06-08-2025
Helensburgh Coal loses High Court challenge to rulings it breached Fair Work Act by sacking workers
A coal company which sacked 22 workers at the outset of the COVID-19 pandemic has lost a High Court challenge to rulings that the sackings breached the Fair Work Act.
Helensburgh Coal sacked the workers from its Metropolitan Coal Mine north of Wollongong in June 2020, after a significant drop in the price of metallurgical coal.
The workers argued their dismissal was unfair because some work at the mine was being performed by contractors, and theirs was not a case of genuine redundancy.
Multiple hearings in the Fair Work Commission resulted in a finding of unfair dismissal, which was upheld in the Federal Court.
In a unanimous decision, the High Court has dismissed the company's appeal.
The majority judgment pointed to the context of the Fair Work Act as a reaction to the Howard government's WorkChoices legislation.
Under WorkChoices, a dismissal which was deemed "harsh, unjust or unreasonable" was permitted for "genuine operational reasons".
The Fair Work Act states a dismissal is not a genuine redundancy "if it would have been reasonable in all the circumstances for the person to be redeployed".
"There has therefore been a significant rebalance in favour of employees since the enactment of the Fair Work Act," the High Court ruled.
The case will now go back to the Fair Work Commission to assess what remedy the workers are owed.
Helensburgh Coal engaged labour hire companies Nexus and Menster in August 2018 and March 2020 respectively.
A drop in the coal price in the early stages of the pandemic led to its decision to reduce production at the mine, requiring only four crews instead of the usual five.
The company committed to insource some, but not all, of the work being done by Nexus.
A total of 90 permanent employees were ultimately dismissed, 47 of whom, including the 22 litigants, did not agree to their termination.
A major point of difference in the case was whether an employer must consider restructuring its operations and freeing up work for the otherwise redundant employees.
Helensburgh Coal argued it only had to consider whether any jobs were available at the time of the sackings.
The workers disagreed, and submitted it was up to the Fair Work Commission to assess whether any potential changes were reasonable.
They said the concept of redeployment "envisages re-arrangement, re-organisation or transfer and is not limited to an existing vacant job, position or task".
The workers argued Helensburgh Coal owed no obligations to either of the labour hire firms it had engaged in the months and years prior.
In a statement, the Mining and Energy Union said the High Court had delivered justice for the workers, and set an important precedent about corporate responsibility to a workforce.
"Today the High Court has been clear: permanent workers cannot be removed in favour of contractors through dodgy corporate restructuring," MEU General Secretary Grahame Kelly said.
