In a major decision, the High Court has confirmed that, when assessing redeployment, employers need to consider whether they can make changes to how they use their workforce.
Introduction
In Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, an unfair dismissal case concerning genuine redundancy and redeployment obligations, the employer contended that the Fair Work Commission is not entitled to second‑guess the employer's business decisions concerning the operation of its enterprise.
The High Court rejected this contention, clarifying that the Commission has the authority to make inquiries into whether an employer could have made changes to how it uses its workforce (in this case, contractors) to operate its enterprise and could have created or made a position available for an employee who would have otherwise been made redundant.
As a quick recap, for those employees covered by the unfair dismissal laws, a redundancy must be genuine. This means that, due to operational changes, the employee's job is no longer required to be performed by anyone and that the employer has complied with any consultation obligations relating to the redundancy.
Importantly, and relevant in this case, under section 389(2) of the Fair Work Act 2009 (Cth), a redundancy will not be genuine if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise or the enterprise of an associated entity of the employer.
The case
The High Court decision ended a five-year dispute between the employer, who operated a mine, and 22 of its former employees, when demand for coking coal processed at the mine decreased significantly and the employer experienced an economic downturn.
The employer restructured its operations, resulting in 47 forced redundancies. However, during this time, the employer continued to deploy contractors to the mine to perform the same type of work that had been performed by the redundant employees. The employees applied to the Commission for remedies for unfair dismissal. The employer objected on the basis that the dismissals were cases of 'genuine redundancy'.
At first instance, the Commission found that the dismissals were not cases of 'genuine redundancy' because it would have been reasonable for the employees to be redeployed to perform the work that was being performed by contractors at the mine.
After a second unsuccessful appeal to the Commission, the employer appealed to the Full Court of the Federal Court, which also dismissed the appeal. The employer was then granted leave to appeal to the High Court.
High Court's decision
The employer contended that section 389(2) of the Fair Work Act, concerning obligations to redeploy, did not permit the Commission to consider whether the employer could have made changes to its operations to replace onsite contractors with employees so as to avoid making those employees redundant. In a unanimous decision, the High Court rejected this contention, stating that the Commission is permitted to make such an inquiry.
In reaching its conclusion, the High Court described the terms under section 389(2) (namely if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise, or the enterprise of an associated entity of the employer) as 'broad' and broke down each element as follows:
- The employer's 'enterprise' is its business, activity, project or undertaking at the time of dismissal and any future plans. While the nature of the employer's enterprise cannot be changed, it is not defined by reference to how the employer uses its workforce to operate its enterprise, or why it does so in that manner.
For employers, while they are not required to change the nature of their business to support redeployment, they cannot simply assess their ability to redeploy based how they choose to organise employees. Employers will need to assess workforce composition.
- The term 'redeployed' does not require for there to be a vacant position available and to redeploy does not exclude or prohibit some changes to how the employer uses its workforce to operate its enterprise that facilitates redeployment. Rather, to redeploy looks at whether there was work or a demand for work within the employer's enterprise that could have been performed by the redundant employee.
For employers, where there is work available that can be performed by an employee, even if it is currently being performed by contractors, it may be reasonable to redeploy the employee to replace the contractor. Employers may not be able to avoid redeployment obligations simply on the basis that there is no formal job openings.
- Whether the redeployment 'would have been' reasonable directs attention to what the situation would have been at the time of the dismissal. This can include consideration of a hypothetical situation regarding what the employer could have done to redeploy the employee within the employer's enterprise.
For employers, they must show that they seriously considered whether redeploying the employee would have been possible and reasonable at the time, and consider options that could be applied to facilitate this occurring.
- In terms of 'reasonableness', the Court described it as an inquiry of reasonableness in the context of the employer's enterprise, and the nature of that enterprise. This is an objective test.
For employers, 'reasonableness' will not be what the employer themselves thought was reasonable at the time. Rather, it is what an ordinary person would consider reasonable based on all the circumstances of the particular case. The test of reasonableness will differ depending on the facts of each case and the nature and type of business.
- 'Reasonable in all the circumstances' enables the Commission to consider a range of factors, including the attributes of the redundant employee, such as their experience, skills and training, and the attributes of the employer, including its policies, business choices, nature of the workforce, contract terms and practical concerns.
For employers, they will need to show that they considered all the circumstances surrounding their assessment of redeployment. It will not be sufficient that the employer thought it would be inconvenient to redeploy the person. Employers need to look at the whole picture and consider what is fair and realistic, whether they could train the employee in a different area, and whether there are any contractors that could reasonably be replaced by the employee.
In Helensburgh Coal Pty Ltd v Bartley, the High Court considered that it was likely that the employer would have been able to replace the contractors at the mine with the employees quickly, if not immediately. The contractors were engaged on an 'as needed' basis to do the work, and there was no continuing obligation upon the employer to retain them. The agreement with the contractors was also set to expire shortly after the employees were made redundant. Therefore, it would have been reasonable for the employees to undertake the work performed by the contractors.
Key takeaways for employers
- Redeployment is not limited to whether there is or is not a job opening but requires an assessment of workforce composition, particularly when contractors are being used.
- Employers need to consider all the surrounding circumstances, which may include creating a new role where work is available or training an employee in a different area to expand their skills.
- Where contractors are performing work that could be fulfilled by the redundant employee, it may be reasonable to replace the contractor with the employee rather than making the employee redundant. This is particularly the case where a contractor is engaged on a 'as needed' basis and there are no contractual obligations that require the employer to retain the contractor.
If you would like to discuss how this decision impacts your business or have any questions regarding the issues mentioned in this article, please contact our workplace relations and safety team.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.
