Do you as an employer know what a “genuine redundancy” is?

Background: Helensburgh Coal Pty Ltd v Bartley (S119-2024) [2025] HCA 29.pdf

Introduction

A recent High Court decision has reshaped how employers should approach redundancies, especially when contractors are involved. The case, Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, makes one thing clear. It’s not enough to say there was no vacancy. Employers must now consider whether a redundant employee could have been kept on by changing how work was arranged, including by replacing contractors.

Here’s the full story, and why it matters to your business…

The Case 

In early 2021, Helensburgh Coal, like many businesses, was under pressure. COVID-19 had reduced demand for coal, and management needed to cut costs and restructure operations. As a response, Helensburgh Coal decided to…

• Reduce production at one of its sites,
• Retain a pool of external contractors, and
• Made several employees forcefully redundant, including Mr Daniel Bartley, a mechanical fitter with nearly 10 years’ service.

Helensburgh Coal argued the decision was straightforward. Bartley’s role was no longer needed, and no similar positions were available. It relied on the “genuine redundancy” defence under section 389 of the Fair Work Act 2009 (Cth), which says:

 (1) A person’s dismissal was a case of genuine redundancy if:

 (a) 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; and

 (b) 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 the circumstances for the person to be redeployed within:

 (a) the employer’s enterprise; or

 (b) the enterprise of an associated entity of the employer.

The Dispute

Mr Bartley challenged his dismissal, arguing it wasn’t a genuine redundancy at all. He argued that, if the company still needed fitters, and contractors were still doing the work he could do, then surely, as outlined by the legislation, he could have been redeployed instead of dismissed. Mr Bartley lodged an unfair dismissal claim with the Fair Work Commission within less than a month of his forced redundancy. As it turned out, the Fair Work Commission agreed with him. The Commission found that while Helensburgh had cut production, it continued to use contractors for work that Bartley was qualified to do. The Commission ruled…

• Mr Bartley could have been redeployed, and
• The company could have reasonably altered its contractor arrangements to retain him.

Therefore, as defined, this was not a “genuine redundancy”.

The Appeal

Helensburgh appealed the Fair Work Commission’s decision, first to the Full Federal Court, then to the High Court of Australia.

 High Court’s Decision: Redeployment Is Bigger Than Just “Vacancies”

In a unanimous decision, the High Court dismissed the appeal and upheld the Commission’s findings. It confirmed that when assessing whether a dismissal was a “genuine redundancy,” the Fair Work Commission isn’t limited to checking whether a vacancy existed at the time. Instead, the Commission can consider whether it would have been reasonably practicable for the employer to redeploy the employee, including by reallocating work being done by contractors. If replacing a contractor with the employee was a reasonable option, then failing to do so may mean the redundancy wasn’t “genuine” under section 389 of the Fair Work Act.

Lessons for Employers

1. “No vacancy” is not the end of the matter.
   It’s no longer enough to say, “there was no job available,” or “this is how we usually operate.” An employer’s preference for outsourcing or to follow a more convenient workforce model does not override the obligation to consider whether redeployment was reasonably practicable. If a suitable alternative existed, even one requiring changing existing arrangements, and the employer didn’t properly explore it, the dismissal risks being unfair.
2. Contractors are not a shield.
   If contractors are doing work that a redundant employee could reasonably perform, you may need to justify why you didn’t offer that work to the employee. The law doesn’t prohibit outsourcing altogether, but it does require you to consider whether retaining contractors over employees was reasonable in the circumstances. In the Helensburgh case, the company was advised during consultation to minimise the impact on employees by reducing its reliance on contractors. While some insourcing occurred, the employer ultimately decided to retain key contractors while making employees redundant. This undermined the employer’s case.
3. Reasonableness, not convenience, is the legal test.
   The law doesn’t demand that you restructure your entire business to keep an employee but it does expect that you actively consider your redeployment obligations and make decisions accordingly. A “reasonable process” means more than a quick scan for vacancies, it includes identifying suitable roles (even if they’re not ideal), at least offering them where appropriate, and documenting why redeployment was or wasn’t feasible. We want to remind you that a reasonable process matters just as much as the outcome. Even if the employee declines the offer or the alternative isn’t perfect, you must be able to show that acted in accordance with your obligations and offered reasonable options in good faith.

If in doubt, please reach out!

This case is a timely reminder of a common oversight we are seeing across the industry. Employers often underestimate the full extent of their legal obligations and risks when managing tough decisions about their workplace. The team at Master Builders ACT is here to help you navigate these complexities. We’re available on weekdays during business hours to support you with any workplace or industrial relations concerns.

As part of your membership, you have unlimited access to our Workplace Relations Team and we encourage you to contact us if you are unsure of your right or obligations. When it comes to compliance, it’s always better to be safe than sorry.

You can reach us at workplace@mba.org.au or call 02 6175 5900.