Who is the 'true employer' in an alleged 'joint employment' case?

If there's confusion over an employer's identity – what is the test?

Who is the 'true employer' in an alleged 'joint employment' case?

The Fair Work Commission (FWC) has dealt with an unfair dismissal claim where the identity of the true employer was put into question. In this case, the worker filed against a company that denied having an employment relationship with him.

Background of the case

Boom Logistics Limited (BLL) objected against a worker who argued that the company was his employer. The worker was employed as a rigger in March 2019 and worked for varying periods. The FWC found that the worker’s employment contract references another company, Shutdown Staffing. Shutdown Staffing is a labour-hire company – and a wholly owned subsidiary of BLL.

After dismissal, the worker went after BLL, saying it was his “true” employer.

There is no ‘joint employment’ in Australia

The FWC said that the concept of “joint employment” does not exist in the country.

“In no case has an Australian court approached the analysis on the basis that the exercise of control over the worker by the hirer of labour in a labour hire arrangement may render the hirer, together with the labour hire company, a joint employer of the worker,” the FWC said.

The FWC considered that the mere existence of an arrangement when a first company provides labour to a second company does not point to [the latter] being the employer.

On the other hand, the FWC further said that “when a labour supplier is not conducting a business of its own and the arrangement lacks commercial practicality, this may point to the labour hire supplier not being the true employer.”

What is the test to determine an employment relationship between two companies?

In determining who a worker’s employer is, an “objective assessment” is necessary for identifying the parties to a contract and the context, the FWC said. This process requires careful consideration of not only the text of the document but also the circumstances known to the parties and the purpose and object of the transaction.

The FWC’s decision

In this case, the FWC said that the parties gave limited evidence.

The worker’s letter of offer and timecards named Shutdown Staffing as his employer, but he was “fully aware” that it was a labour-hire company.

Thus, the FWC held that the worker entered an employment contract with Shutdown Staffing.

It should also be noted that for workers to be protected from unfair dismissal, they must be established that they served “contiguous periods of service” amounting to six months before they were dismissed.

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