Navigating Labour Hire Dismissals: Insights from Rose Nagy v ProQuest Recruitment Pty Ltd

In the case of Rose Nagy v ProQuest Recruitment Pty Ltd [2025] FWC 78, the FWC found that whilst a labour hire worker had been unfairly dismissed when she was abruptly removed from her long-standing placement with the employer’s client, she was not entitled to compensation from her employer.

The Applicant had been posted at the employer’s client as a Store Worker effectively on a full-time basis for 8 years (although she was employed on a casual basis).

However, the client directed the employer to remove her from her assignment after she inadvertently swapped the delivery labels on two boxes, leading to them arriving at the wrong destination.

The employer complied with the client’s request and notified the worker that her assignment with the client had come to an end, but that her employment would continue whilst they found a suitable new assignment for her.

Two months later, the employer offered the Applicant one short-term assignment, which she declined. The Applicant subsequently made an unfair dismissal claim in the FWC, to which the employer argued that she had not been dismissed, stating that her employment continued notwithstanding the end to her assignment.

Was the worker dismissed?

In considering the claim, the FWC gave consideration to the worker’s employment contract, which expressly provided that the employer was under no obligation to provide the employee with work, nor was there any expectation of ongoing employment.

Notwithstanding this, the FWC referred to an earlier decision of a similar nature, emphasising that where a labour hire agency does not make efforts to find and offer an employee other work at the conclusion of a placement, then it may be found that there is a dismissal at the initiative of the employer.

Given that the employer had not communicated with the worker, nor identified a new placement, for two months after the assignment ended, the FWC found that her employment had been terminated by the employer at the time the assignment ended.

Was the dismissal unfair?

The FWC found that the employer had a valid reason to remove the worker from the assignment (ie that its client had requested her removal, and the employer had no contractual basis to refute the request). However, the FWC noted the employer had demonstrated a ‘remarkable’ lack of resistance to the client’s direction, and that it would have expected the employer to make some attempt to secure the worker’s ongoing employment.

The FWC ultimately found the dismissal to be unfair based on:

• the employer’s failure to consult with the worker before making the decision to terminate her employment and to explore alternatives to the dismissal; and
• the worker’s length of service, unblemished employment record, and her age.

Despite this finding, the FWC declined to order compensation for the worker, noting to do so would be “punitive rather than compensatory” as the worker had no basis to expect her employment would continue at the conclusion of her assignment with the client, and as such, she had no entitlement to continue to receive remuneration.

What do labour-hire employers need to be aware of?

This decision emphasises the complexities faced by labour hire employers in removing workers from assignments. The decisions also highlight the need for carefully worded employment contracts, assignment documentation as well as terms of business with agency clients. HR Legal can assist with drafting and reviewing contracts and terms of business – contact our team today.

HR Legal is also running a FREE webinar on ‘Navigating Recruitment and Staffing in a Changing Legal Landscape’ on 8 April 2025, which will discuss how recent legal development will impact the ways in which recruitment and staffing agencies engage with on-hire employees and clients. For more information and to register, please click here.

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This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.