Australia: Dismissing on-hired employees: A cautionary tale

In Tasmanian Ports Corporation Pty Ltd t/a Tasports v Gee [2017] FWCFB 1714 (18 May 2017) (Tasports), a Full Bench of the Fair Work Commission has clarified the obligations of labour hire employers when dismissing an employee.

The decision in Tasports makes it clear that, when determining whether to dismiss an employee, labour hire companies cannot simply rely on the process adopted by a host business.

THE FACTS OF THE CASE

Tasmanian Ports Corporation Pty Ltd (Tasports) is a State-owned company which owns and operates a number of ports in Tasmania. It also engages in a number of other commercial activities, including supplying labour to privately-owned ports. Amongst its clients is Grange Resources Limited (Grange), a mining company which processes and ships iron pellets on the north coast of Tasmania.

Mr Gee was an employee of Tasports for a number of years, and was assigned to work for Grange from 2009 until his dismissal in August 2015.

The termination of Mr Gee's employment occurred following advice from Grange to Tasports that it would be terminating Mr Gee's access to its premises with effect from 17 August 2015. That decision was triggered by an investigation into Mr Gee's alleged failure 'to follow a reasonable work and deployment directive' on 13 August, and into earlier incidents allegedly involving:

  • the posting of unauthorised photos of Grange's assets and work sites, circumventing Grange's reporting protocols; and
  • being in unauthorised possession of a mobile phone.

Although Tasports was made aware of this investigation, Mr Gee was not advised of its existence or given any opportunity to respond to the matters that were considered as part of the investigation.1

While Tasports subsequently gave Mr Gee an opportunity to respond to these allegations, there was no evidence to suggest that Mr Gee's responses were ever communicated to Grange.2

On 28 August, Tasports wrote a letter to Mr Gee advising him that:

  • he had been excluded from Grange's premises and was therefore unable to perform the 'inherent requirements' of his position;
  • there were no alternative available positions/duties he could perform at Tasports; and
  • in consequence, he had been removed from Tasports' employment roster.3

Mr Gee subsequently lodged a claim for unfair dismissal with the Fair Work Commission (FWC).

THE DEPUTY PRESIDENT'S DECISION

Her Honour Wells DP accepted Mr Gee's evidence as to the relevant course of events, and found that his dismissal was unfair, having regard to the fact that the investigation conducted by Grange was procedurally flawed, and that Tasports had not made sufficient effort to redeploy him in an alternative position.

Deputy President Wells also found that Tasports had failed to take into consideration all of the matters set out in section 387 of the Fair Work Act 2009 (Cth) (FW Act).

In reaching these conclusions, Wells DP referred to two recent FWC decisions: Pettifer v MODEC Management Services Pty Ltd (Pettifer) and Kool v Adecco Industrial Pty Ltd T/A Adecco (Adecco).4 Her Honour did not consider that the decisions were inconsistent with each other, or that they impelled a conclusion that Mr Gee's dismissal was fair.

A brief summary of the Pettifer decision

This case concerned Mr Pettifer, an employee of labour hire company Modec Management Services Pty Ltd (Modec), who had been assigned to work for BHP Billiton Petroleum Inc (BHPB) on a 'floating production, storage and offloading vessel'.

Following a 'near-miss' incident, BHPB directed Modec to remove Mr Pettifer from the vessel on which he had been working. BHPB was entitled to issue this direction by force of a provision in the labour supply contract between it and Modec. Although Modec did not agree that Mr Pettifer's conduct justified his removal from the vessel, they facilitated his removal in accordance with the contract. Modec then endeavoured to find alternative work for Mr Pettifer, but decided to terminate his employment because of its inability to identify a suitable role for him. Mr Pettifer was given an opportunity to respond to this conclusion, but ultimately Modec proceeded with the termination.

A Full Bench of the FWC found that the dismissal was not unfair on the basis that Mr Pettifer's 'capacity' was a factor in determining whether there was a valid reason for termination, and that there were no practical alternative means by which he could have been retained. In reaching this conclusion, the Full Bench distinguished Adecco on its facts, but endorsed the understanding of the relevant principles upon which it was based.

A brief summary of the Adecco decision

Adecco was handed down shortly before Pettifer, and also concerned a labour hire company that was required to remove one of its employees from the host employer's workplace. In Adecco, however, the FWC had not been provided with access to the contract between the labour hire company and its client, so that it was not clear whether the host had the contractual capacity to direct Adecco to remove its employee from its workplace.

Further, Adecco did not make any attempt to find alternative work for the displaced employee. In finding that the applicant had been unfairly dismissed, Asbury DP stated that:

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. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal. To hold otherwise would effectively allow labour hire employers to contract out of legislative provisions dealing with unfair dismissal.5

Tasports' Appeal

Tasports sought to appeal Deputy President Wells' decision on a number of grounds, including that:

  • the Full Bench decision in Pettifer had established that, in cases where an employee is unable to perform work as a result of the actions of a third party, the employer will have a valid reason for dismissal related to the employee's incapacity to perform the inherent requirements of their job; and
  • it was not the role of the Commission to determine whether the decision of that third party was correct or fair but to consider whether the dismissal was unfair.6

The Full Bench granted leave to appeal – although, as we explore below, the appeal was dismissed on its merits.7

THE FWC FULL BENCH'S DECISION

Applying the statement of principle in Adecco to the circumstances of Tasports, the Full Bench of the FWC upheld the decision of Wells DP to the effect that Mr Gee had been unfairly dismissed.

In doing so, it decisively rejected Tasports' arguments by finding that the Deputy President had correctly distinguished Mr Gee's case from the facts in Pettifer, on the grounds that Tasports:

  • did not provide the FWC with a copy of its contract with Grange, and had therefore failed to establish that Grange did in fact have a legal right to require Mr Gee's removal from the site;
  • did not form its own independent view as to whether Mr Gee had committed misconduct, but instead essentially adopted the outcome of Grange's procedurally flawed investigation; and
  • failed to adequately investigate options for Mr Gee's redeployment (especially in light of the fact that Tasports operates and employs workers in its own ports).

KEY TAKEAWAYS FOR EMPLOYERS

If a host employer wishes to have an unrestricted right to require the removal of an on-hired employee from workplaces controlled by it, it should ensure that its contract with the relevant labour hire provider expressly invests the host with the capacity to do so.

Even if a host employer has a clear right to require the removal of an on-hired employee, it does not necessarily follow that a subsequent dismissal of the employee by the labour hire provider would be fair. In all instances, the fairness or otherwise of the termination will be determined on the merits, and by reference to the s 387 criteria in the FW Act.

If an employee is dismissed on the basis of their lack of capacity to perform the requirements of their job, the dismissal must be genuine. Further, a labour hire provider must make a bona-fide and far reaching attempt to redeploy the employee to another position, whether within the provider's own organisation, with another client, or with another employer.

Footnotes

1[1] [2017] FWCFB 1714, [3].

2 [2017] FWCFB 1714, [6].

3 Tasports did not in fact discuss the possibilities for alternative work with Mr Gee – [2017] FWCFB 1714. [8].

4 [2016] FWCFB 5243; [2016] FWC 925.

5 [2016] FWC 925, [49].

6 [2017] FWCFB 1714, [16].

7 [2017] FWCFB 1714, [25].

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.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

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

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

Authors
 
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”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.