Labour hire companies are subject to unfair dismissal laws and cannot ‘hide’ behind the ultimate employing entity, according to the Fair Work Commission.
Labour hire employers should take note of a recent case heard at the Fair Work Commission (FWC), which warns that employers cannot opt out of unfair dismissal laws by treating the host entity as the responsible party. The FWC will examine the relationships between all parties in assessing whether an employee has been unfairly dismissed, and will ask for documentation.
In Kool v Adecco Industrial Pty Ltd [2016] FWC 925, Ms Kool claimed she has been unfairly dismissed by labour hire firm Adecco when it told her she could no longer work at Adecco’s client, Nestle. Ms Kool was employed by Adecco and on-hired to Nestle for more than two years, working up to 38 hours per week.
Nestle accused her of misconduct by apparent gossiping and an allegation she had ‘clocked’ other employees in and out of work. Nestle informed Adecco it “no longer required” Ms Kool, and Adecco informed Ms Kool that her assignment at Nestle was ending immediately. Ms. Kool brought a claim of unfair dismissal and Adecco argued Ms Kool had not been dismissed because she was still on their books and they were trying to secure new work for her.
The FWC found that under the Fair Work Act an employee is considered to have been ‘dismissed’ where the employment with the employer has been terminated ‘at the employer’s initiative’.
The FWC established that the employment had been terminated because Adecco continued to supply labour to Nestle and Ms Kool’s replacement work was not of the same hours or certainty as the Nestle placement.
The FWC also found the dismissal was unfair, principally because there was insufficient evidence to support a valid reason for the termination of Ms Kool’s employment; Adecco had not afforded Ms Kool a fair dismissal procedure in accordance with section 387 of the Fair Work Act.
The Kool decision highlights four key lessons for labour hire employers:
By Mark Abernethy
In Kool v Adecco Industrial Pty Ltd [2016] FWC 925, Ms Kool claimed she has been unfairly dismissed by labour hire firm Adecco when it told her she could no longer work at Adecco’s client, Nestle. Ms Kool was employed by Adecco and on-hired to Nestle for more than two years, working up to 38 hours per week.
Nestle accused her of misconduct by apparent gossiping and an allegation she had ‘clocked’ other employees in and out of work. Nestle informed Adecco it “no longer required” Ms Kool, and Adecco informed Ms Kool that her assignment at Nestle was ending immediately. Ms. Kool brought a claim of unfair dismissal and Adecco argued Ms Kool had not been dismissed because she was still on their books and they were trying to secure new work for her.
The FWC found that under the Fair Work Act an employee is considered to have been ‘dismissed’ where the employment with the employer has been terminated ‘at the employer’s initiative’.
The FWC established that the employment had been terminated because Adecco continued to supply labour to Nestle and Ms Kool’s replacement work was not of the same hours or certainty as the Nestle placement.
The FWC also found the dismissal was unfair, principally because there was insufficient evidence to support a valid reason for the termination of Ms Kool’s employment; Adecco had not afforded Ms Kool a fair dismissal procedure in accordance with section 387 of the Fair Work Act.
The Kool decision highlights four key lessons for labour hire employers:
- Do not automatically assume a ‘casual’ has no unfair dismissal rights
- Do not hide behind the host entity
- The onus is on you to provide evidence that supports your case
- Document the nature and purpose of the relationship – Adecco did not give the FWC any evidence of signed agreement between it and Ms Kool which could be referred to in support of the termination of her employment due to the wish of the client.
By Mark Abernethy