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IR Update: Labour Hire Unfair Dismissal Case

March 02, 2016

This recent case warns that labour hire companies cannot “abrogate [their] responsibilities to afford procedural and substantive fairness to a dismissed employee by relying on the fact that unfair treatment was meted out by another entity in which [they] had placed the employee.”

Adecco Australia were found by the FWC to have unfairly dismissed a factory worker it withdrew from its client’s factory after she was wrongly accused for card clocking – a practice whereby an employee clocks off another employee.

The employee was assigned as a casual factory worker at the end of 2012 to Nestle Chalet Patisserie where she worked regular hours on what was essentially a full time basis for almost two and a half years.

Nestle managers informed Adecco that the employee had engaged in misconduct associated with repeated clocking off breaches and was “no longer required”. Adecco accepted that this was the case without question and without consideration of the need to afford the worker substantive or procedural fairness and removed the employee from Nestle without warning.

In court, the factory worker stated that the only time she had clocked someone off was when she was asked to do so by her supervisor.

Her supervisor had clocked her off “without even thinking” the week before she was dismissed. Nestle wrongly concluded that the employee had asked her supervisor to do so and when they were informed otherwise by the supervisor, they said that it was not the reason for her dismissal anyway as they had received complaints that she didn’t “fit in”.

Adecco argued that despite being removed from Nestle, the worker was not dismissed as the labour hire company continued to “seek alternate work” for her. Alternatively, if it was found that the employment relationship had ended, Adecco argued that this was not at their initiative.

DP Ashbury found that Adecco did initiate the dismissal and did little to place the worker in another position. She held that the managers of Adecco failed to appreciate that a “fundamental change to the terms and conditions under which an employee is working can constitute dismissal” and “failure to offer work to a causal employee can constitute dismissal”.

The employee was entitled to question the validity of the reasons for dismissal by contending that she did not engage in the alleged conduct and she was also entitled to raise a failure on the part of the employer to afford her procedural fairness.
A remedy is yet to be determined.

This case serves as a warning to all employers to ensure they provide their employees with procedural fairness when terminating their employment.
Kool v Adecco Industrial Pty Ltd [2016] FWC 925

For information regarding employment termination please contact the National Retail Associations team of advisors on 1800 RETAIL (738 245).

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