A recent case has confirmed that the Commission can engage in an extremely broad inquiry when determining whether it was reasonable for an employer to redeploy employees who would otherwise have been made redundant, in the context of an unfair dismissal claim.

Factual background

• Helensburgh Coal (the employer) employed many employees at the Metropolitan Coal Mine in Wollongong, as well as engaging several contractors to perform the same or similar tasks as its employees at that same mine.
• After the COVID-19 pandemic, the employer made the positions of approximately 90 employees redundant. The employer, however, continued to engage contractors to perform work at that site.
• 22 employees pursued unfair dismissal claims, arguing that they should have been redeployed to perform the work being performed by the contractors engaged by the employer at the same mine.

The Law

Under the law, a redundancy is not a genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise (or the enterprise of an associated entity of the employer).

The court held that:

• redeployment does not require an existing vacancy, nor does the concept exclude or prohibit some change to how an employer uses its workforce to operate its enterprise that facilitates redeployment; and
• the Commission is permitted to consider whether an employer could have made changes to how it uses its workforce to operate its enterprise so as to create or make available a position for an employee who would otherwise have been redundant. If the Commission considers that such changes were reasonable in all the circumstances, the defence of ‘genuine redundancy’ may not be made out by the employer.

Implications

The decision means that all of an employer’s operational and staffing arrangements, including those within its related entities and with contractors, may be subject to detailed scrutiny and challenge by employees and unions in an unfair dismissal claim arising out of redundancies.

It also means that the consideration of redeployment opportunities is not limited to roles or work which are ‘available’ and not already being performed by someone else. Instead, the search extends to looking at all possible options the employer could have done differently apart from making an employee redundant.

Whilst each matter will need to be dealt with on their merits, the inevitable result of this decision is that single members of the Fair Work Commission may increasingly exercise discretion to substitute their own views of what is ‘reasonable’ for those of the responsible employer.