Australia: Unfair dismissal update – casual and labour hire employees

Last Updated: 23 April 2018
Article by Ethan Brawn

The Fair Work Commission (FWC) has handed down a number of recent decisions which may provide increased access to unfair dismissal claims by employees engaged on a casual basis, particularly those employees engaged in the labour hire industry.

Part 3-2 of the Fair Work Act (Cth) 2009 (the Act) provides the legislative framework for claims for unfair dismissal. An employee will need to have accrued six months continuous service (12 months for a small business) before they can bring an unfair dismissal claim. The period of service as a casual employee does not count towards the period of employment unless:

  • the employment as a casual employee was on a regular and systematic basis; and
  • during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

The following is an outline of some recent decisions which illustrate how the FWC is approaching these issues.

Recent decisions

Robert Smith v Goldfields People Hire Pty Ltd ATF Goldfields People Hire Trust T/A GPH Recruitment [2017] FWC 6730

The worker was engaged by a labour hire company to work as a truck driver for his miner client. His role was defined as a casual under a contract of employment. He worked on a 3 week roster cycle, in which he worked 4 days on, 3 nights on, 3 days off, 3 days on, 4 nights on, 4 days off and performed these duties for approximately 10 months.

Due to a change in staffing requirements from the host employer, his services were no longer required and his employment was terminated. Subsequently he brought a claim for unfair dismissal and the employer made a jurisdictional objection. It alleged that Smith had no reasonable expectation of ongoing employment, and that he was merely performing a task that came to an end (meaning he was not terminated on the initiative of the employer).

A Casual Employment Declaration signed by the employee, stated:

"I understand the conditions of working for a labour hire company and that the length of my assignments will depend on my level of performance and competency, my classification and the requirements of the clients of GPH recruitment. I understand and accept that with any assignment, there can be no expectation of permanent employment."

However, the FWC found that "the fact that he [the Applicant] knew and accepted his status as a casual employee does not, of itself, mean he could never hold an expectation of continuing employment by Goldfields [the Respondent]." Importantly, it found that "an expectation of continuing employment is not the same as an expectation of permanent employment." As there had been no other factors (such as issues with performance, or an indication of a change in the requirements of the host employer that would affect the employee) the FWC found that the employee did have a reasonable expectation of continuing employment.

The FWC further found that the employee's contract of employment was clearly for multiple tasks and that there was no evidence that the terms of the employment were limited to a specified task.

Mandy Morrow v MedHealth Pty Limited T/A MedHealth [2017] FWC 3120

Ms Morrow was employed as one of around 30 casual employees who performed 'overflow' typist work from home. Tasks to be completed by typists were uploaded to an online virtual queue called 'Report Manager' by the employer. The amount of work uploaded to Report Manager each day was not predictable. The employee was not required to log into Report Manager at set times and there was no minimum level of work that the employee was required to complete. The employee could therefore choose which tasks, and the level of tasks she completed. As a result, the fortnightly pay of the employee was variable. The employer subsequently failed to allocate work to the employee. The employee applied to the FWC alleging that she had been unfairly dismissed by the employer.

The employer contended that the above work arrangement meant the employee was not employed on a regular and systematic basis, and that as the level of work uploaded was variable, and the level of work which the employee was required to complete was discretionary, that the employee did not have a reasonable expectation of continuing employment. In support of her application the employee relied on the fact that her timesheets showed that she worked a reasonably consistent schedule earning approximately $600.00 per week, clause 7 of her contract referred to notification of working hours, the requirement to be on a roster; and an email from the employer seeking further commitments from typists for increased workload.

The FWC found that following the decision of Yaraka Holdings Pty Ltd v Ante Giljevic (2006) 149 IR 339 (Yaraka) it is a workers 'engagement' that must be regular and systematic, not the hours worked. Further, the term 'regular' should be interpreted liberally such that it means only 'frequent' or 'often', not 'uniform' or 'constant'. "Systematic" was defined as to "not require the worker to be able to foresee or predict when his or her services may be required" but merely that there be a sufficient pattern of engagement that occurs as a consequence of "an ongoing reliance upon the worker's services as an incident of the business by which he or she is engaged" (Yaraka). On this definition, the FWC found that the employee was employed by the employer on a systematic and regular basis. With respect to whether the worker had a reasonable expectation of continuing employment, the FWC found that a clear long standing pattern could be established such that the employee would have a reasonable expectation of ongoing employment.

Rebecca Barnes v Plantagenet Bakery [2017] FWC 3762

The employee commenced employment with the employer on a part time basis in April 2016. On 29 August 2016, the employee's employment status was changed to casual and continued as such until her dismissal on 3 February 2017. The employee applied to the FWC alleging unfair dismissal. The employer alleged that as a casual employee, the employee was not entitled to this protection.

With respect to whether there was an expectation of ongoing regular and systematic employment, the FWC found that there was no evidence to support this proposition. To the contrary, an expectation of ongoing employment could be established on the basis that the employee had made enquiries as to her hours/roster at the time of her dismissal indicating she expected her employment with the employer to continue in the same systematic and regular fashion as it had previously.

Manisha Kumar v Australia Personnel Global Pty Ltd [2017] FWC 5661

The employer was a labour hire company that employed the employee, Ms Kumar, on a casual basis. The employee was lent on hire to a chicken processor as a casual labourer where she worked approximately 37.5 hours per week. Due to attendance and punctuality issues, the host employer lost trust and confidence in Ms Kumar and directed the employer to no longer allocate her to work at its site. This ultimately resulted in her termination.

In the FWC, the employer submitted that the employee was not entitled to bring her application on the basis that she did not have a reasonable expectation of ongoing employment. However it was found that owing to the employee's work history with the employer, the requirement that she inform either the employer and/or the host employer if she was unable to attend work, and the lack of evidence to suggest that the employee anticipated a change in her employment arrangements led to a reasonable expectation of continuing employment being held by the employee. As such, the employee was protected from unfair dismissal under the Act.

When examining the question of unfair dismissal, the FWC made a number of comments with respect to unfair dismissal relevant to labour hire companies. In particular the FWC noted that following the decisions of Kool v Adecco Industrial Pty Ltd T/A Adecco [2016] FWC 925 and Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243 the employer, as a labour hire company, could not solely rely upon its contractual relationship with the host employer to defeat the rights of a dismissed worker. The FWC found that the employer had failed to investigate the complaints of the host employer, or to provide warning to the employee with respect to her behaviour; therefore its termination of the worker was unfair.

Considerations for employers

The FWC's approach to these cases suggests that it will interpret the application of the unfair dismissal jurisdiction broadly in relation to casual employees. Key points for consideration include:

  • even if a contract for casual employment makes clear that there is no expectation of permanent employment this does not necessarily protect an employer from a finding that a casual employee is entitled to protection from unfair dismissal.
  • in establishing that an employee holds a reasonable expectation of continuing employment, the FWC may find in their favour even though limited evidence is put forward in support of the proposition.
  • businesses should give casual employees similar due process as they would with permanent staff. In the context of labour hire, consider redeployment prior to termination.
  • employment contracts which purport to employ an employee under a casual engagement should make clear that the employee's employment is casual with no ongoing expectation of continued future engagement. This will provide some level of protection but will not be determinative.
  • in relation to labour hire, the employer should clearly spell out what tasks the employee is being assigned to perform, and make it clear in their employment contract that their continued employment is contingent on the labour requirements of the host and the host's willingness to accept the employee's labour.

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.

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