Two recent decisions of the Fair Work Commission suggest that labour hire companies need to satisfy themselves that there is a valid reason for the dismissal of their employee, and that the host company blocking them from a work site is not automatically a valid reason for dismissal.

In Catherine Hocroft v Verifact Pty Ltd [2018] FWC 611, Verifact, a labour hire organisation contracted by BHP Billiton (BHP) to provide labour for onsite drug and alcohol testing at the Mount Arthur Coal Mine, was found to have unfairly dismissed Ms Hocroft.

Two complaints were made against Ms Hocroft with regard to the manner in which she performed the onsite drug and alcohol testing that was the primary function of her role. BHP removed Ms Hocroft’s access to the mine. Verifact met with Ms Hocroft to inform her that BHP had blocked her from accessing the mine and that her employment contract subsequently had to be terminated.

The Commission stated at [48]:

The employer had, in practical terms, outsourced the decision to dismiss the applicant so that the dismissal could occur for any reason or even for no reason. Consequently the dismissal of the applicant was not for valid reason.

The Commission ordered that compensation be paid to Ms Hocroft in lieu of reinstatement.

In Ms Kim Star v WorkPac Pty Ltd T/A WorkPac Group [2018] FWC 4991, Ms Star was employed by WorkPac as a casual employee to work at the Goonyella Riverside Mine. Ms Star performed work at the mine pursuant to a labour hire agreement between WorkPac and BHP Billiton Mitsubishi Alliance (BHP).

During a night shift, Ms Star refused to comply with a request to transport an ore load to a specified area using a piece of machinery because it was too dark. Subsequently, Ms Star was ‘demobilised’ from working at the mine by WorkPac following a direction by BHP.

WorkPac’s argument that Ms Star’s employment with BHP had ended at BHP’s request, not at the initiative of WorkPac, was rejected

Importantly, the Fair Work Commission stated that, although BHP may have had a contractual right to direct WorkPac to remove Ms Star from working at the mine, this did not constitute a valid reason for WorkPac’s dismissal of Ms Star.

The Commission ordered that Ms Star should be reinstated. This order required that Ms Star be reinstated to her position at the BHP mine.

WorkPac sought a variation to the reinstatement order (Ms Kim Star v WorkPac Pty Ltd T/A WorkPac Group [2018] FWC 5745). WorkPac argued that it had no authority to request that BHP Billiton reinstate Ms Star. The Commission refused to vary the order. Nevertheless, BHP refused to allow Ms Star access to the mine.

Ms Star’s union then decided to approach the matter in a different way. On 22 October 2018, the Construction, Forestry, Maritime, Mining and Energy Union obtained an interlocutory injunction from the Federal Court restraining BHP from preventing Ms Star’s working at the mine (Construction, Forestry, Maritime, Mining and Energy Union v BM Alliance Coal Operations Pty Ltd [2018] FCA 1590), after the Court found the union had a prima facie case that adverse action had been taken against her for exercising the workplace right described above and the balance of convenience favoured the granting of the order.

Implications

These cases show that labour hire organisations need to have a valid reason to dismiss an employee. It is not necessarily a defence to assert that the decision was made by the client. Even though the host company may be able to ordinarily deny access to the employee, that act may be unlawful if taken because of a prohibited reason, allowing a court to order that the labour hire employee be permitted to work at the client’s worksite.