On 6 August 2025, the High Court of Australia (Australia's most senior court) handed down the landmark decision in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, reshaping the risk environment for global employers who make redundancies in their businesses in Australia, i.e., eliminate certain positions or roles in the business, potentially resulting in the employees holding those roles losing their jobs. The decision has particular implications for businesses that rely on a mix of employees and contractors.
What was the case about?
Helensburgh Coal, operating the Metropolitan Coal Mine, made 22 employees redundant during a restructure prompted by a downturn in demand after COVID-19. However, the company continued to engage two contractor companies to provide conveyor belt maintenance services at the mine. The affected employees made unfair dismissal claims, arguing that they could have been redeployed to perform the work undertaken by the contractor workforce – that is, the contractor work could have been "in-sourced" to the redundant employees to allow them to continue in employment.
Under the Fair Work Act, an employee cannot bring an unfair dismissal claim if their employment ended as a result of "genuine redundancy". One of the central questions for the Fair Work Commission (Australia's labor relations tribunal) in determining whether a redundancy is a "genuine redundancy" is whether it would have been "reasonable in all the circumstances for the person to be redeployed" within the employer's business or the business of an associated entity. There has been a general understanding that this concept is limited to assessing whether there are any vacant positions available – without the need to look at whether operations could be restructured to allow the redundant employees to continue working.
The question was therefore whether Helensburgh Coal needed to consider replacing the contractor workforce with the redundant employees, or whether it only needed to look at whether there were any vacant positions for the redundant employees.
What did the High Court decide?
The High Court decided that, when determining what was "reasonable in all the circumstances", the Fair Work Commission can consider whether the employer could have made changes to its enterprise to create or make available a position for a redundant employee. This means that, contrary to the previously commonly understood position, "redeployment" isn't limited only to vacant positions – whether a redeployment would have been reasonable depends, at least in part, on whether it would have been reasonable for the employer to reorganise its business to make a position available.
What does the decision mean for international employers in Australia?
The decision does not mean there is an obligation to replace contractors with redundant employees in every situation. But, we can expect that employees and unions will press employers to look more closely at whether they could reorganise their business to find positions for redundant employees – especially where the employer is using contractors or third parties to provide labor on an ongoing basis and the work being done by those workers could be done by employees (even if they need to be retrained).
When going through a redundancy process, to minimise legal risk, employers with operations in Australia will need to:
- look at the way in which they structure their overall business operations – including parts of the business where ongoing contractors are used – when considering whether redundant employees could be redeployed. It is not enough just to look at whether there are any vacant positions available;
- consider reasonable changes that they might be able to make to their operations so that the redundant employees could be redeployed – including whether contractors or labor hire workers could be replaced by the redundant employees;
- if the employer decides not to make a change to the way in which it operates its business, make sure the reasons for doing so are commercial and sensible, and document them;
- remember that – in most situations – employers will need to consult with the affected employees as part of the redundancy process. Engaging with employees and unions during the consultation process can help flush out some of these issues. Employers will need to be open to considering proposals put by employees and their unions.
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.
