Can the client of your labour hire company fire you? A recent finding by the FWC shows that they can. According to Pettifer v MODEC Management Services, the dismissal of an employee by a labour hire company is not unfair where the employee is unable to perform his or her job.


In Pettifer v MODEC, a labour hire company (MODEC) was contractually obliged by its client BHP to terminate the employment of one of its employees. MODEC’s attempts to find alternative employment for the man were unfruitful, however the employee’s contract was nevertheless terminated.


Specific facts that the FWC pointed out were that:

  1. The worker was employed to work on a specific project.
  2. MODEC was contractually obliged to remove the employee.
  3. Having been removed from the project, the employee was unable to perform the requirements of the job.
  4. The worker’s employment was only terminated after MODEC’s attempts to find him alternative employment were unsuccessful.

The FWC found that the employee’s removal from the project by BHP meant that he could no longer perform his job. Because of this, the dismissal was not unfair.


What does this mean for labour hire employees?

Labour hire employees should consider the steps taken by the labour hire company prior to any dismissal. Four points should be considered when deciding whether or not a dismissal is fair:

  1. Whether there are contractual arrangements in place between the labour hire company and its client. If the labour hire company is contractually obliged to dismiss, the dismissal will be fair.
  2. Whether the worker cannot carry out his contract because of his or her removal from the project. If the contract cannot be performed, the dismissal will be fair.
  3. Whether the employer took steps to find alternative work for the employee. If so, the dismissal is fair.
  4. Whether the employee was given the chance to respond to the suggestion that they cannot carry out their contract.

Employees in Pettifer’s situation need to consider the circumstances between the labour hire company and its client. Whether Pettifer v MODEC will apply in the future to other employment contexts is uncertain, however this case is a key lesson for those in the labour hire industry. Labour hire employers should exercise caution in dismissing its employees with direction from a client, and should ensure the decision is not harsh or unreasonable.