Anthony Reid v Lion Dairy & Drinks Services Pty Ltd T/A National Food Services Pty Ltd

[2015] FWC 8241

[2015] FWC 8241

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Anthony Reid
v
Lion Dairy & Drinks Services Pty Ltd T/A National Food Services Pty Ltd
(U2015/12941)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 1 DECEMBER 2015

Application for relief from unfair dismissal –no employment relationship – no dismissal – application dismissed.

[1] On 17 September 2015 Mr Reid lodged an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (the FW Act). In that application, Mr Reid asserted that Lion Dairy & Drinks had unfairly dismissed him as an employee. The application was not resolved through the conciliation process and was referred to me for determination. At the conclusion of a conference convened on 27 November 2015 I dismissed Mr Reid’s application. I have set out below the reasons for my decision in this respect.

[2] The response to the application advised that the respondent was Lion Dairy & Drinks Services Pty Ltd T/A National Food Services Pty Ltd (Lion). I have utilised the discretion in s.586 of the FW Act to amend the application so as to specify the correct name of the respondent.

[3] Mr Reid’s application was the subject of a Directions Conference on 10 November 2015. In that conference, and in the directions issued immediately after the conference, the parties were required to provide to the Fair Work Commission (the FWC), material in support of their respective positions by 23 November 2015. Lion provided this material consistent with my directions. Reminder advices seeking the provision of material from Mr Reid were sent on 24 November 2015. On 26 November Mr Reid advised that he had been unwell and sought an adjournment in the following terms:

“If I provide a medical certificate is there any possibility of delaying Fridays hearing?
Anthony Reid”

[4] Following email advicefrom Lion to the effect that Mr Reid was, and had been working for his labour hire employer over the past week, Mr Reid then advised that he would file material and participate in the determinative conference. Mr Reid forwarded some very limited material late on 26 November 2015.

[5] In the determinative conference on 27 November 2015, Mr Reid represented himself. Lion was represented by Mr Cregan.

[6] Mr Reid’s position was that he was an employee of Lion and that he had been unfairly dismissed following a breach of safety procedures. The Lion position was that the application was without jurisdiction because Mr Reid was not employed by Lion, but rather, was an employee of a labour hire contractor, Programmed Skilled Workforce (Programmed Skilled). Accordingly, Lion asserted that it had not dismissed Mr Reid. At the commencement of the conference I detailed my concern with respect to Mr Reid’s application and the extent to which his continued pursuit of that application could represent an unreasonable act. Mr Reid confirmed that he sought to pursue the application.

[7] The evidence provided to me supported the Lion position. Mr Appleton is a Team Leader at Lion. The advice he provided confirmed Lion’s use of labour hire employees and the role undertaken by labour hire employers. Mr Appleton confirmed that Mr Reid was an employee of Programmed Skilled and that, after he had reported a safety incident to Programmed Skilled, he was aware that Mr Reid had been relocated away from the Lion site. He confirmed that Lion did not, and never had, employed Mr Reid. I note that Mr Reid did not seek to challenge Mr Appleton’s evidence.

[8] Mr Hitchcock is the South Australian Regional Manager of Programmed Skilled. He provided advice about the operation of that business as a labour hire employer. More particularly, Mr Hitchcock confirmed that Programmed Skilled had employed Mr Reid since February 2013. Mr Reid had been allocated to work at Lion. Programmed Skilled decided to remove Mr Reid from the Lion site following a safety incident and advised him of this on 28 August 2015. Mr Hitchcock subsequently corresponded with Mr Reid about this decision. Mr Hitchcock’s advice was that, on 14 September 2015, Mr Reid was allocated to work at another business where he remains as a labour hire employee. I note that Mr Reid did not seek to challenge Mr Hitchcock’s evidence.

[9] Mr Reid provided a statement made out by a Mr Crompton. Mr Reid agreed that this statement went to the merits of what he asserted was the termination of his employment and did not go to the question of whether he was engaged as an employee, by Lion. On that basis I declined to admit Mr Crompton’s statement as it did not deal with this jurisdictional issue.

[10] Mr Reid declined the invitation to give sworn evidence. He acknowledged that he was “still employed” by Programmed Skilled. Notwithstanding this, he asserted that, because he worked exclusively and consistently at the Lion work site, he should be regarded as a Lion employee who had been dismissed.

Findings

[11] Section 394 forms part of Part 3-2 of the FW Act. This Part provides protections from unfair dismissal. Mr Reid is only able to pursue an unfair dismissal application against Lion if he was, in fact, employed by Lion, and then dismissed by Lion.

[12] I have applied the generally accepted approach to the consideration of labour hire contract employment arrangements. These are succinctly summarised by Watson VP in Arcadia v Accenture Australia 1in the following terms:

“6 An employment contract is formed by the offer and acceptance of a contract of service in which all of the essential ingredients of a valid contract are present. The contract must include consideration, the parties must have a continuing and mutual obligation to perform their respective sides of the bargain and there must be intention to create legal relations.

7 In a typical labour hire situation, a tripartite arrangement is made whereby an agency enters into an agreement with a worker to hire out the services of the worker to a host. In general, the absence of any contract between the worker and the host will lead to a finding that the worker is not an employee of the host. [1] Although the concept of joint employment has some recognition in US Labour Law, it has not been adopted by any Australian Court. [2]

8 The principles to be applied in relation to this question arise from cases which identify the essential ingredients of an employment contract, distinguish between the relationship of employee and independent contractor and consider these matters in the context of a labour hire arrangement.

9 A critical consideration is whether a contract of employment was mutually intended to be established between the worker and the host. [3] This in turn depends on an objective consideration of the subject matter of the relevant agreement, the status of the parties thereto, their relationship to one another and other surrounding circumstances. [4] Because of the need for consideration of the details of the arrangements, it is not possible to apply any rules of general application. In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; 112 IR 56, Gaudron, McHugh, Hayne and Callinan JJ said at [25]:

“Because the inquiry about this last aspect may take account of the subject-matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the ‘intention to create contractual relations’ requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word ‘intention’ is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.”

(Footnotes omitted)

10 It has also been said that the task involves the need for “characterisation of the essence of the relationship” under scrutiny, [5] “the obtaining of the overall picture by the accumulation of detail”[6] as distinct from “the mechanical exercise of running through items on a checklist”. [7] After acknowledging the general position that the interposition of a labour hire agency between its clients and the workers does not result in an employment relationship, Merkel J. in Damevski v Giudice (2003) 133 FCR 438; 129 IR 53 said at [174]:

“[174]However, the present case differs in significant respects from those cases. In those cases, in general, the hiring agency interviewed and selected the workers, and determined their remuneration, without reference to the client. Usually, a client requesting a worker with particular skills was provided with one, who may or may not have been ‘on the books’ of the hiring agency at the time the order was placed. The workers of such hiring agencies were usually meant to keep the agency informed of their availability to work, and in many cases were not to agree to undertake work for the client which had not been arranged or directed by the hiring agency. Equipment was either supplied by the worker themselves, or by the hiring agency, except for specialist safety equipment which the client often supplied. Dismissal of a worker was only able to be effected by the hiring agency. The client can only advise the hiring agency that the particular worker is no longer required by it. Had AICA/MLC acted as a labour hiring agency for Damevski to contract his services to other cleaning companies, as suggested in the chart and in the information pack, then the decisions in the above cases may have been applicable to this situation. However, that did not eventuate in the present case.”

11 It is therefore necessary to undertake an objective assessment of the overall circumstances in order to characterise the essence of the relationship and determine the mutual intention of the parties.”

[13] This position is consistent with the position adopted by Buchanan J in Fair Work Ombudsman v Ramsey Food Processing Pty Ltd 2in the following terms:

“47 Subject to that principle, the common law has long recognised the possibility that an employee of one business entity might be hired, loaned or seconded to another person or business, without any change in employment relationship occurring. That is so even if a good measure of practical control is exercised over the work of the employee by the person to whom the employee’s services are supplied. Amongst the earlier English cases where such arrangements were discussed are Quarman v Burnett (1840) 6 M&W 499 (“Quarman”); Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ld [1947] AC 1 (“Mersey Docks”); and Denham v Midland Employers Mutual Assurance Ld [1955] 2 QB 437 (“Denham”). However, discussion of arrangements for the hire of labour in those early cases must be approached with some caution because in some the issue at hand concerned a question of which entity bore liability to a third party for the negligence or other conduct of the hired (or loaned or seconded) employee: Quarman and Mersey Docks were such cases.”

[14] The material before me clearly establishes that Mr Reid was not employed by Lion and was not dismissed by Lion. Indeed, the communications which Mr Reid entered into with Mr Hitchcock of Programmed Skilled in late August 2015, and which resulted in him being placed at another business, seem to suggest that it should have been patently obvious to Mr Reid that he was neither employed by Lion, nor dismissed. Mr Reid agreed in the conference that he was, and remained, an employee of Programmed Skilled. Programmed Skilled had been contracted to provide labour to Lion in a manner which is quite unremarkable and, in no way established Mr Reid as an employee of Lion.

[15] The application was dismissed on this basis. When the application was dismissed I confirmed to Mr Reid my concern that, had he properly read the material provided by Lion, I would have expected that he would discontinue the application. An Order (PR574508) confirming the dismissal of Mr Reid’s application will be issued.

Appearances:

A Reid on his own behalf.

E Cregan for the respondent.

Hearing (Determinative Conference) details:

2015.

Adelaide:

November 27.

 1 (2008) 170 IR 288

 2 (2011) FCA 1176

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<Price code A, PR574507>