Redundancy, Redeployment, and Contractors: High Court Delivers Key Ruling
On 6 August 2025, the High Court of Australia in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 confirmed that the Fair Work Commission can examine an employer’s workforce structure, including its use of contractors, when deciding whether redeployment was reasonable in a redundancy.
Importantly, the High Court did not decide whether the dismissals in this case were unfair, nor whether the Fair Work Commission’s (FWC) conclusion about the reasonableness of redeployment was or was not correct.
The decision relates to the scope of the inquiry that the FWC can undertake when considering whether redeployment was reasonable under subsection 389(2) of the Fair Work Act 2009 (Cth) (FW Act).
Jump to the end of this article for our key takeaways!
What is a genuine redundancy?
A dismissal is not “unfair” if it is a “genuine redundancy”, making it essential to understand what that term means under the law.
Under section 389 of the FW Act, a dismissal is a genuine redundancy if:
(a) Job no longer required: The employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
(b) Consultation: The employer has complied with any consultation obligations; and
(c) Redeployment: It would not have been reasonable in all the circumstances for the employee to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer (Redeployment Factor).
This case relates to the Redeployment Factor.
Background
Helensburgh Coal Pty Ltd (Helensburgh) operated the Metropolitan Coal Mine in New South Wales.
Helensburgh employed permanent employees at the mine, and also engaged two external companies to provide services, which in turn supplied contractors to provide the services.
In response to a downturn in demand for coking coal during the COVID-19 pandemic, Helensburgh restructured its operations.
During consultation, Helensburgh was asked to mitigate the impact on employees by reducing its reliance on contractors. While it agreed to some insourcing, it did not terminate its contractor arrangements.
Ultimately, Helensburgh reduced its direct workforce of employees by 90 and the number of contracting staff by 40%.
Twenty-two employees lodged unfair dismissal claims.
Helensburgh objected to the unfair dismissal claims, stating that each of the terminations was a genuine redundancy.
In relation to the Redeployment Factor, Helensburgh argued that it was not required to structure its enterprise to create roles for the redundant employees. Further, it argued that it would not have been reasonable to remove the contractors in order to redeploy the employees.
FWC and Full Court of Federal Court proceedings
This case was dealt with in four decisions in the FWC:
In the first decision, Commissioner Riordan decided it was reasonable in all the circumstances to redeploy the employees into the jobs performed by the contractors. The Commissioner found the contractor work was not specialised labour, the employees had the skills and competencies to perform the work and the work was ongoing. Commissioner Riordan also formed the view that Helensburgh was not “philosophically opposed” to insourcing the work.
Bartley v Helensburgh Coal Pty Ltd [2020] FWC 5756
Helensburgh appealed the above decision. The Full Bench of the FWC (FWCFB) quashed the decision and remitted it back to Commissioner Riordan for determination. The FWCFB found there was no evidence to support that Helensburgh was not opposed to insourcing. Further, the FWCFB recognised that it was necessary to consider whether work “could or should” be insourced (and not the reasonableness of insourcing).
Helensburgh Coal Pty Ltd v Bartley [2021] FWCFB 2871
In the second case before Commissioner Riordan, Helensburgh argued removal of the contractors would have been a “fundamental change” to its operations and that it would have been “operationally impracticable” to redeploy the employees to the work performed by the contractors. Commissioner Riordan held it was feasible for Helensburgh to insource some of the work of the contractors. Again, Commissioner Riordan found there was no genuine redundancy.
Bartley v Helensburgh Coal Pty Ltd [2021] FWC 6414
Helensburgh again appealed. The FWCFB accepted that Commissioner Riordan had made two errors – he failed to consider whether there might have been an impediment to insourcing the work and he did not consider the appropriateness of displacing the contractors. However, the FWCFB found that these factors did not demonstrate that the decision was otherwise incorrect. Therefore, the appeal was dismissed.
Helensburgh Coal Pty Ltd v Bartley [2022] FWCFB 166
Helensburgh then took the matter to the Full Court of the Federal Court, where it was dismissed, and then took the matter to the High Court.
The High Court decision
The High Court was tasked with deciding whether, when assessing redeployment under subsection 389(2) of the FW Act, the FWC can consider whether an employer could have changed how it structured its workforce, for example by replacing contractors with employees.
The High Court unanimously dismissed Helensburgh’s appeal, and confirmed that the FWC is permitted to consider whether an employer could have made changes to its workforce structure, including reducing reliance on contractors, when assessing the reasonableness of redeployment.
However, the High Court did not determine whether the FWC’s conclusion about reasonableness of redeployment in this case was correct.
Further, the High Court made the following observations in relation to this case:
The contractors were supplied on an “as needs” basis, without any continuing obligation on Helensburgh to request the provision of the contractors, meaning the jobs being performed by the contractors were constantly becoming available and being renewed by new purchase orders. This created potential opportunities for redeployment.
Helensburgh could not point in evidence to any business decision to use the “blended workforce”, being a mix of permanent employees and contract workers.
Although the concept of redeployment could not be confined to vacant positions, “it would be a "rare case indeed" in which it could be concluded that it would be reasonable to require the creation of new positions and a fundamental change to an employer's business model.” ([120]).
When considering whether a person can be redeployed within an “employer’s enterprise”, the FWC needs to consider the actual enterprise which, for example, includes (at [131]):
“…all of the actual policies, processes, procedures, strategies and business choices of the enterprise, including any plans it had for the future. It includes the composition of the enterprise's actual labour force, as well as any vacant positions which existed at that time, or which were expected to arise. It includes the approach of the business to issues such as risk-taking, its corporate governance practices and its methods of carrying on a business. It includes its policies and practices in relation to the use of labour, including as to whether to use permanent employees, independent contractors, casual labour, or contractors. It also includes the actual practices and policies of the enterprise in relation to labour relations…”
Although the High Court was not considering the reasonableness of the redeployment, Justice Steward stated “…it would be difficult to conclude that redeployment is reasonable if that meant that another person with a job, for which there is a business need, has to make way for someone else whose job was no longer needed…Redeployment 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.”
Key Takeaways for Employers
Following the High Court’s decision, businesses must consider the structure of their enterprise, including reliance on contractors, when assessing whether redeployment is reasonable in a redundancy context.
In this regard, businesses need to be aware that the redeployment obligation is not strictly limited to vacant positions. The FWC can make inquiries into whether there was work available that could reasonably have been performed by the employee.
However, businesses should be comforted by the following:
Each case turns on its own facts. Each case will be considered on its own facts, and the actual enterprise, when determining whether redeployment was, or was not, reasonable in all the circumstances.
This decision does not mandate replacing contractors with employees in all redundancies. Whether such a step is reasonable in a redundancy scenario will depend on the specific circumstances. However, the High Court cast doubt on the reasonableness of redeploying one person at the expense of another—describing it as a “grave step to take.”
Employers using blended workforces (employees and contractors) should be able to explain, and support with evidence, why redeployment into contractor roles was not pursued in a redundancy. Without such evidence, it may be difficult to argue that redeployment was not reasonable.