On 6 August 2025, the High Court delivered its much-anticipated decision in Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29, unanimously dismissing the employer's appeal and confirming a broad interpretation of employers' redeployment obligations under section 389(2) of the Fair Work Act 2009 (Cth) ("FW Act").
This decision has significant implications for employers navigating restructures and redundancies, particularly where contractors are performing work that could be undertaken by employees.
Background
The case related to the dismissal of 22 employees at the
Metropolitan Coal Mine operated by Helensburgh Coal Pty Ltd
following a restructure prompted by economic downturn and reduced
demand. Despite the redundancies, Helensburgh continued to engage
contractors through Nexus Mining Pty Ltd and Mentser Pty Ltd to
work at the mine.
The employees claimed their dismissals were unfair and not "genuine" because it would have been reasonable for them to be redeployed into roles performed by contractors. The Fair Work Commission ("FWC") agreed, and its decision was upheld by the Full Federal Court and the High Court.
Reasonable redeployment
The key issue in the appeal was the interpretation of
section 389(2) of the FW Act, which provides that 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."
Helensburgh argued that the FWC erred by considering whether the company could have restructured its operations to create redeployment opportunities; specifically, by replacing contractors with employees. It argued that section 389(2) did not permit such a hypothetical analysis.
The High Court disagreed, finding that the FWC was entitled to consider whether it would have been reasonable for Helensburgh to make changes to how it used its workforce, including insourcing work performed by contractors.
The High Court confirmed that:
- the FWC may consider whether an employer could have made changes to its enterprise to create or make available a position for an otherwise redundant employee.
- section 389(2) requires a holistic assessment of what would have been, "reasonable in all the circumstances," which may include the possibility of redeploying employees into roles currently performed by contractors.
Implications for employers
This decision significantly raises the bar for employers
seeking to rely on the "genuine redundancy" defence in
unfair dismissal claims.
For employers undergoing a restructure or redundancy process, we recommend carefully considering:
- whether employees could be redeployed into roles currently performed by contractors, especially where the work is not highly specialised and could be performed with minimal retraining; and
- whether employees could, in the near future, be redeployed into roles that could become available through operational changes, contract expirations, or retirements.
The High Court's decision highlights the importance of a thorough and forward-looking approach to implementing redundancies. Employers must now take a more expansive view of redeployment obligations, including the potential to restructure contractor arrangements.
For advice on managing redundancies or defending unfair dismissal claims in cases of genuine redundancy, please contact Mellor Olsson's Employment and Workplace Law team.
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.
