Labour hire companies have a unique position in the management of its employees. A ‘contractor’ (an individual employed by a labour hire company) who works for a Host company often has very little day to day contact with the labour hire company and is often supervised by an employee of the Host employer. If the Host company exercises its contractual right to notify a labour hire company that it no longer wishes to retain the services of a contractor, for example because a contractor has engaged in misconduct, it is important that a labour hire company does not blindly accept that decision.

Best practice is for the labour hire company to at least conduct its own review of the matter and to understand the evidence relied on by the Host company. Failure to do so may result in an outcome like that in Kool v Adecco ( decision handed down by the Fair Work Commission yesterday . In that decision the Commission made clear its views that “An employer cannot abrogate its responsibilities to afford procedural and substantive fairness to a dismissed employee by relying on the fact that unfair treatment was meted out by another entity [the Host company] in which the [labour hire] employer had placed the employee”.