Redundancies and Redeployments: What the High Court’s Latest Decision Means for Employers

The High Court has recently handed down a major decision clarifying that the Fair Work Commission (FWC) can consider whether an employer could reasonably adjust its workforce, including by altering existing arrangements with contractors or labour hire workers, to facilitate redeployment of an otherwise redundant employee. This outcome will significantly impact businesses planning restructures, requiring a broader and more proactive approach to managing redundancies.

Background

Helensburgh Coal Pty Ltd, which operated a mine, experienced a downturn and made 22 employees redundant while continuing to engage independent contractors. All 22 dismissed employees lodged unfair dismissal claims with the FWC. In the initial proceedings, Commissioner Riordan found that, rather than dismissing the employees, Helensburgh Coal Pty Ltd could have “insourced” the work being performed by contractors and re-assigned it to the employees as redeployment.

Between 2020 and 2022, the FWC issued a series of decisions upholding this view and ultimately found that the dismissals were not genuine redundancies - as it would have been reasonable to redeploy the employees.

The matter was appealed to the FWC Full Bench, then the Full Federal Court and finally the High Court. Helensburgh Coal argued before the High Court that, when assessing whether redeployment would have been reasonable in all the circumstances, the FWC could not inquire into whether the employer might have made changes to its business structure to create or make available positions for affected employees. The High Court rejected this argument.

Why This Matters for Employers

When considering restructures or redundancies, businesses now need to look more broadly at redeployment options:

• “No vacancies” is no longer enough. Simply advising that there are no open roles will not suffice. Employers must consider whether there is ongoing work or demand within the business that could reasonably be offered as redeployment.

• Contractor roles may count. If contractors are performing work that employees could do, those positions may need to be treated as redeployment opportunities.

• The FWC can look beyond your current structure. The FWC may consider whether, at the time of dismissal, it would have been reasonable for the employer to “free up” work for employees by making changes to how the workforce was used to facilitate redeployment. 

Practical Takeaways for Business’

If you’re planning a restructure, here’s what this decision means in practice:

• Review contractor arrangements – could employees do that work instead?

• Look beyond current vacancies – investigate whether there are other roles that could be created or reshaped.

• Document your process – keep clear records of the steps you took, the options you explored, and the reasons why redeplo

  yment was not considered reasonable (if that is the conclusion your business reaches).

• Consult with employees – have a documented discission with employees about the restructure, possible redeployment opportunities and potential operational changes.

This decision makes it clear that a business considering redundancies cannot simply assess redeployment based on how it chooses to organise its employees, it must also consider overall workforce composition. Getting this wrong carries real legal and commercial risks. If your business is planning a restructure, we can help you navigate these obligations, review contractor arrangements and design a process that reduces risk and ensures compliance.