Most employers assume that if they engage the services of a person through a labour hire company, the person is not their employee.
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 Kittochside3.
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.
Conclusion
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.
Footnotes
1 Texas World Service Co. In NLRB 928 F 2d 1426
2 Orlikowski v IPA Personnel Pty Ltd [2009] AIRC 565
3 Morgan v Kittochside 117 IR 152
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