The High Court has clarified the scope of 'genuine redundancy' under the Fair Work Act 2009 (Cth) (FW Act) in its decision in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29. The decision provides important guidance on how employers must approach redundancy decisions.
In issue
- On 6 August 2025, the High Court unanimously dismissed an appeal made by Helensburgh Coal Pty Ltd (Helensburgh), concerning the dismissal of 22 employees. Commissioner Reardon’s original decision in the Fair Work Commission (FWC) had already been appealed, first, to the Full Bench of the FWC and then to the Full Bench of the Federal Court before reaching the High Court. In the High Court, Helensburgh argued that the FWC erred in finding that the dismissals were not a case of genuine redundancy under s 389 of the FW Act, and that the Full Bench of the FWC applied the incorrect appellate standard in the decision of Commissioner Reardon.
- The key question considered by the High Court was whether the FWC was correct in its approach to determining that it was 'reasonable in all the circumstances' for the employees to have been redeployed to perform the duties currently performed by the contractors. The High Court also considered whether the FWC could consider hypothetical changes to workforce structure when determining reasonableness.
The background
Due to the Covid-19 pandemic, demand for coking coal had been severely diminished. Helensburgh, which ran a coal mining operation, experienced a significant downturn in its operations as a result. In carrying out its mining operations, Helensburgh employed some workers directly and engaged other workers as contractors via two labour hire providers, Nexus Mining and Mentser. In managing the downturn in operations, Helensburgh restructured its workforce, making 47 direct employee positions redundant, including the first to twenty-second respondents in this case, while reducing contractor numbers by 40%. However, it continued to rely on the external contractors in maintaining its operations.
The decision
The High Court reasoned that 'redeployment' under s 389(2) of the FW Act should be interpreted broadly, encompassing consideration of potential redeployment within an employer’s enterprise, including positions that may not currently exist or where those duties are being performed by other workers. In reaching this decision, the High Court considered the intention of Parliament in asking whether it was 'reasonable in all the circumstances' for an employer to redeploy an employee within its 'enterprise'.1
In relation to the employer’s 'enterprise', the High Court considered that this referred to its 'business, activity, project or undertaking'.2 This rightly limits the scope for consideration of redeployment such that an employer should not be required to consider redeployment that contemplates the restructuring of its enterprise. Nonetheless, the High Court also held that '[t]he nature of the employer’s "enterprise", however, is not defined by reference to how the employer uses its workforce to operate its enterprise.'3 Therefore, it is a requirement that an employer consider how work is performed within its enterprise and whether there are options available to it for restructuring, within that enterprise.
Having established the first parameter in which the options for redeployment must be considered, the High Court considered the second parameter applied by s 389(2), being whether redeployment was 'reasonable in all the circumstances'. The High Court found that '[t]he FWC was permitted to make the inquiry into 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 an employee who would otherwise have been redundant.'4
On that basis, the High Court found that redeployment 'does not require there to be a vacant position', but rather 'envisages some reorganisation or rearrangement'.5 Redeployment should, therefore, include consideration of what work there is to be performed and not only whether that work is attributed to an existing position or job. As such this decision significantly narrows the scope of what may constitute genuine redundancy.
On examination of the changes to industrial relations legislation across the previous 30 years, the court determined that section 389 represents a 'significant rebalance in favour of employees' by Parliament.6
Implications for you
This decision confirms that employers must take a proactive and expansive approach when assessing redeployment options before claiming a genuine redundancy. Key implications include:
- Employers must be more conscious of the steps they take and the circumstances in which they decide to make a position redundant. When deciding whether to make a position redundant, an employer will need to engage in a more holistic review of its operations.
- Employers must consider the nature of their enterprise, including aspects such as workforce attrition, training opportunities, restructuring, and 'insourcing'. In the context of this decision, the fact that Helensburgh continued to require a large volume of work to be performed by contractors was significant. Equally, the limited amount of retraining (if any) that would have been required to redeploy the employees was also relevant.
- Employers can no longer rely solely on the absence of a particular job or existing vacancies (or lack thereof) to justify redundancy. Instead, employers will need to undertake a thorough analysis of their enterprise, including how work is performed and how it could be performed differently before deciding to make a position redundant.
It might be tempting to consider that this decision makes termination via genuine redundancy nearly impossible. However, this is not the case. The High Court has clarified the limitations around what constitutes a reasonable redundancy in all the circumstances:
- The relevant circumstances relate specifically to redeployment within the employer’s enterprise. This means that employers must consider how they carry out their business but not the nature of the business itself.
- While employers must still consider their use of external contractors, they are not required to redeploy an employee by removing or reducing the work performed by another employee (or multiple employees) to accommodate redeployment. As articulated by Justice Stewart, '[r]edeployment 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.'7
Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29
1 Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 at [32]
2 Ibid at [35]
3 Ibid at [35]
4 Ibid at [49]
5 Ibid at [36]
6 Ibid at [48]
7 Ibid at [137]
