Genuine Redundancy in Australia: Legal Requirements for Employers

Recent judicial developments, most notably the High Court’s clarification in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, have reshaped how employers and practitioners should approach redundancy and redeployment, especially where employers place heavy reliance on contractors to perform duties that can be performed by employees.

What is Genuine Redundancy?

Under the Fair Work Act 2009 (Cth) (the FW Act), a dismissal is a genuine redundancy if both of the following are satisfied:

• the employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the enterprise; and

• the employer has complied with any applicable consultation obligations set out in a modern award or enterprise agreement.

When these conditions are met, the employee is excluded from bringing an unfair dismissal claim on the basis of redundancy. However, there is an important exception based on reasonable redeployment.

Reasonable Redeployment: The Critical Exception

The FW Act provides that a dismissal is not a genuine redundancy if “it would have been reasonable in all the circumstances” for the employee to be redeployed within the employer’s enterprise or an associated entity.

Where an employee is covered by a Modern Award or Enterprise Agreement, the employer generally has strict obligations regarding information sharing once a definite decision has been made to introduce major changes. If an employer fails to provide this information upon request (or proactively), they face risk that the redundancy is deemed ‘not genuine’ (i.e., an unfair dismissal) or that the consultation clause in an Award or EA (being a term of a statutory instrument) was breached in contravention of section 45 (or section 50) of the Fair Work Act, potentially leading to further penalties.

It is this provision that has become a focal point of recent legal analysis and litigation.

How Redeployment Is Assessed

Key points from judicial and regulatory guidance include:

• reasonableness is assessed objectively and holistically at the time of dismissal. It requires consideration of all circumstances when the redundancy occurs, not merely whether a vacant role already existed;

• redeployment does not require a vacant position. Employers must consider whether work could have been reorganised or made available to retain the employee, including potentially reallocating duties or replacing contractor arrangements with employee roles where appropriate; and

• the inquiry extends to roles within the broader enterprise, including associated entities, where such redeployment would have been reasonable.

The mere absence of an existing vacancy does not conclusively establish that redeployment was unreasonable. Organisations must examine creative and pragmatic workforce adjustments to determine whether a redeployment option was feasible at the relevant time.

The High Court Decision in Helensburgh Coal 

In Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, the High Court provided definitive guidance on the scope of the redeployment inquiry under section 389(2) of the FW Act. The Court confirmed that:

• the Fair Work Commission (FWC) is entitled to conduct a broad inquiry into whether redeployment would have been reasonable, including considering reallocation of work or roles even if this requires adjustments to the way the employer uses its workforce;

• the scope of the employer’s enterprise for this purpose includes the business, activity, project or undertaking not merely the existing workforce structure as at the time of dismissal; and

• the FWC may consider whether work performed by contractors could reasonably have been reallocated to employees who are otherwise made redundant.

While employers are not expected to radically overhaul their business models or strategic direction, the judgment emphasises that practical steps that could have retained employees should be explored and documented before finalising redundancy decisions.

Practical Implications for Employers

The High Court’s clarification underlines that genuine redundancy planning involves more than formal consultation and establishing operational obsolescence of a role. Employers should also:

• conduct a structured redeployment assessment, documenting why certain roles were or were not considered suitable for redeployment;

• consider workforce design holistically, including whether roles performed by contractors or adjacent business units could be adapted to accommodate employees at risk of redundancy;

• evaluate organisational capability to reassign work, reflecting business realities and employee capabilities, without requiring disruptive or unreasonable changes; and

• maintain thorough records of consultations, operational analyses and redeployment assessments to support any genuine redundancy defence in future disputes.

Risk Management and Fair Work Commission Jurisdiction

With the advent of accessible AI, the traditional information asymmetry between management and staff is eroding, producing a workforce that is increasingly legally literate and acutely aware of the specific obligations employers bear under the Fair Work Act.

Consequently, astute employees are now better equipped to scrutinise redundancy processes and request reasonable, non-confidential information to verify that all alternatives to dismissal have been exhausted. This shift demands that employers move beyond 'tick-a-box' compliance; employees are now positioned to consult meaningfully and to fully ventilate all potential redeployment opportunities within the enterprise and its associated entities.

Employers must recognise that even where operational changes irrefutably underpin a redundancy, a failure to transparently engage with requests for information regarding vacancies can be legally risky. If the Fair Work Commission concludes that the withholding of information prevented the identification of a role where reasonable redeployment was possible, the dismissal will fail to meet the definition of a 'genuine redundancy' under section 389, thereby exposing the employer to significant liability and remedies for unfair dismissal.

Practical Implications for Redundancy Decisions

Genuine redundancy remains a viable defence to unfair dismissal claims. However, employers must appreciate that statutory compliance extends beyond the elimination of a role and procedural consultation. The requirement to consider reasonable redeployment has been broadened through judicial interpretation to include a wide range of practical workforce adjustments. Employers should adopt  robust and documented processes when evaluating redundancies to ensure that, in all circumstances, redeployment was genuinely unreasonable.

If you require tailored strategic advice on redundancy planning or mitigation of unfair dismissal risk, consider consulting an employment law specialist to align organisational practice with current legal expectations.

ABOUT THE AUTHOR

Olivia Gebron, is an associate and an enthusiastic, committed member of our team. With a genuine passion for helping clients navigate complex legal disputes, she brings a clear and strategic mindset to every matter. Olivia takes pride in understanding each client’s unique circumstances, allowing her to deliver tailored solutions with confidence and clarity.