Australia
Meaning of 'redeployment' broadened by the High Court (case law)
Impact date: 6 August 2025 The High Court of Australia has confirmed that in considering redeployment opportunities in the context of a redundancy process, employers should consider making changes to the structure of their business, including replacing independent contractors with employees, not just looking for suitable vacant roles.
The decision involved a lengthy unfair dismissal dispute in relation to the termination of 22 former employees. The employees argued they could have been redeployed into roles performed by contractors. The issue for determination was whether it would have been reasonable in all the circumstances for the 22 former employees to be redeployed within the enterprise.
The High Court held that reasonable redeployment is not only limited to vacant roles. Creating new roles or replacing contractors could be reasonable redeployment options, particularly if the work performed by employees and contractors is similar in nature or does not require specialist skills. However, this must still be considered 'reasonable' in the circumstances, which remains dependent on the particular facts of the case. The Court stated that situations where redeployment requires fundamental changes to the employer's business model will be rare.
Employer implications/action needed Employers will need to ensure they fully consider all reasonable redeployment options when undertaking a restructuring process. That assessment should now go beyond just considering the suitability of currently vacant roles in their business or in related companies. Employers may also need to reassess the scope of the information provided to employees as part of meeting consultation processes, to demonstrate that they have met their obligations under modern awards and enterprise agreements in relation to consultation.
Employer risk If an employer does not fully consider all reasonable redeployment options, the employer will risk being subject to an unfair dismissal claim and face orders for reinstatement or the payment of compensation to employees.
Significant penalty imposed for breach of Fair Work Act 2009 (Cth) (case law)
Impact date: 18 August 2025 The Federal Court of Australia imposed an AU $90,000,000 penalty on an airline for the unlawful outsourcing of ground handling operations in November 2020, constituting the largest penalty ever imposed for a breach of the Fair Work Act 2009 (Cth).
The contravention involved 1,820 affected workers involved in baggage handling and other support services, whose employment was terminated due to the outsourcing decision. The Court concluded that the decision to outsource this work was in part taken for the unlawful reason of prevent the exercise of workplace rights, including the right to participate in collective bargaining.
The Court ordered that AU $50,000,000 of the penalty be paid to a trade union. In an earlier settlement reached in the proceedings, both parties agreed that the airline would pay AU $120,000,000 in compensation to the employees who were terminated from their employment.
Employer implications/action needed The case highlights the risk of significant penalties, in addition to the risk of orders for compensation, when undertaking restructuring in circumstances that might involve the application in part of unlawful considerations. The case also highlighted the ease with which decisions concerning complex matters, such as undertaking corporate restructuring, which are often based on a number of reasons can trigger risks of claims under the general protections provisions of the Fair Work Act.
Employer risk Significant penalties can apply to employers who contravene the general protections provisions of the Fair Work Act. The case has also highlighted for unions in Australia the benefits of bringing legal claims to challenge restructuring, because of the prospect of receiving orders of substantial penalties.
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