Fair Work Commission clarifies dismissal standards for labour hire companies

14 July 2017

The Full Bench of the Fair Work Commission (“FWC“) has recently decided the case of Tasmanian Ports Corporation Pty Ltd t/a Tasports v Gee [2017] FWCFB 1714, having dismissed the appeal based on the principles established in Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243 (“Pettifer“) and Kool v Adecco Industrial Pty Ltd t/a Adecco [2016] FWC 925 (“Adecco“).

Mr Gee was hired by Tasports, a labour hire company, to provide services for Grange Resources Limited (“Grange“) at the port in Tasmania, and following an investigation into Mr Gee’s conduct, Grange advised Mr Gee’s access to the work site would be revoked. It is important to note, however, that the worker was not given any opportunity to respond to the allegations which formed the basis of the investigation, and despite Tasports’ knowledge of the investigation, Mr Gee was not made aware of the same.

Mr Gee was subsequently terminated due to his inability to complete the inherent requirements of his duties, noting Mr Gee was hired to work exclusively at Grange’s worksite. It is also important to note that Tasports failed to conduct an independent investigation into the allegations made against Mr Gee, and instead relied upon the outcome of Grange’s investigation. The FWC questioned whether Tasports had taken every reasonable action to protect the interests of Mr Gee, and discussed the principles established in Pettifer and Adecco.

Adecco carried many similar principles as the current case, with the employee dismissed for the inability to complete the inherent requirements of the duties due to being removed from a host employer’s work site, and importantly, Adecco also failed to explore redeployment opportunities for the employee which constituted an element of unfairness. The case of Adecco was relied upon for the general principles established, in which the FWC stated:

“…the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal. Labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly. If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship.”

The above passage was also quoted in Pettifer, however, Pettifer carried different circumstances in that MODEC Management Services Pty Ltd (“MODEC”) had made all reasonable enquiries to redeploy Mr Pettifer in alternative employment, however, were unable to do so. Further, in the termination of Pettifer, MODEC did not make any reference to the investigation into the Mr Pettifer’s actions justifying the removal of Mr Pettifer from the host employer’s work site, and further the host employer had a contractual power to make such a decision.

The principle in Pettifer was relied upon in the current case as it showed the correct course of action for a fair dismissal, of which Tasports failed to follow. Using the above principle the Full Bench of the FWC have clarified further in the current case how the relationship between a host employer and a labour hire company will not exclude the labour hire company from using due diligence to ensure a fair dismissal occurs, including investigations into redeployment opportunities, and conducting independent investigations into circumstances for removal.