Australian employers commonly use a mix of employees, contractors and labour-hire workers. However, a recent High Court redundancy decision has reshaped how businesses must approach redeployment and redundancy under the Fair Work Act 2009 (Cth).
In Helensburgh Coal Pty Ltd v Bartley & Ors [2025] HCA 29, the High Court confirmed that employers must look beyond vacant roles and assess whether employees at risk of redundancy could reasonably be redeployed into contractor or labour-hire tasks.
This ruling significantly expands the criteria for a genuine redundancy in Australia and increases unfair dismissal risk where contractor use continues during restructures. This article, by our employer lawyers, explains what changed and what employers must do now.
Key Takeaways
Redeployment must consider contractor and labour-hire tasks, not just vacancies.
Employers must assess whether work can be reorganised or retrained for.
Continued contractor use during redundancies now carries greater legal risk.
Documentation is essential to defend a genuine redundancy.
Failure to meet redeployment obligations may lead to unfair dismissal claims.
What Changed?
Under section 389 of the Fair Work Act, a dismissal will only be considered a genuine redundancy if it would not have been reasonable for the employer to redeploy the employee within its enterprise or that of an associated entity.
Many employers previously interpreted this narrowly, focusing only on available vacancies.
The High Court has now confirmed that redeployment obligations are significantly broader, requiring employers to consider:
whether contractor or labour-hire work could be reassigned;
whether duties could be reorganised; and
whether retraining the employee is reasonable.
This shift means businesses must take a more detailed and evidence-driven approach to the redundancy process in Australia.
Small business owners needing guidance on dismissals will find our article Small Business Fair Dismissal Code particularly useful.
The Court’s Findings
1. Redeployment Isn’t Limited to Vacancies
The Court held that employers must consider more than vacant roles. Redeployment may require reorganising work, reallocating tasks or redesigning roles.
For detailed guidance on employer duties during restructure, read How Employers Can Meet Consultation Obligations.
2. Contractor Work Must Be Considered
Where contractors or labour-hire workers are performing work an employee could reasonably do, employers must assess whether reallocating that work could avoid redundancy.
3. A Wider, Objective Test Applies
The Court emphasised an objective assessment that considers:
employee skills and training potential,
operational needs,
workforce structure and labour-hire usage,
future work requirements.
This broader test changes how employers must evaluate redeployment obligations in Australia.
4. Documentation Is Crucial
Employers must be able to demonstrate that they explored redeployment options — including contractor task reallocation — and explain why specific decisions were made.
Why This Matters for Employers
This decision affects industries that frequently use contractors or labour-hire workers, including:
mining and resources;
construction;
logistics and warehousing;
manufacturing;
security firms; and
IT and professional services.
If contractors remain engaged during a restructure, the Fair Work Commission may find the redundancy was not genuine. This increases the likelihood of unfair dismissal claims, reinstatement orders or compensation.
Legal Lesson: Employers must now take a more detailed and documented approach to managing the redundancy process in Australia.
Practical Guidance for Employers
Workforce mapping
Employers should map tasks performed by employees, labour-hire workers and contractors and assess whether employees at risk of redundancy could reasonably perform those duties.
Review outsourced labour arrangements
The employer must document why contractors are retained and whether reallocating contractor work to employees was genuinely considered.
To learn how employers should approach role redesign and redeployment during restructuring, read Suitable Alternative Role and Reducing Redundancy.
Strengthen documentation
Record the factors considered when assessing redeployment obligations, including why retraining or restructuring was or was not reasonable.
Update HR policies
Ensure redundancy and redeployment policies reflect this widened obligation under the Fair Work Act’s redundancy requirements.
Seek early legal advice
Legal advice is crucial when planning a restructure or managing potential redundancy and unfair dismissal risks.
For a comprehensive overview of employer responsibilities under the Fair Work Act, read The Fair Work Act: A Guide for Employers.
Frequently Asked Questions (FAQs)
Is redundancy still genuine if the business uses contractors?
It depends. An employer must consider whether reassigning contractor tasks to an employee would have been reasonable.
If you’re navigating a restructure and have an employee on maternity or parental leave, our guide on Redundancy During Maternity Leave: Know Your Rights will help.
Do employers have to redeploy employees into contractor or labour-hire roles?
Not always, but the employer must evaluate this possibility and document the assessment.
What did the High Court say about redeployment?
The Court confirmed the employer’s obligation includes considering restructuring, retraining and reallocation of contractor work.
Can labour-hire arrangements increase unfair dismissal risk?
Potentially, yes. If contractors remain while employees are made redundant, it may undermine the genuineness of the redundancy.
What if retraining would take time or cost money?
Reasonableness is assessed in all the circumstances. Some training may be reasonable; significant cost or disruption may not be.
For employers looking to understand termination law more broadly, check out our article on What Is Not Unfair Dismissal in Australia.
