Last Updated on 09/03/2026 by Damin Murdock
Under the Fair Work Act 2009 (Cth), a redundancy is only “a genuine redundancy” if the employer meets strict statutory requirements. If these are not met, the “shield” against unfair dismissal claims vanishes. As of 2026, the most significant risk for employers is no longer just finding a vacant desk, but proving they couldn’t have restructured their workforce, including contractor arrangements, to keep an employee.
The Statutory Hurdle: Section 389
For a dismissal to be a “genuine redundancy” under Section 389, you must prove:
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The job is no longer required due to operational changes.
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You complied with any Award/Enterprise Agreement consultation obligations; and
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It would not have been reasonable in all the circumstances to redeploy the person.
Dispute Analysis: From Ulan Coal to Helensburgh Coal
The “Competition” Failure (Ulan Coal Mines Ltd v Honeysett [2010]): In this foundational case, the employer failed the redeployment test because they required redundant employees to compete in an open selection process for other internal roles.
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The Rule: “Redeployment” means placing an employee into a suitable job. Making them interview against the general public is not redeployment.
The “Contractor” Expansion (Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29): In a landmark unanimous decision handed down on 6 August 2025, the High Court significantly raised the bar for what constitutes “reasonable” redeployment.
The Dispute: Helensburgh Coal made 22 employees redundant while continuing to use external contractors for similar work. The company argued that because there were no “vacant positions,” redeployment was impossible.
The High Court’s Applied Judgment: The Court rejected the “vacancy-only” approach. It held that the Fair Work Commission is permitted to inquire into whether an employer could have made changes to how it uses its workforce—including reducing its reliance on contractors—to create a position for a redundant employee.
2026 Practical Lessons for Employers
This High Court ruling means that in 2026, your “Genuine Redundancy” defense is at risk if contractors are performing work that a redundant employee could reasonably do.
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Audit Your Contractors First: Before serving redundancy notices, assess whether any work currently performed by labour hire or independent contractors could be “insourced” to the affected employees.
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The “Reasonableness” Test: You aren’t required to overhaul your entire business model, but you must be able to prove, with evidence, why it was not reasonable to displace a contractor. Commercial costs and specialist skills are valid reasons, but “it was easier to keep the contractor” is not.
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associated entity Search: The obligation still extends across your entire corporate group. If a sister company has a contractor performing work that your redundant employee can do, you must consider that role.
How Leo Lawyers Can Help
Redundancy litigation in 2026 is forensic and highly scrutinized. At Leo Lawyers, we provide the legal expertise to audit your restructure process before you terminate, ensuring your “Genuine Redundancy” defense stands up to the “Helensburgh Test.”
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DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
