Rethinking redundancy: what recent High Court guidance means for workplaces

On Wednesday, 6 August, the High Court handed down its judgment in Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29, clarifying the critical test for a genuine redundancy under s389(2) of the Fair Work Act 2009 (Cth) (FW Act) for the purposes of unfair dismissal. If the person’s dismissal is a ‘genuine redundancy’ within the meaning of section 389(2), the person has not been unfairly dismissed.

Section 389(2) provides that a redundancy is not genuine if in all the circumstances, it would have been reasonable for the impacted employees to be redeployed.

The High Court has clarified the scope of the Fair Work Commission’s (FWC) inquiry under section 389(2) and unanimously held that the FWC can undertake a broad inquiry into whether the employer could have made changes to its workforce structure when assessing whether it would have been reasonable in all the circumstances for an employee to be redeployed.

Helensburgh Coal Pty Ltd (Helensburgh Coal) is owned by the prominent mining company Peabody Energy and operated the Metropolitan Coal Mine. Due to a downturn in demand for coking coal during the COVID-19 pandemic, Helensburgh Coal restructured its operations, resulting in 47 forced employee redundancies. The affected employees challenged their dismissals in the FWC, arguing that the redundancies were not ‘genuine’ under the FW Act because it would have been reasonable for them to be redeployed into roles performed by contractors. Helensburgh argued that it was outside the FWC’s scope to consider whether it could have made changes to its enterprise—such as replacing contractors with employees—to facilitate redeployment.

The matter proceeded through several FWC decisions, two appeals within the FWC, and then to the Full Federal Court, which dismissed Helensburgh Coal’s application for judicial review. Helensburgh then appealed to the High Court. This article sets out the High Court’s decision.

Scope of the test under section 389

The High Court’s primary focus in this inquiry was on the scope given to the FWC under section 389 to assess whether redeployment would have been reasonable in all the circumstances. In other words, how far does the FWC’s mandate go to assess whether an employer could have made changes to how it uses its workforce to operate its business? 

Helensburgh Coal argued that s 389(2) does not give the FWC the mandate to inquire whether an employer could have made changes to its business by creating or making available a position for an employee that would have otherwise been made redundant. The Court rejected this argument and unanimously held that s389(2) permits the FWC to inquire into whether an employer could have made changes to how it uses its workforce and that in the circumstances, the FWC was right to consider whether Helensburgh Coal could have redeployed the affected employees to perform work that was being performed by contractors. The Court considered the wording of s389(2) which allows the FWC to assess whether redeployment ‘would have been reasonable in all the circumstances’. The wording is deliberately broad and points to an objective inquiry that takes into account all relevant circumstances, including the employer’s policies, business choices, workforce composition and practical considerations such as training needs or contract terms with contractors. 

Helensburgh Coal also argued that the FWC’s inquiry is limited to the employer’s enterprise as it existed at the date of the dismissal. In other words, it was not in the FWC’s scope to consider potential ‘abstract’ changes to workforce arrangements. The Court rejected this argument and reasoned that the term ‘redeploy’ in s 389(2) does not require a vacant position to exist at the time of dismissal and encompasses the possibility of rearranging the workforce to create or make available positions for otherwise redundant employees. 

Limits to FWC inquiry

While the FWC can consider whether the employer could have made changes to workforce arrangements such as making positions available, it cannot disregard the essential nature of the employer’s enterprise. The FWC is not empowered to fundamentally alter the business, activity, project, or undertaking of the employer. Justices Eldelman and Stewart (who supported the majority decision), acknowledged that while it is possible for redeployment to involve replacing contractors with employees, such cases will be rare, and the reasonableness of such a step will depend on the specific facts of the case. Justice Steward went further to say that ‘[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.’ 

Given the specific issue before the High Court, it ultimately did not need to decide whether it could have been reasonable in all the circumstances for the employees to be redeployed to the roles that were in fact occupied by contractors.

The decision has implications for employers wanting to restructure their business, especially where the business or operations use a mix of employees and contractors. 

It is within the FWC’s mandate under s389(2) to consider whether it would have been reasonable to redeploy redundant employees into roles performed by contractors, even if this would require changes to workforce arrangements. While the FWC cannot fundamentally alter the nature of an employer’s enterprise, it can scrutinise business choices about workforce composition, especially where those choices impact the availability of redeployment opportunities. 

Employers should genuinely consider redeployment options for employees who are protected from unfair dismissal and would otherwise be made redundant, including the possibility of insourcing work performed by contractors. Employers should also be alert to justifying their workforce decisions, which the FWC can now scrutinise by way of a broad inquiry as to what is reasonable.