Home - General protection breaches can catch labour hire agencies and their contractors

UpdatesNov 01, 2021

General protection breaches can catch labour hire agencies and their contractors

Some businesses engage their labour through labour hire agencies to avoid being liable for employees. In this tripartite scenario, the worker remains the employee of the labour hire agency, which provides the worker to the business.

If the business does not want to engage the worker, then the labour hire agency is generally tasked with the job of finding alternate employment for their employee. However, if the labour hire agency or contractor refuses to provide work to the worker for discriminatory reasons or a reason that includes a discriminatory reason, then both can be liable for discrimination or a breach of the general protections provisions of the Fair Work Act 2009 (Cth).

In the recent decision of Australian Building and Construction Commission v Corestaff WA Pty Ltd and Gumala Enterprises Pty Ltd (2021), both Corestaff WA Pty Ltd (Corestaff) (the labour hire agency) and Gumala Enterprises Pty Ltd (Gumala) (the contracting business) were found to have breached the general protections provisions.

Mr Selsmark was 70 years old when he applied to Corestaff for a grader operator position. Mr Selsmark was fully qualified for the position. Corestaff put his name forward to Gumala as a potential worker. Gumala replied saying “we had his details already, he applied directly with us. He has all the tickets we are looking for, however, [his] age is a concern – 70 years old”. Corestaff replied saying, “Wow didn’t know that however I would have found out eventually…yes will certainly keep looking”. Corestaff thereafter advised Mr Selsmark, saying, “Sorry…no joy with the role at Gumala due to your age mate”.

The Australian Building and Construction Commission (ABCC) brought a general protections claim on behalf of Mr Selsmark, a prospective employee. The ABCC alleged both Corestaff and Gumala had taken adverse action against Mr Selsmark because of his age.

The Federal Court ultimately decided that Mr Selsmark’s age was the substantial reason for the refusal to employ him and that while Corestaff had been influenced by Gumala’s communication, Corestaff ultimately made its own decision not to employ Mr Selsmark.

The Federal Court ordered that Corestaff pay a penalty of $20,000 and Gumala pay a penalty of $9,000, with 50% of each to be paid to Mr Selsmark. The Court discounted Gumala’s penalty because it had apologised to Mr Selsmark, which was action not taken by Corestaff.

Irrespective of how staff are engaged in your business, the basis for that engagement cannot be influenced by discriminatory factors. Businesses cannot hide behind labour hire agencies to mitigate this liability. It is important not to make assumptions based on age or a worker’s decision to continue to engage in work. Focus on the employee’s ability to perform the inherent requirements of the position, such as their qualifications, experience, skills, attitude, and willingness to engage and learn.

By Kelly Godfrey

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