High Court Considers the Reasonableness of Redeployment in the Context of Genuine Redundancy

Can an employer make workers redundant while continuing to use contractors for the same work?

The High Court has held that the Fair Work Commission (FWC) can test that question when deciding if a redundancy is a genuine redundancy. In particular, the High Court considered the reasonableness of redeployment under s.389 of the Fair Work Act 2009.

 

What the Law Says

Under section 389(2) of the Fair Work Act, a dismissal is not a genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or an associated entity.

In Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, the High Court interpreted the provision broadly and confirmed that “redeployment” can include creating roles by changing workforce arrangements, even if there are no existing vacancies. When deciding if a dismissal is a “genuine redundancy”, the FWC can examine whether an employer could have changed how it used its workforce to enable redeployment.

 

Background

Helensburgh Coal cut production in 2020 and made roles redundant, while still engaging contractors.

During consultations, Helensburgh was asked to mitigate the impact of the restructure on employees by reducing its reliance on contractors. Helensburgh agreed to some "insourcing" but did not terminate the arrangements with companies who engaged contractors to provide services at the mine.

Employees made unfair dismissal claims in the FWC on the basis that the mine could have redeployed them to roles performed by contractors. The employer argued that the terminations were genuine redundancies under s.389.

In multiple rulings, the FWC held that it would have been “reasonable in all the circumstances” for the employees to be redeployed to perform work that was being performed by contractors. The dismissals were therefore not a case of genuine redundancy under s.389.

Helensburgh Coal appealed to the Full Court of the Federal Court, which dismissed the employer’s application. It interpreted s.389 broadly and found that “there is no reason to excise from “all [of] the circumstances” the possibility that an employer might free up work for its employees by reducing its reliance upon external providers” and that this “… is capable of informing whether redeployment “would have been reasonable”.”

 

High Court Decision

In its appeal to the High Court, Helensburgh argued that s.389(2) does not permit the FWC to inquire into whether an employer could have made operational changes to how it uses its workforce to enable redeployment.

The High Court unanimously rejected this contention and held that the FWC may consider whether an employer could have restructured its workforce - including by reducing reliance on contractors - to redeploy redundant employees.

However, the FWC must not disregard essential features of the employer’s enterprise. It cannot consider the reasonableness of a potential redeployment that would require a change to an important aspect of the enterprise itself.

The High Court interpreted the wording of s.389 broadly. The term “redeploy” does not require there to be a vacant position available and may include changes to how the employer uses its workforce, particularly when jobs are outsourced or performed by contractors. “All the circumstances” allows a wide-ranging inquiry-factoring in workforce composition, contract terms, training, and enterprise policies.

 

Key Points for Employers

Outsourcing work to contractors will not shield employers from redeployment obligations under s.389(2).

When making positions redundant, employers must consider all options for redeployment, including:
•    redeploying an employee to a position previously held by a contractor;
•    re-training an employee for a different role within the organisation; and
•    retaining an employee if a position is expected to become available in the near future.

Employers should consider all redeployment options across their broader workforce before proceeding with redundancy and must be prepared to justify why redeployment was not feasible.

Employers who fail to properly consider the possibility of redeployment risk a challenge to redundancies.