In my outplacement work I ask employers about re-deployment options and sometimes I hear – “there is a position, we’re advertising it on the open market as well” – and alarm bells start ringing in my head! Why? Because – Australian Employers can fall foul of the law if asking a re-deployee to compete for a new role with external candidates, or against those who are not also re-deployees. Did you know that? The Courts don’t take kindly to re-deployees having to “compete” for a role that could have been directly offered.
Make sure your ducks are all in a row before you start making legal mistakes. Read on for more details…
A re-deployee faced with being asked to apply for and compete for a role in-house could easily claim their position isn’t genuinely redundant – and have a case for unfair dismissal. Nobody wants that so let’s examine best practice when offering re-deployment prior to redundancy.
In Australia, requiring a redeployee (an employee whose position has been made redundant) to compete for a vacancy against other candidates is generally considered unlawful or at least unreasonable, putting the employer at high risk of an unfair dismissal claim.
Under the Fair Work Act 2009, for a redundancy to be considered a “genuine redundancy” (and therefore exempt from unfair dismissal), the employer must take reasonable steps to redeploy the employee.
I’m not offering legal advice here but suggesting you check out the law with an employment lawyer or the Fair Work Commission before you take action on redundancy and re-deployment.
These are the legal principles to be aware of:
1. The Legal Definition of Redeployment
- Direct Placement: Redeployment means being “placed in another job”. It is not a competitive process.
- No Competitive Interviewing: Case law (e.g., Ulan Coal Mines Ltd v A. Honeysett & Ors) has established that forcing a redundant employee to apply for a job and compete with other applicants (internal or external) does not constitute genuine redeployment.
In Ulan Coal Mines Ltd v Honeysett, the Full Bench of Fair Work Australia determined that requiring a redundant employee to compete for an available position is not genuine redeployment; instead, preference should be given to the employee for suitable roles. The ruling also established that redeployment obligations extend to associated entities, with the reasonableness depending on factors like managerial integration and geographic feasibility, judged objectively at the time of dismissal.
- Guaranteed Role: A truly suitable role should be offered directly, rather than asking the employee to compete for it.
2. When Competition Makes Redundancy “Unfair”
- Unfair Dismissal Risk: If a suitable vacancy exists and the employer forces the redeployee to compete, the Fair Work Commission (FWC) may find that the redeployment was not “reasonable in all the circumstances”.
- Result: The redundancy will not be a “genuine redundancy,” and the employee can claim unfair dismissal.
3. “Suitable” Alternative Employment
- Definition: “Suitable” means a role that the employee has the skills and competence to perform, usually with minimal or no further training.
- Lower Level Roles: If a similar-level role is not available, the employer should consider offering a lower-level role (a “demotion” in status or pay). Failing to offer a lower-level role when it is available can also make the redundancy not genuine.
4. Exceptions and Nuances
There may be applicable exceptions for small business and if many people are being re-deployed at one time so do contact an employment lawyer or the Fair Work Commission to get legal advice for your circumstances.
- Restructuring: If many positions are made redundant and fewer similar positions are created, it may be reasonable to have a selection process (interview/assessment) specifically among the affected employees for the new positions. However, this is distinct from forcing them to compete against external, non-redundant candidates.
- Interstate/Associated Entities: Employers must consider redeployment across their business and associated entities.
5. Best Practices for Employers
- Do not compete: Do not make a redundant employee compete for a vacant position.
- Document everything: Document all attempts to find redeployment, including why a role was deemed unsuitable.
- Consult: Comply with consultation obligations in modern awards or enterprise agreements.
Hansard records from the introduction of the Fair Work Act 2009—specifically the Second Reading Speech and Explanatory Memorandum—emphasize that “genuine redundancy” requires an employer to act with fairness and compassion, rather than making employees “make their own way” against “odds deliberately stacked against [them]”.
While Hansard itself does not contain a specific line-by-line ban on “competing,” the legislative intent and subsequent case law interpret the statutory duty to redeploy as a proactive obligation on the employer.
Legal Interpretation of “Compete”
Courts and the FWC (interpreting the intent recorded in Hansard) have concluded that forcing a redundant employee to compete for a vacancy often invalidates a “genuine redundancy”:
- Ulan Coal Mines Ltd v Honeysett: This landmark case established that “redeployment” means actually placing an employee in a role. Asking them to “apply and compete” against others is not considered a “reasonable step to redeploy”.
- Preference Over Others: To meet the “genuine redundancy” criteria, an employer should generally offer a suitable role to the redundant employee without a competitive process, provided the employee has the necessary skills or can be retrained in a reasonable timeframe.
Recent High Court Clarification (2025)
In the 2025 case Helensburgh Coal Pty Ltd v Bartley, the High Court further expanded this by ruling that employers must even consider restructuring or “freeing up” work—such as replacing contractors with redundant employees—rather than just checking a list of vacant roles. This reinforces the idea that the employer must actively seek to preserve employment rather than making the employee win their job back in an open market.
Under the principles established by Parliament and clarified by the High Court, asking a redeployee to compete for a role they are qualified to perform is a high-risk strategy that likely fails the “genuine redundancy” test, leaving you, the employer, open to unfair dismissal claims.
Always check with an employment lawyer and the Fair Work Commission if you have any questions – and err on the side of caution, exemplify best practice at all times.
For information about outplacement services, change management, psychological and wellbeing support for leaders, retrenched employees and those who stay – call Bridget Hogg for information and prices on 0477 016966 or email bridget@developmentatwork.com.au. See www.outplacementadelaide.com.au for testimonials and further information about outplacement services.