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Warning for labour suppliers after Fair Work Commission unfair dismissal ruling

Submitted on Thursday, 7th December 2017

A labour supplier has been ordered to pay $8,500 to a casual labour hire worker following a successful unfair dismissal claim. The worker had been engaged by the labour supplier on a regular and systematic basis from January 2013 until June 2017, including two periods of parental leave. The Commission found the worker was therefore protected from unfair dismissal.

The worker’s employment was terminated after the host employer reported instances of her attending work late, leaving work early and not providing advice of absences. As a result, the host employer stated it had lost confidence and trust in her capacity to carry out allocated tasks.  The labour supplier was advised by the host employer on 22 June 2017 the worker was “unsuitable for further work”. The next day the labour supplier advised the worker her assignment had ended and they would look for other work for her. The worker did not hear from the labour supplier again until 2 September 2017, two days before the scheduled hearing.  

The Commission heard the host employer, and subsequently the labour supplier, cite 22 occasions of lateness, 6 instances of leaving work early, and 6 occasions of being absent from work as explanation for cancelling the worker’s assignment. However, during the hearing it was soon established these reasons were not supported by any evidence. The 22 occasions of lateness included incidences of lateness from one minute to 30 minutes, despite the host employer exercising a 5 minute leniency. The worker was also able to provide explanations for the recorded instances of lateness, and demonstrated the early departures were authorised by on duty supervisors and related to an inability to work overtime, rather than leaving a rostered shift early.

Despite claims by the host employer the worker had been counselled regarding her work performance, there was no evidence to support this. The Commission found the labour supplier were “merely parroting the allegations” made by the host employer. When considering the information presented in the hearing, the Commission was “not convinced that [the worker] engaged in the conduct ascribed to her”. The Commissioner noted it was “dangerous to rely upon” information presented by the host employer to support the allegations. The Commission considered the labour supplier “should have sought more detailed information, and properly investigated the basis on which [the host employer] made its decision”. Had this occurred, they would have “had an opportunity to raise inconsistencies” and would have discovered that most of the records were incorrect. Following the termination of engagement with the host employer, it was found the labour supplier did not take “reasonable steps to engage with [the host employer] or other employers about alternative assignments”. It was on these grounds the Commission concluded the employee was unfairly dismissed.

The Commission highlighted previous case law reminding labour suppliers “the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal.  Labour Hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly.  If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship.  If the Commission considers that a dismissal is unfair in all the circumstances, it can be no defence that the employer was complying with the direction of another entity in affecting the dismissal.”

This case highlights the importance of thorough investigations into allegations of poor performance and conduct, not only for labour suppliers, but all businesses. Relying solely on the word of others, without verification of facts, can lead to successful unfair dismissal claims. Under current employment legislation, costly consequences 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.

By Megan Wood

Fair Work Commission Decision [2017] FWC 5661


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