHugh); and specifically remuneration (at [137] per Callinan J).

92    The reference to a “position” in the relevant industrial agreement in Amcor was held to refer to a position in a business, rather than employment by a particular employer (at [52]-[53] per Gummow, Hayne and Heydon JJ). Likewise, in s 83-175(1) of the 1997 Act, a “genuine redundancy payment” is defined by reference to an employee who is dismissed from employment because “the employee’s position is genuinely redundant”. This reference draws attention to the position performed by the employee.

93    This is significant. In Dibb at [43], this Court was concerned with the definition of a “bona fide redundancy payment” in s 27F(1) of the Income Tax Assessment Act 1936 (Cth), which referred in s 27F(1)(a) to the “bona fide redundancy of the taxpayer” (emphasis added). As such, the decision in Dibb (and UGL Rail Services at [120]) is of limited assistance in examining the meaning of a “genuine redundancy payment” in s 83-175 of the 1997 Act, which is concerned with the redundancy of the employee’s “position”.

94    It is not useful to conflate redundancy of a person with redundancy of a “position”: cf. UGL Rail Services at [132]. The importance of the language used in s 83-175 of the 1997 Act was noted in Weeks v Commissioner of Taxation [2013] FCAFC 2; (2013) 209 FCR 264 at [25]-[26], where this Court rejected the proposition that because the appellant was made redundant it followed that her dismissal from employment answered the statutory criterion that “the employee’s position is genuinely redundant”. An employee may be qualified to undertake a different position. That does not determine whether the employer requires the former position to be performed by anyone. In Dibb, the Court found that the job was defined by reference to the duties attached to it (Dibb at [43]-[44]). I take that to be a description of the job in that case, which did not entail the hours (or days) worked.

95    In Dibb at [43], it was acknowledged that the circumstance of a job no longer being performed by any employee of the employer “may not be the only circumstance where it could be said that the employee becomes redundant”. This was stated in the context of an enquiry as to the redundancy of the taxpayer. Understandably, in that context, even where the job is obsolete, the question remains whether the employee is able to perform any (other) available job. That may not be a pertinent enquiry where one is concerned with the redundancy of the “job” or “position” performed by the employee.

Relevance of hours and (hence) remuneration

96    Both parties accepted that hours and remuneration are relevant (directly or indirectly) to the assessment of “genuine redundancy”. This is not novel in relation to hours of work, which has been acknowledged in the cases that have determined a change from full-time to part-time work to reflect a change in the operational requirements of the employee’s business, and thereby result in redundancy of the full-time position for the purposes of ss 119 and 389 of the Fair Work Act: Fair Work Ombudsman v F L Press Pty Ltd [2015] FCCA 1578 at [236]; Hryhorec v Mobility Plus [2013] FWC 1072 at [27], [30]. The difference in the present case, in which the previous role was also a part-time position, is one of degree.

97    I accept, as the respondent contended, that the primary judge treated the change in remuneration as derivative of the change in hours (PJ at [61], [78], [94] and [105]). In that way, this case is not concerned with the independent relevance of a change in remuneration to the assessment of the redundancy of the “position” in question.

98    The appellant accepted the primary judge’s finding that the reduction in hours and hence remuneration was “material”. The point of departure is whether, as a matter of principle, such a reduction can be determinative of the outcome (i.e., material such that it negates the former “position”).

99    The appellant contended that hours and remuneration did not constitute the functions, duties and responsibilities that comprise the “position”, and remuneration could only be utilised as a “trigger” or “proxy” for the consideration of whether the functions, duties and responsibilities have changed (as distinct from hours which could be considered as part of an “holistic” analysis). The respondent contended that, in the present case, hours and thereby remuneration were the most important considerations, given the ruled fact that the skills and duties of the new roles were similar to those of the respondent’s former role. The respondent contended that this is a case in which the hours are a “direct driver” of, or “in lockstep with” remuneration.

100    This raised a significant difference in the parties’ reliance on the ruled facts. For the appellant, the fact that the skills and duties of the new roles were stated to be “similar” to the former “position”, meant that the reduction in hours and remuneration was insignificant. For the respondent, the fact that skills and duties were “similar” placed the reduction in hours and remuneration in stark relief so as to exacerbate their significance.

101    While the appellant did not put his case as beginning and ending with the ruled fact of “similar” skills and duties, in the context of limited facts where a conclusion was stated as to the comparison of skills and duties, rather than a description of those respective skills and duties, the effect of the appellant’s argument was just that.

102    The appellant criticises the primary judge for not undertaking an “holistic” analysis. This is because, as the appellant says, even if the reduction in hours is relevant, it cannot be determinative given the ruled fact that the skills and duties are similar. In other words, the statement of similarity of skills and duties trumps any other variation in the attributes of the “position”. I do not accept that argument. The authorities relied on by the appellant do not dictate that outcome.

103    That the assessment must be one of fact and degree may reveal ostensibly little about the mechanics of the exercise. However, it does indicate that there is little utility in: (a) purported analogies with the factual circumstances of other cases; and (2) the conclusion that certain attributes of the “position” have not been treated as determinative in other cases.

104    This is relevant in a case such as the present, where the appellant claims that the authorities demonstrate that a change in hours and remuneration (which the appellant says is the “price for doing the duties and responsibilities”) is not part of the analysis, and the respondent accepts that these factors have not been determinative in the decided cases, or even relevant in the absence of a change in hours or remuneration. That acceptance is not an impediment to such a finding in the present case.

105    The respondent draws an analogy with the decision of the Fair Work Commission in Stanley International College Pty Ltd t/a Stanley College [2018] FWC 4843, where a part-time role was reduced from 30 hours per week over four days, to 15 hours per week over two days (at [5]-[6]), in circumstances where this was the only difference between the redundant position and the other employment obtained (at [17]). Commissioner Williams held that this was not “other acceptable employment” for the purposes of s 119 of the Fair Work Act (Stanley International College at [19]). In my view, this introduces an additional element into the analysis, which bears no analogy with the elements of the provision to be construed, viz., s 83-175 of the 1997 Act.

106    The respondent also relies on the decision in Lever v BSI Learning Institute Pty Ltd [2025] FWC 1371, in which Deputy President Dean held that for the purposes of determining a “genuine redundancy” in s 396 of the Fair Work Act, “[t]he test is whether the job previously performed by the employee has survived the restructure or downsizing, not whether the duties have survived in some form” (Lever at [25]). The enunciation of the test in that manner is consistent with Dibb at [43] (although the Court was there concerned with the bona fide redundancy of the taxpayer) and Kekeris v A.Hartrodt Australia Pty Ltd t/a a.hartrodt [2010] FWA 674 at [27] (which was concerned with the genuine redundancy of the person’s job as per s 389(1)(a) of the Fair Work Act), both of which are cited by the Deputy President in Lever (at footnotes 3 and 4).

107    Applying that test, the Deputy President found (at [36]) that, notwithstanding that the alternative position involved identical duties (at [15]): (a) the applicant’s job (described as “a 34 hour per week part time position”) was no longer required to be performed by anyone because of changes in operational requirements; (b) “[t]here is no question based on the cases cited earlier that a reduction in hours can be an ‘operational change’”; and (c) the job was no longer required in that the training hours required by the Correctional Centre at which he worked had reduced (from 34 hours, for which he was paid, to 24 hours, notwithstanding that the hourly rate had increased).

108    To the extent that the appellant contends that a (material) reduction in remuneration cannot be determinative of whether the “position” has been retained, I consider the reliance on UGL Rail Services at [151] to be misplaced. The indicated passage reads:

The fact that the remuneration attached to the position is reduced may be a reason to examine closely whether the position has in truth been retained, but it cannot be determinative of the issue.

109    It cannot be determinative of “the issue” in that case. To the extent that the import of the finding is broader, I disagree. As Sackville AJA states (at [151]), the matter is one of substance and not form. As such, it is artificial to exclude or diminish the significance of any one factor as a general proposition, divorced from the exigencies of the particular case. I do not take the finding of Sackville AJA in UGL Rail Services at [151] to be a statement that a reduction in remuneration can never be determinative of the issue (of redundancy) in any case.

110    In the present case, the functions are performed by reference to the hours worked (i.e., part-time), which dictates remuneration. This does not mean that a reduction in hours/remuneration is significant in every case of part-time work. That will depend on the degree of reduction and the nature of the work performed. The appellant accepted as a matter of principle that a reduction in hours might change the nature of the “position”. In the present case, the change in remuneration is a function of the change in hours. The degree of reduction in hours and therefore remuneration represents a significantly reduced role, performed on different days of the week (Scheme [3], although we do not know which days, and the primary judge did not make any finding as to the materiality of that change). In my view, that is sufficient to alter the complexion of the “position”, such that it no longer resembles the previous role.

111    In other words, in a case where there is no material change to the skills and duties performed by the employee, and the only change to a “position” is a material reduction in hours and hence remuneration, there is no error in finding that the change is such that the employee is no longer working the same “position” (PJ at [81], [82]). The appellant contends that the primary judge should have focused on whether the nature of the “position” had changed. That is precisely what the primary judge did, by reference to the change in the hours and hence remuneration of the work performed by the respondent. In this case, as the respondent contends, that was determinative of the “genuine redundancy” of the “position”.

112    In any one case, it may not be apt to ask whether the “position” is “largely stripped of its functions” (cf. UGL Rail Services at [151]; see also Spotless at [66]) or whether there are “any duties left to discharge” (cf. Jones at 308). Viewed through the prism of hourly work, this might suggest that the reduction in hours would need to be total or near total in order to effect a change that substantially alters the “position”. I do not accept that this is a necessary threshold. However, it may be appropriate in a case such as UGL Rail Services, which was concerned with a reduction in managerial responsibility (and remuneration that was not linked to the hours worked by the employee).

113    When the Court in UGL Rail Services at [147] examined the “key responsibilities” of the employee’s “position” in determining whether the “position” was made redundant, that did not mean that those responsibilities were the only relevant considerations in all cases (even in that case, the assessment of nominal areas of responsibility was said to be a “starting point”, at [148]). The Court reasoned that the fact that the employee was not given certain responsibilities did not justify a finding that the “position” had been abolished. That is not a general principle that applies in all cases. It is a finding based on the particular circumstances of that case.

114    Furthermore, the distinction drawn by the appellant between “a reason to examine closely whether the position in truth has been retained” (UGL Rail Services at [151]), and a factor that may be determinative in that assessment, is tendentious. If it is an attribute of a “position” and an indicium of change, it is relevant to consider in itself, and, depending on the degree of change, capable of determining the outcome of the assessment.

115    The appellant explained that remuneration is “personal to the employee and part of their employment contract”, and yet accepted that it is “attached to the position”. Remuneration for a “position” reflects the value of that “position” to the employer, and, in that regard, is as much a reflection of the employer’s needs. The appellant did not demonstrate why certain qualities or attributes of a “position” were relevant to consider, while others could not be taken into account at all or directly (i.e., not as a “proxy”).

116    It is wrong to define the employee’s “position” in a formulaic manner. Ultimately, it is a fact-based enquiry as to the attributes of the work performed. Viewed in that way, it is evident, as the respondent submitted, that the attribute of remuneration cannot be divorced from the attribute of hours worked. In that regard, it is artificial to assess the relevance and significance of remuneration alone in determining whether the employee’s “position” was “genuinely redundant”.

117    Contrary to the submission of the appellant, I do not consider that there is any error of principle in the primary judge’s reliance on the finding of a material reduction of hours of work (and thereby remuneration) as determinative of whether the employee’s “position” was “genuinely redundant”. Nor do I consider that the primary judge’s assessment was based on a “material alteration to the days … of work”. There was no such finding; only that the days had altered (which the appellant accepted).

118    Neither the appellant nor the respondent gains much assistance from Broadlex Services Pty Ltd v United Workers’ Union [2020] FCA 867; (2020) 296 IR 425, in circumstances where it was common ground, as it was found at trial, that the “position” in question (which changed from a full-time to a part-time role) was terminated because the company no longer required the full-time job to be done by anyone (Broadlex at [7], [92]). Justice Katzmann did not independently engage with that finding (Broadlex at [92]). Her Honour addressed a question of statutory construction regarding the termination of the employment relationship and employment contract for the purposes of s 119 of the Fair Work Act. Contrary to the submission of the respondent, these are not the same concept as “position” for the purposes of s 83-175 of the 1997 Act. At least, it cannot be assumed to be so.

119    The appellant relied on the Commission’s finding in Mallard v Parabellum International Pty Ltd [2017] FWC 2531 at [43] that the term “job” in the Fair Work Act does not include remuneration of the particular job. The Commission reasoned that “remuneration is the value placed on performing the job by the employer” (Mallard at [45]). That may be so, but it does not negate that it is an attribute of the “position”, which assumes greater significance where it is inextricably linked to the hours of work performed. In Mallard, there was a 13% reduction in remuneration, with no corresponding reduction in hours (Mallard at [9]).

120    Similarly, Foster’s Group is of little assistance to the appellant. The Victorian Court of Appeal held that the primary judge erred in holding that redundancy occurred “if it is decided to get the job done for a smaller price by reorganisation” and by describing “a cost-cutting measure” as amounting to “some of the threads involved in redundancy” (at [38], [46] per Habersberger AJA; Maxwell P agreeing at [1]; Nettle JA agreeing at [2]). That is not a finding that remuneration is irrelevant to any assessment of “genuine redundancy”. Rather, it is the inverse: i.e., it is an error to find that redundancy results from any decision to get the job done for a smaller price by reorganisation. I agree. That is not an evaluative assessment of fact and degree.

121    The Court of Appeal also held that the primary judge misapprehended that any reorganisation or restructuring by the employer coupled with termination of an employee’s employment meant that there had been a redundancy (Foster’s Group at [47]). There can be no reasonable suggestion that the primary judge in the present case proceeded on the basis that restructure or redeployment per se results in redundancy.

Not a “mathematical” approach

122    Both parties agreed that the assessment was evaluative, disavowing a “mathematical” approach. The issue arises in the circumstances of this case where the only acknowledged (material) change was in the hours of work and hence remuneration paid.

123    The cases to which the appellant took the Court did not establish, as claimed, that remuneration was not part of the analysis. They established that the concept of redundancy “cannot be applied in the manner of a mathematical formula” (UGL Rail Services at [132]). That is a different proposition. It does not accurately describe the primary judge’s analysis. Taking cognisance of the limited ruled facts, in combination with the reduction in hours and thereby remuneration, in the context of a “position” that is described by the primary judge as one that involved working 34.56 hours per week on particular days, for particular remuneration, the primary judge concluded that the reduction was material and that, as a consequence, the employer no longer desired to have the “position” (as described) performed by anyone (PJ at [49], [106]).

124    This is underscored by the finding at paragraph [81] of the Primary Judgment, in which the primary judge accepted that different hours on changed days means that a “position” is different “subject to the question of materiality”. The primary judge understood that the task was evaluative.

125    The approach of the primary judge was not “mathematical” or “arithmetic” in the sense described in UGL Rail Services (at [132]) and Bampton (at [129]), simply because his Honour relied on the percentage reduction in hours and remuneration to demonstrate that the “position” formerly performed by the respondent had changed in a material way. The primary judge did not suggest a 20% or 40% threshold (to qualify the change as “material”) for all cases.

126    Admittedly, it is possible to be reductionist in the assessment of fact and degree. As Gleeson CJ and McHugh J held in Amcor: “[i]n the industrial context, redundancy of position is not a concept of clearly defined and inflexible meaning” (Amcor at [12]). Whether a circumstance is regarded as justifying an award of redundancy payments is dealt with on the particular merits of the case. Like the industrial agreement in Amcor, the legislation in the present case provides a “broad prescription” (Amcor at [12]). The task is to decide how that broad prescription operates in the particular circumstances. In that regard, their Honours cautioned against an approach whereby “any change” would mean that the “position” became redundant (Amcor at [14] per Gleeson CJ and McHugh J). The primary judge did not adopt such a volatile approach.

127    Unlike the case of Bampton, in which the Court determined that Mr Bampton’s job was not stripped of its functions, and where the substantive change was that Mr Bampton was to concentrate on half the breadth of the operations with a corresponding increase in the depth of the operations for which he could remain responsible (at [223]), the present case was not one of give and take. Based on the ruled facts, there was only a material diminution in work, corresponding with a material diminution in hours and thereby remuneration. The skills and duties were otherwise “similar”. That change justified a conclusion that the employer no longer desired to have the previous part-time role of 34.56 hours per week performed by anyone, as opposed to a part-time role of 28.5 or 21.5 hours per week. Admittedly, when the units of measurement are hours, it is difficult to avoid mathematical deductions. However, in assessing the quality of the change, the same mathematical terms (viz., a 20% and 40% reduction in hours/remuneration) might not yield the same result in relation to a different “position”.

Appropriateness of alternative positions

128    Ground 5 of the notice of appeal contends that the primary judge erred in law by treating the “appropriateness” of a post-restructure “position” from the employee’s perspective when compared with their pre-structure “position” as potentially relevant to the test of “genuine redundancy”. This derives from s 120(1)(b)(i) of the Fair Work Act, whereby the amount of redundancy pay may be reduced in circumstances where the employer has obtained “other acceptable employment” for the employee.

129    The respondent put the argument below on a contingent basis (PJ at [70]). The appellant contested its relevance.

130    The primary judge assumed arguendo the relevance of the “appropriateness” of the alternative positions, in order to find that a “position” involving a material reduction in hours and remuneration, and with working days changed, was not an appropriate alternative to the pre-structure “position” (PJ at [107]-[108]).

131    It is evident that the primary judge’s finding in that regard was not essential to his Honour’s conclusion that the “position” was “genuinely redundant”. Rather, it followed from his Honour’s finding that the change in the pre-structure “position” was material, and provides a separate and alternative basis for that outcome albeit on a contingent basis, i.e., assuming the relevance of the “appropriateness” of alternative positions to the assessment of “genuine redundancy”.

132    Given the conclusions above, it is not necessary to decide that question. However, I note that as the primary judge’s finding shows, it would be difficult to divorce the assessment of the “appropriateness” of alternative positions from the assessment of the materiality of the change without addressing the question of convenience to the employee, which would divert the focus of the assessment away from the “position” and towards the circumstances of the employee.

CONCLUSION ON GROUNDS OF APPEAL

133    The assessment of the “genuine redundancy” of a “position” is an evaluative task. It requires a comparative analysis of what was required to be performed by the employee in that “position” before the claimed redundancy, and what was required to be performed afterwards, in order to assess the fact and degree of change. No attribute of the “position” is excluded in principle from that analysis, although the relevance and significance of any one factor will vary from case to case. In the present case, it is relevant to consider the reduction in the hours worked by, and remuneration paid to, the respondent, which by comparison with the previous role undertaken by the respondent, was significant. The primary judge made no error in so finding, nor in concluding that the significance was such as to indicate that the previous role was inutile from the perspective of the employer, and therefore “genuinely redundant”.

Grounds 1 and 6 – Contingent conclusions

134    Grounds 1 and 6 are conclusionary, based on the errors claimed in Grounds 2 to 4. Given the disposition of Grounds 2 to 4, Grounds 1 and 2 are thereby rejected.

Ground 2 – Test of “genuine redundancy”

135    The Commissioner contended that the primary judge applied the wrong test of “genuine redundancy” for the purposes of s 83-175(1) of the 1997 Act by treating a material reduction in hours and thereby remuneration as determinative of whether the respondent’s “position” was “genuinely redundant”.

136    The primary judge did not find that such a conclusion would follow in all cases. In the present case, remuneration was derivative of the hours of work, and thereby relevant to consider.

137    The primary judge did not find that there was a material alteration to the days of work (cf. PJ at [81]) and therefore did not find that a material alteration to the days of work was determinative of whether the respondent’s “position” was “genuinely redundant”.

138    Accordingly, Ground 2 is rejected.

Ground 3 – Reduction in hours

139    The Commissioner contended that the primary judge erred in finding that a reduction in hours of 20% and 40% meant that the employer no longer desired the respondent’s “position” to be performed by anyone.

140    The primary judge did not find that such a conclusion would follow in all cases. The primary judge approached the assessment of “genuine redundancy” as an evaluative task, concluding that the change to the hours of work in the present case was such as to indicate that the employee’s former “position” was superfluous to the employer’s operational needs.

141    There was no error in treating: (a) the hours of work (and thereby remuneration) as relevant to consider; (b) the reduction in hours (and thereby remuneration) as material or significant; and (c) the material reduction in hours (and thereby remuneration) as indicating that the respondent’s “position” had lost its former character and utility.

142    Accordingly, Ground 3 is rejected.

Ground 4 – Reorganisation of work

143    The Commissioner contended that the primary judge erred in finding that a reorganisation of work, of itself or coupled with a reduction in remuneration or change in hours or days, was determinative of whether there has been a “genuine redundancy”. That conclusion does not follow from [84]-[85] of the Primary Judgment.

144    Accordingly, Ground 4 is rejected.

Ground 5 – Appropriateness of new role

145    Ground 5 of the notice of appeal is outlined at paragraph [128] above.

146    The “appropriateness” of the new roles was not a critical (or necessary) element of the primary judge’s finding that the employee’s “position” was “genuinely redundant”. The primary judge did not purport to decide the question of its relevance, but answered it on a contingent basis.

147    Accordingly, and given my answers to Grounds 2 to 4 above, it is not necessary to determine this ground of the appeal.

148    The appeal should be dismissed, with costs.

Associate:

Dated:    20 February 2026