In Brown & Ors v Clermont Coal Operations Pty Ltd T/A
Clermont Open Cut  FWC 3862, the Fair Work Commission
held that employers were not obliged to terminate labour hire
employees to redeploy redundant employees where the labour hire
arrangements are in place as part of a legitimate business
Factual Background. Six former employees
("Applicants") of Clermont Coal Operations Pty Ltd
("Respondent") claimed that the Respondent had failed to
consider redeployment (under s 389(2) of the Fair Work Act
2009 (Cth)) to the Clermont mine or other mines run by the
Respondent's parent company, particularly those which had a
large labour hire workforce. As a result, the Applicants claimed
that their dismissal was not a case of genuine redundancy.
Legal Background. Section 385 of the Fair
Work Act 2009 (Cth) states that an employee may have access to
the unfair dismissal regime if their dismissal was not a case of
genuine redundancy. A redundancy is genuine where the employer no
longer requires the job to be performed by anyone and the employer
has considered redeployment within the employer's enterprise or
an associated enterprise. The question whether an employer must
offer redundant employees jobs being performed by existing labour
hire employees to avoid unfair dismissal claims has been raised on
a number of occasions in the Fair Work Commission, and it has led
to conflicting views.
Decision. In this case, the Commission
considered that operations of a mine involved "symbiotic
processes" such that if one unit is unable to complete a task,
it would result in major operational difficulties. Accordingly, it
would not be reasonable to require an employer to reduce numbers of
existing labour hire employees to free up positions so that
redundant employees could be redeployed, where the labour hire
employees gave the mine the flexibility to cover employees on leave
to avoid bringing operations to a standstill. The labour hire
employees were found to be part of a "legitimate industrial
Lessons for Employers. Employers employing
labour hire employees pursuant to a legitimate staffing rationale
should not be concerned with unfair dismissal claims in
circumstances that would otherwise be genuine redundancies. However
employers should monitor developments in the area as the Vice
President left it open for limited circumstances where it might be
appropriate for the Commission to consider work undertaken by
contractors for employers or associated entities for the purposes
of s 389(2).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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