This text was co-authored with Reece Druiven.
Key factors
- The Federal Court docket has clarified that dismissals could not represent real redundancies if an employer might moderately redeploy redundant workers to positions being carried out by contractors.
- Employers should display they’ve exhausted cheap redeployment prospects, together with insourcing contractor roles, earlier than resorting to redundancies.
- Workers might be able to problem dismissals if proof suggests redeployment to roles being carried out by contractors was cheap in all the circumstances.
Introduction
A current determination by a Full Court docket of the Federal Court docket of Australia (Court docket) examined the idea of “real redundancy” within the context of redeploying staff to contractor roles.
The Court docket dominated that the dismissals weren’t real redundancies as redeployment to positions held by contractors was cheap. This replace analyses the case and its implications for employers.
Background
Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45 (Bartley) involved workers dismissed resulting from a reorganisation of operations at a coal mine. These workers argued that their dismissals had been unfair, and never a case of real redundancy, as a result of the employer might have redeployed them to positions presently stuffed by contractors.
The Honest Work Fee (Fee) was initially tasked with figuring out whether or not the dismissals glad the factors for real redundancy outlined at s389 of the Honest Work Act 2009 (Cth) (FW Act). 4 separate functions had been introduced earlier than the Fee, with two continuing to the Full Bench.
Broadly, the FW Act defines a real redundancy as a dismissal necessitated by operational adjustments that eliminates the worker’s job (s389(1)(a)). Nevertheless, the FW Act specifies that if it might have been cheap in all of the circumstances for the worker to be redeployed throughout the employer or an related entity, the dismissal can’t be thought of a real redundancy (s389(2)). Compliance with session obligations beneath a contemporary award or an enterprise settlement may also be thought of (s389(1)(b)).
At first occasion, Riordan C determined that Mr Bartley’s dismissal didn’t represent a case of real redundancy, holding that redeployment to roles carried out by contractors was cheap within the circumstances. Remitting the applying for reconsideration on a factual foundation, the Full Bench in any other case affirmed that Riordan C had not erred in deciding redeployment to contractor roles was a related consideration in assessing whether or not a termination was a case of real redundancy for the needs of unfair dismissal.
Helensburgh Coal sought judicial assessment of the Full Bench’s determination beneath s39B of the Judiciary Act 1903 (Cth), arguing (amongst different assessment grounds) that the Full Bench’s determination was affected by jurisdictional error, because it misinterpreted the authorized check for real redundancy. Helensburgh Coal contended that redeployment ought to solely be thought of for vacant positions throughout the firm, and it mustn’t have thought of the capability for it to cut back reliance on contractors for the needs of redeployment.
The Court docket’s determination
The Court docket (Katzmann and Snaden JJ, Raper J) dismissed the applying, holding that the Full Bench had not erred. Importantly the Court docket held that:
- part 389(1) doesn’t require an inquiry into whether or not the operational adjustments that result in redundancies had been cheap;
- against this, part 389(2) requires that the opportunity of redeployment must be assessed in accordance with “what would have been cheap”. ‘Redeployment’ as contemplated by s389(2) doesn’t essentially require a task on the employer to be vacant; and
- accordingly, a related consideration as to whether a redundancy is ‘real’ might contain an evaluation of the reasonableness, in all of the circumstances, of an worker being redeployed to fill a task or carry out duties of contractors.
The Court docket subsequently clarified that the exemption on the grounds of real redundancy must be interpreted broadly, granting the Fee the authority to look at all related elements when assessing redeployment choices, together with the employer’s reliance on contractors.
As Katzmann and Snaden JJ defined (from [59] – [60]):
“Part 389(2) … requires that the opportunity of redeployment must be assessed in accordance with what “would have been” cheap. That essentially envisages some evaluation of the measures that an employer might have taken as a way to redeploy an in any other case redundant worker. In its correct context, “redeployed” can solely check with the prospect that an in any other case redundant worker could be taken from a place now not required and deployed to the discharge of different duties. If, in a given case, there have been measures that would have been taken and which, in all the circumstances, might moderately have led to redeployment, that may suffice to have interaction the exemption to the immunity.
… there isn’t a motive to excise from “all [of] the circumstances” the likelihood that an employer would possibly release work for its workers by lowering its reliance upon exterior suppliers. The existence of that risk in any given case is a circumstance that’s succesful of informing whether or not redeployment “would have been cheap”.”
The Court docket subsequently rejected the employer’s submissions, affirmed the Full Bench’s determination, and in the end dismissed the applying.
Implications
Bartley has important implications for each employers and workers. It establishes that the Fee can contemplate whether or not employers might have moderately redeployed workers to contractor roles when figuring out if a dismissal qualifies as a case of real redundancy in unfair dismissal functions. Employers may want to think about whether or not it’s cheap to retrain workers, and contemplate the chance that appropriate positions would possibly turn out to be out there within the close to future.
The choice suggests employers should totally assess all redeployment prospects, together with the potential for reassigning work from contractors to workers, earlier than resorting to redundancies. Workers might have sturdy grounds to problem dismissals if they’ll display that it might have been cheap within the circumstances to redeploy them to contractor roles.
Raper J agreed with Katzmann and Snaden JJ, however made some extra observations.Her Honour highlighted the palpable uneasiness underpinning this case when she commented (at [96]):
“It’s not insignificant that the impact of the Full Bench’s reasoning is that there doesn’t should be a vacant place within the enterprise for redeployment to be “cheap in all of the circumstances”. A consequence is that the Fee, glad that there’s not a “real redundancy” could enter the fray, as a part of the unfair dismissal proceedings and, by operation of s 391, order reinstatement which would require the creation of a brand new place and doubtlessly as is the case right here, result in the termination of third-party contractual preparations and a elementary change of the employer’s enterprise mannequin. It could be a uncommon case certainly the place an applicant (searching for to avail him or herself of unfair dismissal protections) might fulfill the Fee, beneath this provision, that redeployment in such circumstances, was cheap.”
(Emphasis added).
Employers ought to search authorized recommendation via any organisational restructure to make sure its reliance on contractors doesn’t imply that proposed redundancies aren’t real, and that these workers are reinstated by the Fee, or compensation awarded.
