Are agency employees protected from unfair dismissal?

by The FindLaw Team

According to the Australian Bureau of Statistics (ABS), five percent of Australian employees currently in the workforce are labour hire employees, and for the most part, will be considered as casual employees. Because most agency employees will hold a casual status, they’ll generally have the same benefits and liabilities as their casual cohorts. So with that being said, labour hire employees will probably be no different from other types of employees in that they’ll hold the same concerns and fears in regards to matters such as job security, however, unlike part-time or full-time employees, labour hire workers have limited recourse in the event of an unfair dismissal. So the inquiry that needs to be asked is: What options are available to a labour hire/agency worker in the event of an unfair dismissal? The question is worth exploring especially when we take into account the limited rights available to casual employees if they wish to initiate an unfair dismissal claim under the Fair Work Act 2009 (Cth) (the FWA).

The common law position

If a labour hire employee is not offered any further work by the labour hire agency, this may constitute a ‘dismissal’, although, industrial awards and instruments found within state legislation may make special provisions in regards to notice and other such requirements. However, in the absence of such provisions, we can look to case law for some guidance in regards to dismissal of a labour hire employee.

In Nguyen v A-N-T Contract Packers Pty Ltd (t/as A-N-T Personnel) (2003) 128 IR 241, the Industrial Relations Commission of New South Wales (the Commission) had to determine whether the applicant who made a claim for unfair dismissal was a labour hire firm employee or an employee of the host company. 

The applicant in Nguyen had worked exclusively for the host company for two and a half years and it was later found that the host company had terminated the applicant’s employment after she became pregnant – which was in breach of anti-discrimination legislation. The agency argued that the applicant was not ‘dismissed’ because she was still on their books, leading to the claim by the host company that an action of unfair dismissal was not available because the applicant was an employee of the labour hire agency. 

McKenna C who was presiding over the matter, held that the host company was indeed the employer of the applicant, and that the dismissal was harsh, unreasonable and unjust, therefore, the applicant had an available claim for unfair dismissal. The Commissioner in Nguyen accepted the views of the South Australian Commission that a “casual employee deprived of employment from time-to-time according to a regular roster arrangement may well…reasonably be said to have had his services dispensed with – that constitutes a dismissal.”

The Fair Work Act

As noted in the introduction, a labour hire employee may have some difficulty in making an unfair dismissal claim under ss 382 – 384. For national system employees, the person must have been employed for the minimum period of employment, and have been employed on a regular and systematic basis for six months, or if the employer is a small business, the minimum period of employment is 12 months. Furthermore, the labour hire employee must have one or more of the following be applicable in order to make a claim of unfair dismissal:

  • the employee must be covered by a modern award or an enterprise agreement; or
  • their earnings must be below the high income threshold which at the time of writing, $138, 900.




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