Who's really the boss? FWC rules on contractor employment

The Fair Work Commission (FWC) recently dealt with a worker who claimed he was unfairly dismissed after being terminated without notice or explanation.

The worker said he was also deprived of basic employment entitlements, including penalty rates and superannuation.

The case brought up questions about who exactly qualifies as an employer when multiple companies operate in the same workplace, and what happens when workers misunderstand who they actually work for.

Dismissal without notice or explanation

The worker filed an unfair dismissal application as a security guard, stating he had worked from February 2023 until his employment ended on 30 June 2024.

He said his supervisor contacted him and terminated his role without notice or explanation.

The worker also claimed he was paid in cash and missed out on essential entitlements like penalty rates, public holiday payments, and superannuation. He asked to be reinstated to his position.

The security services company brought forward evidence from their project security manager and administration officer showing they had never employed the worker. Instead, they demonstrated that a company called Regent Maintenance Solutions Pty Ltd employed him and supplied security services through a contract arrangement.

A key piece of evidence stated: "[The employer] has never paid [the worker] directly and does not have his payment details."

The company also showed they had a contract with Regent that started in April 2022 for providing security guards to construction sites. While the company's project security manager interviewed guards before they started work, they didn't hire them directly.

Multiple companies in the workplace

The worker supported his claim by presenting screenshots from a work group chat and shift handover checklists that showed the company's logo.

He believed these proved he worked for the security services company. However, the company explained these materials were standard parts of site operations:

"Through its Project Security Manager, [the employer] participates in a 'group chat'. This chat allows [the employer] to communicate with the companies it is subcontracted to and the guards on the site to confirm rosters and to pass on information about what is happening on that site."

Unfair dismissal claim

The Fair Work Act sets out specific requirements for unfair dismissal claims. The FWC explained that for such claims to succeed, there must be an actual employment relationship between the worker and the employer they're claiming against:

"For a person to be protected from being unfairly dismissal by another party under the Act, the person must have completed a certain period of employment, that is, a period of employment as an employee of an employer in respect of whom the application is made."

The Commission found: "It appears that [the worker] believed that he was engaged directly by [the employer] and worked for them because they had a presence on the sites at which he was working and because he received communication through a group chat that included [the employer]."

The final decision stated: "[The worker] is not a person protected from unfair dismissal by [the employer] because there was no relationship of employer and employee between them. Nor was [the worker] dismissed by [the employer]."