A recent High Court decision has confirmed that, in a redundancy context and for the purpose of unfair dismissal, the Fair Work Commission has scope to inquire into whether a business could have made changes to its workforce structure when assessing the reasonableness of redeployment and genuine redundancy.

The topical question of whether a dismissal is a genuine redundancy has made its way up to the High Court recently, with the ramifications set to significantly impact decision-making about redeployment in the redundancy context.

Background of decision

In Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29, the High Court was tasked with interpreting section 389(2) of the Fair Work Act 2009 (Cth) (FW Act), which provides that a dismissal is ‘not’ a case of genuine redundancy where it would have been ‘reasonable in all the circumstances’ for the employee to be redeployed ‘within the employer’s enterprise’.

By way of background, due to economic downturn during the COVID-19 pandemic, Helensburgh restructured its operations at the Metropolitan Coal Mine, consequently resulting in the dismissal of 22 employees. Helensburgh continued to engage contractors to perform work at the mine albeit fewer and on Helensburgh’s case, not doing the same work.

The Fair Work Commission (FWC) agreed that the dismissals were unfair and not “genuine” redundancies, because through a series of decisions, it ‘would have been reasonable in all the circumstances’ for the employees to be redeployed to perform the contractors’ work. Helensburgh sought judicial review of the decisions by way of appeal to Full Court of the Federal Court but was ultimately unsuccessful.

In appealing to the High Court, Helensburgh principally argued that section 389(2) of the FW Act does not permit the FWC to consider whether the employer could have made changes to how it arranges its workforce, for example, by replacing the contractors with employees. The High Court unanimously disagreed with Helensburgh.

Conclusions

Between three judgments, the Justices notably agreed and concluded:

• the FWC can lawfully inquire into whether changes could be made to the employer’s enterprise so as to create or make available a position for an employee who would otherwise have been redundant. However, there are limitations to this, such as regard only to the state of the employer's enterprise at the time of the employee's dismissal;
• the ordinary meaning of ‘redeployed’ does not require there to be a vacant position nor does it exclude or prohibit some change to how an employer uses its workforce to operate its enterprise. It was found that to redeploy “envisages some reorganisation or rearrangement” and looks to whether there was work, or a demand for work, within the employer's enterprise / an associated entity that could have been performed by the otherwise redundant employee; and
• in considering whether redeployment would have been reasonable ‘in all the circumstances’, reasonableness was an objective test for the FWC to determine (as opposed to determinable from the employee / employer perspectives) with reference to the nature of the employer’s enterprise and other factors. The Court also commented that the wording “in all the circumstances” was unmistakably broad and does not prevent the FWC considering particular circumstances, such as an employer making changes to their workforce, when deciding whether or not redeployment was reasonable.

Key takeaways for businesses

While the High Court has commented that employers will not be obliged to impose changes to an essential or important facet of their enterprise, there is now significantly more scope for employees to challenge the reasonableness of an employer’s decision to not redeploy them within an enterprise. Managerial decisions leading to restructuring, including outsourcing decisions, can now be scrutinised by employees and unions with greater confidence and challenged lawfully in the FWC.

Further, as the FWC is armed with broader scope to conduct enquiries into the reasonableness of redeployment, employers will be tasked with a heavier evidence burden in defending unfair dismissal claims so as to satisfy this higher threshold when arguing that the dismissal was a genuine redundancy.