High Court’s ‘genuine redundancy’ decision signals wake-up call for employers

The High Court’s recent decision on the dismissal of 22 underground miners has served up some potential learnings for Australian employers when carrying out redundancies.

The recently (6 August) tossed-out challenge filed to the High Court of Australia by Helensburgh Coal, pushing back against previous decisions made by the Fair Work Commission and Federal Court, serves as a reminder for employers on their obligations when carrying out redundancies.

Back in 2020, Helensburgh Coal sacked 22 miners, citing that the COVID-19 pandemic had “significantly reduced” the need for the extraction of coal at the mine. A restructure resulted in a number of redundancies for employees.

Despite calls during the consultations before the restructure to mitigate the impact by reducing its reliance on contractors, Helensburgh did not follow through, axing 90 employees, including the 22 miners who filed for unfair dismissals, compared to just 40 per cent of contractors.

The Fair Work Commission and the Federal Court found that the terminations were not cases of “genuine redundancy” as affected staff should have been redeployed to perform the work that was being performed by the remaining contractors.

Failing twice at appealing the decision, Helensburgh Coal took its challenge to the High Court – being palmed off with the same decision for a third and final time.

“For over five years, these workers have been fighting to protect the very principle of job security in the mining industry,” said Mining and Energy Union general secretary Grahame Kelly.

According to a Peninsula spokesperson, the case “reaffirms the Fair Work Commission’s scope and power to consider potential workforce changes, even those affecting contractor arrangements, when deciding if a dismissal is a genuine redundancy”.

Peninsula highlighted some key takeaways and potential learnings from this case that employers should consider, especially if they’re planning on carrying out redundancies in the near future.

• When considering redeployment, employers should not only consider other currently available positions but also positions that are about to become available.

• The redeployment obligation requires an employer to consider whether a new internal position should be created by reducing reliance on labour hire providers or contractors.

• Where further training would be needed to redeploy employees in another role, this is not necessarily a barrier to redeployment.

• Employers must be more cautious when dismissing employees while retaining contractors; if the business could be reorganised to prevent the redundancy, you could be exposed to costly unfair dismissal claims.

• Policies and contracts with labour providers should be reviewed to ensure decisions align with enterprise needs and don’t overlap with the roles of your current workers.