'Joint employer': Case highlights importance of clearly defined employment relationships in labour hire arrangements
The Fair Work Commission (FWC) recently dealt with a case involving a worker's claim of unfair dismissal against a company where she had been placed through a labour hire arrangement.
The worker argued that despite being officially employed by a labour hire agency, the company where she worked exercised substantial control over her employment and should be considered her joint employer.
The case raised questions about who can be considered an employer in situations where workers are placed by agencies but work under the day-to-day direction of another company.
In January 2023, the worker entered into a casual employment contract with ProQuest Recruitment Pty Ltd, a labour hire agency. Shortly after, she was assigned to work at a warehouse operated by Stanley Black & Decker Australia Pty Ltd, performing packing duties.
On June 8, 2024, an incident occurred at the warehouse involving a power industrial vehicle collision with another worker. Following this event, the company informed the labour hire agency that the worker was no longer required to attend the warehouse for her casual packing duties.
Believing she had been unfairly dismissed, the worker filed an application with the Fair Work Commission against the company where she had been working, not against the labour hire agency that had employed her.
The worker acknowledged that she was employed by the labour hire agency. However, she argued that the company where she worked had significant control over her employment. She said that the company managed her work duties, performance assessments, and ongoing engagement.
In her application, the worker said:
"[The employer] exerted substantial control over the key aspects of [my] employment."
She also argued that "all decisions" about whether her placement would continue or end were determined solely by the company.
Based on these factors, the worker claimed that the company should be considered a "joint employer" for the purposes of her unfair dismissal application.
The company objected to the application on jurisdictional grounds. They argued that they had not dismissed the worker because she was not their employee. Instead, they maintained that she was employed by the labour hire agency, which provided labour to the company under a labour hire arrangement.
The FWC examined the evidence, including the worker's employment contract with the labour hire agency and the terms of business between the agency and the company. The contract clearly defined the labour hire agency as the worker's "Employer" and stated:
"At all times when an employee is on Assignment with a Client, [the worker] is and remains an employee of [the labour hire agency] and not [the client company] although employees will usually be given day to day instructions about the performance of work by [the client company]."
This clause was important in establishing the nature of the employment relationship. The FWC also considered other documents, such as payslips and invoices, which further supported the conclusion that the worker was employed by the labour hire agency, not the company where she worked.
After considering the evidence, the FWC determined that there was no employment relationship between the worker and the company. The Commission found that at all material times, the worker was on a temporary assignment to the company, as outlined in her employment contract with the labour hire agency.
The FWC said:
"[The employer's] election to end [the worker's] assignment was not an act of dismissal by it, because [the employer] was not [the worker's] employer. In these circumstances, I am satisfied that [the employer] did not (and could not) dismiss [the worker] within the meaning of s 386(1) of the Act, or at all."
The Commission also addressed the worker's argument about joint employment:
"[The worker's] contention that she was jointly employed by both [employers] is rejected. The Full Bench of the Commission in FP Group Pty Ltd v Tooheys Pty Ltd declined to find that jurisdiction exists for the Commission to hear a claim of joint employment in circumstances where there is no firm adoption of that concept in Australian law by the courts."
Finally, the FWC said:
"I find that [the worker] has not been dismissed by [the employer] within the meaning of s 386(1) of the Act. Consequently, [the employer's] jurisdictional objection is upheld."
The case highlights the importance of clearly defined employment relationships in labour hire arrangements. It also underscores the limitations of the FWC's jurisdiction in cases where there is no direct employment relationship between the parties involved.
