The Helensburgh Coal Case: A Turning Point in Australian Redundancy Law
In 2020, COVID-19 devastated coking coal demand at Helensburgh Coal’s Metropolitan Mine. The company restructured from five crews working seven days to four crews working six days, dismissing 90 employees while retaining 98 contractors in similar roles.
Twenty-two dismissed employees challenged their redundancies, arguing they should have been redeployed to contractor positions. The case reached the High Court, which ruled in August 2025 that the Fair Work Commission can consider whether replacing contractors with employees would constitute reasonable redeployment.
This landmark decision fundamentally shifts Australian redundancy law, requiring employers to broadly consider redeployment options including contractor arrangements, maintain stronger evidence for decisions, and justify why alternatives weren’t pursued—protecting worker rights while reshaping workplace practices nationwide.
Australia’s High Court confirmed that, when testing a “genuine redundancy,” the Fair Work Commission may examine whether it would have been reasonable to redeploy an employee into work currently done by contractors or labour-hire, taking a broad, practical view of redeployment across the enterprise—not just vacant roles. The ruling does not mandate dismissing contractors first, but it raises the bar on evidence, consultation quality, and redeployment analysis in restructure decisions.[1][2]
Insights
– The FWC can probe whether redeployment would have been reasonable, including replacing some contractor work with employee roles in all the circumstances.[2][1]
– “Job no longer required” remains a factual, operational question, but redeployment is a separate, reasonableness-based inquiry under s.389(2).[2]
– The redeployment enquiry is enterprise-wide and may consider upcoming role changes, contract expiries, and workforce configuration choices.[1][2]
– Employers aren’t required to remove all contractors before redundancies, but must justify why keeping contractors and dismissing employees was reasonable.[1][2]
– Expect more ambitious consultation proposals from unions and employees, and closer scrutiny of data underpinning “no reasonable redeployment” claims.[1]
Lessons learned
– Map redeployment broadly: include contractor/labour-hire work, near‑term vacancies, restructures, and training pathways—not just current openings.[2][1]
– Document “reasonableness”: skills matching, training feasibility, timing, cost, contract terms, and operational impacts supporting decisions.[2][1]
– Engage early and substantively in consultation; evaluate and record responses to specific redeployment suggestions.[1]
– Prepare evidence: workforce data, contractor usage, contract dates, and business cases to defend “genuine redundancy” if challenged.[2][1]
– Calibrate risk: higher unfair dismissal exposure where redeployment options weren’t genuinely explored and evidenced.[1]
