Key takeaways
It is important for employers to consider redeployment opportunities, including for roles that are being performed by contractors, in any redundancy process.
The FWC may consider whether reasonable changes to workforce structure could have created redeployment opportunities.
Simply labelling a dismissal as a “genuine redundancy” will not suffice if redeployment options were overlooked.
In a significant decision for employers navigating redundancy processes, the High Court of Australia has unanimously dismissed an appeal in Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29, reinforcing the Fair Work Commission’s (FWC) broad remit in assessing redeployment obligations under the Fair Work Act 2009 (Cth) (FW Act).
The background
The decision involved 22 employees (together, the Employees), who were made redundant by Helensburgh Coal (Helensburgh) following an operational restructure at its mining site as a result of an economic downturn. While Helensburgh reduced its permanent workforce, it continued to deploy contractors to perform similar work.
The Employees applied to the FWC for remedies for unfair dismissal. Helensburgh objected to the applications on the basis that the terminations were cases of “genuine redundancy” pursuant to s 389 of the FW Act.
Through a series of decisions, the FWC ultimately held that the terminations were not cases of “genuine redundancy” because, applying s 389(2) of the FW Act, it would have been reasonable in all the circumstances for the Employees to be redeployed by Helensburgh to perform the work that was being performed by the contractors.
Helensburgh then sought judicial review of the FWC decisions in the Full Federal Court, which dismissed the application. Accordingly, Helensburgh appealed to the High Court.
The High Court’s decision
Helensburgh argued on appeal that the FWC was not permitted, under section 389(2) of the FW Act, to consider whether the company could have restructured its operations to create or make available redeployment opportunities for employees who would otherwise be made redundant.
The High Court disagreed.
It held that the FWC is entitled to consider whether, in all the circumstances, it would have been reasonable for the Employees to be redeployed into roles being performed by contractors. The Court confirmed that the FWC may assess whether an employer could have made changes to the way it operated its enterprise to facilitate redeployment.
Implications for employers
This decision sends a clear message to employers when undertaking redundancies - that it is not enough to look only at existing roles within the direct workforce.
Rather, employers must also consider:
- whether roles performed by contractors could reasonably be offered to employees at risk of redundancy;
- whether changes to workforce arrangements could create redeployment opportunities; and
- the totality of the enterprise and operational structure when assessing redeployment feasibility.
In effect, the High Court has confirmed that outsourcing or contracting work does not shield employers from their redeployment obligations. Employers should ensure they undertake a genuine assessment of redeployment possibilities, or risk facing unfair dismissal claims that may not be shielded by the genuine redundancy exception.