You’re banned: what to do when a client or host employer won’t work with an employee

Employee, worker, talent, resource, temp, contractor – there is an abundance of terms used to describe the people that perform work in a workplace. There are often technical reasons for these differences but to an outsider, those differences rarely matter - if a person works at that place, they must be an employee.

This misconception can create some challenges for employers who either share their workplace or business space with employees of an entirely different employer or who send their employees to a host employer or host site.

Take for example the challenges that Myer has recently faced in relation to its delivery of customer service. In May this year, Fairfax reported that Myer had sent letters to its concession partners expressing concern about poor customer experience resulting from the attitudes of some employees at concession outlets. Concession outlets are those run by partner brands from within Myer’s department stores who maintain their own space and engage their own employees.

Myer claimed to have received feedback that customers experienced poor levels of service from the employees of concession outlets who told customers that they were unable to assist them if they were not enquiring specifically about the concession brand because they did not work for Myer.

In its letters to concession outlets, Myer outlined its expectation that all customer service employees should act as one team and that any failure by concession outlet employees to do so may result in Myer not permitting the concession partner to return the employee to work at Myer.

This type of situation raises some interesting questions about the intersection of business relationships and the employment relationship:

  • What should a concession partner do if an employee is denied access to work at Myer?

  • More broadly, what should any employer do if an employee who works at a host site is refused access to that site?

  • What should an employer do if a key client refuses to work with a particular employee?

  • Should the relationships between businesses determine the course of the employment relationship?

Thankfully there are some case law lessons to assist employers in navigating this complex, but common, situation.

Case law

There is not much an employer can do to return an employee to work at a host site or host employer if it has decided that it does not want the employee there anymore. However, the decision of a host site or host employer does not automatically mean that the employment relationship has come to an end.

In Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243 an employee was dismissed following a host employer’s reaction to a near miss incident which resulted in the employee being excluded from the host employer’s site.

The actual employer, a labour hire company, investigated the incident for itself and explored redeployment options for the employee before dismissing him. At each stage the employee was provided with an opportunity to respond.

The employer concluded the employee’s involvement in the incident did not warrant dismissal but that, as a result of him being excluded from the site, he could no longer perform the inherent requirements of position he was hired to perform.

The employee lodged an unfair dismissal claim with the Fair Work Commission which was heard at first instance by a single member and later appealed to the Full Bench.

The Full Bench found that the dismissal was not unfair because the employer had taken all necessary steps to afford the employee procedural fairness and had a valid reason for the dismissal, in that the employee could no longer perform the role he was hired to perform because he was excluded from the host employer’s site.

In reaching that conclusion, the Full Bench summarised a number of important principles concerning third party arrangements:

…in the context of labour hire arrangements, the actions of an employer who dismisses an employee following the exercise of a host employer’s contractual right to have the employee removed from the host site cannot rely exclusively on the actions of that third party as their defence to a claim of unfair dismissal. A discretion remains with the FWC to decide whether a particular dismissal is unfair in all the circumstances.

In contrast to this decision is the later decision of Tasmania Ports Corporation Pty Ltd t/a Tasports v Gee [2017] FWCFB 1714 where the Full Bench found that an employee’s dismissal was unfair after his site access was revoked by a host employer.

In that decision the Full Bench found that the labour hire employer failed to make its own enquiries into allegations made by the host employer, failed to allow the employee the opportunity to respond and failed to properly explore redeployment options. Accordingly, there was no valid reason for the dismissal that the employer could have reasonably been satisfied existed and the process followed in dismissing the employee was flawed and therefore harsh, unjust and/or unreasonable.

Lessons for employers

Partnerships between organisations are crucial for business and employees can certainly impact on those relationships. Where a client or a host employer no longer wants to work with a particular employee, it can be a difficult situation to manage but should not automatically spell the end of the employment relationship.

Employers should consider the following factors before rushing to dismiss an employee who has been excluded from a site, project or other arrangement with a third party:

  • What actually happened? Employers should conduct their own enquiries to understand what happened and why the host employer or client doesn’t want to work with the employee anymore. Employers should also make their own assessment about the seriousness of the conduct before rushing to impose any disciplinary penalty.

  • Are there redeployment options available? Can the employee move to a different site, project or client? If an employee is dismissed before redeployment options are explored, this may render the dismissal harsh, unjust or unreasonable.

  • What was the role the employee was hired to perform? If the employee was only hired to perform work for one host employer or one project then it is more likely that losing access to that work means that the employee can no longer perform the inherent requirements of their role (which is a valid reason for dismissal).

  • Has the employee been afforded procedural fairness throughout the process? At each stage, the employee should be invited to give their version of events or respond to matters put to them by the employer.

Considering these factors may assist employers in determining the appropriate course of action when dealing employees excluded by unhappy host employers.

Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law. Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.

02 9256 7500 |

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog.

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