Labour hirers and unfair dismissal

Labour hire companies will take some comfort in a recent decision of the full bench of the Fair Work Commission (FWC) in an unfair dismissal case.

The facts of the case were the host employer deemed an on-hire employee’s conduct unsatisfactory and exercised its right under the labour hire agreement to have the employee removed from the worksite. The labour hire employer made no finding as to the employee’s alleged misconduct, and made genuine attempts to redeploy him. When the labour hire employer was unable to redeploy the employee, he was dismissed.

In determining whether a dismissal is harsh, unjust or unreasonable, the FWC must take into account whether that was a valid reason for the dismissal related to the person’s capacity or conduct. Here, the FWC found that while the employee’s conduct was not the reason for the dismissal, the employee’s capacity was relevant. Usually capacity relates to the employee’s personal ability to perform a role.

The FWC found the employee had no capacity to work at the host employer’s business because the host employer had exercised its right under the labour hire agreement to have the employee removed. As the labour hire employer had made genuine attempts to redeploy the employee, the labour hire company was found to have a valid reason for dismissing the employee.

The FWC found the circumstances of this case were different to an unfair dismissal case we commented on earlier this year in which the FWC found a labour hire company had unfairly dismissed an employee after the host employer told the employer it did not want the worker at its workplace. What was critical in the recent decision and the finding that the labour hire company had not unfairly dismissed the employee is:

• the labour hire company provided evidence of its contractual obligations to remove an employee upon request of the host employer;
• the labour hire company made genuine attempts to redeploy the employee.

If you need assistance with labour hire agreements, unfair dismissal or any other workplace matter, please contact:

Jim Rutherford
Principal
T 03 5226 8579
E jrutherford@ha.legal

Sonia McCabe
Senior Associate
T 03 5226 8558
E smccabe@ha.legal

This article was prepared with the assistance of Jenni Walker, Graduate Lawyer.