The Case

Tasmanian Ports (TP) owns and operates a number of ports in Tasmania. It also supplies labour to privately owned ports. From 2009 until the date of dismissal, Mr Gee was assigned to work for a host employer.

In August 2015, the host employer informed TP it would be revoking Mr Gee’s access to all its sites effective immediately because Mr Gee:

• had allegedly failed to comply with a reasonable work direction;
• posted inappropriate photos to social media;
• failed to comply with reporting procedures; and
• had been in possession of a mobile phone without prior authorisation.

TP supported the decision to revoke Mr Gee’s access to the site. TP informed Mr Gee of the allegations, Mr Gee provided a response, however TP did not provide Mr Gee’s response to the host employer. The host employer provided TP with a summary of its investigation of which Mr Gee had no knowledge and to which he was not provided with an opportunity to respond. TP then dismissed Mr Gee, indicating that as his site access to the host employer’s site had been revoked, he was unable to perform the inherent requirements of his position and no alternative positions were available.

Mr Gee commenced proceedings in the Fair Work Commission (FWC) alleging unfair dismissal. His application was successful at first instance. TP appealed the decision to the Full Bench.

The Verdict

The Full Bench indicated there is a difference between dismissal for conduct and a dismissal for capacity:

• where a decision to dismiss an employee is for conduct, the labour hire company must do more than automatically accept the assessment of the host employer – the labour hire company must undertake a proper process and form an independent view about the allegations; and
• where a decision to dismiss an employee is for capacity reasons, the labour hire company is required to look for redeployment opportunities.

It is only after this process has been exhausted that an employee can be dismissed.

Whether a dismissal is for conduct or capacity reasons depends on the circumstances. For example, where a host employer has an absolute right to remove an employee and that employee was employed by the labour hire company solely for the purpose of working at that site, it is likely that any subsequent dismissal for that reason will be capacity based. If there is no right for a host employer to remove an employee from site, then any dismissal is likely to be conduct based.

On the facts of this case, the Full Bench found the dismissal of Mr Gee was conduct based. As such, given TP had dismissed Mr Gee without a proper investigation of its own, the dismissal was unfair.

Lessons for You

This case demonstrates that the use of labour hire cannot avoid the requirements of unfair dismissal laws.

In circumstances of dismissal for misconduct, the employer must:

• not automatically accept the allegations made by the host employer; and
• conduct a proper investigation into the allegations, which includes giving the employee an opportunity to respond and take into account the employee’s response.

In circumstances of dismissal for capacity:

• the host employer must have a contractual right to require the labour hire employer to remove the employee from site;
• the labour hire employer must search for redeployment opportunities; and
• the labour hire employer must show that no redeployment opportunities are available.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.