DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Troy Harris
v
Laing O’Rourke Australia Construction Pty Ltd
(U2016/11192)

Application for relief from unfair dismissal - jurisdictional objections – minimum employment period and extension of time – application dismissed.

[1] Is an employee who ceases employment with their employer and is then re-employed by the same employer within three months entitled to include the earlier period of service as part of their continuous service for the purpose of satisfying the minimum employment period in s.384 of the Fair Work Act 2009 (the Act)? That is the principal issue I need to decide in this case.

[2] Mr Troy Harris was dismissed from his employment with Laing O’Rourke Australia Construction Pty Ltd (LORAC) on 17 August 2016. He lodged an unfair dismissal application in the Fair Work Commission (the Commission) on 8 September 2016 (the Application). LORAC objects to the Application on two jurisdictional grounds: first, the Application is one day late; and secondly, Mr Harris was not employed for at least the minimum employment period (6 months) at the time of his dismissal.

[3] I conducted a hearing in relation to these two jurisdictional objections on 1 March 2017. Mr Harris gave evidence in support of his case, as did Mr Matthew Peterson, solicitor, and Mr Matthew Kamupala. LORAC adduced evidence from Mr Michael Stevens, Project Employee & Industrial Relations Manager.

Minimum employment period

Legislative regime

[4] Section 382 of the Act provides:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period....”

[5] Section 383 of the Act provides:

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[6] Section 384 of the Act defines “period of employment” as follows:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[7] “Service” is defined by s.22 of the Act as follows:

“22 Meanings of service and continuous service

General meaning

(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

...

(2) An excluded period does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service.

(3A) Regulations made for the purposes of paragraph (2)(c) may prescribe different kinds of periods for the purposes of different provisions of this Act (other than provisions to which subsection (4) applies). If they do so, subsection (3) applies accordingly.

Meaning for Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2

(4) For the purposes of Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2:

(a) a period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include:

(i) any period of unauthorised absence; or

(ii) any other period of a kind prescribed by the regulations; and

(b) a period referred to in subparagraph (a)(i) or (ii) does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service; and

(c) subsections (1), (2) and (3) do not apply.

...

(4A) Regulations made for the purposes of subparagraph (4)(a)(ii) may prescribe different kinds of periods for the purposes of different provisions to which subsection (4) applies. If they do so, paragraph (4)(b) applies accordingly.

When service with one employer counts as service with another employer

(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:

(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and

(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.

...

Meaning of transfer of employment etc.

(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:

(a) the following conditions are satisfied:

(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;

(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or

(b) the following conditions are satisfied:

(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;

(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.

Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.

(8) A transfer of employment:

(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and

(b) is a transfer of employment between non-associated entities if paragraph (7)(b) applies.”

[8] The relevant statutory regime may be summarised in the following way:

(a) An employee must have completed at least the minimum employment period to be eligible to bring an unfair dismissal claim against their employer (ss.382, 390 & 396 of the Act);

(b) For a person employed by a non-small business employer, the minimum employment period is six months (s.383 of the Act);

(c) An employee’s period of employment with an employer is the period of continuous service the employee has completed with their employer (s.384(1) of the Act);

(d) A period of “service” by an employee with their employer is a period during which the employee is employed by the employer, but does not include certain “excluded periods” (ss.12 & 22 of the Act);

(e) The expression “continuous service” is not defined in the Act. The ordinary meaning of “continuous service” is the period of unbroken service by an employee with an employer. 1 However, the ordinary meaning of “continuous service” is affected by s.22 (s.12 of the Act);

(f) An “excluded period” does not break an employee’s “continuous service” with their employer, but does not count towards the length of the employee’s “continuous service” (s.22(3) of the Act). “Excluded periods” include a period of unauthorised absence and a period of unpaid leave or unpaid authorised absence, subject to certain exceptions (s.22(2) of the Act);

(g) Subsections 22(5) and (7) of the Act alter the ordinary meaning of “continuous service”. In effect, they deem 2 service by an employee with one employer to be service with another employer if there is a transfer of employment within the meaning of s.22(7) of the Act.3 In addition, those provisions stipulate that, in the event of such a transfer of employment, the period between the termination of employment with the first employer and the commencement of employment with the second employer does not break the employee’s “continuous service” with the second employer, but the “gap” does not count towards the length of the employee’s “continuous service” with the second employer (s.22(5)(b) of the Act); and

(h) In order for an employee’s service with a previous employer to be deemed to be part of their “continuous service” with a subsequent employer as a result of a “transfer of employment”, one of the following sets of conditions must be satisfied (s.22(7) of the Act):

● First, the first and second employers must be “associated entities” and the “gap” in employment must not be more than three months; or

● Secondly, the first and second employers are not “associated entities” and the employee is a “transferring employee” in relation to a “transfer of business” within the meaning of s.311 of the Act.

[9] It is plain from the references to a transfer of employment from the “first employer” to the “second employer” in s.22(5) and (7) of the Act that the deeming provisions in those sections do not apply unless the employee is employed by two different employers at two different points in time. The Act does not deem or otherwise permit an employee whose employment relationship with an employer comes to an end and is later re-employed by the same employer to have their earlier period of service with the employer combined with their later period of service as part of their “continuous service” with the same employer. Put another way, a “gap” between periods of employment with the same employer would not satisfy the ordinary meaning of “continuous service” because the service is broken and there is nothing in s.22 or elsewhere in the Act to alter this outcome. For those reasons, I agree with the conclusion reached in relation to this issue by Commissioner Spencer in Voican v Monadelphous Engineering Pty Ltd 4 at [64]-[69] and Commissioner Roe in Tebble v Rizmas Pty Ltd5 at [6], but respectfully disagree with the obiter remarks by Commissioner Cambridge in Kefer v Tattersall’s Holdings Pty Ltd6 at [41]-[44].

Relevant facts

[10] Mr Harris is a carpenter. He commenced full-time employment with LORAC to work on the Wheatstone Project in Western Australia on 25 February 2014. The Laing O’Rourke Australia Construction Pty Ltd Wheatstone Project Agreement 2013 (Wheatstone EA) applied to Mr Harris during his employment on the Wheatstone Project.

[11] By letter dated 16 April 2016, Mr Harris was provided with notice of the termination of his employment with LORAC on the grounds of redundancy. The letter stated that Mr Harris would be required to work during his two week notice period, which he did, and his last day of employment would be 30 April 2016.

[12] On or about 30 April 2016, Mr Harris received the following gross payments from LORAC:

(a) $7,094.61 in respect of accrued but untaken sick leave;

(b) $1,003.89 in respect of accumulated but untaken rostered days off;

(c) $36,866.92 in respect of accrued but untaken annual leave; and

(d) $11,686.46.

[13] There is a dispute as to the correct characterisation of the payment of $11,686.46 to Mr Harris. It is recorded in the employment separation certificate provided to Mr Harris as an “other” payment, rather than “redundancy” or some different classification. Mr Harris gave evidence that he believed the payment was a productivity incentive payment, although he did not explain the basis of his belief in that regard. Mr Stevens gave evidence that the payment was a severance payment. His basis for giving that evidence was the fact that Mr Stevens was told by a LORAC employee based in Perth that the payment of $11,686.46 was in respect of severance pay. Mr Stevens does not know why the payment was described as “other”, rather than “redundancy”, in the employment separation certificate. He believes that may be just a mistake.

[14] Clause 35(1) of the Wheatstone EA provides as follows:

“An Employee who ceases employment on the Project for any reason other than termination due to misconduct shall be paid a severance payment calculated at the rate of two (2) times their Ordinary Hourly Rate for each Completed Week of Service under this Agreement.”

[15] No evidence was adduced as to Mr Harris’ “Ordinary Hourly Rate” as at 30 April 2016. However, his separation certificate recorded that he was paid $7,094.61 in respect of 19 days’ sick leave. That equates to $373.40 per day or $1,867 per week. Assuming a 36 hour week pursuant to the Wheatstone EA, that equates to $51.86 per hour. Given that Mr Harris was employed for about 113 weeks from 25 February 2014 to 30 April 2016, the severance formula in clause 35(1) of the Wheatstone EA would be: $51.86 x 2 x 113 = $11,720.36. That is very close to the gross figure paid ($11,686.46). That analysis lends weight to the view that the payment of $11,686.46 was in respect of severance pay.

[16] In light of the analysis referred to in the previous paragraph and the fact that the termination of Mr Harris’ employment is described in the letter of termination dated 16 April 2016 as being on the grounds of redundancy, I am satisfied, on the balance of probabilities, that the gross payment of $11,686.46 was in respect of severance pay under the Wheatstone EA.

[17] There is no dispute that Mr Harris did not undertake any work for LORAC in the period from 1 to 26 May 2016, nor was he on any form of leave or authorised or unauthorised absence from work during any part of that period. For much of that period of time, Mr Harris was out of Australia.

[18] From as early as February 2016, LORAC had called for expressions of interest from its employees, including Mr Harris, for future employment on the Ichthys Project in Darwin. Mr Harris registered his interest in such future employment in February 2016. However, Mr Harris was not offered employment by LORAC to work on the Ichthys Project until May 2016. Mr Harris was in email communication with employees of LORAC in May 2016 for the purpose of pursuing his interest in employment on the Ichthys Project. In May 2016, he was provided with a written letter of offer dated 23 May 2016 for employment on a full-time basis, commencing on 27 May 2016, on the Ichthys Project.

[19] Mr Harris commenced work on the Ichthys Project on 27 May 2016. The Ichthys Onshore Construction Project Greenfields Agreement 2012 applied to Mr Harris in respect of his work on that project.

[20] On 17 August 2016, Mr Harris was provided with written notice of the termination of his employment with LORAC. Accordingly, Mr Harris was employed by LORAC to work on the Ichthys Project for just less than three months (27 May to 17 August 2016).

Consideration

[21] It was accepted, correctly in my view, by Mr Cardillo, solicitor for Mr Harris, in final submissions that Mr Harris’ employment with LORAC came to an end on 30 April 2016 and he was re-employed by LORAC on 27 May 2016. The evidence summarised in paragraphs [10] to [19] above supports a finding that the employment relationship between Mr Harris and LORAC came to an end on 30 April 2016 and he was re-employed by LORAC on 27 May 2016.

[22] Mr Harris’ period of “continuous service” with LORAC from 27 May 2016 until his dismissal on 17 August 2016 was less than three months. Further, because Mr Harris was re-employed by LORAC, rather than by one of its “associated entities”, on 27 May 2016, Mr Harris is not entitled to include his earlier service with LORAC from 25 February 2014 to 30 April 2016 to bring his total period of “continuous service” to at least the minimum employment period prescribed by s.383 of the Act.

[23] In my view, it is irrelevant whether Mr Harris had (a) a reasonable expectation of re-employment (as contended in the submissions filed on his behalf on 23 November 2016) or (b) a reasonable belief that he had continuing employment with LORAC (as contended in his witness statement). Mr Harris’ subjective understanding or expectation does not assist in determining whether his employment relationship with LORAC came to an end on 30 April 2016 or whether his earlier service with LORAC (prior to 30 April 2016) could form part of his “continuous service” with LORAC. The test in relation to those questions is objective, and the objective evidence to which I have referred overwhelmingly points to the conclusion that Mr Harris’ employment relationship with LORAC ceased on 30 April 2016 and a new employment relationship between the same parties commenced on 27 May 2016. In any event, I do not accept that Mr Harris had a belief that he had continuing employment with LORAC in the period from 1 to 26 May 2016, in light of the facts summarised in paragraphs [11] to [19] above.

[24] I also reject the suggestion that paragraph 384(2)(a) of the Act, or the concepts with which it deals such as whether the employee had a reasonable expectation of continuing employment, is relevant to the determination of a full-time employee’s period of employment. Paragraph 384(2)(a) of the Act sets out the circumstances in which a period of service as a casual employee will count towards the employee’s period of employment; it has no relevance or application to a full-time employee, such as Mr Harris.

Extension of time

[25] In light of my conclusion that Mr Harris was not employed by LORAC for at least the minimum employment period, I do not need to decide whether to exercise my discretion to extend the time for Mr Harris’ Application to be made. Had I been required to determine that issue, I would have extended the time, primarily on the basis that the one day delay was solely caused by a representative error on the part of Mr Harris’ solicitor.

Conclusion

[26] For the reasons set out above, I am satisfied that Mr Harris was not employed by LORAC for at least the minimum employment period at the time of his dismissal on 17 August 2016. It follows that he is not a person who was protected from unfair dismissal at the time of his dismissal. The Application is therefore dismissed.

COMMISSIONER

Appearances:

Mr T Cardillo, solicitor, appeared for the Applicant

Mr P Ludeke, solicitor, appeared for the Respondent

Hearing details:

2017

Newcastle

1 March

 1   Holland v UGL Resources Pty Ltd [2012] FWA 3453 at [20]; Butterworths Australian Legal Dictionary, 1997, 263.

 2   “Deem” in the sense of being used as a device “for the purpose of extending the meaning of some term to a subject matter which it does not properly designate.” (Muller v Dalgety & Co Ltd (1909) 9 CLR 693 at 696)

 3   Subject to the exception in s.384(2)(b) of the Act (transfer of business between non-associated entities where the new employer notifies the employee in writing that a period of service with the old employer would not be recognised), which is not relevant to the present case.

 4   [2013] FWC 9329

 5   [2011] FWA 6853

 6   [2012] FWA 2375

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