What happens when a client wants my employee off their premises?

In situations where your staff are working on client premises, significant questions can arise regarding the legal liability of the client and the employer, particularly where the agreement between the client and employer allow the client the right to remove the employee from the premises.

Over the years, The Fair Work Commission (FWC) have looked at a couple of different cases where a client has removed another employer’s worker from their workplace, and this has led to an unfair dismissal claim.

Back in 2016, in Pettifer v MODEC Management Services [2016] FWCFB 5243 the FWC reviewed a case where Mr Pettifer claimed he had been unfairly dismissed by his employer, MODEC, after MODEC’s client decided to end his long-term assignment at their site after a serious “near miss” safety incident.  The facts in this case included:

• the client had the right to direct MODEC to remove Mr Pettifer from its premises
• Mr Pettifer’s employment with MODEC was in relation to the particular project at the client site
• once removed from the client site, Mr Pettifer could not fulfil the purpose of his employment, and
• MODEC only terminated Mr Pettifer’s employment after it had looked for alternative assignments, but could not find one.

On the basis of these particular facts, the FWC found Mr Pettifer had not been unfairly dismissed. On appeal, a Full Bench of the FWC agreed for the reason that he was not capable of fulfilling the inherent requirements of his role once he had been removed from the client site.

In a separate case from 2016, Kool v Adecco Industrial Pty Ltd T/A Adecco [2016] FWC 925, the FWC found Ms Kool had been unfairly dismissed. On the facts in this case, the client (Nestle) had formed a view that Ms Kool had engaged in misconduct and directed Adecco to remove her from their site. Adecco complied, as it was contractually obliged to do, but did not take steps to separately establish whether the misconduct had in fact occurred and did not inform Ms Kook why she had to leave the client site.

In the Kool case, the FWC held:

“the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal. Labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly. If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal.”

The FWC ruled that Ms Kool was to receive $24,050 in compensation for her unfair dismissal (after an appropriate reduction due to wages she had earned since dismissal).

While the outcomes in these cases are very different, they are not inconsistent. The outcomes can be clearly explained by the particular facts in those cases, and the express terms of the employment contract and the commercial agreement with the client.

Employers may also take some comfort that if they find themselves in a situation similar to the MODEC case, it would appear that the removal of an employee from a client site and then termination of the employment (if there is no alternative role) may be safe from an unfair dismissal challenge: see Gee v Tasports [2016] FWC 6710.

Of course, it is often the case that the outcome will be improved by the employer having a robust and clear set of employment documentation, with consistent management practices in communicating what those documents mean to staff.

About our author

Benjamin Gee is a Partner and Solicitor with Citation Legal and is an Accredited Specialist in workplace law in Victoria. Ben works out of our Sydney office with clients across Australia and has over 25 years’ experience as an advisor and advocate in employment and workplace relations law. His expertise lies in advising clients operating in the infrastructure and construction, health and education and sectors.