Worker had 'no guaranteed employment,' argues labour-hire company
The Fair Work Commission (FWC) recently dealt with a case involving a labour hire worker who claimed unfair dismissal after his assignment with a client company ended abruptly. The case shed light on the nature of employment relationships in the labour hire industry and the challenges workers may face when their assignments are terminated.
The worker argued that the ending of his assignment effectively constituted a dismissal from the labour hire company. He contended that he was not offered further work after the incident and questioned why the company did not take action to protect him as an employee.
The labour hire company, on the other hand, maintained that the worker remained their employee even after the assignment ended. This disagreement formed the core of the dispute brought before the FWC.
The worker began his employment with the labour hire company on 7 September 2023. On the same day, he received an email from the company's account manager with a letter confirming his assignment to a client company. The letter stated:
"As detailed in the Candidate Declaration and Consent Form, the Client Assignment may be ended at any time by [the employer] or [the client]. The terms outlined above are only applicable to the Client Assignment referred to in this letter. At all times during this Client Assignment, you will be a casual employee of [the employer] and therefore, the existing terms, conditions, and obligations of your employment with [the employer] as outlined in the Candidate Declaration Form continue to apply."
The worker replied to this email two minutes later, confirming his acceptance of the terms.
The worker started his assignment at the client company on 11 September 2023. He initially worked in the small parts warehouse before moving to operate a forklift. His duties involved receiving orders by email, locating goods in the warehouse, and packaging them.
Around 1 May 2024, an altercation occurred between the worker and a full-time employee, referred to as “Scott,” of the client company. The worker's evidence was that the full-time employee "threatened to physically hit" him. He described the incident as follows:
"Scott threatened to hit me... While I was looking everywhere for the part, Scott, out of the blue said to me 'I hate you' and raised his fist and threatened to hit me. Scott then went upstairs to bring down more parts and said that he 'hates to work together' with me."
The worker reported the incident to the client company's management and was instructed to return home while the matter was investigated.
Following the incident, there were conflicting accounts of the communications between the worker and the labour hire company. The worker claimed he heard nothing further until he contacted the company and was told he "was not needed (by the client) anymore". He expressed his frustration, saying:
"I was the wronged person, and I am the one that got terminated by [the employer]. How come they did not bring the matter to the Fair Work Commission? How come they do not do anything to protect an employee like me?"
The labour hire company's account differed. Their representative stated that on 10 May 2024, the client company informed them that they had completed an internal workplace investigation into the worker's conduct.
The outcome was that the worker's assignment would be terminated immediately, while the full-time employee was reprimanded under the client's internal processes.
The labour hire company's representative said he then contacted the worker to inform him of the assignment's end and advised that he would "assist in trying to find additional assignments for him when opportunity arose."
A crucial point in the case was the labour hire company's claim that they had offered the worker a new assignment on 4 June 2024. According to their records, the worker declined this offer, stating he wanted to "wait for the outcome of Fair Work before discussing or accepting anything".
Furthermore, the worker had submitted two medical certificates to the labour hire company. One certificate, issued on 8 June 2024, said he had "no capacity for employment from 9 June 2024 to 7 July 2024". Another certificate, following an examination on 1 May 2024, stated the worker was "unfit for duties".
The Commission examined the terms of the worker's employment, which were outlined in a "Candidate Declaration and Consent" form. Key clauses in this document stated:
"I am employed as a casual employee. I acknowledge that I have no guarantee of ongoing employment and may from time to time be offered client assignments by [the employer]. I am under no obligation to accept any client assignment I am offered by [the employer]."
After considering all the evidence, the Commission concluded that the worker had not been dismissed from his employment with the labour hire company. The Commission emphasised several key points:
1. The worker had accepted the terms of the assignment, which included acknowledgement that there was "no guarantee of ongoing employment".
2. The labour hire company had offered the worker a new assignment in June 2024, which he declined. As the Commission noted:
"That offer by [the employer], coming ten days after the commencement of these proceedings, may well have been tactical, however, it is fatal to his claim that his employment relationship with [the employer] had ended when his assignment to [the client] had ended."
3. The medical certificates submitted by the worker also played a crucial role in the decision. The Commission stated:
"If the ending of the [client] assignment had been the end of his employment relationship, why would he need to establish that he had no capacity to work for [the employer]? His contract of employment continued."
The Commission also made some broader observations about the nature of labour hire arrangements:
"The engagement of externally employed casual labour hire has proliferated in Australia over the last two decades. The business model is a risk-shifting exercise for the host employer. Rather than directly employing workers to deal with work surges, businesses engage externally employed labour hire workers. These externally employed workers come without the on-costs associated with direct employment or the legal regulation of the process of ending a direct employment relationship."
In conclusion, the Commission said:
"To bring an unfair dismissal application, an employee must have been dismissed. [The worker] was not dismissed. This application fails for want of jurisdiction and is therefore dismissed."
