Redundancy – How far do you have to go to redeploy an employee?

A redundancy cannot be genuine unless there was a reasonable opportunity for redeployment… but what does that mean?

Redundancies are crucial to assist businesses in their operational needs, however employers must follow strict criteria in order to make sure an employee’s redundancy is genuine.

The Fair Work Act 2009 (Cth) requires that a redundancy be ‘genuine’, otherwise an employee may be able to make an unfair dismissal claim. In considering what is genuine, an employee must be redeployed elsewhere in the business or in an associated entity of the business, if a suitable position is available.

The recent Federal Court decision of Helensburgh Coal Ltd v Bartley [2024] FCAFC 45 aims to shed some light on the requirements of genuine redundancy. In this case, 22 workers employed by Helensburgh Coal were dismissed in 2020 due to a restructure.

Around the same time of the restructure, Helensburgh Coal had various contractors whose contracts were set to expire, but were renewed for a further 12-month period. The Court ultimately held that the dismissal of the 22 employees was unfair as Helensburgh Coal could have reasonably redeployed them into positions that at the time were held by the expiring contracts. 

Key Takeaways for Employers and Employees

When assessing whether there is a reasonable opportunity for redeployment of the employee into a position within your business (or an associated entity), employers should consider whether: 

• there are any currently available roles in their business or in the business of an associated entity;
• any suitable roles that may arise in the near future, for example due to contractor’s contracts expiring; and
• providing further training and skills development to current employees would help them fill other available positions in the business.

If you are a business considering an operational restructure or are an employee who has just been made redundant and would like to find out your options to claim unfair dismissal, do not hesitate to reach out to Mr Aaran Johnson, Partner or Hannah Lennon-Mather, Associate. 

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.