Case tests whether employment periods can be combined across different employers
The Fair Work Commission (FWC) recently dealt with a case involving a worker who claimed unfair dismissal after being made redundant from his role as an industrial services operator.
The worker had been employed through a labour hire company before transitioning to direct employment with the host company for just under seven weeks.
The worker argued that his service with the labour hire employer should count towards his minimum employment period with the host company, claiming his employment was continuous between both entities.
The host company objected on jurisdictional grounds, arguing the worker had not met the minimum six-month employment period required under the Fair Work Act 2009.
Labour hire arrangement leads to direct employment
The worker was employed by a labour hire company from 23 January 2023 and was placed with an environmental services company at a mining plant in the Cooper Basin.
The worker was employed as a casual operator and worked in the sludge treatment plant operated by the host company.
From early November 2023 onwards, the worker repeatedly asked the host company to employ him directly.
The host company ultimately agreed and on 20 May 2024, the worker started employment as an operator in industrial services, performing the same role but on a full-time rather than a casual basis.
In February 2023, the host company was advised that its industrial services contract would not be renewed.
On 28 June 2024, the worker was notified that his role was at risk of being made redundant due to the proposed cessation of the host company's contract.
Redundancy process results in employment termination
On 4 July 2024, the host company offered the worker a casual operator role at the site. The correspondence stated that if the worker did not accept the casual role and as no other roles had been identified for redeployment, his employment would terminate due to redundancy on 5 July 2024.
As the worker did not express interest in the casual role, his employment was terminated. On 16 July 2024, the worker filed a claim for an unfair dismissal remedy with the FWC.
The worker argued that his redundancy was not genuine because the offer of a casual operator role was evidence that the host company still required his job to be performed.
The host company maintained that the dismissal was a genuine redundancy and that the worker was not protected from unfair dismissal because his employment did not meet the minimum six-month period required under the Fair Work Act 2009.
FWC examines continuous employment requirements
For employment to be considered continuous when transferring between employers, specific conditions must be met under section 311 of the Fair Work Act 2009.
These include that there must be a connection between the old and new employers, typically through an outsourcing arrangement where work is later brought back in-house.
The FWC found that the worker performed the same work in both roles and that his employment with the labour hire company had terminated when he accepted full-time employment.
However, the central issue was whether there was a connection between the labour hire company and the host company as required by the Act.
The worker argued that the host company had outsourced his work when it engaged the labour hire company.
He claimed his work was "to fulfil a critical and ongoing function" and was "a core function necessary to meet [the host company's] contractual obligations" that was "integral to operations".
FWC looks into alleged outsourcing arrangement
The host company argued that no outsourcing arrangement existed. The general manager gave evidence that the labour hire company "is a labour hire company which provides additional workers to the relevant company as and when requested". She explained that labour hire employees were engaged because the work was "project-based a lot of the time so guaranteed tenure into the future could not be given".
The FWC found that the arrangement was a conventional labour hire arrangement where the host company advised the labour hire company when additional labour was needed. The worker worked alongside full-time employees of the host company, and his role was added to operations to ensure operators were not working alone for safety reasons.
The FWC concluded that no outsourcing arrangement existed. The Commission stated: "In my view more is required to find that outsourcing occurred than an employee ceasing to perform work for one employer and starting the same or similar work with a new employer."
Worker's unfair dismissal claim dismissed
The FWC found there was no connection between the labour hire company and the host company as required by the Fair Work Act 2009. The Commission found the evidence showed "engagement of a labour hire employee engaged to supplement the existing [host company] workforce, not a decision to have another entity undertake the transferring work".
Consequently, there was no transfer of business between the employers, meaning the worker's employment periods could not be combined for the purpose of meeting the minimum employment period. The worker's employment period of just under seven weeks with the host company did not meet the minimum six-month requirement for unfair dismissal protection.
The Commission concluded: "Accordingly, there was no transfer of [the worker's] employment between [the labour hire company] and [the host company] as required by section 22(7)(b) for his employment with [the labour hire company] to be counted as a period of service with [the host company]." The worker's application for an unfair dismissal remedy was dismissed.
