Fair Work Commission Confirms Prior Labour Hire Service Counts Towards Minimum Employment Period: Michael Alkan of HR Experts Secures Important Win

A decision by the Fair Work Commission has clarified how periods of service with a labour hire company can count towards an employee’s minimum employment period when work is “in-sourced.” This ruling reinforces protections for employees transitioning between employers after a change in contracting arrangements.

Background

Mr Taulapapa, represented by Michael Alkan, principal of HR Experts, lodged an unfair dismissal claim against Toll Personnel Pty Limited after his employment ended in June 2018.

Toll argued that Mr Taulapapa did not have the required minimum six months’ employment to bring an unfair dismissal claim because he commenced directly with Toll Personnel only in April 2018, less than three months before his dismissal.

However, Mr Taulapapa and HR Experts contended that his service should be counted from 2016, when he began working at the same Asahi Beverages warehouse through labour hire provider Staff Australia.

Key Facts

1. From April 2016, Mr Taulapapa worked regularly and systematically at Asahi’s warehouse as a Staff Australia labour hire employee.

2. In early 2018, Toll Personnel began directly engaging workers at the site, effectively in-sourcing labour hire roles.

3. On 3 April 2018, Mr Taulapapa transitioned to direct employment with Toll Personnel, continuing the same warehouse duties.

4. He was never advised in writing that his prior service with Staff Australia would not be recognised.

Legal/IR Issues

The main question was whether there had been a transfer of business under section 311 of the Fair Work Act 2009, allowing Mr Taulapapa’s earlier service to count towards his continuous employment.

Toll Personnel argued there was no such transfer because it had never “outsourced” the work to Staff Australia. However, HR Experts relied on the concept of in-sourcing under section 311(5), which applies when a company stops outsourcing work and starts employing workers directly.

The Commission’s Findings

Commissioner Cambridge accepted HR Experts’ submissions and found that:

1. The applicant’s employment with Staff Australia was regular and systematic, with a reasonable expectation of continuing work.

2. Toll Transport (an associated entity of Toll Personnel) had initially outsourced warehouse work to Staff Australia.

3. When Toll Personnel began hiring workers directly, this amounted to ceasing to outsource the work, satisfying section 311(5).

4. Because Mr Taulapapa was not notified in writing that his prior service would not be counted, his employment period effectively commenced in April 2016.

As a result, the Commission ruled Mr Taulapapa had completed the minimum employment period and was entitled to pursue his unfair dismissal application.

Significance

This decision is now featured in the Fair Work Commission’s Unfair Dismissal Benchbook and is published on the Commission’s website as a guidance example for employers and employees. It underscores that:

1. Employers cannot simply reset an employee’s service clock by in-sourcing work without written notification.

2. Labour hire employees working on a regular and systematic basis retain important rights when transitioning to direct employment.

HR Experts’ Role

With representation by Michael Alkan, Mr Taulapapa successfully overcame a complex jurisdictional objection that could have blocked his claim entirely. The case demonstrates the vital role of skilled advocacy in ensuring employees’ service and entitlements are correctly recognised under Australia’s workplace laws.