High Court Redundancy Ruling: What Employers Should Know

Redundancy has just been redefined in a landmark High Court ruling.

The High Court has ruled that employers can no longer limit redeployment considerations to vacant positions. Instead, they must also look at any work within the business that the employee could perform—which could include roles that contractors currently hold.

What the ruling means

• Vacant roles aren’t the only option. Employers have to assess whether they can rearrange or reorganise work to create a role.
• Contractor positions count. If an employee could reasonably perform work that a contractor is currently performing, they may need to be redeployed into that work.
• Retraining is on the table. The need to retrain employees for roles is not a valid reason to avoid redeployment.

In short,  this ruling increases the onus on businesses to explore all reasonable redeployment options before ending employment.

The case behind the ruling

In 2020, mining company Helensburg Coal made 90% of its direct mining roles redundant. The decision was borne from a downturn during the pandemic. They reduced their use of external contractors, but still retained some of them.

Employees affected by the redundancies lodged unfair dismissal claims, reasoning that they could have been redeployed into contract roles.

The Fair Work Commission and the Federal Court agreed, and the High Court has now unanimously upheld those decisions.

Key takeaways for employers: redeployment considerations

1. Redeployments must be assessed in a wider scope. Employers must now look beyond vacancies to all potential work arrangements.
2. Contractor arrangements are under scrutiny. Employees may need to be placed into those roles if reasonable.
3. Document every decision. Remember to keep detailed records showing the scope of your redeployment search and why decisions were made.

How to stay compliant in redundancy decisions

Before making redundancy decisions, employers and business owners must go through these steps:

• Conduct a full redeployment review across the organisation
• Consider restructuring or task reallocation to create opportunities
• Evaluate retraining opportunities for employees
• Consult with HR experts to help you assess and mitigate legal risk

The bottom line: This ruling makes it clear that redundancy decisions are now more complicated than ever. Need guidance on restructuring and making the best decisions under these new rules? Contact the Now Actually team today for expert HR support.