Labour hire
companies operate to connect potential employees to businesses of a particular industry
that matches their skillset and attributes. Suitability is attained when the
attributes of an employee overlap with the operational needs of the business,
known as the host employer.
However, the
nature of the relationship between employee and labour hire company, in the
presence of the third party host employer, can pose legal concerns and implications
for the parties involved.
Recently this
situation arose in a case before the Fair Work Commission. Labour hire company
Adecco Industries found itself liable for the unfair dismissal of an employee
who was dismissed by Nestle, the host employer. It is not in dispute that this
employee was treated unfairly; she was not offered the rights that the Fair
Work Act (1999) affords an employee faced with the prospect of termination.
Despite Adecco’s
assertion that the employee remained contracted by Adecco and was merely
removed from Nestle, the Fair Work Commission determined that the labour hire
relationship cannot be use to abrogate the responsibility to ensure fair
treatment of employees.
It was deemed
that if the dismissal of an employee would be considered unfair if executed by
the Labour Hire company directly, then such a dismissal does not cease to be unfair
if executed by a third party to the employment relationship. If such a
determination were not reached, it would be effectively permissible for labour
hire companies to contract out of the legislative provisions regarding unfair
dismissals.
Despite the
involvement of host company Nestle, the Fair Work Commission requires that Adecco
remedy the employee for the unfair dismissal.
Whilst the
employee ultimately enjoys compensation candy, it seems that Adecco must endure
the cane.
To discover
the best way to insure and protect your business against such penalties when
terminating an employee, speak to one of Nevett Ford’s workplace relations team
members on (03) 9614 7111.
