Fair Work Act 2009
s.394—Unfair dismissal

Shwan Ismail
v
Safico Pty Ltd T/A Smokemart
(U2022/4188)

Application for an unfair dismissal remedy – jurisdiction – whether employer complied with Small Business Fair Dismissal Code – whether small business and whether associated entities involved and to be considered – found to be small business employer – whether the employer held a belief on reasonable grounds that applicant’s conduct was sufficiently serious to justify immediate dismissal – compliance with Code found – application dismissed.

1. What this decision is about

[1] Mr Shwan Ismail has made an application seeking a remedy for an alleged unfair dismissal under s.394 of the Fair Work Act 2009 (the FW Act). The respondent in this matter is his former employer, Safico Pty Ltd T/A Smokemart (Safico or the Respondent).

[2] I note that the Respondent has requested that its name be amended to “Safico Pty Ltd as trustee for the Safieddin Family Trust T/A Smokemart Avenues”. This is disputed and goes, in part, to the substance of the present matter before the Commission. Ultimately, the evidence before the Commission supports the notion that this request reflects the legal reality, albeit that the Respondent trades as 3 different Smokemart stores. Given the ultimate outcome of this matter, it has not been necessary to formally deal with this aspect.

[3] The directors of the Respondent are Mohsen and Rosa Safieddin. The Respondent conducts three retail stores in South Australia; being Smokemart Parabanks, Smokemart Welland, and Smokemart Avenues respectively. These stores sell, amongst other items, cigarettes and tobacco products.

[4] At the time of his dismissal on 28 March 2022, Mr Ismail was employed, substantially at Smokemart Avenues, as a “Casual” employee in the Respondent’s retail business. The precise nature and basis of this employment is in dispute, and I will return to this aspect to the extent necessary for me to determine the present matter. Mr Ismail was dismissed based on alleged serious misconduct involving an exchange between himself and Mr Safieddin.

[5] Section 385 of the FW Act provides as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[6] The Respondent has raised a jurisdictional objection and contends that it is a small business employer and that Mr Ismail’s dismissal was consistent with the Small Business Fair Dismissal Code. Both elements of that contention are in dispute. Section 396 of the FW Act provides that certain matters must be decided before considering the merits of an application and the issue of whether the dismissal complied with the Small Business Fair Dismissal Code is one such case. 1 This is the focus of this Decision.

[7] In essence, the dispute about whether the Respondent is a small business arises from the proposition, advanced on behalf of Mr Ismail, that there are associated entities (businesses) that must be included for the purposes of assessing the number of employees for that purpose. In broad terms, this involves a consideration of the nature of the relationships and the extent of control (if any) between the Respondent, SEPL Pty Ltd, 2 which trades under the broad umbrella of the Peregrine Corporation (SEPL or Peregrine), and potentially some other entities. SEPL owns the brands, names and logos associated with the Smokemart stores and has licenced the Respondent to use the Smokemart brand and operate the 3 Smokemart stores concerned. Peregrine is a major private company owned by the Shahin family. Mr Safieddin is related to the Shahin family. There are also other personal (family) connections between some of the Directors of the various businesses associated with the “Smokemart” brand.

[8] Also in broad terms, the second element of the Respondent’s jurisdictional objection involves an assessment as to whether the Respondent believed on reasonable grounds that Mr Ismail’s conduct was sufficiently serious to justify immediate dismissal. The context and substance of the exchange between Mr Ismail and Mr Safieddin relied upon by the Respondent in this respect are strongly disputed.

[9] The Respondent has the onus to demonstrate both elements of the jurisdictional objection.

[10] I have conducted a hearing of the matter. Mr Ismail was represented by Mr Tim Hardie, and the Respondent was represented by Ms Kirsty Stewart of counsel. Both parties sought and were granted permission for representation. 3

[11] For reasons that follow, I have found that the Respondent was a small business employer within the meaning of the FW Act at the time of Mr Ismail’s dismissal – being the relevant time. Further, I have found that the Respondent complied with the Small Business Fair Dismissal Code in dismissing Mr Ismail. The consequences of that finding are also dealt with at the conclusion of this Decision.

2. Observations on the evidence

[12] The Respondent provided witness statements and led evidence from the following:

•  Mr Mohsen Safieddin, Director and Shareholder of Safico Pty Ltd as trustee for the Safieddin Family Trust. 4

•  Mr Tony Kuhlmann, General Counsel for SEPL Pty Ltd. 5

•  Ms Elisabetta Canale, Director and Shareholder of Moore Australia Pty Ltd – a provider of professional services to the Respondent. 6

[13] Mr Ismail gave sworn evidence and relied upon a series of witness statements. 7

[14] The evidence of Mr Kuhlmann and Ms Canale went to the extent and nature of the business relationships between SEPL and the Respondent. That evidence was objective, and I accept it. To the extent that Mr Kuhlmann did not know the detail of the contractual relationships between SEPL and the manufacturers/suppliers of tobacco products, this was understandable given the nature of his role. In any event, Mr Safieddin was able to give direct evidence about the contractual and practical relationships between the Respondent, SEPL and the tobacco companies, to the extent that it was relevant to the present matter.

[15] I found the evidence of Mr Safieddin to have been given openly and honestly. I did however gain the impression that he was minimizing the role previously played by Mr Ismail in the Respondent’s business and was influenced in so doing by the breakdown in what had previously been a close and personal relationship, as well as that of employer and employee. This does not lead me to discount his evidence more generally and his testimony about the nature of the business arrangements and the events leading to the dismissal was convincing.

[16] Mr Ismail indicated that because of a poor education and undiagnosed learning difficulties, he is unable to read or write. He is profoundly illiterate and unable to apply written numbers. His witness statements were produced by explaining his evidence to others who then wrote the statements, read them to him and orally confirming the contents. This is an entirely proper process in Mr Ismail’s circumstances. It is however evident to me that those statements have involved those undertaking their production using some of their own words and interpreting the events, and certain mistakes were not picked up. This is also understandable and not a basis to conclude that Mr Ismail’s evidence was intentionally false. It does however lead me to the treat the written statements with a degree of caution.

[17] As to Mr Ismail’s oral evidence, I gained the impression that he was overstating his role in the Respondent’s business to some degree and sought to minimise the degree of emotion he felt during the exchanges that ultimately led to his dismissal. However, I do not discount his evidence entirely and I have made appropriate allowances for the circumstances in which he provided his evidence.

[18] In terms of the factual disputes about the business operations, I have resolved these having regard to the objective evidence, the degree to which the various witnesses had direct knowledge of the matters involved and my overall view about the creditability of the evidence. In that regard, I have found that Mr Ismail had a partial understanding of the business arrangements and relationships between the Respondent, the tobacco companies and SEPL, but made assumptions about these matters based upon that limited understanding.

[19] In terms of the direct and fundamental dispute about the exchanges that led to the dismissal, I have resolved this having regard to my overall view about the creditability of the evidence and the probability of the competing versions in the overall context of the events.

[20] Some of the context for the dismissal occurred in relation to a relatively new employee to the business, “F”. Indeed, it is the differential treatment of F and Mr Ismail concerning leave by the Respondent that sets some of the context for the exchanges that occurred between Mr Ismail and Mr Safieddin. F was not called to give evidence. In some circumstances, I may have drawn an inference from the failure to call that evidence. However, the focus of the Small Business Fair Dismissal Code is the reasonable belief of the Respondent about the alleged grounds for the dismissal. In that light, although the evidence might have assisted findings about the context, that element of the context is not central or decisive. In that light, I have not drawn a negative inference, but I have determined the issues based only upon evidence that is properly before the Commission.

[21] In the lead up to the hearing, Mr Ismail sought that certain production orders be issued against the Respondent concerning, in general terms, documents revealing the details of contracts between it and Peregrine. In the context of a denial by the Respondent that any such documents existed, beyond the licence agreement already provided, and no clear basis to contend otherwise at that time, I declined the order. I did however grant liberty to apply including as a result of subsequent evidence provided during the hearing. The evidence before the Commission from each of the Respondent’s witnesses confirms that no such contractual documentation exists, beyond the licence agreement. Some business records relevant to the pricing arrangements of tobacco products operating in the business of the Respondent, which were beyond the scope of the production orders sought, were also provided during the hearing and ultimately tendered.

[22] The production orders sought ahead of the hearing were not expressly directed to the Peregrine Corporation and its relationship with the tobacco companies.

3. What is a small business and what is the relevance of the Small Business Fair Dismissal Code under the FW Act?

[23] The Small Business Fair Dismissal Code is established by s.388 of the FW Act in the following terms:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”

[24] Accordingly, for the Small Business Fair Dismissal Code to be applicable to the Respondent, it must be a ‘small business employer’.

[25] ‘Small business employer’ is defined in s.23 of the FW Act in the following terms:

“23 Meaning of small business employer

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and

(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.”

[26] The relevant time for this assessment in this matter is the time of the dismissal.

[27] Section 12 of the FW Act states that an “associated entity” has the meaning given by section 50AAA of the Corporations Act 2001 (the Corporations Act).

[28] Section 50AAA of the Corporations Act defines an associated entity in the following terms:

“50AAA Associated entities

(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

(2) This subsection is satisfied if the associate and the principal are related bodies corporate.

(3) This subsection is satisfied if the principal controls the associate.

(4) This subsection is satisfied if:

(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

(5) This subsection is satisfied if:

(a) the associate has a qualifying investment (see subsection (8)) in the principal; and

(b) the associate has significant influence over the principal; and

(c) the interest is material to the associate.

(6) This subsection is satisfied if:

(a) the principal has a qualifying investment (see subsection (8)) in the associate; and

(b) the principal has significant influence over the associate; and

(c) the interest is material to the principal.

(7) This subsection is satisfied if:

(a) an entity (the third entity) controls both the principal and the associate; and

(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.

(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

(a) has an asset that is an investment in the second entity; or

(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.”

[29] Mr Ismail contends that subsection 50AAA (3) is relevant in this case. Namely, that the principal (SEPL) controls the associate (the Respondent). 8

[30] For the purposes of the Corporations Act, an entity is defined in s.9 in the following terms:

“entity: for the purposes of Chapter 2E an entity is any of the following:

(a) a body corporate;

(b) a partnership;

(c) an unincorporated body;

(d) an individual;

(e) for a trust that has only 1 trustee—the trustee;

(f) for a trust that has more than 1 trustee—the trustees together.

Otherwise, entity has the meaning given by section 64A.”

[31] Section 64A of the Corporations Act states:

“64A Entities

Except in Chapter 2E, a reference to an entity:

(a) is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and

(b) includes, in the case of a trust, a reference to the trustee of the trust.”

[32] Both SEPL and the Respondent are entities.

[33] The concept of “related bodies corporate” referred to in s.50AAA(2) is ultimately defined by s.50 of the Corporations Act as follows:

“50 Related bodies corporate

Where a body corporate is:

(a) a holding company of another body corporate; or

(b) a subsidiary of another body corporate; or

(c) a subsidiary of a holding company of another body corporate;

the first mentioned body and the other body are related to each other.”

[34] It is not contended by Mr Ismail that the Respondent is a related body corporate in connection with any of the relevant entities. The evidence also demonstrates that that it is not a related body corporate with any relevant entity within the meaning of s.50 of the Corporations Act.

[35] Control is defined in s.50AA of the Corporations Act as follows:

“50AA Control

(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(4) If the first entity:

(a) has the capacity to influence decisions about the second entity’s financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members; the first entity is taken not to control the second entity.”

[36] The application of s.50AA of the Corporations Act is the focus of the first element of the jurisdictional objection.

4. Was Smokemart a small business at the time of the dismissal?

[37] The Respondent submits that as it had less than 15 employees at the relevant time, it is a small business consistent with s.23 of the FW Act. It is not in dispute that the Respondent employed less than 15 employees at the relevant time, and this is confirmed by the evidence 9 before the Commission. Further, whilst the Respondent conceded that it does have associated entities which it controls, the evidence10 confirms that these do not employ anyone. However, it is contended by Mr Ismail that there are (other) associated entities that must be included and that the total employment numbers involved would then readily exceed the defined limit. In particular, it is contended that SEPL Pty Ltd (the Peregrine Corporation) is an associated entity on the basis that they control, or exercise significant influence over, the Respondent. I observe that, given the earlier (undisputed) evidence, if that other entity is considered, many more than 15 employees would be included for present purposes and the Respondent would not be a small business. Conversely, unless there are other employing associated entities included and, in effect, treated as the same entity as Safico for the present purpose of assessing employment numbers, the Respondent will qualify as a small business employer under the FW Act.

[38] The Respondent contends that it is solely responsible for the operation of Safico, the Safieddin Trust, and the three stores. Further, it asserts that “the Peregrine Corporation is not involved with the day-to-day running of the business, nor do they have any interest, control, or financial interest in Safico, the Safieddin Trust, or vice versa”. The profits generated by Safico are stated to be distributed between 4 directly related members of the Safieddin family, all named beneficiaries under the Safieddin Trust. The Respondent states that “there is no relationship between Safico, the Safieddin Trust and SEPL or the Peregrine Corporation other than a commercial agreement for the use of the “Smokemart” trademark”.

[39] The Respondent also submits that Peregrine Corporation, including SEPL Pty Ltd, has no control or influence over Safico or any qualifying interest in the three stores of the Safieddin Trust. Further, it contends that Safico is run solely by Mohsen and Rosa Safieddin, and no control is exercised by any other entity in the running of the retail stores. As such, the Respondent contends that there are no relevant associated entities within the meaning of s.50AAA of the Corporations Act.

[40] The Applicant contends that Safico is an “associated entity” of SEPL consistent with s.50AAA(3) of the Corporations Act, as Peregrine exercises “significant influence” over its operations. He submits that Peregrine has “direct contractual control” over purchases of cigarettes, prices to be paid and charged, and rebate entitlements. Further, he contends that Peregrine directs Safico how to promote, display, and position promotions for tobacco companies in its stores.

[41] Mr Ismail’s witness statement in reply 11 also stated that:

“the five independent Smokemarts are all owned by Charlie Shahin’s (the boss of Peregrine)’s relatives and all linked to Peregrine’s Smokemart. Peregrine Smokemart does the contracts with the cigarette companies for the pricing of all cigarettes supplied to both Peregrine’s Smokemart and the “independent” Smokemarts (including Mohsen’s business) including quantity sales rebates paid back to both Peregrine and the “Independents”. They also contract special promotions etc. on behalf of the whole group. Peregrines arranges for promotion meetings for all staff in the group, all of whom are expected to attend without pay after hours every three months”.

[42] The evidence before the Commission reveals the arrangements set out below.

[43] The Respondent is the trustee of the Safieddin Family Trust and the directors are Mohsen and Rose Safieddin.

[44] The Respondent is licensed by SEPL through a formal licence agreement to operate three retail stores as follows:

•  Smokemart Parabanks

•  Smokemart Welland

•  Smokemart Avenues

[45] The “Peregrine Corporation” is a group of companies owned by the Shahin Family, being founded by Mr Safieddin’s late uncle, Fred Shahin in 1984. SEPL Pty Ltd, which is part of the Peregrine Corporation, owns the registered trademark ‘Smokemart’.

[46] There is no common ownership or board directorships between the Respondent and SEPL. There are no investments in the Respondent made by SEPL (or any part of the Peregrine Corporation).

[47] In late 1999, Fred Shahin made a verbal agreement with Mr Safieddin to license the use of the trademark “Smokemart” to the Safieddin Family Trust. In October 1999, Mr Safieddin opened up the Avenues store. In March 2017, a formal licence agreement was made between SEPL and the Respondent to confirm the arrangements in the following terms:

“1. (No Franchise) The Business is independently owned and carried on by the Business Owner and is not a franchise granted by SEPL. The Business Owner does not carry on its Business under a system or marketing plan substantially determined, controlled, or suggested by SEPL (or any associated entity of SEPL). The Business Owner is not required to pay to SEPL any franchise fee or other amount in order to carry on its Business.

2. (Purchasing) SEPL and the Business Owner will continue to purchase tobacco stock from suppliers on materially the same basis as they presently do.

3. (Share discounts, rebates etc) SEPL and the Business Owner will continue to seek discounts, rebates, and other incentives from suppliers, and will share the benefit of those discounts, rebates, and incentives between themselves on materially the same basis as they presently do.

4. (Brands) SEPL is the owner of the Brands. The Business Owner may continue to use the Brands in its Business under license from SEPL for so long as the Business Owner owns and carries on the Business at the Business Address. No licence fee or loyalty is payable to SEPL.

5. (Term of Agreement) This agreement expires on the first to occur of the following events.

5.1. 90 days after the Business Owner gives written notice of termination of this Agreement without cause

5.2. The day on which the Business Owner ceases to own and carry on the Business at the Business Address.

5.3. The date on which SEPL gives written notice of termination because of an Event of Default of the Business Owner under clause 6.

6. An Event of Default of the Business Owner occurs if:

6.1. The Business Owner becomes non-compliant with any of the trading terms, display and pricing agreements in place currently, or in the future, and such non-compliance is not remedied within 7 days after written notice by SEPL requiring that the non-compliance be remedied; or

6.2. The Business Owner uses or allows the Brands to be used otherwise than at the Business Address in the course of carrying out the Business; or

6.3. The Business Owner commits any illegal trading activity in the Australian tobacco industry, or becomes insolvent or is placed into liquidation, receivership, bankruptcy, or administration in insolvency.

7. (Effect of Termination) All obligations and rights of the parties cease or termination of this agreement.

8. (Other Obligations) The parties agree to the other obligations (if any) set out in Item 5 of the Schedule.

9. (Give effect to this document) Each party must use best efforts to give effect to this document (including giving any consent and signing any document or form)”. 12

[48] There are no other written agreements operating between SEPL and the Respondent and there are no other obligations stated in schedule 5 of the licence agreement. No fee is payable, or paid, by the Respondent to SEPL in connection with the licence agreement or otherwise.

[49] The Respondent holds tobacco and e-cigarette merchant licences for Smokemart Avenues, Parabanks, and Welland. It does not operate under the merchant licences of any other business.

[50] The Respondent has contracts with tobacco manufacturers/suppliers in its own name and receives the products and invoices directly from those companies and makes direct payments. The tobacco companies supply the Respondent with a (wholesale) price list.

[51] SEPL has licence agreements with other entities that operate as Smokemart, and these are conducted by other relatives of the Shahin family. I will refer to these arrangements as the “independent stores”, without making any findings about their relationship to SEPL. I observe that there is no suggestion that these independent stores are associated companies to the Respondent. SEPL operates a large number of Smokemart stores (also badged as ‘Giftbox’) in its own right.

[52] The Respondent has certain obligations that arise under the regulatory regime applicable to the supply of tobacco, including those set by the Australian Taxation Office. That regime includes providing data to monitor the sale of cigarettes (to assist to detect the sale of illicit tobacco) and incorporates being accountable for all the sales made, which must be reported back to the tobacco companies for audit. Further, certain commercial arrangements are made between the tobacco companies and the retailers, including for the payment of rebates on sales, which require that the pricing of the products be within a certain range, or at least not more than a ceiling price or outside of certain price margin parameters that are also set by tobacco companies.

[53] During the hearing, the Respondent tendered a copy of the national price list of a major Tobacco company 13, and the 2022 Promotional Plan, for Smokemart.14 Mr Safieddin explained that these contained the maximum selling price of cigarettes to qualify for the relevant rebates, and he also confirmed the sales data that would be sent to British American Tobacco (and other tobacco suppliers) via Peregrine at the end of the month. The Respondent’s evidence, which I accept, is that similar arrangements also exist with other tobacco companies with which it does business.

[54] SEPL, the independent Smokemart stores and the Respondent, have encouraged the tobacco companies to consider them as a group for buying purposes. This has led to tobacco companies making rebate offers to the independents, including the Respondent, as a group. It is not clear whether SEPL negotiates those arrangements, but it has significant buying power in its own right and this “group” negotiation role for the Smokemart independents is certainly feasible, if not probable, and I have determined this matter on that basis.

[55] However, there are no contractual arrangements between SEPL and the Respondent regarding how to promote and price cigarettes. There are also no such arrangements in which SEPL and the Respondent have jointly entered into contractual terms with any of the tobacco companies.

[56] The Respondent is not bound to offer the same product range as the Smokemart independents (or SEPL) and is subject to its own contractual arrangements with the tobacco companies, subject to the constraints applied by those companies and discussed above. The Respondent makes its own pricing decisions and approaches the tobacco companies for variations to the “Smokemart” rebate offers and has been successful in gaining concessions from time to time.

[57] The Respondent does not have the technology to directly report the detailed product sales to the tobacco companies in the format required for regulatory purposes. It reports the product sales for the combined 3 stores to SEPL which provides a consolidated report to the tobacco companies, keeping the Respondent’s figures separated. The reports that are provided via SEPL do not disclose the price, only the sales volume (packets) for each product for regulatory audit purposes. The tobacco companies subsequently send a reconciliation document for the sales directly to the Respondent, which confirms/approves the information as part of the process for rebates to be paid, again directly, to the Respondent.

[58] The tobacco companies audit the Respondent, and other retailers from time to time, to ensure that their products are not being sold above the prices set out in the (Smokemart independents) rebate offers or outside of the margin parameters set by the tobacco companies. This is necessary for the Respondent to retain the recognition as a tobacconist by the tobacco companies.

[59] There are no store fit out conditions applied to the stores under the Licence Agreement and the Respondent determines that fit out and any changes at its stores from time to time without reference to SEPL. The Respondent has determined that the Smokemart logo and signage are however to be kept consistent for marketing purposes.

[60] The Respondent conducts the stores with the understanding that it is operating them without payment of a licence fee or any other payments to SEPL, in effect, because of the family connections. Mr Safieddin additionally outlined that no contractual arrangement existed between the Respondent and the other independent Smokemart stores; noting these were conducted by individuals that were “cousins, uncles, and brothers” of his.

[61] The profits generated by Safico are earned for the sole benefit of the beneficiaries under the Safieddin Trust. There is no contractual relationship between Safico, the Safieddin Trust and SEPL or the Peregrine Corporation other than a commercial licence agreement for the use of the “Smokemart” trademark.

[62] The licencing agreement would not represent a qualifying investment for the purposes of s.50AAA of the Corporations Act.

[63] The Respondent employed a total of 11 Full-time, Part-time, and Casual Team Members at the relevant time.

[64] The question then becomes whether SEPL, as the principal, controls the associate, the Respondent. 15 This, in turn requires the Commission to consider whether SEPL has the capacity to determine the outcomes of decisions about the Respondent’s financial and operating policies.16 This assessment is to be made having considered those matters provided in s.50AA(2) to (4) of the Corporations Act including the practical influence that can be exerted and the practice or pattern of behaviour affecting the Respondent’s financial or operating polices. The full terms of this provision have been set out earlier in this Decision.

[65] In submissions, the Respondent referred to several decisions of the Commission in which factors such as shared directorships and governance arrangements 17 and funding agreements18 were important factors. I accept that these are amongst the relevant considerations and that none of these factors apply in this case to support the notion of control. However, it is the terms of the Corporations Act that must be applied to the given circumstances of the case at hand.

[66] Accordingly, I need to consider whether SEPL has the practical capacity to influence the Respondent’s financial and operating policies. There are no written contractual arrangements that provide this influence. The licence agreement and associated arrangements do not in my view provide that capacity. However, when assessing the practical influence, the constraints of contractual terms do not apply. That is, the consideration includes looking beyond the enforceable rights 19 and a pattern of behaviour may be taken into account even if this involves a breach of an agreement.20

[67] Given all the findings above, which generally do not support the notion of control within the meaning of s.50AA of the Corporations Act, there are 2 aspects that come closest to potentially demonstrating the required influence. Firstly, whether the joint tobacco products buying power and associated arrangements and/or secondly, the family connections between the ownership of the entities, lead to the practical capacity to influence the Respondent’s financial and operating policies.

[68] Mr Safieddin gave the following evidence in response to questions from the Commission about an element 21 of the licence agreement:

“THE COMMISSIONER: Perhaps you might provide the context for that. What did that mean, at least at the time that the licence agreement was entered into?

MR SAFIEDDIN It's like a buying power. We share. When they look at us – for example, British American Tobacco wants to promote in Smokemart, give us a discount. Instead of looking at us having that number of stores, they look at us when they give us the rebate, like as we share our buying power.

So you act collectively? When I say 'you', I mean your business, SEPL and the independents? --- No, we get looked at as – but we don't compete against each other. Okay, we do in the market a little bit, but not as – we get looked at as collectively, big volume for purchasing power.

So it's mutually helpful at least for the tobacco companies to see you as a group? ---Exactly, more organised for them as well and easier to deal with.

What understanding, if any, do you have between your company and SEPL about that? Nothing. You need to understand the arrangement between me and SEPL is a little bit odd and weird at the same time in Adelaide. It is a family arrangement. I bought – for example, I bought my first shop, it was called Avenues Tobacconist. Because maybe at that time I wasn't a good boy, I wasn't given permission to use the word Smokemart for another five/six years. I needed to prove myself first and then my uncle let me use the word Smokemart. You know what I mean? Like it benefits me. When I put the word Smokemart at my other shop in Salisbury, it was without Smokemart for three or four years, and then he allowed me to put the word Smokemart. The moment I put the word Smokemart, sales went up by 30 per cent because it's a known name, it's a respectful name.

The non-written agreement between us is I adhere not to sell illicit tobacco, not to sell nicotine vapes, which I'm not allowed because it reflects on the whole brand name Smokemart. 'I allow you to use the word Smokemart as long as you respect Smokemart as such.' I don't know. As I said, you know, I can explain it till tomorrow. It's a family arrangement. The influence of SEPL, and I would like Mr Hardie to hear this, it's more my uncle picking up the phone and saying, 'Come over here, I want you to do something for me', but it's not influence on my business, it's influence on me personally.” 22

[69] I have found that SEPL has some influence over the rebate offers that the cigarette companies make to the Respondent and the other Smokemart independents. However, this does not establish the capacity to control (contractual or practical capacity) to determine the outcome of the Respondent’s decisions about financial and operating policies. Those arrangements set some of the context in which pricing decisions are made, but within the framework of the prices provided by the tobacco companies, it is the Respondent that makes the relevant product purchasing and pricing decisions. The basic propositions advanced by Mr Ismail in support of the notion of control by SEPL were contradicted by direct and persuasive evidence led by the Respondent.

[70] In terms of the capacity for control associated with the family relationships, I do accept that these set some of the context and the desire to maintain and respect those relationships is a relevant consideration. However, the evidence demonstrates that there is no practice or a pattern of behaviour so as to become relevant control within the meaning of s.50AA of the Corporations Act. That is, these relationships do not provide SEPL (or the Peregrine Corporation) with the legal capacity or practical influence to determine the outcomes of the decisions about the Respondent’s financial and/or operating policies.

[71] I observe only for completeness, that even if the individual owners of SEPL were relevant entities in their own right for present purposes, 23 it was not suggested that they (directly) employed staff in that capacity. On that basis, this would also not change the small business status of the Respondent.24

[72] I also do not consider that there is any other basis to suggest that SEPL has the capacity to determine the outcomes of decisions about the Respondent’s financial and operating policies or that it is an associated entity. That is, I do not consider that SEPL has the contractual or practical influence that can be exerted on, or that there is a practice or pattern of behaviour affecting, the Respondent’s financial or operating polices as contemplated by s.50AAA of the Corporations Act.

[73] As a result, I find that the Respondent has demonstrated that it was a small business employer under the FW Act at the relevant time.

5. Did the Respondent comply with the Small Business Fair Dismissal Code in relation to the dismissal?

[74] The Small Business Fair Dismissal Code provides as follows:

“Small Business Fair Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[75] The approach required to the question of Code compliance has been described by a Full Bench of the Commission in Pinawin T/A RoseVi.Hair.Face.Body v Domingo 25 (Pinawin) in the following terms:

“[29] … … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.”

[76] The context for these observations was set by the Full Bench in the discussion that led to this point:

“[27] Deputy President Bartel in Narong Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana Tree Cafe said:

“[60] At the outset it is appropriate to note that unlike a consideration of the dismissal of an employee of a business that is not a small business employer, the function of FWA is not to determine on the evidence whether there was a valid reason for dismissal. That is, the exercise in the present matter does not involve a finding on the evidence as to whether the applicant did or did not steal the money. The application of the Small Business Fair Dismissal Code involves a determination as to whether there were reasonable grounds on which the respondent reached the view that the applicant’s conduct was serious enough to justify immediate dismissal. As such, the determination is to be based on the knowledge available to the employer at the time of the dismissal, and necessarily involves an assessment of the reasonableness of the steps taken by the employer to gather relevant information on which the decision to dismiss was based.”

[28] Senior Deputy President O’Callaghan in Harley v Rosecrest Asset Pty Ltd T/A Can Do International said:

“[8] For an employer to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal, it is firstly necessary for the employer to establish that the employer did in fact hold the belief that as a matter of fact that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) that the conduct justified immediate dismissal. This is to be contrasted to the provisions of s.387(a) where FWA, in determining whether there was a valid reason for the dismissal, must find whether the conduct in fact occurred.

[9] Secondly, it is necessary for the employer to establish that there are reasonable grounds for the employer holding the belief. It is thus necessary for the employer to establish a basis for the belief held which is reasonable. In this regard it would usually be necessary for the employer to establish what inquires or investigations were made to support a basis for holding the belief. It would also ordinarily be expected that the belief held be put to the employee, even though the grounds for holding it may not be. Failure to make sufficient inquiries or to put the accusation to the employee in many circumstances might lead to a view that there were no reasonable grounds for the belief to be held.”(references omitted)

[77] It is also necessary for the Respondent to demonstrate compliance with the Small Business Fair Dismissal Code for its objection to be sustained.

[78] The evidence reveals that the dismissal was an immediate (summary) dismissal as contemplated by the Small Business Fair Dismissal Code. It was a dismissal without notice and was based upon the Respondent’s belief that Mr Ismail's conduct was, in effect, serious misconduct. 26 I will return to this aspect as part of my consideration of the reasonable grounds aspect of the Respondent’s belief.

[79] Before dealing more specifically with the immediate issue, some background facts arise from the evidence.

[80] Mr Ismail initially worked for the Respondent between 2002 and 2010, when he left to open a restaurant. Mr Safieddin and Mr Ismail were personally close, and a family-type relationship developed. There was mutual respect and goodwill in the working and personal relationships and Mr Safieddin mentored the Applicant.

[81] This relationship was such that during the period between 2010 and the resumption of employment in 2012, when Mr Safieddin travelled overseas, he left keys to the shop with Mr Ismail who would respond to security and other callouts, despite the absence of any employment relationship during that period.

[82] I have earlier indicated that both parties here have tended to overstate or understate respectively, the role played by Mr Ismail within the business of the Respondent. There were limitations that arose from Mr Ismail’s lack of capacity to read and write and this did impact upon his ability to manage the shops and do those roles where that skill was important. However, Mr Ismail has a broad understanding of the business of selling and was used by the Respondent to open up wholesale leads in other States and to act as reference point for the business of some matters. I observe that a disagreement subsequently arose about whether Mr Ismail would be paid commission on some of the leads that arose from one of these interstate sales visits (Victoria). I will return to this aspect shortly. The Applicant’s role also included being the second name on the contact list for security alerts and he regularly attended the business premises in that capacity.

[83] In that sense, Mr Ismail was Mr Safieddin’s “right hand man” as he described him at a social function in 2016.

[84] Mr Ismail also prepared and packed customer orders, received and unpacked stock and deliveries, and collected monies for sales. He also assisted with store fitouts and other similar matters under the direction of Mr Safieddin.

[85] Mr Ismail was not however involved in pricing and did not have a direct understanding of the relationships between the Respondent, the cigarette companies and SEPL. He also needed assistance with the use of price lists and other documents and was not involved in the preparation of staff rosters or other activities that would normally be undertaken by someone who was managing a store.

[86] In relatively recent times, the Respondent brought in a new employee, “F”. I find that F was engaged as part of a decision to increase the level and sophistication of the management and administration systems of the business. The evidence does not permit a finding to be made about F’s role relative to Mr Ismail’s, beyond the fact that F also reported to Mr Safieddin and Mr Ismail continued as a long-serving part of the team with considerable practical experience in the business.

[87] F, and another more recent employee, were engaged as full-time employees. All other employees were treated by the Respondent as casuals. I find that the engagement of F within the business was a source of some concerns for Mr Ismail and that Mr Safieddin became aware of some apparent tensions between the two. Mr Safieddin also had a discussion with Mr Ismail in early March 2022 about the issue during which Mr Ismail raised his expectation that he had an entitlement to (was due to be gifted) some of the shares of the business, a proposition that was rejected by Mr Safieddin.

[88] Mr Ismail was not paid for periods of leave, except for Long Service Leave and a period of 1 week at some point where the Respondent continued to pay the Applicant during a period of absence.

[89] I find that on or about 21, 22 or 23 March 2022, Mr Ismail approached Mr Safieddin for a period of leave in the context of a significant family issue. It appears to be common ground that Mr Safieddin indicated that this would be okay and that the details would be worked out. However, it was Mr Ismail’s evidence that on Friday 25 March, Mr Safieddin advised Mr Ismail that he (the Applicant) would have to work because F was going on leave and that he would have to wait until F returned from his leave. Mr Ismail indicated that this made him very upset and that he could not persuade Mr Safieddin to change his mind.

[90] The evidence reveals that on Saturday 26 March 2022, Mr Ismail learned from F that F was being paid for his leave and this further upset Mr Ismail who then called Mr Safieddin at around 12.30 pm and explained in clear terms how unhappy he was with the situation. It is also clear that Mr Safieddin took exception to the manner of that phone call and decided to attend at the shop where Mr Ismail was working. During that phone call Mr Safieddin advised Mr Ismail that he had approved F taking annual leave, as F was getting married overseas, that operational arrangements had been made to cover the absence, and that Mr Ismail did not have any authority to question that decision. Although one of Mr Ismail’s written statements indicated that he was dismissed during that phone call, I find that this is a misinterpretation of what he was attempting to indicate. Although there is a dispute about the precise details of that conversation, it is common ground based upon the oral evidence that Mr Ismail was not dismissed at that time. It is however conceivable that Mr Safieddin indicated during that phone call that he could dismiss the Applicant if he wished to.

[91] I find that this was a very tense discussion and that both men were agitated.

[92] There are 2 distinct views about the subsequent exchanges that occurred when Mr Safieddin attended the shop in the afternoon on Saturday 26 March. It is common ground that Mr Ismail was working at the time and that when Mr Safieddin arrived, he closed to door of the shop to enable a private discussion to be held. It is also clear on the evidence that the result of the meeting was, in effect, that Mr Ismail had been dismissed and that Mr Safieddin would subsequently confirm the dismissal in writing as sought by the Applicant.

[93] Mr Safieddin’s evidence was follows:

“25. At approximately 4.30pm on that day, I went to the Avenues store to have a discuss with Shwan and make sense of his concerns. We had a conversation to the following effect:

Me: I do not understand what your concern is, F applied for his leave, and I approved it and it is not for you to challenge. All arrangements have been made to replace him without effecting the operations within the stores. I do not appreciate you calling me on a Saturday afternoon while I am at home to complain about something that has nothing to do with you.

Shwan: I am entitled to more holidays than him because I’ve been with you for longer time.

Me: F is employed on fulltime basis, and you are employed on casual basis, you get paid heaps more than him for the same number of hours and in the last few months I’ve been giving you bonuses on weekly basis which means you are getting $3,500 per week in certain weeks and over $2,000 any other week. I did that from my heart because I want to help you even if you and I know that you do not read and write, and your duties are limited. I am happy for you to let me know when you wish to have some time off that doesn’t overlap with any approved holidays and I will give you the time.

Shwan: I don’t agree that he gets holidays and he’s been with the company less than a year.

Me: That is my decision to make, not yours. Also, I suggest you consider moving to the Welland store towards the end of April, that gives me time to train someone on deliveries. You will not lose any hours or benefits, but I don’t think you should stay at this shop with F and myself being based here. This will give you time to reflect on your behaviour.

Shwan: Why do you want me to wait till end of April? You want to milk me for 1 more month?

Me: You can move to Welland end of next week if you prefer.

Shwan: No, do it now.

Me: Okay, you go to Welland on Monday, and I will plan for Avenues over the weekend.

Shwan: I refuse to go Welland. I work wherever I want.

Me: No, you don’t. I am your boss, and I am entitled to direct you to work between the stores as required and needed. Things are getting too technical for you at the Avenues store and you haven’t been able to fulfill most of the tasks and you will be more useful at Welland.

Shwan: Why don’t you just sack me? You are coward and I dare you to do it.

Me: I was trying to avoid getting to that point after all these years.

Shwan: You have no respect, you are a thief, you steal from cigarette companies, you steal from your family, you betray all people around you including your wife. You see that you are a coward, you won’t sack me after what I just said because you are scared, and you are only good with words not action.

Me: Okay Shwan, you are fired if that is your wish. You cannot speak to me that way. I would like you to leave the shop immediately and hand over all the company belongings.

Shwan: I refuse to leave before you give me a letter saying that you don’t want me any more and you need to state the reasons and I promise you that I won’t let you get away with this lightly. I know a lot about your business, and I will hurt you.

Me: Shwan, you will get your letter on Monday. I can’t work with someone that thinks I am a thief and accuses me of all sorts of things. Please leave now.” 27

[94] Mr Safieddin’s evidence was that when Mr Ismail would not leave the shop, he departed to defuse the situation.

[95] Mr Ismail contends that Mr Safieddin was angry and that he yelled and shouted at him about the phone call. Under cross-examination about the Respondent’s version, Mr Ismail’s evidence included 28:

“MS STEWART: That's what happened, isn't it?

MR ISMAIL: No. No. He was upset, and I was upset, like I said before. He was upset and I was upset, and that's – he's got – he got – and I don't know if that day he had a bad day. Like, to be honest here, like, most Mohsen Safieddin, we had many, many, many phone calls. He called me, 10 o'clock at night, I call him 2 o'clock in the morning. We don't have any issue. We discuss many things. We have discussion, we have talking, we have sometimes disagreeing with stuff about work, about employee, about a lot of things, but we never reached, he come to the shop straight away, okay, and he sack me.”

[96] Mr Ismail also gave evidence that:

“A letter confirming that your employment was terminated? Yes. That's when he sacked me, when he said to me, 'You're finished here, you're sacked, you go home and I'm going to send someone to pick up your stuff.' I said to him, 'Okay, can I have my letter please?' 29

[97] Mr Ismail also denies that he made any of the remarks about Mr Safieddin’s character as attributed to him by Mr Safieddin and generally disputed the version provided by the Respondent.

[98] In making findings about this exchange, I have had regard to my earlier observations about the evidence more generally. I have also considered, and made allowances for, the different circumstances of each of the 2 men, including the disadvantages that come with Mr Ismail’s reliance on others to read and prepare his statements and those of the Respondent.

[99] Mr Safieddin’s recall of the detail of that discussion was also assisted by the fact that he prepared notes of the discussion shortly after the event, based upon advice that he received at that time.

[100] I have also had regard to the overall probability of the events, based upon the surrounding circumstances. Amongst other contextual factors that tend to support Mr Safieddin’s version, the strength of his response to the afternoon discussion and the initial attempts to maintain the employment before then dismissing Mr Ismail is much more probable given the long and close personal history between them. Further, I find that Mr Ismail had concerns, related to the dispute about sales commission on the Victorian tobacco sales and his not being treated as family in terms of a stake in the business, that may well have led him to express the claimed personal comments, particularly given the added frustration associated with his leave and his own family circumstances

[101] On balance, I find that whilst Mr Safieddin has understated the extent of emotion involved from his perspective, the events on Saturday 26 March 2022 largely unfolded as he contends.

[102] The decision to dismiss was made by Mr Safieddin. The directly associated questions that arise under the Small Business Fair Dismissal Code are whether:

•  He, on behalf of the Respondent, held the belief that the conduct was sufficiently serious to justify summary dismissal – the requisite belief; and

•  If so, was the belief based upon reasonable grounds – reasonable grounds?

[103] In terms of the requisite belief, Mr Safieddin’s evidence about the belief was in the following terms:

“27. I was extremely disappointed and shocked that Shwan behaved in this manner towards me. We have had disagreements in the past however he has never raised his voice at me or called me names. I always made concessions for Shwan and asked other employees to be patient with him because I have known him and his family for many years. I directed Shwan to move to the Welland store to avoid further conflict with F. However, once Shwan started raising his voice at me, accused me of being a thief and threatened me, I felt that I had no option but to terminate his employment. Shwan used to refer to me as “Basha” which means “sir” in Arabic and is a sign of respect. However, during this conversation he stopped calling me Basha. I could no longer see how we could continue working together after he had blatantly disrespected me, and I therefore formed the belief that his conduct was serious enough to justify immediate dismissal.” 30

[104] I accept that evidence and find that this aspect of the Small Business Fair Dismissal Code is satisfied.

[105] The more difficult question is whether this belief was based upon reasonable grounds. In submissions, Mr Hardie for the Applicant, described this as a “reasonable person test”. This notion is applied in different contexts and is often used as reference point for what is reasonable, including that to be adopted by a decision-maker. It is also useful here, subject to the consideration of the role that is provided to the Commission under the Small Business Fair Dismissal Code. This includes that it is not presently necessary or appropriate for me to consider whether the conduct of Mr Ismail objectively represented a valid reason for dismissal or whether dismissal was harsh in the circumstances. These considerations would arise under s.387 of the FW Act, only where compliance with Small Business Fair Dismissal Code is not found. The present frame of reference is whether Mr Safieddin had reasonable grounds for his belief. 31 This is to be determined objectively.32

[106] In Pinawin, the Full Bench took into account whether the relevant conduct in that matter bore a sufficient connection with the “employee’s duty of fidelity and good faith” to constitute reasonable grounds. 33 The Full Bench also addressed the notion of the need for an investigation and/or a discussion with the employee concerned in that case as follows:

“[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well. They directly observed his behaviour. They believed that he had made lifestyle choices that involved drug-taking and this directly related to his capacity to perform his work. His work involved close personal dealings with clients. At the time they made their decision, Mr Domingo was hospitalised. They were conscientious in considering the grounds for summary dismissal in regulatory material available on the internet. In these unusual circumstances we are of the view that the employer, when considering Mr Domingo’s recent erratic and unusual behaviour, formed the belief that Mr Domingo had engaged in conduct that justified immediate dismissal on reasonable grounds. Our conclusion should not be seen as one that would necessarily be reached in all cases of out of hours misconduct or drug-taking.”

[107] In Steri-Flow Filtration Systems (Aust) Pty Ltd v Craig Erskine 34 another Full Bench found compliance with the Small Business Fair Dismissal Code on the basis that that employer’s belief (about a disputed conflict of interests) was founded on reasonable grounds, being directly supported by or reasonably inferential from the reasonable investigation that it conducted.35

[108] In this case, Mr Safieddin was directly involved in the discussions on 26 March 2022 and observed the conduct concerned. No investigation was required, at least in relation to the actual conduct and context. 36

[109] Given the direct nature of the working relationship between Mr Ismail and Mr Safieddin and their respective roles within the business, the statements made by Mr Ismail about (in effect) his employer’s honesty and integrity, and his refusal to move store location or leave the shop when directed, bore a direct connection with the employment and reasonably struck at the basis of that relationship. This would reasonably and objectively have been understood by Mr Safieddin as misconduct that was sufficiently serious to justify immediate dismissal. That is, the conduct was wilful or deliberate and was inconsistent with the continuation of the contract of employment.

[110] I observe that there were mitigating circumstances that would be relevant to the assessment of whether the dismissal was harsh. This included Mr Ismail’s family circumstances and his sense of outrage in terms of his own leave request. It was also entirely appropriate for Mr Ismail to seek clarification about his leave and whilst this was not the reason for the dismissal, it set some of the context. However, the assessment as to whether the Commission itself considers that the dismissal was harsh is, for reasons set out above, beyond the scope of the present consideration.

6. Conclusions and Order

[111] I have found that the Respondent was a small business employer within the meaning of the FW Act at the relevant time and that the Small Business Fair Dismissal Code has application.

[112] I have also found that the dismissal of Mr Ismail was consistent with the Small Business Fair Dismissal Code. Given the terms of s.385, the dismissal cannot be unfair within the meaning of the FW Act.

[113] As a result, there is no basis to consider this matter further and the application must be dismissed. An Order 37 to that end is being issued in conjunction with this Decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR745483>

Appearances:

T Hardie, with permission for Mr Ismail, the Applicant.
K Stewart, of counsel with permission for Safico Pty Ltd, the Respondent.

Hearing details:

2022
September 8
Video Hearing.

 1   Section 396(c) of the FW Act.

 2   Formerly known as Shahin Enterprises Pty Ltd.

 3   Section 596 of the FW Act.

 4   Exhibits R2 and R3.

 5   Exhibit R1.

 6   Exhibit R6.

 7   Exhibits A1, A2 and A3.

 8   Confirmed at transcript PN84.

 9   Payroll Activity [Summary] spreadsheet of Safico Pty Ltd for the period of 1 April 2022 – 30 April 2022. This spreadsheet had a total of 11 employees listed.- attached to the statement of Ms Canale – exhibit R6.

 10  . Exhibits R1 and R6.

 11   Exhibit A2

 12   TK3 attached to exhibit R1.

 13   Exhibit R4.

 14   Exhibit R5.

 15   Section 50AAA(3) of the Corporations Act. It was not contended that the other subsections were relevant in this case.

 16   Section 50AA(1) of the Corporations Act.

 17   Budden v Finke Enterprises Pty Ltd ATF M&L Carlson Family Trust T/A Fused Café Pender Place [2015] FWC 8675; Salagaras v Fingal Glen Pty Ltd atf the Adelaide Riviera Trust T/A Comfort Hotel Adelaide Riviera [2011] FWA 1401

 18   Adams v Condamine Catchment Natural Resource Management Corporation T/A Condamine Alliance 2010 FWA 5374.

 19   Section 50AA(2)(a) of the Corporations Act.

 20   Section 50AA(2)(b) of the Corporations Act.

 21   Clause 3.

 22   Transcript, 8 September 2022, PNs 575–579.

 23   Sections 9 and 64A of the Corporations Act include individuals as entities.

 24   The Applicant’s case was conducted on the basis that the relevant associated entity was the Peregrine Corporation (SEPL). It was also not contended on behalf of Mr Ismail that the individuals were relevant entities in their own right for present purposes.

 25   (2012) 219 IR 128.

 26   Se the discussion of this aspect of the Code by the Full Bench in Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services [2015] FWCFB 5264.

 27   Exhibit R2

 28   Transcript, 8 September 2022, PN 1222.

 29   Transcript, 8 September 2022, PN 1231.

 30   Exhibit R2.

 31   Confirmed by the Full Bench in Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services [2015] FWCFB 5264 at [39].

 32   Ibid at [40].

 33   Pinawin at [36].

 34   [2013] FWCFB 1943.

 35   Ibid at [43].

 36   See Nesbitt v Dragon Mountain Gold Limited [2015] FWCFB 3505 at [36] to [40].

 37   PR746318.