The fuel crisis triggered by the conflict in the Middle East has moved quickly, and businesses across Australia are feeling the strain. A snap survey of more than 430 WA businesses conducted by the Chamber of Commerce and Industry WA (CCIWA) in late March 2026 found that 82% had experienced an increase in supplier costs, and one in four said they would review their staffing as a result.
That last figure matters. Because when financial pressure builds quickly, staffing decisions often follow, and they are frequently made faster than the law allows.
This article is not an argument against redundancy. There are circumstances where reducing headcount is the right operational decision. But redundancy decisions made under pressure, without a structured process or documented rationale, carry significant legal and financial exposure — exposure that has increased materially since the High Court’s landmark ruling in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 in August 2025.
If you are considering redundancies, what follows is what you need to understand before you act.
This article is the third in a series. If you want to understand how this issue developed, from the original High Court case to the ruling itself, you can read what was at stake before the decision and our full explanation of the ruling and its implications.
Stand down and redundancy are not the same thing
When costs rise sharply and trading conditions deteriorate, some businesses reach first for stand down provisions under the Fair Work Act 2009 (Cth). This is one of the most common and consequential mistakes made in a downturn.
A stand down under s.524 of the Fair Work Act applies only where an employee cannot be usefully employed due to a stoppage of work that is outside the employer’s control — a breakdown of machinery, a natural disaster, or an industrial action the employer did not cause. It is a narrow provision.
Higher fuel costs, reduced consumer spending, or tightening margins do not satisfy that threshold. Attempting to stand down employees in those circumstances is unlawful and exposes the business to wage claims for the period of the stand down.
Redundancy is a separate mechanism entirely, and it operates under different rules. Understanding which applies to your situation, and whether either genuinely applies, is the first and most important step.
What the law requires for a genuine redundancy
At its core, a redundancy occurs when a role is no longer required to be performed by anyone within the business. It is about structural or operational change — not short-term cost management.
Under s.389 of the Fair Work Act, a dismissal is only a genuine redundancy if three conditions are met.
First, the role must genuinely no longer be required to be performed by anyone. This is an operational determination — the role must have ceased to exist because of changes to the business’s operational requirements. A role that is simply unaffordable at current cost levels is not automatically a genuine redundancy. The distinction is whether the work itself is no longer needed, not merely whether the business wants to reduce its wages bill.
Second, the employer must comply with any consultation obligations under an applicable Modern Award or enterprise agreement. Most Modern Awards contain a consultation clause that requires employers to notify and consult with affected employees — and their representatives — before a final decision is made. This is not a formality. Genuine consultation means providing information and allowing employees a real opportunity to respond before the outcome is determined. Skipping or shortcutting this step is one of the most common grounds on which redundancy decisions are subsequently challenged.
Third, it must not have been reasonable in all the circumstances for the employee to be redeployed within the employer’s enterprise or the enterprise of an associated entity.
That third requirement is where the law changed significantly last year.
For the authoritative government reference on redundancy obligations under the Fair Work Act 2009, including the three-part test, consultation requirements, and redeployment obligations, see the Fair Work Ombudsman’s official redundancy guidance page.
What Helensburgh Coal v Bartley changed
Prior to August 2025, employers assessed redeployment by looking at vacant roles within the business. If no suitable vacancy existed, the redeployment test was generally satisfied and the redundancy could proceed.
The High Court’s unanimous decision in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 materially broadened that obligation and increased the scrutiny on redeployment. For a detailed breakdown of the ruling itself, including the full background of the case, see our dedicated analysis of the High Court’s decision.
The case arose from restructures made by Helensburgh Coal during the COVID-19 pandemic. The company reduced its workforce and retained contractors to perform work at the mine. Dismissed employees argued they should have been redeployed into roles being performed by those contractors. The High Court agreed that the Fair Work Commission was entitled to consider exactly that question — not merely whether a vacancy existed, but whether it would have been reasonable to reorganise the workforce, including contractor arrangements, to make a position available.
The practical consequence is significant. An employer can no longer satisfy the redeployment test by confirming there are no vacant positions. The assessment must now consider whether the employer could reasonably have reorganised how work is allocated — including work currently performed by contractors or labour hire — to retain the employee in some capacity.
This does not mean an employer is obliged to displace contractors in every case. The High Court was clear that such a step would be unlikely to be reasonable in most circumstances. What it does mean is that the assessment must be conducted, documented, and demonstrably thorough. A superficial review will not be sufficient if the decision is later challenged.
The expectation is clearer, and the tolerance for superficial consideration is lower.
When redundancy may be appropriate
With those requirements understood, redundancy remains a lawful and sometimes necessary response to genuine operational change.
It is appropriate where the nature or volume of work has changed such that a role is no longer required — where the function has been restructured, automated, merged with another role, or simply no longer exists in its current form as a result of a legitimate business decision. That last phrase is important: a legitimate business decision. Reducing costs is a legitimate business objective. But the mechanism used to achieve it must still comply with the law, and financial pressure alone does not make a role redundant.
The distinction that the Fair Work Commission applies in practice is whether the role has genuinely ceased to be required, or whether the employer simply wants to reduce headcount and is framing it as redundancy to avoid the procedural obligations that attach to other forms of dismissal.
Getting that distinction right — and being able to demonstrate it if challenged — is the difference between a defensible process and a costly one.
Where the process breaks down under pressure
The pattern is consistent. A business under financial pressure identifies roles it needs to shed. Leadership wants to move quickly. The process is compressed. Consultation is treated as notification. The redeployment assessment is cursory or absent. The rationale is not documented.
None of this is usually malicious. It is the product of speed and stress. But the Fair Work Commission does not assess these decisions based on the difficulty of the circumstances at the time. It assesses what can be demonstrated — the process followed, the alternatives genuinely considered, and the reasoning behind the outcome.
Following Helensburgh Coal v Bartley, that assessment now extends to contractor arrangements and any reasonable workforce reorganisation that could have been pursued. Businesses that have not reviewed their contractor and labour hire arrangements as part of their redeployment process are exposed, even if they were satisfied the process was adequate under the previous standard.
What a defensible process looks like
Before proceeding with any redundancy, a structured assessment should address the following.
The role must be demonstrably no longer required. Document the operational change that drives the decision. The business reason must be clear, specific, and capable of being explained to an independent decision-maker.
Consultation obligations must be met before the decision is finalised. Identify the applicable Modern Award or enterprise agreement, confirm what consultation is required, notify affected employees, provide meaningful information, and allow a genuine opportunity to respond. Record each step.
The redeployment assessment must be genuine and broad. Consider all roles within the enterprise and associated entities. Following Helensburgh Coal v Bartley, this now includes roles performed by contractors or labour hire where redeployment could reasonably have been considered. Document what was assessed, why each option was not viable, and the reasoning applied. A conclusion without reasoning will not hold up.
Redundancy entitlements must be correctly calculated. Confirm the applicable notice period and redundancy pay under the National Employment Standards or any applicable Modern Award or agreement, and ensure payments are accurate.
At a high level, this includes:
- Confirming the operational change
Identify what has actually changed in the business and why the role may no longer be required. - Assessing the role, not the individual
The focus must be on the position itself, not the person performing it. - Exploring redeployment properly
Consider all reasonable alternatives, not just obvious vacancies. - Documenting the reasoning
Record the assessment, options considered, and rationale for the decision. - Following a fair consultation process
Engage with affected employees in line with applicable obligations and expectations.
A note on documentation
Documentation is not an administrative burden. In a redundancy process, it is the primary form of protection the employer has.
If a dismissed employee files an unfair dismissal application, the Fair Work Commission will assess the process based on what is on record — not what was intended. A process that was conducted thoughtfully but not documented is, for practical purposes, a process that cannot be defended.
Every decision point should be recorded: the business rationale, the consultation steps taken, the redeployment assessment and its conclusions, and the final outcome with supporting reasoning.
The consequences of getting it wrong
A redundancy that does not satisfy the genuine redundancy requirements under s.389 of the Fair Work Act removes the employer’s jurisdictional shield against unfair dismissal claims. The financial exposure is real and direct.
Where an unfair dismissal claim succeeds, the Fair Work Commission can order reinstatement of the employee or payment of compensation of up to 26 weeks’ pay — capped at the high income threshold. For mid-sized businesses managing multiple redundancies, that exposure multiplies.
Beyond compensation, there are indirect costs that are harder to quantify but equally significant. Legal fees for defending a claim. Leadership time consumed by proceedings that can extend over months. Reputational damage in a labour market where employer conduct is increasingly visible. And the cultural cost within the remaining workforce of watching colleagues exit through a process that was visibly inadequate.
The businesses that navigate restructures well are not necessarily those that face no challenges. They are the ones that followed a process capable of withstanding scrutiny — and documented it accordingly.
Act correctly, if you need to act at all
The pressure on WA businesses right now is real. Some will need to make difficult decisions about their workforce. That is understood.
But the legal standard does not adjust for economic conditions. A redundancy process that cannot demonstrate genuine operational change, proper consultation, and a thorough redeployment assessment — including consideration of contractor arrangements — is a process that may not survive challenge.
If you are considering redundancies and want to ensure your process is structured, compliant, and defensible, speak with us before you act.
