When you make a role redundant, can you rely on the fact that there were simply no other jobs going? Not any more.
Following the High Court’s 2025 decision in the Helensburgh Coal matter, “reasonable redeployment” under section 389 of the Fair Work Act now reaches beyond a list of vacant positions — in some cases it extends to work performed by contractors. A genuine redundancy is defended not by pointing at an empty vacancy board, but by showing you investigated whether the affected person could reasonably have been kept on, and documented why they could not.
What’s the real issue?
Genuine redundancy is a jurisdictional gate. If a dismissal qualifies, it is deemed not unfair and the Fair Work Commission does not interrogate the process — but only if all three limbs of section 389 are satisfied. The trap is the third: it must not have been reasonable, in all the circumstances, to redeploy the person.
Section 389 never mentions a “job” or a “vacancy”. It asks whether redeployment would have been reasonable. The bar has lifted from “were there vacancies?” to “did you genuinely investigate whether this person could reasonably have been kept working?”
What does this look like in practice?
Take a mid-sized Queensland services organisation we will call Riverbend (an anonymised composite, not a real client). Facing a downturn, it cut six operations roles. The process looked sound — it consulted, checked the vacancies list, found nothing suitable, and let the six go. What it missed was one fact:
- The same work was contracted out to an external labour-hire firm.
- The affected employees could do it — two of the six had, in previous years.
- Nobody asked whether it could reasonably have been brought back in-house.
When one of them claimed unfair dismissal, the defence wobbled: redeployment was arguably reasonable because the work existed, the employee could do it, and the contract was cheap to unwind. Riverbend had no record it had ever considered the option — and that missing analysis, not the missing vacancy, was the problem.
What does the law say?
Section 389 sets out three cumulative elements, all of which must be true:
- Operational change — the employer no longer requires the job to be done by anyone.
- Consultation — it has complied with any obligation in a relevant award or enterprise agreement.
- Redeployment — it would not have been reasonable, in all the circumstances, to redeploy the person within the enterprise or an associated entity (broader than a related company under the Corporations Act).
That third limb is an objective test, focused on redeployment, not vacancy. In Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29, a coal operation retrenched around 90 employees during the pandemic but kept certain contractors, and 24 argued redeployment into that contracted work would have been reasonable. The unanimous High Court agreed that “redeploy” carries its broad ordinary meaning and is not limited to filling existing vacancies: the Commission may weigh whether contractors’ work could reasonably be brought in-house, though it cannot force a change to the fundamental nature of the business.
Two caveats: there is no rule that contractors must always go first, and in most cases a vacancy analysis still exhausts the options. What has changed is the breadth of the inquiry you must be ready to answer.
What are the risks for employers?
- A collapsed defence. If reasonable redeployment is not made out, the redundancy is not “genuine”, the deeming protection falls away, and reinstatement or compensation is back on the table.
- One shot. A decision on redeployment is discretionary, and appeals require permission on a stringent public-interest test — thin evidence at the first hearing may never be fixed.
- Contractor blind spots. Using labour hire or contractors now carries an added obligation to consider whether that work could reasonably be insourced — and record the reasoning.
- Cost and disruption. Even a claim you win is expensive, and costs are rarely recovered.
Our top five tips: what every employer should do
- Treat vacancies as the starting point, not the finish line. Map affected employees against current and imminent vacancies across your enterprise and any associated entities. Then keep going — ask what other work needs doing and who could reasonably do it.
- Look honestly at contractor and labour-hire arrangements. Where affected employees could perform contracted-out work, assess whether insourcing is reasonable. Weigh your degree of control, how long the contract has to run, the cost or break fees of ending it, the history of contracting that work, and the impact on the contractor. Reaching a “no” is fine — reaching it without analysis is not.
- Factor in retraining and known future changes. Consider not only the skills an employee has today but what they could do with a reasonable period of retraining — and don’t ignore known changes such as a contract about to lapse or an approaching retirement.
- Document everything, contemporaneously. Your redeployment assessment is your evidence. Record the options considered, the factors weighed, and why each pathway was or was not reasonable — at the time, not reconstructed later.
- Get consultation and process right in parallel. Comply with award or enterprise agreement consultation obligations, apply objective selection criteria, and run a fair process. The redeployment limb sits within a genuine redundancy that must satisfy every element of section 389.
Frequently asked questions
- Do I now have to sack my contractors before I can make an employee redundant?
No. The High Court did not rule that contractors must always be replaced first. It held that redeployment can, in some circumstances, extend to work done by contractors — so you must genuinely consider that option. Whether insourcing is reasonable depends on the facts of each case.
- What does “reasonable redeployment” actually mean under section 389?
It means asking, objectively and in all the circumstances, whether the person could reasonably have been redeployed within your enterprise or an associated entity — including into work you might restructure or bring in-house, not just an existing vacancy.
- Does this apply to small businesses and not-for-profits, or only large employers?
It applies to any employer whose employees can access the unfair dismissal regime. The scale of the inquiry is proportionate — a small organisation need not invent roles or change its business — but the obligation to genuinely consider redeployment exists regardless of size.
- Is failing to redeploy an “unfair dismissal”?
Not automatically. If redeployment would have been reasonable, the dismissal is not a “genuine redundancy”, so it loses that protection. The Commission then assesses whether it was harsh, unjust or unreasonable on the full facts.
- How far does the obligation reach — beyond my own company?
It extends to your enterprise and any “associated entity” — broader than a related company under the Corporations Act. It does not require you to enter a new line of business or change the fundamental nature of what you do.
- What if there genuinely were no vacancies and no contracted work to bring back?
Then a vacancy-based analysis may well exhaust the realistic options — and in many cases it still does. The key is being able to show you turned your mind to redeployment and reached a reasoned conclusion, not merely assert nothing was available.
- Why does the documentation matter so much?
Because a decision on reasonable redeployment is hard to overturn on appeal, and merits reviews are limited. Your first hearing is often your best and only chance — and a contemporaneous record of the options you considered, and why, is the evidence that wins the point.
How Harrisons can help
Get redundancy wrong and a “cost-saving” restructure becomes reinstatement, back pay, and months of Commission proceedings — with the reasonable redeployment limb the exact point where defences now fail.
We help SME owners, Queensland local government councils, and not-for-profit organisations get it right. We can:
- Design defensible selection criteria and a compliant consultation process.
- Conduct and document a rigorous redeployment assessment — including contractor and labour-hire work — that stands up if it is ever tested.
- Pressure-test your restructure plan before you act, so risks surface early.
Get in touch with our team today. The best first step is a redundancy and redeployment review before you restructure — so you make the change you need while keeping your organisation protected.
This article provides general information for Australian employers and is not legal advice. Workplace laws change and how they apply depends on your specific circumstances. For advice tailored to your organisation, contact Harrisons.
Claire Harrison is the Founder and Managing Director of Harrisons, a flourishing HR consulting business that sprouted in 2009 from Claire’s passionate belief that inspiring leaders and superstar employees are the key success factor to any business. With over 20 years’ experience, Claire has worked as a HR Director of multi-national organisations, as a Non-Executive Board Director, and a small business owner. Claire’s corporate career includes working with companies such as BHP, Westpac, Fonterra and Mayne Nickless.
