FWC Unfair Dismissal Jurisdiction: Contest where labour hire worker engages payroll provider

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A recent Fair Work Commission decision might be worth a read if you’re scanning the labour hire horizon for signs of squalls ahead. It was an unfair dismissal case in which the applicant claimed she had been dismissed by Hays from her labour hire engagement as a project manager. However, it was not a typical tri-partite labour hire scenario.

Contractual Arrangements

Here’s how the Commission, described the multi-party contractual arrangements that underpinned the work relationship:

[13] It is necessary to briefly mention the contractual arrangements that were applicable to the work performed by [the applicant]. [The applicant] had entered a contract with a company called PayMe in May 2017 to provide what is in effect a payroll service to her …

[14] In November 2020 [the applicant] contracted through PayMe to provide her services to a client of Hays… Hays made weekly payments to PayMe in relation to the hours worked by [the applicant] while she was on the assignment.

per Deputy President Dean

Jurisdictional Contest

Although it was not included as a respondent to the application, the interposition of PayMe, in the arrangement for the supply of the applicant’s labour to Hays’ client, raised a question about the identity of her true employer (as distinct from her employer-of-record). Was it Hays, or was it PayMe?

Hays contested jurisdiction[i] on the grounds that:

  1. the applicant was not an employee of Hays;
  2. the applicant was not dismissed;
  3. Her application was out of time; and
  4. She earned more than the high-income threshold.

The parties agreed to contest the high-income threshold point as a preliminary issue on the basis that, if the application was knocked out on that ground, there was no need to argue the other points.[ii]

The Commission held that the applicant earned above the high-income threshold and that she was not an Award covered employee. It appears that only three awards were contended by her to apply to her employment:[iii]

  1. Australian Government Industry Award 2016;
  2. Clerks Private Sector Award 2020; or
  3. Miscellaneous Award 2020.

Coverage under the Professional Employees Award 2020, which might also have been a contender, was not argued.

In view of its findings on income and Award coverage, the FWC determined that the applicant was an excluded employee and that her unfair dismissal claim was beyond its jurisdiction.[iv]

A “Missed Opportunity” or a “Near Miss”?

Consequently, the question of who was the true employer did not need to be decided. 

There was no examination of Hays’ back-to-back contract with its client, as there was in Personnel Contracting[v]; and therefore, no core asset analysis of the type that might have determined whether Hays or PayMe controlled the provision of the worker’s labour[vi], or rendered the work performed by her dependent upon and subservient to[vii] either Hays or PayMe.

An answer to those questions may have provided further clarification of how the approach adopted by the High Court in Personnel Contracting and Jamsek[viii] should be applied in cases, where the contest is not merely about whether a worker is an employee or an independent contractor, but concerns the need to identify the true employer when there is more than one contender for that honour.

Whilst those questions remain unanswered, workers will continue to bear the cost and uncertainty of having to decide who, as between the person who pays them and the person who controls the supply of their labour to its clients, should respond to matters such as their worker entitlements, casual conversion and unfair dismissal claims, and their applications for anti-bullying orders.  In harsh cases, they may be left without timely, reliable and effective remedies.

So, we will have to wait for answers to those questions.

I’m guessing it might not be too long.

Andrew C. Wood


[i] Grounds as summarised at para [2].

[ii] See para [3].

[iii] At para [27].

[iv] At paras [25] and [32]-[33].

[v] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 96 ALJR 89[2022] HCA 1. See in the judgments of Kiefel CJ, Keane & Edelman JJ at paras [11]-[13], despite the view taken by their Honours that it was not necessary to refer to the LHA “in detail”. See also in the judgments of Gageler & Gleeson JJ at paras [144] and [158]; and Gordon J at para [168].

[vi] Personnel Contracting per Kiefel CJ, Keane & Edelman JJ at para [89].

[vii] Personnel Contracting per Kiefel CJ, Keane & Edelman JJ at para [90].

[viii] ZG Operations Australia Pty Ltd v Jamsek (2022) 96 ALJR 144[2022] HCA 2.

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