Court ruling: Outcome from the High Court
In a significant ruling on August 6, 2025, the High Court of Australia upheld the Fair Work Commission's (FWC) power to investigate an employer's potential changes to their workforce, particularly in relation to contractors. The case, known as Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, has far-reaching implications for employers in industries with downsizing and outsourcing.
The case revolved around Helensburgh Coal Pty Ltd, the operator of the Metropolitan Coal Mine, which reduced its reliance on contractors Nexus Mining Pty Ltd and Mentser Pty Ltd by 40% in 2020 due to the COVID-19 pandemic. As a result, 22 employees from these contracting companies applied to the FWC, claiming unfair dismissal.
The FWC held that the terminations were not genuine redundancies because it would have been reasonable for the employees to be redeployed to perform the work of the contractors. The employer, however, appealed to the High Court, arguing that the FWC should not inquire into other ways the employer could have run its business, including by terminating the services of the contractors.
The High Court unanimously dismissed the Employer's appeal. In its decision, the court emphasised the need for employers to consider in detail whether it is reasonable in all the circumstances to redeploy redundant employees within their enterprise or an associated entity.
The court further clarified that the FWC is permitted to inquire into whether an employer could have made changes to its enterprise to create or make available a position for an employee who would otherwise have been redundant. The "enterprise" referred to in the decision is not limited to the actual enterprise of the employer at the date of dismissal, but can also include other potential enterprises conceived of in the Fair Work Commission.
The concept of redeployment is not confined to a vacant position, but rather includes some reorganization or rearrangement. Reasonableness in the context of redeployment is an objective question that must be considered in the context of the employer's enterprise. The circumstances to be considered in determining reasonableness include the redundant employee's skill set, experience, training, and competencies, as well as the employer's policies, plans, business choices, contract terms, and current vacancies or anticipated changes.
Employers should consider the attributes of the redundant employee, their enterprise, and their contract terms when determining whether redeployment would be reasonable. The decision has significant implications for employers, underscoring the importance of careful consideration when making workforce changes.
The High Court's decision serves as a reminder that employers must be mindful of their obligations under the Fair Work Act 2009, particularly in relation to redeployment of employees and genuine redundancy. Section 389 of the FW Act defines "genuine redundancy" and outlines the conditions for it.
In conclusion, the Helensburgh Coal Decision reinforces the Fair Work Commission's power to investigate an employer's potential changes to their workforce, and emphasises the need for employers to consider in detail whether it is reasonable to redeploy redundant employees within their enterprise or an associated entity.
