Contract services businesses such as Spotless can no longer rely on a broad exemption to paying redundancy when they lose contracts as a result of a precedent-setting ruling and are now potentially on the hook for millions of dollars in entitlements.

A full bench of the Federal Court on Wednesday rejected Spotless' defence of its practice of not paying redundancy to long-term cleaners and security guards when it lost contracts, finding its argument that the job losses were part of the usual turnover of labour in the industry did not hold water.