In Tasmanian Ports Corporation Pty Ltd t/a Tasports v Gee [2017] FWCFB 1714 (18 May 2017) (Tasports), a Full Bench of the Fair Work Commission has clarified the obligations of labour hire employers when dismissing an employee.

The decision in Tasports makes it clear that, when determining whether to dismiss an employee, labour hire companies cannot simply rely on the process adopted by a host business.

The Facts of the Case

Tasmanian Ports Corporation Pty Ltd (Tasports) is a State-owned company which owns and operates a number of ports in Tasmania. It also engages in a number of other commercial activities, including supplying labour to privately-owned ports. Amongst its clients is Grange Resources Limited (Grange), a mining company which processes and ships iron pellets on the north coast of Tasmania.

Mr Gee was an employee of Tasports for a number of years, and was assigned to work for Grange from 2009 until his dismissal in August 2015.

The termination of Mr Gee’s employment occurred following advice from Grange to Tasports that it would be terminating Mr Gee’s access to its premises with effect from 17 August 2015. That decision was triggered by an investigation into Mr Gee’s alleged failure ‘to follow a reasonable work and deployment directive’ on 13 August, and into earlier incidents allegedly involving:

  • the posting of unauthorised photos of Grange’s assets and work sites, circumventing Grange’s reporting protocols; and
  • being in unauthorised possession of a mobile phone.

Although Tasports was made aware of this investigation, Mr Gee was not advised of its existence or given any opportunity to respond to the matters that were considered as part of the investigation.[1]

While Tasports subsequently gave Mr Gee an opportunity to respond to these allegations, there was no evidence to suggest that Mr Gee’s responses were ever communicated to Grange.[2]

On 28 August, Tasports wrote a letter to Mr Gee advising him that:

  • he had been excluded from Grange’s premises and was therefore unable to perform the ‘inherent requirements’ of his position;
  • there were no alternative available positions/duties he could perform at Tasports; and
  • in consequence, he had been removed from Tasports’ employment roster.[3]

Mr Gee subsequently lodged a claim for unfair dismissal with the Fair Work Commission (FWC).

The Deputy President’s Decision

Her Honour Wells DP accepted Mr Gee’s evidence as to the relevant course of events, and found that his dismissal was unfair, having regard to the fact that the investigation conducted by Grange was procedurally flawed, and that Tasports had not made sufficient effort to redeploy him in an alternative position.

Deputy President Wells also found that Tasports had failed to take into consideration all of the matters set out in section 387 of the Fair Work Act 2009 (Cth) (FW Act).

In reaching these conclusions, Wells DP referred to two recent FWC decisions: Pettifer v MODEC Management Services Pty Ltd (Pettifer) and Kool v Adecco Industrial Pty Ltd T/A Adecco (Adecco).[4] Her Honour did not consider that the decisions were inconsistent with each other, or that they impelled a conclusion that Mr Gee’s dismissal was fair.

A brief summary of the Pettifer decision

This case concerned Mr Pettifer, an employee of labour hire company Modec Management Services Pty Ltd (Modec), who had been assigned to work for BHP Billiton Petroleum Inc (BHPB) on a ‘floating production, storage and offloading vessel’.

Following a ‘near-miss’ incident, BHPB directed Modec to remove Mr Pettifer from the vessel on which he had been working. BHPB was entitled to issue this direction by force of a provision in the labour supply contract between it and Modec. Although Modec did not agree that Mr Pettifer’s conduct justified his removal from the vessel, they facilitated his removal in accordance with the contract. Modec then endeavoured to find alternative work for Mr Pettifer, but decided to terminate his employment because of its inability to identify a suitable role for him. Mr Pettifer was given an opportunity to respond to this conclusion, but ultimately Modec proceeded with the termination.

A Full Bench of the FWC found that the dismissal was not unfair on the basis that Mr Pettifer’s ‘capacity’ was a factor in determining whether there was a valid reason for termination, and that there were no practical alternative means by which he could have been retained. In reaching this conclusion, the Full Bench distinguished Adecco on its facts, but endorsed the understanding of the relevant principles upon which it was based.

A brief summary of the Adecco decision

Adecco was handed down shortly before Pettifer, and also concerned a labour hire company that was required to remove one of its employees from the host employer’s workplace. In Adecco, however, the FWC had not been provided with access to the contract between the labour hire company and its client, so that it was not clear whether the host had the contractual capacity to direct Adecco to remove its employee from its workplace.

Further, Adecco did not make any attempt to find alternative work for the displaced employee. In finding that the applicant had been unfairly dismissed, Asbury DP stated that:

The contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal. Labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly. If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal. To hold otherwise would effectively allow labour hire employers to contract out of legislative provisions dealing with unfair dismissal.[5]