Planning a Redundancy? What Employers Need to Know

Employment Law: 28 May 2026

Author: Bianca Mazzarella , Maddi Fenton - Our People

Redundancy decisions require careful planning and strict compliance with consultation and redeployment obligations. This article outlines the key legal requirements employers must meet and the implications of recent High Court guidance.

When a business experiences disruption or financial pressure and needs to reduce headcount, a redundancy process is often considered. It is vital that employers comply with any consultation obligations and provide employees with an opportunity to respond to the proposed changes and consider redeployment before making a final decision.

In rare cases an employee may have only held a couple of different roles during their career, and a redundancy can be an extremely stressful life event. In this article, we cover the key aspects employers need to know to handle the process the right way.

Redundancy requires careful consideration by employers before any termination of employment occurs. A failure to properly assess whether a redundancy is genuine, or to comply with obligations, may expose an employer to Fair Work claims such as unfair dismissal or general protections claims.

Recent guidance from the High Court in Helensburgh Coal Pty Ltd v Bartley (Helensburgh) has clarified the scope of redeployment obligations, reinforcing that employers must take a broad and objective approach when determining whether redundancy is appropriate.

What is a redundancy?

A redundancy occurs where an employer no longer requires a job to be performed by anyone. This may arise due to:

• reduced business demand
• restructuring or reorganisation
• introduction of new technology
• business closure or relocation
• sale of business where a suitable alternative role is not offered

Redundancy can also occur in cases of insolvency or bankruptcy.

When is a Redundancy “Genuine”?

Under sections 385 and 389 of the FW Act, a dismissal will only be a genuine redundancy if:

• The employer no longer requires the job to be performed by anyone.
• The employer has complied with consultation obligations under any applicable award or enterprise agreement.
• It would not have been reasonable in all the circumstances to redeploy the employee within the business or an associated entity.

If these criteria are not met, the employee may bring an unfair dismissal claim.

A redundancy may not be genuine if:

• the role still effectively exists
• another person is hired to perform the same work
• redeployment opportunities were not properly considered

The Expanding Scope of Redeployment

The High Court’s decision in Helensburgh has significantly clarified how redeployment must be considered.

Key Takeaways from Helensburgh

• Employers must consider whether changes to workforce arrangements could enable redeployment.
• “Redeployment” is not limited to existing vacant roles.
• The Fair Work Commission (Commission) can assess whether employers could reasonably restructure their workforce to avoid redundancy.
• This may include considering whether work currently performed by contractors could be brought in-house.

In Helensburgh, the employer reduced its workforce due to declining demand but continued to engage contractors. The Commission found, and the High Court confirmed, that the dismissals were not genuine redundancies because the employees could have been redeployed into roles performed by those contractors.

In Helensburgh, it was relevant that:

• contractors were engaged on an “as needed” basis
• there was no legal obligation to retain them
• the work was suitable for employees with reasonable training
• insourcing would not have changed a core aspect of the business

Limits on the Principle

Importantly, the High Court emphasised that the words “all the circumstances” in s 389(2) of the FW Act are deliberately broad, and do not prevent the Commission from considering whether an employer could make changes to its workforce when assessing redeployment.

However, this inquiry is not without limits. The Commission cannot assess the reasonableness of redeployment where it would require a change to an essential or important facet of the employer’s enterprise.

Further, both the High Court and the Full Court of the Federal Court in Helensburgh indicated that it will be rare for such an inquiry to result in a finding that redeployment was reasonable in all the circumstances.

Redeployment Obligations in Practice

Employers should actively explore alternatives to redundancy, including:

• redeployment within the organisation or associated entities
• retraining employees for other roles
• restructuring duties across the workforce
• reducing reliance on contractors where appropriate

Consultation Obligations

Employers should consult with employees about major workplace changes, including redundancies. This typically involves:

• notifying employees of the proposed changes
• discussing the impact
• considering any feedback

Failure to consult in accordance with an applicable award or agreement may mean the redundancy is not genuine.

Notice Periods

Employers must provide written notice of termination or payment in lieu of notice in accordance with section 117 of the FW Act.

Minimum notice periods are:

• 1 week (less than 1 year of service)
• 2 weeks (1–3 years of service)
• 3 weeks (3–5 years of service)
• 4 weeks (more than 5 years of service)

Employees aged 45 or older with at least 2 years’ continuous service are entitled to an additional week of notice.

Employers should also check workplace policies, enterprise agreements and employment contracts to confirm how much notice is required. Legally, the employee must be notified in writing and provided with the correct notice period (or payment in lieu of notice).

Redundancy Pay and Entitlements

Eligible employees may be entitled to redundancy pay of up to 16 weeks under section 119 the FW Act, depending on their length of service.

However, sections 121 and 123 of the FW Act provides redundancy pay is not payable in certain circumstances, including where the employee:

• has less than 12 months’ service
• is a genuine casual employee
• is employed for a fixed term, task or season
• is a trainee engaged for a set rime or the duration of a training arrangement
• is dismissed for serious misconduct
• works for a small business employer (fewer than 15 employees)

Final Thoughts

The decision in Helensburgh highlights that redundancy is no longer a narrow, role-based assessment. Employers must now take a broader and more proactive approach, including considering whether adjustments to workforce structure could avoid dismissal.

While the obligation is not unlimited, failing to properly consider redeployment, including unconventional options, may mean a redundancy is not genuine, exposing employers to significant legal risk.

If your business requires advice or support in navigating redundancy and redeployment obligations, please contact Bianca Mazzarella, Principal at Aitken Partners at bmazzarella@aitken.com.au or +61 3 8600 6093.