20 Jan 2026
Libby Pallot, Ben Tallboys, Anthony Massaro, Mandi Xu, Walter MacCallum, Samuel Ellemor, Abbey Burns, Kelly Ralph, Morgan Smithe, Philip Gruszka, Shi Jing Wong, Harrison Gray, Emily Tang, Molly Lawlor, Sarah Newman, Sara Ibrahim, Emily Aforozis, Martine Rodger, Sophie Harrington and Laura Rasile
On 6 August 2025, the High Court of Australia unanimously held that when assessing whether a redundancy is genuine under the Fair Work Act 2009, the Fair Work Commission may consider whether an employer could have made changes to how it uses its workforce to create or make available a new position for an employee who would otherwise have been redundant. This is likely to have significant implications for dismissal claims arising from redundancies and restructures.
Appeal to the High Court
As covered in a previous RK alert, the Commission and the Federal Court had previously determined that the Helensburg redundancies were not genuine redundancies, because it would have been reasonable for Helensburgh to have insourced work being performed by contractors and redeployed the affected employees, rather than making them redundant.
On appeal to the High Court, Helensburgh argued that the Act does not permit the Commission, when assessing if an employee could have been redeployed, to consider changes that would require an employer to alter how it conducts its enterprise, for example by creating new roles by replacing contractors with employees.
The High Court rejected this argument and dismissed the appeal, finding that it was open to the Commission to consider whether it may have been reasonable for Helensburgh to create new roles or alter its workforce arrangements.
In reaching its decision, the High Court gave detailed and illustrative consideration of the meaning of ‘genuine redundancy’ under the FW Act, and the broad considerations the Commission is authorised to make when assessing the reasonableness of redeploying employees.
High Court's reasons
A dismissal is not a genuine redundancy if it would have been reasonable in all the circumstances for the person to have been redeployed within the employer's enterprise. In a joint judgment, Gageler CJ, Gordon and Beech-Jones JJ held that this assessment involves a broad hypothetical enquiry, having regard to the following:
- The nature of the employer’s enterprise is to be understood broadly by reference to its business, activity, project or undertaking at the time of the dismissal, and not only to how or in what manner the employer uses its workforce to operate its enterprise. The nature of the employer’s enterprise includes its policies, processes, procedures, strategies, business choices, future plans, workforce composition, current or expected job vacancies, corporate governance practices, and methods of business. While the Commission cannot require the employer to change the nature of its enterprise overall, it can require changes to how the employer uses its workforce.
- The reasonableness of redeploying the employee is to be assessed by reference to the work, or the demand for work, within the employer’s enterprise that could be performed by the employee. This is not limited to a consideration of vacant positions. Redeploying an otherwise redundant employee may, in some circumstances, require reorganisation of the employer’s workforce and the creation of new positions.
- Based on the above considerations, it is necessary to consider the hypothetical redeployment options available at the time of the dismissal.
- The reasonableness of any possible redeployment options must be assessed, considered objectively in the context of the employer’s enterprise and the nature of the enterprise.
- Finally, it is necessary to consider whether redeployment would have been reasonable in “all the circumstances”. Factors that could be relevant in undertaking this assessment include:
- the employee’s skills, experience, and training;
- the policies, risk appetite, plans, processes, procedures, business choices, and workforce composition of the employer’s enterprise;
- the contractual terms between the employer and its engaged employees and contractors;
- the practical concerns involved in redeploying the employee, such as the requirement for additional training, or anticipated changes to the workforce, for example another employee taking a period of leave or retiring; and
- the actual and expected economic and market conditions the employer’s enterprise operates in
The joint judgment did not consider in detail practical examples of where it could be reasonable to redeploy redundant employees, and there is some doubt about how this would work practically in terms of a business creating positions, displacing others already in roles, or taking action which does not accord with the overall strategy of the business.
Ultimately, however, these were factors for the Commission to assess, and the Court found that the Commission was acting within its authority to consider a broad range of factors, including possible insourcing, when determining if a redundancy was genuine.
Key takeaways
The High Court’s decision has affirmed the Commission’s jurisdiction to scrutinise an employer’s broader workforce arrangements when determining whether redeployment of employees within the employer’s enterprise would have been reasonable in all the circumstances. In deciding whether redeployment would be reasonable, the Commission can consider whether it would have been reasonable for the employer to create new positions, or substitute contractor and labour hire workers with redeployed employees.
In the Court’s own words, this decision represents “a significant rebalance in favour of employees”. Employers should carefully evaluate their redundancy decisions going forward and comprehensively consider all reasonable redeployment opportunities to avoid the risk of being found to have unfairly dismissed employees because reasonable redeployment opportunities were not pursued.
How can we help?
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