Case update: High Court decision

Summary

On 6 August 2025, the High Court handed down the decision of Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 (Helensburgh Coal Decision), paving the way for the Fair Work Commission to make inquiries into whether an employer could make changes to its workforce, particularly with respect to its use of contractors (including contractors engaged through labour hire or other outsourcing arrangements), when considering whether a redundant employee could be reasonably redeployed within the employer’s enterprise.

This decision has wide-reaching implications for employers in downsizing and outsourcing environments.

Background

Helensburgh Coal Pty Ltd (Employer) operates the Metropolitan Coal Mine (Mine). During the COVID-19 pandemic in 2020, as was the case with many Australian employers, the Employer took steps to restructure its operations at the Mine. These steps included reducing:

1. Its reliance on contractors Nexus Mining Pty Ltd and Mentser Pty Ltd (Contractors) by 40 per cent.
2. The number of employees it employed, which included 47 forced redundancies.

22 of the employees who were made redundant (Impacted Employees) applied to the Fair Work Commission (FWC) claiming they had been unfairly dismissed.

The Employer objected to the applications on jurisdictional grounds, arguing that the terminations were cases of ‘genuine redundancy’ within the meaning of section 389 of the Fair Work Act 2009 (Cth) (FW Act).

The FWC held that the terminations were not genuine redundancies because, applying section 389(2), it would have been reasonable in all the circumstances for the Employees to be redeployed to perform the work being performed by the Contractors.

Following an unsuccessful appeal to the Federal Court, the Employer appealed to the High Court.

The Helensburgh Coal Decision involved two appeal grounds. This article focuses on the following appeal ground, being:

“the correct construction of section 389(2)…. [with the Employer submitting] that the language of s 389(2) does not permit the FWC to inquire into whether an employer could have made changes to its enterprise so as to create or make available a position for an employee who would otherwise have been redundant. It also submitted that the “enterprise” referred to in s 389(2) is the actual enterprise of the employer at the date of dismissal, and not some other enterprise conceived of in the mid of the FWC”.¹

Put simply, the Employer argued that s389(2) does not permit the FWC to inquire into other ways the Employer could have run its business, including by terminating the services of the Contractors.

High Court finding

The High Court unanimously² dismissed the Employer’s appeal, finding:

“the FWC was permitted to make the inquiry into whether an employer could have made changes to how it uses its workforce to operate its enterprise so as to create or make available a position for an employee who would otherwise have been redundant”.³

In coming to this decision, the High Court majority (Gageler CJ, Gordon and Beech-Jones JJ) addressed each of the five elements of the inquiry required by section 389(2).

The statutory context: How does the FW Act define a ‘genuine redundancy’?

Section 389 of the FW Act defines “genuine redundancy” as follows:

1. A person’s dismissal was a case of genuine redundancy if:
   1. The person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. 
   2. The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
2. A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all of the circumstances for the person to be redeployed within:
   1. The employer’s enterprise 
   2. The enterprise of an associated entity of the employer

The High Court’s analysis of each of the five elements in s 389(2)

The majority’s analysis of each element under s 389(2) may be summarised as follows:

Implications for employers

The High Court decision emphasises the need for employers to consider in detail whether it is reasonable in all the circumstances to redeploy redundant employees within the employer’s enterprise or an enterprise of an associated entity. The decision also highlights that the concept of redeployment is not confined to a vacant position.

An employer considering making an employee redundant needs to ask itself the following questions:

1. What are the attributes of the redundant employee – what is their skill set, experience, training and competencies?
2. What are the attributes of the employer’s enterprise (and that of any associated entity), including what are the Employer’s:
   1. policies, including appetite for risk, plans, processes, procedures, strategies and business choices, including any plans it has for the future – is there any decision to terminate a contract in the future or to persist with using contractors?
   2. decisions regarding the nature of the workforce – does it have a blended workforce of employees and contractors, what is the composition of the actual workforce, is there a business decision as to why a blended workforce is used and the particular proportion?
   3. contract terms – how does the employer engage its contractors, is it on an ‘as needs’ basis or a longer-term commitment?
   4. would redeployment require an employee to undergo further training?
   5. current vacancies and any anticipated changes – is another employee going on parental leave, retiring or employed under a contract that is due to expire? Or are there positions being performed by a contractor until an employee is hired?

Based on an employer’s response to these questions, it can then be determined whether or not it would be reasonable in all the circumstances for a redundant employee to be redeployed within the employer’s enterprise (or the enterprise of an associated industry).

For advice and guidance on how to implement and manage redundancies, please contact the Norton Rose Fulbright Australia employment team.