Australia: Labour hire agreement justified termination of employment

An employee dismissed by a labour hire company at the request of a host employer was not unfairly dismissed, in circumstances where the labour hire employer was fulfilling a contractual obligation to remove an employee from the worksite.

In Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243 , the Appellant had worked for labour hire company MODEC Management Services Pty Ltd ('MODEC') since 2009, with an "unblemished" record. Pursuant to a contract between MODEC and BHP Billiton Petroleum Inc (BHPB) for the provision of labour for the 'Pyrenees Venture', the Appellant was placed at a BHBP worksite. Following what BHPB alleged to be a "near miss" incident, MODEC was directed by BHPB to remove the Appellant from the site . MODEC acceded to BHPB's direction to remove the Appellant.

The Appellant first instituted proceedings in the Fair Work Commission under the unfair dismissal provisions in Part 3 - 1 of the Fair Work Act 2009 ("the Act"). Section 394 of the Act provides relief to an employee who has been dismissed, if that dismissal is deemed harsh, unjust or unreasonable. Pursuant to section 387 (a) - (h), criteria for considering harshness includes, inter alia, whether there was a valid reason for dismissal relating to capacity or conduct, whether the person was notified of the reason and given an opportunity to respond, whether there was an unreasonable refusal to allow a support person and any other matters that the Fair Work Commission considers relevant.

The Appellant initially alleged, amongst other factors, that his termination was harsh, unjust or unreasonable as he had a lengthy period of service and an "excellent" employment record. The Respondent submitted it did not terminate the worker's employment due to any findings of misconduct, but rather through the enforcement of a clause in the contract between MODEC and BHBP, which provided BHBP could direct MODEC to remove an employee if it was in the best interests of the project.

At first instance, Commissioner McKenna held the termination was not harsh, unjust or unreasonable. In coming to this decision, the Commissioner did not believe the question of whether or not there was a valid reason for dismissal relation to capacity or conduct was relevant.

The Applicant appealed this decision to the Full Bench on the basis that the Commissioner erred in finding MODEC did not rely on the Appellant's capacity or conduct in its decision to dismiss him, and asserted he was, in fact, dismissed for a reason relating to his capacity or conduct as his dismissal occurred as a result of BHPB forming the view that "his conduct demonstrated unacceptable safety behaviour".

On appeal, the Full Bench quashed Commissioner McKenna's decision that there was no need to address whether or not there was a valid reason for the dismissal. Therefore, to determine whether or not there was a valid reason for termination, the Full Bench noted the reason must be judged not by the existence of a legal right to terminate, but by "the existence of a reason for the exercise of that right".

Considering the relevant clause in the contract, the Full Bench concluded that MODEC was contractually obliged to remove the Appellant from the site if instructed to do so, and that this being the case, the Appellant was no longer able to perform the inherent functions of his role with MODEC. Importantly, the Full Bench noted MODEC had sought to find alternative employment for the Appellant and it was only after exhausting alternative employment options that MODEC exercised its reason to terminate.

In its decision, the Full Bench noted the case of Kool v Adecco Industrial Pty Ltd T/A Adecco [2016] FWC 925, where it was held that an employer cannot rely exclusively on the actions of the third party as a defence to unfair dismissal. This case was distinguished from the present case, however, in that the factual situation was "somewhat different" and the terms of the contractual relationship in that case were not provided as evidence.

Further, the Full Bench considered in accordance with section 387 of the Act that the Appellant was notified of the reason for dismissal and was given an opportunity to respond. It was held there was no evidence of a refusal to allow a support person and the dismissal was not related to unsatisfactory performance. In consideration of other relevant factors, the Full Bench noted Commissioner McKenna's consideration of the extent to which MODEC made endeavours to obtain suitable employment for the Appellant.

The Full Bench ultimately held that MODEC was contractually obliged to remove the employee from the worksite. Accordingly, the Full Bench upheld the decision at first instance that the dismissal was not harsh, unjust or unreasonable.


The Full Bench noted the increasingly commonplace practice of labour hire arrangements whereby host employers have a contractual right to exclude a labour hire employee from its worksite. This case demonstrates that employees seeking protection under the Fair Work Act 2009 may not be successful in establishing that a dismissal was harsh, unjust or unreasonable where the employer is fulfilling such a contractual obligation.

Further, this case illustrates the importance of labour hire employers exploring suitable redeployment for an employee, in circumstances where they have had to remove them from a worksite.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions