Labour Hire Employers can’t hide behind client contracts

A recent Fair Work Commission decision has emphasised that the Commission will not permit a labour hire employer to outsource its Fair Work obligations by simply dismissing an employee when its client (the host employer) decides that it no longer wants the labour hire employee on site.

If the direct actions of a labour hire company are found to be unfair, they do not automatically cease to be unfair if they are indirectly carried out by a third party to the employment relationship.

In the Star v WorkPac decision below a labour hire company supplied a machinery operator to a mine. The worker refused to comply with an instruction during her night shift to dump an ore load in an area that she said was too dark. Thereafter the worker’s employment was terminated when the labour hire company called to inform her that the mine operator and client of the labour hire agency had ‘demobilised’ her from the site.

The employer argued that it hadn’t dismissed the worker – rather the employment ended when the worker expressed her disinterest in working in other roles for the labour hire company.

The Commission rejected this argument, ruling that each assignment of the worker to a client was a separate employment relationship.

The Commission observed that although a labour hire company’s client has a contractual right to direct it to remove a worker from their site that does not mean there is a valid reason for the employer’s resulting dismissal.

In this case, the Commission ruled the dismissal was unfair because there was no discussion with the worker about the decision to remove her from the site and the dismissal was harsh because of its consequences for her personal and economic situation and because there was no conduct sufficient to justify the dismissal

[Star v WorkPac Pty Ltd (2018) FWC 4991]

Disclaimer: This summary is not legal advice and for more information on terminating an employment contract call NECA Legal (WA) Pty Ltd on (08) 6241 6129 or email necalegalwa@ecawa.org.au.