The High Court has handed down a judgement specifying the obligations in relation to redundancies in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29.

Background

Helensburgh Coal restructured operations following a decrease in demand in the wake of the Covid-19 Pandemic. This resulted in a reduction in contractors and the number of employees reducing by 90, including 47 redundancies. The employees made redundant applied to the Fair Work Commission for an unfair dismissal remedy. Helensburgh objected on the basis that the redundancies were genuine redundancies.

After numerous decisions in the FWC, it was determined that the redundancies were not genuine because it “would have been reasonable in all the circumstances for the Employees to be redeployed to perform the work that was being performed by the Contractors”. Helensburgh applied to the Full Court of the Federal Court of Australia to obtain a writ of certiorari “quashing all four FWC decisions and a writ of prohibition to compel the FWC to cease dealing further with all the unfair dismissal applications”. The Federal Court dismissed this application. Helensburgh then appealed to the High Court, who stated the principal issue for determination was what the inquiry under section 389(2) of the Fair Work Act 2009 (Cth) (“FWA”) involves.

Legal position

The High Court cited section 389(2) of the FWA, which states that “a person’s dismissal was not a case of genuine redundancy if it would have be reasonable in all the circumstances for the person to be redeployed within…the employer’s enterprise”.

Section 389 (1) of the FWA provides that “a person’s dismissal was a case of genuine redundancy if the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operation requirements of the employer’s enterprise and the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy”.

The High Court stated that section 389(1) “is a factual inquiry about what happened” and that it is not the position that is the subject of the inquiry, but whether “their job in the sense of the nature of the work they performed, was no longer required”. The Court confirmed that “there is no reasonableness inquiry in s 389(1)” and that the fact the employer did not require the work to be done does not need to be reasonable.

The difference with section 389(2) is that this provision does contain a requirement for reasonableness being that the redundancy is not genuine if it would have been reasonable to redeploy the employee. The Court noted that ‘redeployed’ does not mean there needs to be a current vacant position and that “the word ‘redeploy’ does not, by its ordinary meaning, exclude or prohibit some change to how an employer uses its workforce to operate its enterprise that facilitates redeployment”. Therefore, redeployment is not only going to be reasonable if there is a vacant position, as the word redeploy essentially means to reorganise. The Court noted that redeployment “looks to whether there was work, or a demand for work, within the employer’s enterprise or an associated entity’s enterprise that could have been performed by the otherwise redundant employee”. Reasonableness was stated to be an objective assessment in the context of the enterprise of the employer.

The ground of appeal by Helensburgh that section 389 prohibited asking the question of whether “an employer could have made changes to how it uses its workforce to operate its enterprise so as to create or make available a position for a person who would otherwise have been redundant” was rejected, because no such prohibition is contained in the provision. Helensburgh cited the Explanatory Memorandum in relation to this section, which stated that an example of where redeployment is not reasonable is where there are no suitable positions available. The High Court said that “it cannot be read as a clear statement of Parliament’s intention that the FWC cannot consider whether the employer could have made changes to how it uses its workforce to operate its enterprise in order to make a position available”.

It was also noted that section 389 does not “contain any express restrictions upon the considerations relevant to whether it would have been reasonable in all the circumstances for the person who was dismissed to be redeployed within the employer’s enterprise”. It actually allows the FWC to consider a large variety of relevant issues.

Lessons for employers:

• A variety of factors should be considered when determining if redeployment was reasonable in all the circumstances.
• Redeployment of employees needs to be reasonable in all the circumstances. These circumstances include policies of the employer, processes and procedures, whether redeployment would require further training and the extent of that training and any anticipated changes such as employees taking parental leave.
• Consider if there are redeployment opportunities within an associated entity. If you use contractors, you need to consider whether employees can replace the roles of the contractors.
• Consider how you can change the workforce to redeploy the employee. In this case, the employees could have been redeployed into the positions being performed by contractors because the work they previously performed was still required.
• There does not need to be a current or vacant position available for redeployment to be reasonable. Redeployment also has to be considered in the context of the employer’s business as well as the nature of the business.

If you would like to discuss this or other workplace issues, please contact Andrew Bland or call 02 9412 3077.