Two labour hire companies that lost their contracts at a Tooheys site after 20 years have failed to convince Fair Work Australia that the brewery should pay the workers' redundancy.
FP Group Pty Ltd and Proden Pty Ltd sought relief under s120(2) of the Fair Work Act from making redundancy payments or, as a fallback, asked that the payments be reduced for those who'd found suitable alternative employment.
The companies had held contracts at the brewery, in the western Sydney suburb of Lidcombe, from 1991 until Tooheys ended them last year and took on the Skilled Group. Skilled will offer work to some of the FP Group and Proden employees.
Nine of the workers who lost their jobs have also filed unfair dismissal claims - naming the labour hire companies as the respondent employers - but those cases have been put on hold until the tribunal's determination of the jurisdictional issue.
FP Group and Proden argued before Deputy President Peter Sams that Tooheys was the workers' true employer, and that their arrangements with the brewery were a "sham". They only acted as agents and provided limited services, such as recruitment and payroll, they said.
But Deputy President Sams, in rejecting their bid, said that a s120 application wasn't the mechanism for determining the true employer of the workers.
He said the labour hire companies' application was "fundamentally misconceived and must be dismissed".
Deputy President Sams agreed with Tooheys that a s120 bid could only be made by the employer of the affected employees.
The labour hire companies' case, he said, suffered from an "incurable contradiction", in that they couldn't assert they were not the "true employers" while at the same time bringing a s120 application as the employers of the affected employees. "This is impermissible, not only as a matter of law, but of simple logic," he said.
He continued that even if his conclusion was wrong and the tribunal accepted that the labour hire companies weren't the employers, they couldn't, as a matter of law, confer obligations on a third party under s120.
FP Group Pty Ltd v Tooheys Pty Ltd [2012] FWA 2133 (20 March 2012)