Unfair dismissal; labour hire and licensing

There are many occasions when an employee loses his or her job as a result of a decision made by a person or entity which is not the employer. Examples are a dismissal which is directed by the host employer of an employee who is employed by a labour hire entity, an employee whose right to do the job is removed by a statutory authority and so forth. Some employers, several of which are notorious, appear to believe that they have no obligation in this situation other than to dismiss the employee. That is not the law, as the following extract from a recent decision of the Fair Work Commission in an unfair dismissal case makes clear.

“DA’s application raises an unusual circumstance: where neither the employee nor the employer sought his dismissal but where the employer dismissed the employee as a consequence of a mandatory assessment by a third party which removed the capacity of the employee to perform an inherent requirement of the job.

[204] In this sense, the employer says that it had no effective choice but to dismiss the employee.

[205] In response, DA says that:

  • the assessment reached an unfair conclusion;
  • his employer agreed to an assessment process which denied him due process; and
  • irrespective of the assessment outcome or process, his employer acted harshly in dismissing rather than redeploying him into work of comparable value.

[206] I have made findings and drawn conclusions on each of these issues.

[207] Although DA’s dismissal after being declared “currently unsuitable” is specific to its facts and circumstances, dismissal of an employee following intervention by a third party is not entirely unique. A non-exhaustive list of illustrative examples is:

  • where a tradesperson is required to be licenced but where the relevant licensing authority cancels that employee’s license (e.g. a truck driver having their long haul drivers licence removed by a government agency; or an electrician having their trade licence revoked by a trade authority);
  • where a professional fails to maintain mandatory certification to lawfully provide services (e.g. a lawyer having their practising certificate revoked by a court; or a doctor having their right to practice cancelled by a medical board);
  • where a court imposes a custodial sentence on an employee; and
  • where a labour hire agency places its employee in a host business and then, pursuant to contractual arrangements between the agency and the host business, the host business refuses to accept labour by that employee.

[208] A common feature of the Commission’s consideration of such cases is that an employer cannot abrogate responsibility for treating employees fairly. Even where a dismissal is said to be constrained by the conduct or decision of third parties, the dismissal remains to be assessed by reference to the factors set out in section 387 of the FW Act. As recently noted by Asbury DP in the context a labour hire agency employee:  112

“[12] A number of cases have considered the manner in which the matters in s. 387 of the Act are considered in circumstances where an employer provides labour to a client and the client directs the employer to remove the employee from a site. As a Full Bench of the Commission observed in observed in Donald Pettifer v MODEC Management Services Pty Ltd (Pettifer) labour hire arrangements in which a host employer has the right to exclude a labour hire employee from its workplace, are becoming a common part of the employment landscape in Australia. The reality for companies in the business of supplying labour is that they frequently have little if any control over the workplaces at which their employees are placed and the rights of such companies in circumstances where a client seeks the removal of an employee are limited. However, this is not a basis upon which companies in the business of supplying labour to clients can abrogate responsibility for treating employees fairly when dismissal is the result of removal from a particular site and the fairness of the dismissal is considered with reference to the matters in s. 387 of the Act.” (references omitted)

[209] Although an employee’s dismissal following a “currently unsuitable” determination under the South Australian CYP Act has distinguishable features from the dismissal of a labour hire agency worker dismissed at the insistence of a host client, the principle of fairness expressed by Asbury DP is apposite. DA’s dismissal is to be assessed by reference to those same statutory factors within the framework of the “fair go all round” principle. An evaluative assessment of fairness is required no matter what (if any) constraints were placed on Baptist Care by decisions of third parties. That evaluative assessment requires determination of whether, in an objective sense, DA’s dismissal was “harsh, unjust or unreasonable” having regard to objectively found facts and conclusions drawn from an overall assessment.

[210] I have found a valid reason for DA’s dismissal based on the inherent requirements of the job. I have found that Baptist Care adopted, with some qualifications, a generally fair process of decision-making which provided DA an opportunity to put his case to Baptist Care before it made the decision to dismiss. However, I have also found elements of fundamental unfairness in the then operating protocols for third party psychometric testing to which Baptist Care knowingly exposed its employees, and failure on its part to fully consider redeployment or comparable employment.

[211] Whilst the existence of a valid reason is an important factor (and the absence of a valid reason a strong indicator of unfairness) a valid reason alone is not conclusive. Unfair dismissal proceedings are multifactorial. 113

[212] In weighing these factors, I take into account the observations of a Full Bench of the Commission in Parmalat Food Products Pty Ltd v Wililo: 114

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.”

[213] In this passage both the importance of a valid reason and procedural fairness are emphasised, together with the possibility that significant mitigating factors may, in some cases, trump such considerations. 115

[214] There are substantial factors weighing against a finding of unfair dismissal. These include that Baptist Care:

  • had a valid reason;
  • did not seek out DA’s dismissal;
  • allowed the psychometric assessment to be independently conducted on its merits;
  • complied with its legislative and contractual obligations to DA, to PsychCheck and to the Department;
  • provided opportunity for DA to put his position before deciding to dismiss; and
  • in the context of considering redeployment, offered additional rostered work to DA in his parallel operating employment contract.

[215] Two important counterveiling considerations exist. Even though Baptist Care had only limited bargaining capacity to shape the protocols for psychometric testing of its staff, those protocols were not non-negotiable. In registering its agreement to the terms, Baptist Care acted unreasonably in two respects:

  • it failed to ask PsychCheck to justify a term that excluded feedback to staff (including DA) of reasons for a ‘deemed unsuitable’ assessment and a term which denied staff a right to request a review (let alone expressing a preference for a contrasting and procedurally fairer clause allowing feedback in the Department’s example consent form); and
  • it compromised the right of staff to register informed consent by failing to inform staff (including DA) that the terms of employee consent required included these changes thereby differing materially from the example consent form which had been published by the Department.

[216] As a result, Baptist Care exposed its employees to an assessment process by a third party which, in these critical respects, denied fairness; a denial that was neither required by law nor by Baptist Care’s contractual arrangements with the Department.

[217] However, the weight to be attached to these failures is mitigated somewhat by the following:

  • the absence of a right to secure feedback or review, or to provide informed consent, did not cloud or affect the ‘deemed unsuitable’ assessment. Whether merited or not, it was made irrespective of DA’s post-assessment rights; and
  • DA consented to the terms of assessment after wrestling with the risks of being independently assessed.

[218] I take into account that DA’s consent was not a choice of neutral consequence. Had he failed to consent it would have automatically followed that he would have been unable to perform an inherent requirement of his job (and in all likelihood still been dismissed for a valid reason). Yet, even with this caveat, his consent is material. He made a conscious decision to submit himself to an assessment process which he knew would provide no reasons, no feedback, no review and which he knew would, if it did not go his way, preclude him (for twelve months at least) from continuing to be employed as a Child and Youth Support Worker. 116 Twice (in December 2018 and again in April 2019), in his words, he knowingly but with some apprehension “decided to take my chances”:117

“I knew that previously I hadn’t gotten through and was unaware why I hadn’t gotten through and therefore I didn’t want to assume that I would get through.” 118

[219] Weighing in favour of a finding of unfair dismissal is the post-assessment position adopted by Baptist Care’s managers whereby redeployment of DA was assessed on a risk-averse basis. This approach inferred, without foundation, that DA was a risk to vulnerable persons generally. It led Baptist Care to not fully consider DA for redeployment in the Disability Services programme. However, this deficit has to be weighed against the fact that DA was offered additional work in the Family Mental Health programme and refused some of that work in order to try and secure better elsewhere. Baptist Care’s error in not fully considering the Disability Services option was a shortcoming inside an overall process of decision-making which in general provided an opportunity for DA to have a say on dismissal and redeployment, and where some extra working hours were provided for.

[220] As said by the High Court in Byrne v Australian Airlines Ltd: 119

“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap.”

[221] DA’s dismissal was not unreasonable because there was a valid reason. Nor do I conclude that the dismissal was unjust given the valid reason, the fact that I have not adjudicated on the substantive merits of the assessment and because, Baptist Care did discuss next steps with DA and his support person after the assessment but before making its decision to dismiss.

[222] Whilst there are not insignificant factors weighing in favour of a finding of harshness, each has relevant mitigating aspects. When seen in context, and assessed with factors weighing against a finding of unfair dismissal, I conclude that, on balance, DA’s dismissal was not harsh.

[223] DA was not denied reasons for dismissal but he was denied the reasons for the assessment that gave rise to his dismissal. That was unfair. Yet his employer was denied the same information.

[224] Critically, even had reasons been provided to either DA or Baptist Care (or both) at that time, the fact of the unsuitable assessment (merited or not) would still have put Baptist Care in a position where it had no choice but to dismiss DA. Such dismissal would still have been for a valid reason (inherent requirements).

[225] Criticism of Baptist Care (which I have found were largely acts of omission) needs to be viewed in context. The ‘fair go all round’ principle in section 381 of the FW Act requires fairness to both employer and employee, not just a dismissed employee. It should be applied in a practical, common sense way. In the post-assessment environment after 8 July 2019 the position was, in practice, unwelcome and difficult for both DA and for Baptist Care. Baptist Care made mistakes, but mostly omissions made months earlier. Those shortcomings did not go to the merits of the third party assessment which triggered a valid reason for dismissal. The redeployment shortcomings are important considerations but are not sufficient to be determinative.

[226] Having conducted an overall assessment of DA’s dismissal against the statutory criteria, I do not conclude that the dismissal was harsh, unjust or unreasonable. That being so, an order dismissing the application will be issued in conjunction with the publication of this decision. 120”


D.A. v Baptist Care SA (2020) FWC 2773 delivered 29 May 2020 per Anderson DP