Latest Employment and Market Insights

Fair Work Commission Clarifies Employment Status in Labour Hire Dispute

In a recent Fair Work Commission (FWC) case, a worker filed an unfair dismissal claim against a company where she was placed through a labour hire agency, raising critical questions about who the “official” employer is in labour-hire arrangements. Although she was employed by ProQuest Recruitment, the worker argued that the company she worked for, Stanley Black and Decker, exerted substantial control over her job, and should be considered a joint employer.

The FWC reviewed the evidence, including her employment contract, which confirmed the agency as the official employer, despite the company’s daily supervision. The Commission ultimately rejected the worker’s claim of joint employment, reaffirming that Australian law does not recognise the concept of joint employment in such cases.

This case reinforces the need for clear employment contracts in labour-hire setups and highlights the jurisdictional limits of the FWC in handling cases without direct employment relationships. For businesses relying on labour hire, understanding the boundaries of employment law is essential to mitigate legal risks.

New Law Increases Employer Liability for Sexual Harassment Litigation Costs

In a recent media release, the Human Rights Commission highlighted a recently passed law which significantly raises the risk for employers to bear litigation costs in workplace sexual harassment claims. The Australian Human Rights Commission Amendment (Costs Protection) Bill makes it easier for claimants to recover legal costs from employers, even if they succeed in only one aspect of their claim.

Under this law, employers are generally unable to recover their own legal costs, except in rare cases where the claimant acted unreasonably or without cause. This legislation follows recommendations from the 2020 Respect @ Work report and aims to reduce barriers for individuals seeking legal protection against sexual harassment.

Key takeaways for employers:

• Multiple claims: Claimants are now more likely to file multifaceted claims, increasing employer liability for costs.
• Prevention focus: Proactively addressing workplace sexual harassment and complying with the positive duty to prevent harassment is critical.
• Limited cost recovery: Employers can only recover legal costs in exceptional cases, further heightening their financial exposure.

Employers should reassess their workplace policies and legal strategies, prioritizing prevention and compliance to mitigate the risks associated with this new legislation.

Warning on Self-Styled ‘Contractors’ Amid New Employee Definition

An update from FairWork confirmed the recent Closing Loopholes Bill has redefined the classification of workers, putting many self-styled “contractors” at risk of being legally reclassified as employees. This shift is critical for staffing companies, as continuing to let workers dictate their employment status could result in violations of the Fair Work Act and lead to claims for back pay and entitlements.

Key points to consider:

• Multi-factorial test: The law, effective 26 August, reinforces a comprehensive assessment to determine if a worker is an employee or an independent contractor. The true nature of the working relationship, not just the contract terms, is key.
• IT sector challenges: Many workers in fields like IT prefer being labelled as contractors, but unless they meet strict contractor criteria, they will be deemed employees, exposing staffing firms to legal risk.
• Open dialogue needed: Recruiters must navigate these preferences carefully, ensuring contracts are aligned with legal requirements, even if workers insist on the “contractor” title.

As privacy law changes loom for 2025, staffing firms should also review their data practices to ensure compliance with potential reforms.

In this evolving landscape, recruiters must stay vigilant, prioritising legal compliance over worker preferences to avoid costly mistakes.