'Not required on site': Worker claims constructive dismissal

The Fair Work Commission (FWC) recently dealt with a case involving a labour hire worker who claimed she was unfairly dismissed from her assignment with a major mining company.

The worker was initially employed as a casual by a labour hire company in May 2022. She was then placed on assignment with a major mining company client starting in June 2022. This assignment was initially set to end in June 2023 but was later extended to June 2024. Along with this extension, the worker received a pay increase.

In December 2023, the labour hire employer conducted a review of the worker's casual employment to assess the possibility of conversion to permanent employment.

However, due to the fixed-term nature of the assignment, they informed the worker they could not offer her a permanent role at that time. The worker sought clarification about this from the employer's onboarding and mobilisation manager, who assured her that she would remain at the mining company and that the assessment was part of the employer's obligations under the Fair Work Act.

The worker continued her assignment until mid-March 2024, when she was allegedly informed by the mining company client that her services were no longer required. This led to the worker filing an unfair dismissal claim against her labour hire employer with the Fair Work Commission.

The parties’ arguments

The labour hire employer argued that they had not actually dismissed the worker. They stated they had not given her any notice of dismissal and that their communications indicated her casual employment relationship was still active.

The employer emphasised that the end of a particular assignment did not necessarily mean the end of the overall employment relationship.

The employer provided evidence from several of its employees, including a senior contract advisor, onboarding and mobilisation manager, recruitment administrator, and managing director. Their testimonies outlined the timeline of events and the processes followed by the company.

In contrast, the worker claimed she had been effectively dismissed when informed she was no longer required at the mining company site.

She argued that this communication, combined with a lack of subsequent work assignments, constituted a dismissal under the Fair Work Act.

The worker also raised allegations of constructive dismissal, suggesting the employer's actions left her no reasonable option but to consider her employment at an end.

"The [employer’s] failure to provide work assignments, coupled with the knowledge of the [worker’s] pregnancy, contributed to the constructive dismissal," the worker claimed in her submissions. This quote highlights the worker's perspective that multiple factors combined to effectively end her employment.

The worker also stated that she had been repeatedly told by management at the mining company that she would be given a permanent position. She claimed that despite informing them of her pregnancy, she was given assurances about continued employment in January 2024.

Analysis of employment relationship

The FWC deputy president examined the nature of the employment relationship in this case. A key consideration was that the worker was employed by the labour hire company, not the mining company where she was placed on assignment.

As the deputy president noted: "[The employer] cannot dismiss [the worker] in the industrial sense because it did not employ her. A third party cannot insert itself into the employment relationship and declare that relationship over."

This quote emphasises the important distinction between the client company and the actual employer in labour hire arrangements.

The decision also highlighted that in casual labour hire situations, there is typically no guarantee of ongoing work between assignments. The deputy president observed:

"[The worker] is a casual employee and consistent with the terms of her contract, she had no guarantee of work and further, would not be obliged to accept any assignment offered."

The deputy president also noted that the usual process for ending an assignment was not followed in this case. Normally, the client company would contact the labour hire employer to advise that labour was no longer required, and the employer would then terminate the assignment in their system. In this instance, the client company ended the assignment in the system without advising the labour hire employer.

Is it dismissal?

Ultimately, the FWC determined that no dismissal had occurred at the initiative of the labour hire employer. The deputy president concluded: "She has not been dismissed at the initiative of the [the employer] and as such the FWC has no jurisdiction to hear the matter."

This ruling emphasised that in labour hire arrangements, the end of a particular assignment does not automatically equate to dismissal by the labour hire employer.

 As stated in the decision: "While she might claim [the employer] dismissed her, it had no power to do so and such an action would have no legal effect."

The case also highlighted the importance of clear communication in these complex employment relationships. The deputy president noted:

"When it became aware of the circumstances of its employee it conducted investigations to determine what had occurred and then wrote to the employee to advise that she was still employed."

This decision provides valuable insights for HR professionals and employers involved in labour hire arrangements. It underscores the need for clear policies and communication regarding the status of casual employees between assignments, as well as the importance of properly documenting any changes to employment status.