Four projects on site before the direct hire, and the clock still started from scratch
A site manager's years on a builder's projects counted for nothing once the Fair Work Commission looked at who had actually employed him.
A Full Bench dismissed his appeal on August 18, 2026. It disagreed with part of the reasoning at first instance but reached the same result, and along the way settled a point no Full Bench had ruled on: taking on labour hire staff is not the same as outsourcing work.
The setup will be familiar to anyone who converts contract staff to permanent roles. Cubism Projects Pty Ltd, a construction project company specialising in industrial and commercial design and construction, engaged a labour hire firm. That firm employed the worker, who worked as a site manager on four of Cubism's projects across 2023 and 2024. Cubism then employed him directly from July 23, 2024. On May 2, 2025, the company purported to accept his resignation. He lodged an unfair dismissal application four days later.
Cubism is a small business, which set the minimum employment period at one year. That is the qualifying service an employee must have before the Commission can consider an unfair dismissal claim at all. His time as a direct employee did not reach it. Everything turned on whether his earlier service through the labour hire firm counted.
Under the Fair Work Act, service with an earlier employer carries across only where there has been a transfer of business. He relied on the insourcing route in section 311(5): work goes out to another business, then comes back in-house. His role had been outsourced through the labour hire firm, he argued, and brought in-house when Cubism put him on its own books. He had worked exclusively on Cubism-controlled projects. He took direction from Cubism rather than the labour hire firm. His duties, site access, reporting structure and supervision did not change when he switched employers. He said he was integrated into the company and attended work functions, which indicated he was not supplementary.
At first instance the Commissioner found Cubism had outsourced work to the labour hire firm and other providers to supply supplementary labour for time-defined projects, but had not ceased outsourcing when it engaged him directly. The application was dismissed.
The Full Bench went back a step further. Engaging supplementary labour through a labour hire provider, it held, falls outside the ordinary meaning of outsourcing. Outsourcing means making an arrangement with an external supplier, outside the employer's own enterprise, to perform work. Cubism ran its own site supervision: it directly engaged a small number of ongoing key operational staff, including site supervisors, and supplemented them with labour hire staff working under its control. The work had not been outsourced, so there was no outsourcing capable of ceasing.
The integration argument cut the other way. The degree of integration, the Bench said, suggested he had been working in-house rather than for an external supplier to whom work had been outsourced.
The Bench also traced where the opposite reading would lead. If directly employing a labour hire worker into the same work was enough on its own to trigger a transfer of business, the transferable instrument rules would follow every time. A company could end up covered by the labour hire provider's enterprise agreement for that work, running a mix of longer-standing direct employees on one agreement and newer employees on another, and would have to consider an application to the Commission every time it made such a hire. The Bench said it doubted those consequences were intended.
The other grounds did not succeed. A shortened probationary period proved nothing about prior service, because probation is a matter the parties agree between themselves while the minimum employment period is set by statute. A ground alleging apprehended bias, built on the Commissioner's use of the word “resignation,” failed: the Commissioner had expressly made no finding on whether there was a dismissal or a resignation, or on whether any dismissal was unfair. A director had agreed under cross-examination that the company had “ceased to outsource the specific work,” but the Bench said his opinion about what did or did not constitute outsourcing for the purposes of section 311 would not have assisted the Commissioner.
Permission to appeal was granted. The Bench found it was in the public interest, describing the construction of section 311 as an issue of importance and general application and noting the absence of any Full Bench authority directly on point for section 311(5). The appeal was then dismissed, because the point on which the Bench differed did not change the outcome.
The Commission did not decide whether the worker was dismissed or resigned, or whether any dismissal was unfair. Those questions were not reached.
