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Labour-hire employee’s conduct at host not valid reason for dismissal

Submitted on Thursday, 6th July 2017

The Full Bench of the Fair Work Commission has ruled that a labour hire company’s termination of an employee due to their conduct with a host employer doesn’t provide them a valid reason for dismissal.

The labour hire company had terminated their employee for his inability to perform the “inherent requirements” of the role, because he had lost access to their host’s site after six years due to a number of conduct issues. 

The ex-employee’s access to the site was revoked due to the employee failing to follow reasonable directions and reporting protocols, as well as posting unauthorised photos on social media of the host’s assets and worksites. 

At first instance, Deputy President Wells concluded the dismissal was unfair based on three counts. Firstly, the employer “failed to make representations on behalf of their employee” and to push the host employer to “carry out a procedurally fair investigation”. Secondly, the employer based their decision on the host’s procedurally unfair investigation, did not discuss the investigation with the employee and did not provide an opportunity to respond to those allegations. And thirdly, the employer reviewed redeployment without discussing with the employee their “skills, qualifications and experience” as the Deputy President ruled that redeployment discussions would have likely provided a “different outcome, given his proven ability to obtain new skills and his employment record”.

The employer had argued the recent Full Bench decision in Pettifer v MODEC Management Services Pty Ltd was authority for their stance that the employee’s conduct at the host was a valid reason for dismissal from the labour-hire employer. However, the Deputy President concluded that there were “significant differences as to the circumstances requiring decision in this case and those prevailing in Pettifer”.   

The employer appealed to the Full Bench on the basis that the wrong principles were applied for a valid dismissal and the Full Bench agreed that it would be in the public interest to hear the appeal as the employer’s grounds “raise a significant issue concerning the import and application of the Full Bench Decision in Pettifer.

Whilst the Full Bench granted permission to appeal, the appeal was dismissed as they ruled Deputy President Wells’ decision had no appealable error as the Full Bench decision in Pettifer was not seen to have “compelled the Deputy President to conclude there was a valid reason” for the employee’s dismissal as the Deputy President had found “that there were a number of factual matters” between the two cases. 

Labour hire companies should be aware of the risks associated with terminating an employee based on their conduct with a host employer. Costly consequences can await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals to increase your knowledge of counselling and discipline processes, and how to best manage an unfair dismissal claim. 

Written by Laura Quinlan

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