Unfair dismissal and labour hire arrangements

A decision by a host employer to remove a labour hire employee’s right to be on its site or in its operations will generally (but not always) be accepted as a valid reason for the dismissal of the employee by the latter.

“Was there a valid reason for dismissal relating to Mr Anderson’s capacity or conduct? (s.387(a))

[56] PIM does not contend that there was any valid reason for dismissal related to Mr Anderson’s conduct but submitted that if my finding is that Mr Anderson’s redundancy was not “genuine”, there was nonetheless a valid reason for his dismissal because his permission to enter the site was removed by LDD. Mr Anderson disputes this and submits the actual reason for Mr Anderson’s dismissal was concerns held about his performance and further, that these concerns were ill-founded.

[57] In Donald Pettifer v MODEC Management Services Pty Ltd, 30 it was held by the Full Bench that an instruction from a client that an employee of a labour hire company providing it with labour was no longer permitted to work on its site represented a matter that went to the employee’s capacity to work. This in turn led the Full Bench to conclude that this was a matter that required consideration pursuant to s.387(a) to determine whether or not it was a valid reason for the termination of the employee’s employment.31 In that case, the Full Bench was satisfied the contract between employer and the client obligated the employer to remove its employee from the client’s site, if instructed to do so.

[58] In this matter, PIM produced a contract between the entities LD&D Australia Pty Ltd and Programmed Skilled Workforce Limited, 32 together with an Account Management Plan.33 However, PIM is not a party to either of these documents and having considered the submissions of the parties, I am not persuaded that the terms of these documents apply. I have however noted Mr Cooke’s unchallenged evidence that:

  • The Morwell site is owned by LDD and they govern who is allowed through their access gate.
  • Anybody that PIM puts on site or that is requested to come to site has to go through the process of site access for LDD.
  • PIM cannot take people in and out or put people on site without confirmation and approval from LDD;
  • The commercial arrangement is discussed and implemented at a site level between LDD and the PIM operations team on a day-to-day basis; and
  • Notwithstanding the written set of terms and conditions, the reality is that on a day-to-day basis the discussions between LDD and PIM govern what PIM does on that site at any given time. 34

[59] Having regard to this evidence, and the fact that the location of Mr Anderson’s employment with PIM under his contract of employment was the LDD Morwell site, 35 I am satisfied that Mr Anderson’s access to LDD’s Morwell site was dependent on the approval of LDD and a matter going to his capacity to work. When LDD’s approval for Mr Anderson to enter its Morwell site was withdrawn, PIM had a valid reason to terminate his employment relating to his capacity.

[60] In the event my conclusion regarding there being a valid reason for dismissal relating to Mr Anderson’s capacity is incorrect, I am satisfied LDD’s withdrawal of his access to Morwell site can nonetheless be considered in connection with s.387(h), “any other matters the Commission considers relevant”, as outlined below.”

Anderson v Programmed Industrial Maintenance Pty Ltd (20212) FWC 4048 delivered 13 July 2021 per Clancy DP