The Full Federal Court of Australia (FCA) in Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45 recently upheld a decision of the Fair Work Commission (FWC), which found that an employer was required to consider whether its employees could have been redeployed to positions occupied by employees of contractors instead of having their positions made redundant.
The FWC had found that the redundancies of 22 employees of Helensburgh Mine were not genuine because the employer failed to satisfy its redeployment obligations in section 389 of the Fair Work Act 2009 (FW Act). This was because the FWC considered it reasonable for the employer to redeploy each of the employees to roles performed by the workers of two contractors engaged by the employer. The FWC concluded that it was reasonable to reduce the work available to the contractor’s workers and to redeploy the employees to perform the work previously performed by the contractors’ workers.
The Facts Relating to the Case
The Helensburgh Mine in the Illawarra contained coking coal resources mined by Helensburgh Coal Pty Ltd (the Employer). The pandemic led to a decrease in demand for coking coal. Consequently, the Employer notified the employees (and at least one union) that it was considering reducing the number of employees engaged and the duration of their shifts. The union suggested that the Employer could minimise the impact of the proposed changes on existing employees by reducing the Employer’s use of contractors. It was proposed that the work being performed by the contractors’ workers could be taken over by the Employer’s existing employees, which would reduce the need to make redundancies. The Employer agreed to “insource” some of the work undertaken by the contractors’ workers but did not agree to terminate its arrangements with the contractors.
The Employer proceeded to reduce its reliance on contracted workers by 40% and reduced its direct employee headcount by 90 people. Out of the 90 employees affected, 47 were dismissed without an agreement being reached. Some of those employees applied for unfair dismissal remedies under section 394 of the FW Act.
What is the Law
A person has been ‘unfairly dismissed’ if the Fair Work Commission is satisfied that:
- the person has been dismissed
- the dismissal was harsh, unjust or unreasonable
- the dismissal was not consistent with the Small Business Fair Dismissal Code
- the dismissal was not a case of genuine redundancy.
According to section 389 of the FW Act, a redundancy will be a genuine redundancy if:
a. the person’s job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.
b. the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
c. it would not have been reasonable in all of the circumstances for the person to be redeployed within:
- the employer’s enterprise
- the enterprise of an associated entity of the employer
If a dismissal was a genuine redundancy, an employee would be precluded from bringing an unfair dismissal claim.
What was the Court’s Decision?
The FCA concluded that the redundancies were not genuine because the Employer had not discharged its redeployment obligations. It found that as part of its redundancy process, the Employer should have considered whether it could have reduced its reliance on the contractors’ workers and reassigned that work to its employees.
This finding was based on the FCA’s analysis regarding the reasonableness of redeployment. It involved assessing whether the Employer had completed all possible means of retaining the employees before dismissing them through redundancy.
Key Takeaways
This decision suggests that there does not need to be a vacant position in the employer’s business for redeployment to be ‘reasonable in all the circumstances’.
The Full Federal Court of Australia (FCA) in Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45 recently upheld a decision of the Fair Work Commission (FWC), which found that an employer was required to consider whether its employees could have been redeployed to positions occupied by employees of contractors instead of having their positions made redundant.
The FWC had found that the redundancies of 22 employees of Helensburgh Mine were not genuine because the employer failed to satisfy its redeployment obligations in section 389 of the Fair Work Act 2009 (FW Act). This was because the FWC considered it reasonable for the employer to redeploy each of the employees to roles performed by the workers of two contractors engaged by the employer. The FWC concluded that it was reasonable to reduce the work available to the contractor’s workers and to redeploy the employees to perform the work previously performed by the contractors’ workers.
If you have any questions about this article or need assistance reviewing employment agreements, please do not hesitate to contact Robin Young or Daniel Iminjan from our Workplace Relations team.