The difficulties of proving a genuine redundancy when you have a contractor workforce

An employee who is dismissed on grounds of genuine redundancy cannot make an unfair dismissal claim under the Fair Work Act 2009 (Cth) (FW Act). One of the requirements for a genuine redundancy is that it would have been unreasonable in all the circumstances for the employee to be redeployed within the employer's enterprise.

The issue of reasonable redeployment becomes complex when the employer engages contractors to provide labour within its enterprise. This issue was recently explored by the High Court in Helensburgh Pty Ltd v Bartley (2025).

What happened in this case?

As a result of an economic downturn, the employer restructured its operations at a mine, thereby requiring fewer employees. The employees were retrenched, but the employer continued to deploy contractors to perform work at the mine. The retrenched employees lodged unfair dismissal claims, arguing their retrenchments were not cases of genuine redundancy as it would have been reasonable for them to be redeployed to perform the work that the contractors were performing.

The employer argued the Fair Work Commission was not permitted to inquire into whether an employer could have made changes to its enterprise to create or make available a position for an employee in a redundant role. The Court rejected this argument.

What does this mean for you?

The effect of this decision is that an employer, when seeking to rely on the genuine redundancy exemption, may need to consider how it could make changes to how it uses its workforce to create or make available a position for an employee who would otherwise have been retrenched. This might include, in certain circumstances, reducing the reliance of contractors to create direct employment opportunities for employees in redundant positions to be offered redeployment.

The circumstances of how an employer uses its workforce, or the reasons it does so in that manner, will be relevant to whether it would have been reasonable to redeploy an employee within the enterprise.

The Court in Helensburgh Pty Ltd v Bartley (2025) identified some of those circumstances as follows:

the attributes of the employee in the redundant role, such as their skills, experience, training and competencies;
the employer's workforce policies, and its appetite for risk, plans, processes, procedures and business choices, e.g. a decision to terminate a contract in the future or a decision to persist with using contractors;
decisions regarding the nature of the employer’s workforce, such as whether it has a blended workforce of both employees and contractors;
contract terms, such as whether they are "as needs" contracts and whether the contractors are on daily work orders or on some long-term fixed commitment;
practical concerns, such as whether redeployment would require the employee to undergo further training; and
anticipated changes, such as another employee going on parental leave or retiring, a contract expiring, or a position being performed by a contractor while waiting for an employee to be hired.

The size, scope or nature of the enterprise are less material, as these are fixed at the date of dismissal.

Construction company’s penalty doubled to $50,000 on appeal
The Geelong County Court in Victoria doubled the penalty for a construction company on appeal in relation to an incident in which a pedestrian narrowly escaped injury ...