Separation Certificate request ended employment: FWC

A labour hire employee has been denied opportunity to pursue an unfair dismissal claim, with the Fair Work Commission confirming his request that he be furnished with a Separation Certificate to enable him to claim unemployment benefits definitively concluded his employment, whilst at the same time lamenting the “invidious position” the out-of-work casual found himself in.

The machine operator had been successfully engaged on a South Australian quarry site for nearly two years, working full-time hours, when the opportunity arose in June 2024 to become directly employed on a permanent basis. The operator “eagerly accepted” the prospective job offer from the quarry, which was made subject to satisfactory completion of pre-employment screening and onboarding requirements. The offer of permanent employment was withdrawn when the operator failed the quarry’s pre-employment drug and alcohol testing, having tested positive to cannabis. The operator’s casual placement also concluded as a result of the failed drug test despite the employee insisting he was a cannabis user for “medicinal purposes”; information he had not previously disclosed to either his labour hire employer or the quarry owners.

In the days that followed the operator’s last shift at the quarry site on 13 June, the employee repeatedly sought to engage with the quarry directly and had a number of interactions with the labour hire company, hoping for a reversal of the decision to end his engagement at the site. The labour hire company was assured there were no prospects of the operator being returned to the quarry and undertook to explore opportunities for placements with other clients, with the employer assessing the operator “to be a good and reliable employee”.

The operator’s own inquiries established he was required to submit a Separation Certificate to qualify for unemployment benefits, and when no other opportunities for immediate placement eventuated from his labour hire employer, he requested the Separation Certificate by email on 18 June, so he could “finalise [his] centrelink (sic) payments”. His employer filed the Separation Certificate directly with Centrelink (Services Australia) around 25 June, citing the reason as “shortage of work” because, according to the employer’s Principal Consultant, she “did not want anything recorded that indicated that [the operator] had engaged in misconduct or was an unsatisfactory worker, because he wasn’t”. The operator made further attempts to engage with the quarry owners “begging” to be allowed back to work for fear he was about to lose his rental and be “homeless”, but his emails were ignored, and after not hearing again from the labour hire company after requesting the Separation Certificate, filed an unfair dismissal application alleging he was terminated on 14 June.

In upholding the labour hire company’s jurisdictional objection that the casual was not terminated at the initiative of the employer, Deputy President Anderson accepted the evidence of the employer’s Principal Consultant (who had ceased employment for unrelated reasons shortly after the operator worked his last shift) that she had explicitly informed the operator on 17 June – the day before his email request – that if he requested a Separation Certificate “it would mean that his employment would cease” and the company “would no longer be able to place him in alternate assignments as a continuing employee once they had declared to a government agency that his employment had ended”. The Deputy President concluded:

“The employment relationship ended when [the employer] issued the certificate on 25 June but that doing so was not at its initiative. The request for the certificate, when all circumstances are considered in context, was the principal contributing factor which brought the employment relationship to an end”.

Whilst Deputy President Anderson also rejected the operator’s claims that a perceived lack of communication from both the quarry and his employer contributed to his employment ending, the Deputy President observed, “I proffer no criticism of [the operator] in seeking the separation certificate for Centrelink and unemployment benefit purposes. He was placed in an invidious position”. Deputy President Anderson added, “seeking unemployment benefits was an entirely rational response” however, the operator “was left to choose between remaining on [the employer’s] books as an employee (but with no income unless and until he secured an alternate placement) or applying for unemployment benefits which would mean that he was no longer employed”.

In dismissing the operator’s application for unfair dismissal, Deputy President Anderson lamented the dilemma the casual faced, commenting:

“To the extent this raises questions about fairness of government agencies requiring, in order for a labour hire employee to be eligible for unemployment benefits, certificates verifying that employment has ceased (rather than, for example simply that paid work has ceased) is a matter for policy makers, not the Commission”.

Alexandrou v Randstad Pty Limited [2024] FWC 2502 (16 September 2024)