Unfair dismissal and labour hire

This passage from the Fair Work Commission’s unfair dismissal benchbook deals with the legal issues which arise in this jurisdiction when an employee is dismissed by a labour hire company when it is instructed by its client to remove an employee from the host’s’ workplace.

“The appellant in this matter was employed by MODEC Management Services, a labour hire company, to work at a BHP Billiton Petroleum Inc (BHPB) site. He was dismissed after BHPB exercised a contractual right to direct MODEC to remove the appellant from its site. At first instance the Commission held that the dismissal was not harsh, unjust or unreasonable.

The appeal was made on grounds that the Commission erred in finding the question of valid reason did not arise on the facts. The Full Bench granted permission to appeal as the appeal raised broader question regarding the obligations of a labour hire employer.

The Full Bench found that BHPB’s instruction to MODEC that the appellant was not permitted to work on site represented a matter going to the employee’s capacity to work. The issue required consideration under s.378(a) of the Fair Work Act to determine whether there was a valid reason for dismissal. The Full Bench held that the Commission erred in finding the circumstances of the dismissal did not give rise to a consideration of valid reason. The appeal was upheld and the matter redetermined. To be a valid reason the reason must be defensible or justifiable on an objective analysis of the facts. The Full Bench was satisfied that MODEC had a valid reason relating to the employee’s capacity and only exercised the reason because it was genuinely unable to find suitable alternate employment for him. Having considered the s.387 factors the Full Bench held that the dismissal was not harsh, unjust or unreasonable and confirmed the Commission order dismissing the unfair dismissal application.”


Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243 (O’Callaghan SDP, Binet DP, Hampton C, 22 August 2016).