High Court redundancy ruling allows FWC to question if all possible redeployment options have been considered

Summary

The High Court of Australia has unanimously held, in Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29 (Helensburgh), that the Fair Work Commission (FWC) is permitted to engage in a broad inquiry when determining whether an employer could have made changes to the way in which the employer used its workforce when determining whether a redundancy is genuine for the purposes of section 389 of the Fair Work Act 2009 (Cth) (FW Act). Before making a decision to dismiss employees on grounds of redundancy, employers must now consider all possible redeployment options, including whether redeployment in roles currently occupied by other workers, including contractors or workers engaged through labour hire and other outsourcing arrangements, would have been reasonable.

Prior to the decision in Helensburgh, employers were only required to consider suitable vacant roles as redeployment options for employees who they intended to make redundant.

The decision in Helensburgh has a significant impact on what employers must now take into account when considering restructures and redundancies.

Background

In 2020, during the COVID-19 pandemic, Helensburgh experienced a significant decrease in the demand for coking coal that was processed at its Metropolitan Coal Mine (Mine). As a result, Helensburgh implemented a restructure and terminated 47 permanent employees on grounds of redundancy. 22 of those employees brought an unfair dismissal claim alleging that their dismissals were not cases of genuine redundancy, and that they should have been redeployed by Helensburgh to positions which were occupied by contractors that were engaged to provide services at the Mine.

In response to the employees’ application, and having regard to section 389 of the FW Act, Helensburgh argued that the terminations were cases of genuine redundancy and that it would not have been reasonable to redeploy the employees into positions that were not vacant.

Following numerous earlier decisions, the FWC ultimately found that the terminations were not “genuine redundancies” because it was reasonable for Helensburgh, in all of the circumstances, to redeploy the employees to roles that were being performed by the contractors at the time of their termination. This decision was appealed to the Full Bench of the FWC, where it was upheld.

Helensburgh then applied to the Full Court of the Federal Court of Australia for judicial review of the FWC decisions. However, Helensburgh’s application was dismissed.

In September 2024, Helensburgh was granted special leave to appeal the Federal Court’s decision to the High Court of Australia.

The High Court’s decision

On appeal to the High Court, Helensburgh’s principal contention was that the FWC was not permitted to inquire into whether an employer could have made changes to its enterprise so as to create or make available a position for an employee who would otherwise have been redundant.

In their joint judgment, Chief Justice Gageler and Justices Gordon and Beech-Jones held that:

• when an employer is considering options for redeployment, they must look beyond what positions are ‘vacant’. The inquiry that the FWC must undertake is an objective assessment as to whether redeployment “would have been reasonable in all of the circumstances”; and
• on the correct construction of section 389(2) of the FW Act, the FWC was permitted to inquire into whether Helensburgh could have made changes to how it used its workforce to operate its enterprise so as to create or make available a position for the employees who were made redundant.

Key takeaways

In light of the decision in Helensburgh, single members of the FWC now have increased discretion to make broad ranging inquiries into whether the redeployment of employees would have been reasonable in all the circumstances, in unfair dismissal claims arising out of redundancies. The High Court found that the consideration of redeployment opportunities is not limited to roles which are ‘vacant’ and not already performed by someone else.

Before making decisions to terminate employees on grounds of redundancy, employers must turn their mind to the entirety of their operational and staffing arrangements, including what redeployment opportunities are available in the context of the enterprise’s broader workforce strategy, such as the continued engagement of contractors who are performing duties which are suitable to be performed by employees who would otherwise be made redundant.

If you need support or advice on the potential impact of this decision on your business, please contact us.