21 December 2018

Labour hire company takes the hit for host employer’s unfair dismissal

This article was written by Josephine MacMillan.

To avoid liability for unfair dismissal, when dismissing employees at the request of host employers, labour hire companies must act in a procedurally fair manner. It will be no defence that a labour hire company was following the direction of another entity, even if the action is supported by an employment agreement.

Key impacts

  • This case builds on the recent decisions of Pettifer[1]and Tasports[2].  Tasports established that a labour hire company will bear the risk where it adopts a host employer’s reasons for dismissing an employee.
  • It reinforces that the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking an unfair dismissal remedy.

Facts

Spinifex Australia Pty Ltd t/a Spinifex Recruiting (Spinifex) v Patrice Tait[3] involved the appeal of two decisions of the Fair Work Commission. Both decisions related to an application for an unfair dismissal remedy arising from Ms Tait’s dismissal by labour hire company Spinifex, from her assignment with the Department of Justice (DOJ).

In first instance proceedings, the Commission held that Spinifex dismissed Ms Tait with no valid reason and with no evidence provided by the DOJ to support the decision. Further, when asked what he had done to explore redeployment opportunities, Mr Ostro of Spinfex said, “well, I didn't do much”. Ms Tait was successful in obtaining $15,000 compensation for unfair dismissal from Spinifex. Spinifex appealed.

Outcome

On appeal, a Full Bench of the Commission agreed that:

  • Ms Tait had worked on a casual but regular basis and had a reasonable expectation of continuing employment;
  • there was no evidence to sustain any concerns raised by the DOJ in relation to Ms Tait’s performance;
  • by relying on the inadequately evidenced views of the DOJ and failing to provide Ms Tait with reasons for her termination, Spinifex had acted in a manner that was procedurally unfair;
  • despite the “lip service” Spinifex paid to “looking for alternative assignments” for Ms Tait, it was not accepted that Ms Tait’s employment relationship with Spinifex remained on foot;
  • the dismissal was harsh, unjust or unreasonable under the Fair Work Act 2009 on the basis of procedural flaws and that no valid reason was provided; and

among other reasons, as Ms Tait did not find work following her dismissal in October 2017 until February 2018, compensation of 3 months’ pay which equated to $15,000 was appropriate.


[1]Donald Pettifer v Modec Management Services Pty Ltd [2016] FWCFB 5243

[2]Tasmanian Ports Corporation Pty Ltd t/a Tasports v Mr Warwick Gee [2017] FWCFB 1714 (18 May 2017)

[3][2018] FWCFB 6267.


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