AMMA’s Workplace Relations Advisor, Duan Thakhoda (pictured) has prepared for members the following comprehensive case summary after the Fair Work Commission Full Bench upheld an appeal and quashed an order to reinstate a labour hire employee at a client’s work site.
Chaya Johnson (the Respondent) was employed by labour hire company, Chelgrave Contracting Australia Pty Ltd (Chelgrave), for three years working as a maintenance fitter at Carlton & United Breweries (CUB) at their Abbotsford site.
In May 2020, CUB instructed Chelgrave to permanently remove the Respondent from the site, citing a safety incident, and multiple previous occurrences of unacceptable behaviour as reasons for the instruction. Chelgrave dismissed the Respondent, confirming that CUB had requested he not return to the site and that, accordingly, his employment with Chelgrave was terminated. It should be noted that Chelgrave’s own investigations were conducted, and it was determined by Chelgrave that the appropriate outcome in the circumstances was for the Respondent to receive a final written warning for his behaviours. The potential for redeployment to another site was not discussed before the dismissal.
The Respondent then filed an unfair dismissal claim, where it was determined by Commissioner Wilson that the dismissal was harsh, unjust, and unreasonable. Commissioner Wilson ordered the Respondent be reinstated to his position at the Abbotsford site with CUB, despite Chelgrave’s submissions that there had been a loss of confidence in the employment relationship, and that they lacked the contractual power to compel CUB to reinstate the Respondent.
The FWC initially ordered Chelgrave to reinstate the respondent at Carlton & United Breweries, despite Chelgrave’s claim that they lack the contractual power to do so.
CUB appealed this decision, with the Full Bench satisfied they were clearly a person aggrieved by the Decision despite not being a party to the proceeding.
CUB advanced six grounds of appeal, but ultimately the Full Bench found it unnecessary to engage with all the grounds of the appeal, determining an error of principle had occurred whereby the Commissioner had made an order by which Chelgrave is unable to comply.
In considering whether to permit the appeal, the Full Bench determined an appealable error had been made in the first instance, as Chelgrave did not place the Contract into evidence and Commissioner Wilson failed to request it. Notably, at Paragraph 104, Commissioner Wilson stated in his decision “Had Chelgrave placed its contract before the Commission, appropriate findings about its contractual obligations could have been made. No endeavours were made by Chelgrave to do so in any manner, not even in a manner which preserved its commercial terms from public scrutiny. In such situations it cannot just be inferred there was a contractual obligation to remove an employee from a worksite if instructed to do so “.
The Full Bench determined that, having read the contract, the Respondent was incapacitated from working at CUB’s site, as Chelgrave had no contractual power to force CUB to allow the Respondent to access their site.
The Full Bench permitted and upheld the appeal, and quashed Commissioner Wilson’s order to reinstate the Respondent to the site.
Implications for employers
While the Full Bench was satisfied in this instance that reinstatement was inappropriate and impractical, labour hire employers should keep in mind that they should consider the potential to redeploy an employee in circumstances where a client requests an employee is removed from their site, noting reinstatement is the primary remedy to unfair dismissal unless it is inappropriate to do so. Labour hire employers should also note that the incapacity of an employee to work on a client’s site alone may not be sufficiently valid a reason to terminate an employee.
Client employers who host contractor labour should ensure that their contracts should be drafted in clear terms to enforce their rights, be wary that they may still be subject to General Protections claims, and that they are prepared to provide sound, valid, and defensible reasons for someone’s removal from site if called upon.
AMMA’s expert workplace consultants are available to assist with matters before the FWC. Resources and energy employers requiring assist with FWC matters are encouraged to contact your local AMMA office.