AMMA workplace relations consultant Deanna Carlon (pictured) reviews a recent decision which highlights employees are entitled to protections under the Fair Work Act when dismissed from work with third parties.

IN A Fair Work Commission (FWC) full bench decision, Vice President Hatcher, Deputy President Dean, and Commissioner Saunders dismissed an appeal from employer Tasmanian Ports Corporation Pty Ltd t/a Tasports (Tasports), and provided greater clarity to labour hire employers about their obligations to employees who have been removed from client work sites.

Background

Tasports is a state-owned company which runs and operates a number of ports in the state of Tasmania, and also engages in commercial activities including operating or supplying labour to privately-owned ports.

The applicant in this case was an employee of Tasports, assigned to work at Port Latta pursuant to Tasports’ contract with Tasmanian mining company Grange Resources, from 2009 to the date of dismissal.

In August 2015, Grange revoked the employee’s site access and contacted Tasports to let them know that this was occurring with immediate effect. Grange’s reasons for revoking the man’s access can be summarised as:

  • He failed to follow a reasonable work and deployment directive given by Grange Resources’ supervisor during ship loading;
  • He posted to social media unauthorised photos of Grange Resources assets and work sites (a breach of company social media policy).
  • He attempted to circumvent reporting protocols between Grange Resources’ shift supervisors and Tasports pilots during ship loading.

Tasports subsequently dismissed the employee, stating that as a result of his access revocation he was unable to perform the inherent requirements of his role.

In the single-member decision, the sacked employee appealed to the Fair Work Commission and Deputy President Wells agreed that he had been unfairly dismissed.

Tasports subsequently lodged an appeal.

The Appeal

Four grounds of Tasports’ appeal were based on recent Full Bench decision Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243 (Pettifer).

The Full Bench determined it was in the public interest to grant permission to appeal based on these four grounds (and not Tasports’ other six) given they raised significant issues concerning the import and application of Pettifer.

The principle being tested, as established in Pettifer, is that where an employee is unable to perform work as a result of the actions of a third party, the employer will have a valid reason for dismissal related to the employee’s incapacity to perform the inherent requirements of their job.

The applicant submitted that Tasports’ interpretation of Pettifer was incorrect, however, had an alternate submission that if Pettifer did stand for such a principle, it was wrongly decided.

The Full Bench stated that Tasports’ submission cannot be accepted, and is inconsistent with Kool v Adecco Industrial Pty Ltd T/A Adecco [2016] FWC 925 (Adecco) which, like the Full Bench in Pettifer, the Full Bench endorsed.

The Full Bench then differentiated between the individual circumstances of Adecco and Pettifer and outlined why the individual cases had different outcomes for employers who dismissed employees removed from client sites, noting the following:

  • the clarity and disclosure of the relevant terms of employees’ contracts;
  • the investigation – and acceptance or rejection – of the client’s contention regarding removal of the employee; and
  • whether the labour-hire employers engaged in a genuine search for alternative work placements for the removed employee.

Tasports submitted that while the issue of the availability of alternative work might properly arise for consideration under s.387(h) of the Act, it was not relevant to the question of whether there was a valid reason for dismissal based on capacity under s.387(a), relying on J Boag and Son Brewing Pty Ltd v Allan John Button [2010] FWAFB 4022  (J Boag and Son) where the Full Bench stated that the substantive position or role of the employee must be considered, not a modified or restricted alternative position.

This was rejected by the FWC who pointed out that J Boag and Son was based on capacity in regards to illness or injury, as opposed to a labour hire arrangement.

The Full Bench stated that even if the decision was applicable, it would be difficult to identify what the substantive role of a labour hire employee is, noting that Pettifer represented a departure from that conventional position in that Mr Pettifer was engaged to perform work specifically for BHP Billiton. The Commission again stated that an exact position on this would depend on individual circumstances.

The FWC subsequently regarded Pettifer as the application of the principle stated in Adecco to a particular factual scenario. It does not stand for the broader proposition contended for by Tasports.

The FWC subsequently did not deem it necessary to consider the former employee’s alternative submission that Pettifer was incorrectly decided.

The FWC then stated that there were a number of factual matters which distinguished this matter from Pettifer.

Firstly, that Tasports did not establish that Grange Resources has a legal right to require the employee’s removal from the work site, or that Tasports had no recourse to preserve his employment at the site once that step had been taken.

The demonstration of the existence of this legal right was critical to the Full Bench’s conclusion in Pettifer that the employee was incapable of performing his substantive role.

Secondly, that TasPorts did not form its own independent conclusion as to whether the employee had committed misconduct but instead essentially adopted the outcome of Grange Resources’ investigation, which the Full Bench said was ‘procedurally unfair’.

This is in contrast to Pettifer where the labour-hire employer formed the independent conclusion that removal from the work site and dismissal was not justifiable.

Finally, that Tasports failed to adequately investigate options for Mr Gee’s redeployment.

This is in contrast to Pettifer where the Full Bench was satisfied that the employer had thoroughly investigated alternate options for the employee.

The FWC reinforced that the approach taken in Addeco was the correct approach and consistent with Pettifer. The FWC dismissed the appeal. 

Implications

This case reinforces the need for clear contracting between labour hire employers, contractors, employees, and clients, as well as an employee’s right to procedural fairness.

Labour hire employers and contractors must take the principles of Adecco into consideration when dealing with employee removal from client sites.

Labour hire employers cannot use such relationships to abrogate their responsibilities to treat employees fairly. This is relevant even when the labour hire company may have little influence over the conduct and/or practices of the client and its representatives.

If a labour hire employer dismisses an employee removed from a client site for conduct or performance reasons, they must ensure the employee was subject to procedural fairness throughout the process.

The documented nature and purpose of the relationship between labour-hire employers, employees, and clients will be relevant to the proceedings.

In Adecco it was left open to the Commission to make findings on the basis that the relationship was unclear, however, Pettifer demonstrated that clear provisions in an applicable contract of employment or letter of assignment is helpful to an employer when defending an unfair dismissal claim.

For more information on this matter or any workplace discipline or dismissal advice, contact Deanna Carlon via (03) 9614 4777 or [email protected]