Most employers assume that if they engage the services of a
person through a labour hire company, the person is not their
This assumption has been thrown into doubt by a recent
interlocutory decision by the Australian Industrial Relations
Commission (AIRC) with the result that the US concept of joint
employment may emerge as an issue for Australian employers.
In the US, the question is whether two otherwise unrelated
entities share or codetermine those matters governing essential
terms and conditions of employment1. Where they do, a
joint employment relationship exists.
Orlikowski v IPA Personnel Pty Limited
Orlikowski v IPA Personnel Pty Limited2 concerned an
interlocutory application to join both a labour hire company and
its client as employers in an unfair dismissal proceeding.
The Australian Quarantine and Inspection Service (AQIS) engaged
the services of Mr Orlikowski through IPA Personnel (IPA).
Mr Orlikowski originally commenced unfair dismissal proceedings
against IPA, but later sought to add AQIS as a respondent. The
application was opposed by AQIS and IPA.
SDP Lacy noted that AQIS had effective control over the labour
of Mr Orlikowski and that IPA had no involvement with him other
than recruitment and payroll.
At the interlocutory proceedings, there was no evidence
regarding a contract between AQIS and IPA by which AQIS engaged the
services of Mr Orlikowski. SDP Lacy found that it would not be safe
to proceed on the assumption that AQIS did not employ Mr Orlikowski
in the absence of such evidence.
SDP Lacy noted the US principle of joint employment and that it
had gained 'some acceptance' in Australia.
SDP Lacy ordered AQIS to be joined as a respondent with a view
to the issue of whether it was liable in the unfair dismissal
proceedings being resolved at the substantive hearing.
Morgan v Kittochside
The AIRC had previously considered a similar issue in Morgan v
While Morgan concerned the issue of who was the employer and
whether a federal award applied, the Full Bench of the AIRC made
the following comments:
It is not necessary for us to further explore the compatibility
of a joint employer principle with, or its applicability to, the
employment relationship... Were it necessary to do so, we would
incline to the view that no substantial barrier should exist to
accepting that a joint employment relationship might be found and
given effect for certain purposes under the Act...it is manifest
that through Mr Reid, Kittochside and the Northam Pharmacy
exercised in effect a codeterminative control over the work and
conditions of employment of Ms Morgan.
The issue of whether the principle of joint employment exists in
Australia is yet to be conclusively determined. We will report any
further findings in the Orlikowski proceedings in later editions.
Nevertheless, if and when the issue has to be determined, there
appears to be some support for its application in Australia. If
joint employment were to become a possible outcome for employers,
the perceived advantages of securing services through labour hire
arrangements may be seriously undermined.
1 Texas World Service Co. In NLRB 928 F 2d
2 Orlikowski v IPA Personnel Pty Ltd  AIRC
3 Morgan v Kittochside 117 IR 152
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
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