Coal hard truths: redeployment obligations require some serious digging

The High Court has handed down its decision in Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29, clarifying the broad powers that the Fair Work Commission has when assessing whether the redeployment of a redundant employee would have been reasonable. The decision clarifies that the Commission may make inquiries into whether the business may have made changes to its workforce to create available positions into which employees may be redeployed, rather than being dismissed due to redundancy. This potentially includes reviewing their outsourcing or contractor arrangements.

the facts of the case

The COVID-19 pandemic impacted the demand for coking coal, leading to Helensburgh Coal Pty Ltd (Helensburgh Coal) undertaking a restructure. Helensburgh Coal, which is owned by Peabody Energy, had entered into two service agreements with companies to supply contractors to work at the Helensburgh Coal mine. During the redundancy consultations, workforce representatives suggested that Helensburgh Coal reduce its reliance on contractors to retain more existing employees. Helensburgh Coal agreed to some insourcing, with the restructure ultimately involving Helensburgh Coal reducing their number of contractors by about 40% and reducing their number of employees by 90. This included 47 forced redundancies.

Of those dismissed employees, 22 applied for unfair dismissal in the Fair Work Commission (FWC). Helensburgh Coal objected to the applications on the basis that these dismissals were not unfair as they were genuine redundancies within the meaning of section 389 of the FWA. The dismissed employees alleged the redundancies were not genuine, as Helensburgh Coal could have redeployed them into roles being performed by contractors at the time.

There have been four decisions by the FWC in total, two decisions at first instance and two appeals, where the FWC held that the redundancies were not ‘genuine’, as the dismissed employees could have been redeployed into the roles being performed by the contractors. The Full Court of the Federal Court dismissed Helensburgh Coal’s application to quash all four FWC decisions. Helensburgh Coal then appealed to the High Court of Australia.

The High Court found that the FWC was not acting outside its jurisdiction in finding that it would have been reasonable, in all the circumstances, for Helensburgh Coal to redeploy the dismissed employees. This is primarily because:

• the contractors were engaged on an ‘as needs’ basis, and it was therefore open to Helensburgh Coal to terminate those contracts; and
• the duties being performed by the contractors could have been performed by the dismissed employees.

The High Court has confirmed that the considerations of whether redeployment would have been ‘reasonable in all of the circumstances’ under the FWA may not be limited by consideration of vacant roles within an organisation at the time of the redundancy. The FWC may consider a wide range of factors relating to the organisation as it was at the time of the redundancy.

what does this mean for employers?

Redeployment obligations require employers to consider ‘all of the circumstances’. This is a broad requirement and may require some digging. The plurality of the High Court explained that the extent of these enquiries and steps will depend on the circumstances, but the lack of a vacant position does not necessarily mean the employer’s obligations are ended.

Justices Edelman and Steward agreed with the plurality, but also echoed the reasoning of Justice Raper from the earlier Full Federal Court decision, that it would be rare for the FWC to find that it would have been reasonable to terminate the employment of one employee to redeploy another. They also clarified that the FWC generally needn’t consider proposed alternatives to redundancies that would involve a ‘significant change in the enterprise’ at the time of dismissal. In this regard, an employer’s enterprise may include:

• policies and procedures, specifically those in relation to the use of employees, contractors, independent contractors and casuals by the organisation;
• business strategies and choices;
• plans for the future; and
• vacant positions at the time of dismissal, along with positions expected to arise.

In the Helensburgh Coal case, the High Court found that it was open to the FWC to consider whether insourcing was a reasonable alternative to the redundancies. Given the decisions of Justices Edelman and Steward, it remains an open question whether an organisation that has specific policies and practices which govern its use of labour, and its engagement of contractors, independent contractors, casuals and employees, is protected from a finding by the FWC that would require the organisation to change those policies to comply with redeployment obligations.

In a tough economy, employers may consider restructures and outsourcing for commercial reasons. However, the true viability of those decisions might be undermined by successful unfair dismissal applications brought by employees that are made redundant.

In those circumstances, the FWC might consider all decisions open to the employer at the time of the redundancy, including its use of external contractors, and the alignment of these labour practices with any existing policies when assessing if it was reasonable to redeploy the impacted employee(s).