High Court shuts down employer's attempt to sidestep unfair dismissal laws through contracting

Helensburgh Coal has lost its High Court challenge to rulings that it failed to lawfully make 22 workers redundant, setting an important precedent for how redeployment and contractor use are treated under the Fair Work Act.

The dispute began when the company dismissed permanent mine workers in 2020 while continuing to outsource core work to contractors. The Fair Work Commission found that the dismissals were not genuine redundancies, because it would have been reasonable in all the circumstances to redeploy the employees into roles being performed by contractors. That finding was upheld by a Full Bench, the Federal Court, and ultimately by the High Court.

The central legal issue was whether section 389(2) of the Fair Work Act limits redeployment to existing vacancies. The Court ruled it does not. Employers must consider whether redeployment could have occurred by adjusting their operations, including reducing reliance on contractors. Redeployment can involve reorganising workflows—not just slotting employees into unfilled positions.

This is a significant outcome for employees facing job loss under the label of “redundancy”. It confirms that employers cannot simply declare a role redundant while continuing to engage labour hire or outsourced contractors to perform the same work. If work still exists—especially within the broader group of associated entities or through minor restructuring—dismissal may not be protected.

For employees, the decision strengthens the scope of unfair dismissal protections. Workers whose roles are outsourced or replaced by contractors may have grounds to challenge their termination if their employer failed to reasonably consider redeployment options. It also sends a clear message: corporate convenience is not a lawful substitute for procedural fairness.