Written by Australian Business Lawyers & Advisors

 

The High Court has issued its hotly anticipated decision in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29.

In short, the High Court has found that, when considering a ‘genuine redundancy’, the Fair Work Commission (FWC) can consider whether it would have been reasonable to redeploy an employee to a role otherwise performed by a contractor.

The decision confirms the broad discretion of the FWC to determine whether it would have been ‘reasonable in all the circumstances’ to redeploy an otherwise redundant employee.

The decision has important implications for employers.

In this article, we explore the key features of the decision and its implications.

 

Background 

Between 2020 and 2022, the FWC made a series of decisions relating to the dismissal of 22 employees at a coal mine near Helensburgh, NSW.1 

The employer that operated the mine, Helensburgh Coal Pty Ltd (HC), used a workforce made up of direct employees and workers employed by independent contractors.

Due to a downturn in business, HC reduced the size of the workforce at the mine, which involved dismissing a number of employees due to redundancy (as well as reducing the number of contractors).

All 22 of the dismissed employees made unfair dismissal claims in the FWC.


In summary, in proceedings before the FWC, Commissioner Riordan found that, instead of dismissing the 22 employees, HC could have “insourced” work being performed by independent contractors and re-assigned this work to the employees as redeployment.

 

On this basis, the FWC found that the dismissals were not genuine redundancies - as it would have been reasonable to redeploy the employees ‘in all the circumstances’.
These proceedings resulted in appeals before the FWC Full Bench, the Full Federal Court and then ultimately the High Court.2 

The Federal Court decision has now been upheld the High Court.

On appeal, the High Court has clarified the matters that the FWC can consider when considering whether an employee could have been reasonably redeployed in a redundancy situation. 

Employers, who are ultimately responsible for making redeployment decisions, will no doubt take note.

 

Statutory framework

Under section 389 of the Fair Work Act 2009 (Cth) (Act), a dismissal will be a “genuine redundancy” if it satisfies three requirements:

  • Job no longer required - The employer no longer requires the person's job to be performed by anyone because of changes in the operational requirements of the enterprise.
  • Consultation - The employer complies with any obligation in a modern award or enterprise agreement to consult about the redundancy.
  • Redeployment - It would not 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 decision in question concerned the scope of the third requirement - redeployment.

 

Federal Court decision

In the Federal Court, HC argued that the FWC had made an error by interpreting the Act as potentially requiring the redeployment of an employee into a position/role that is already occupied by another worker (eg, a contractor worker).

In its decision, the Federal Court considered the language of the Act - which requires redeployment “…if it would have been reasonable in all the circumstances for the person to be redeployed…” (see above).

Justices Katzmann and Snaden found that, due to the “undeniable width” of the language of the Act, there is no reason to automatically exclude “the possibility that an employer might free up work for its employees by reducing its reliance upon external providers”.3

Justice Raper agreed with Katzmann and Snaden JJ - accepting that the language of s 389 could not confine the concept of redeployment to a "particular (vacant) position."4 Having said that, Justice Raper observed that it would be a "rare case indeed" in which it could be concluded that it would be reasonable to require the creation of new positions and a fundamental change to an employer's business model.

The Federal Court went on to reject the appeal.

HC then appealed to the High Court.

 

High Court decision

In the High Court, HC argued that, in assessing whether redeployment would have been reasonable in all the circumstances, 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 affected by redundancy.

This argument was rejected.

In the leading judgment, Gageler CJ and Gordon and Beech-Jones JJ found that: 

“The language of s 389 does not prohibit asking 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. None of the statutory language, context or purpose supports such a proscriptive rule.”5

In reaching this conclusion, Gageler CJ and Gordon and Beech-Jones JJ made the following observations about the scope of the redeployment requirement in section 389:

  • Redeployment does not require a “vacant position”. Redeployment only requires there to be “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.”6
  • Whether redeployment would have been reasonable in “all the circumstances” requires consideration of the "circumstances" of how an employer uses its workforce to operate its enterprise”, which can include:
    • “the attributes of the otherwise redundant employee, such as their skill set, experience, training and competencies. 
    • attributes of the employer's enterprise that concern its workforce, such as:
      • its policies, including appetite for risk; 
      • plans; processes; procedures; 
      • business choices, such as a decision to terminate a contract in the future and a decision to persist with using contractors; 
      • decisions regarding the nature of its workforce, such as whether it has a blended workforce of both employees and contractors; 
      • contract terms, such as whether they are "as needs" contracts and whether the contractors are on daily work orders or on some long-term fixed commitment; 
      • practical concerns, such as whether redeployment would require the employee to undergo further training; and 
      • anticipated changes, such as another employee going on parental leave or retiring, a contract expiring, or a position being performed by a contractor while waiting for an employee to be hired.”7 

The other members of the Court also rejected the appeal in separate judgments.

Importantly, the High Court did not make a finding that the dismissals were in fact unfair, nor did it address the question whether it was in fact reasonable for HC to redeploy the employees to roles that were already held by contractors. Those decisions were left for the FWC to make.

 

Implications for employers

The High Court decision confirms the broad discretion of the FWC when considering whether a dismissal is a ‘genuine redundancy’ in relation to reasonable redeployment.

For employers making redundancy decisions, it should have the breadth of the Commission’s discretion in mind when considering any redeployment options for otherwise redundant employees. Following the High Court’s decision, employers should not rigidly limit themselves to reviewing only “vacant positions” when considering potential redeployment. Instead, an employer should be guided by what is reasonable in all the circumstances.

This would require at least an assessment as to whether it could make changes to how it uses its workforce to operate its enterprise so as to create or make available a position for an employee who would otherwise have been redundant. This could include “insourcing” work performed by independent contractors and re-assigning this work to employees. It could also involve considering whether a suitable redeployment opportunity may arise at some future time (e.g. following an impending retirement or potential new contract). 

The High Court’s decision should not be read as giving rise to an absolute obligation on employers to replace contractors prior to the making of any employee redundant. Indeed, as put by Steward J “Redeployment of a person at the expense of another person's position would be a very grave step to take and would be unlikely to be a reasonable outcome.”8

Regardless, the High Court’s decision will likely give rise to significantly more caution from employers undertaking redundancies to explore any potential reasonable redeployment options. Equally, the decision is likely to fuel increased and more ambitious requests by unions in consultation processes triggered by redundancy decisions.

As ever, what will be reasonable ‘in the circumstances’ will depend on the facts of each case. 

 

1. Bartley & Ors v Helensburgh Coal Pty Ltd [2020] FWC 5756 (Riordan C); Helensburgh Coal Pty Ltd v Bartley & Ors (2021) 306 IR 219 (Catanzariti VP, Bissett and Wilson CC); Bartley & Ors v Helensburgh Coal Pty Ltd [2021] FWC 6414 (Riordan C); Helensburgh Coal Pty Ltd v Bartley & Ors [2022] FWCFB 166 (Catanzariti VP, Bissett and Wilson CC).

2. Helensburgh Coal Pty Ltd v Bartley & Ors [2022] FWCFB 166 (Catanzariti VP, Bissett and Wilson CC); Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45; Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29.

3. Katzmann and Snaden JJ at [60].

4. Helensburgh Coal Pty Ltd v Bartley (2024) 302 FCR 589 at 611 [95].

5. Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 at [41] per Gageler CJ and Gordon and Beech-Jones JJ.

6. Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 at [36] per Gageler CJ and Gordon and Beech-Jones JJ.

7. Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 at [40] per Gageler CJ and Gordon and Beech-Jones JJ.

8. Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 at [136] per Steward J.