Workplace Watch – 7 August 2025: High Court ruling on reasonable redeployment; damages awarded to harassed employee; consultation on non-compete ban open
Welcome to the latest edition of the KHQ Workplace Watch, our fortnightly summary of key developments in the ER/IR space.
In this edition we cover the High Court’s decision yesterday regarding redeployment obligations and genuine redundancy, a Federal Court matter involving the award of significant damages to a sexually harassed employee, a decision of the Fair Work Commission enabling an employee to work from home on a full-time basis, a general protections decision involving a prospective employee, and key regulatory and legislative updates including the Federal Government’s consultation on post-employment restraints and the Victorian government’s proposal to enshrine in legislation a right for employees to work from home.
CASE UPDATES
High Court confirms what the Fair Work Commission can consider when examining reasonable redeployment in the context of genuine redundancy
The High Court unanimously rejected an appeal by Peabody from a Full Federal Court decision regarding reasonable redeployment in the context of s389(2) of the Fair Work Act 2009 (Cth) (FW Act), following four decisions involving employees at Peabody’s Helensburgh mine where the FWC held that the dismissals in question were not cases of “genuine redundancy” on the basis that it would have been reasonable to redeploy the impacted employees to perform work being performed by previously engaged contractors. The High Court held that, when considering reasonable redeployment, the FWC can consider and inquire into whether an employer could have made changes to the way it uses workforce to create or make available work for an employee who would otherwise be redundant.
Federal Court awards significant damages payment to sexually harassed employee in the fast food industry
Justice Bromwich has ruled that a sexually harassed and victimised employee be paid $305,000 (including general damages of $170,000, aggravated damages of $5,000 and compensation of $130,000). In accepting the employee’s claims that the conduct of the defendant (the owner of the fast food franchise at which she was employed) amounted to contraventions of the Sex Discrimination Act 1984 (Cth), Justice Bromwich noted that “the culture at that workplace tolerated overt and outspoken sexist and boorish behaviour” and that “the senior staff at the Store, including [the defendant], fostered a workplace culture that was disinterested in preventing sexist conduct from taking place and was instead tolerant, or even conducive to its continuation” (see [103]).
Fair Work Commission allows permanent WFH arrangement for employee with carer’s responsibilities
In a dispute regarding flexible working arrangements under the Fair Work Act, the Fair Work Commission has made an order exempting an administrative employee, whose teenage daughter suffers from cystic fibrosis, from a direction to work from the office for a minimum of three days per week in circumstances where the employee was concerned to minimise the risks of being exposed to pathogens in the workplace and bringing those into her household and endangering her daughter.
In determining the dispute in favour of the employee, Commissioner Sloan found that the employer had not provided an evidentiary basis on which the FWC could find that the employer had reasonable business grounds on which to refuse the request noting that that the employer “did not demonstrate how [its] interest outweighed the interest of [the employee] in reducing the risk of introducing pathogens to her home” (see at [115]).
No workplace rights to make an inquiry for prospective employee
Judge Gostencnik in the Federal Circuit and Family Court has found that an employer’s withdrawal of a job offer did not constitute a breach of the general protections provisions of the Fair Work Act.
In considering the contrasting authorities which deal with the question of whether an employee “is able to” make a complaint or inquiry regarding their employment, (noting in this circumstance that no “employment” yet existed), Judge Gostencnik found that ‘the matters the subject of inquiry made by [the Applicant] … were not anchored in any kind of legal entitlement’ (see [43]).
REGULATORY UPDATES
Victorian Government proposes to legislate WFH rights
The Victorian Government has announced that it will introduce legislation to protect the ability of an employee to work from home for two days per week, if the employee can reasonably do their job from home and that a consultation process led by the Department of Premier and Cabinet will be used to develop the legislation. It remains to be seen how the new laws will be enacted, and how possible constitutional issues arising from any inconsistency with the flexible working provisions in the FW Act will be navigated.
Access a copy of the Victorian Government announcement here.
Federal Government commences consultation on bans on non-compete clauses and other restraints
During the federal election last year, the Federal Government announced that it was proposing to ban non-compete clauses for workers earning less than the high-income threshold in the FW Act (currently, $183,100). The Government has commenced a consultation process, open until 5 September 2025, on reforming restraints including inviting submissions about the need for limitations on client non-solicitation clauses and ‘co-worker non-solicitation’ clauses.
Access the consultation paper and consultation questions is here.
Penalty rates Bill passes House of Representatives
The House of Representatives has passed an amendment to the FW Act, proposing to insert a new clause 135A into the FW Act which would ensure that when making, varying or revoking modern awards the Fair Work Commission must ensure that: (1) the rate of a penalty rate or an overtime rate that employees are entitled to receive is not reduced; and (2) modern awards do not include terms that substitute employees’ entitlements to receive penalty rates or overtime rates where those terms would have the effect of reducing the additional remuneration for working overtime, unsocial, irregular or unpredictable hours, weekends or public holidays or shiftwork.
While the Supplementary Explanatory Memorandum to the Bill explains that the amendment would “would not operate to require the Commission to undertake a review of all modern awards [or] initiate a review of any award terms outside the scope of an application before the Commission…”, it is anticipated that the proposed amendments will impact on enterprise agreement approval processes by inviting greater scrutiny of proposed enterprise agreement clauses that seek to annualise employees’ salaries, or “roll-up” entitlements into a single rate of pay.
The Bill has been referred to a Senate Committee with a Report due on 21 August 2025.
Access the text of the Bill, proposed amendments and Explanatory Memoranda here.
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