[2012] FWA 2375 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Heidi Kefer
v
Tattersall's Holdings Pty Ltd
(U2011/13543)
COMMISSIONER CAMBRIDGE |
BRISBANE, 23 MARCH 2012 |
Unfair dismissal - jurisdictional objection - ss.382, 383 and 384 - minimum employment period - period of continuous service - transferring employee - s.22 meaning of service and continuous service - employment period with previous associated entity - effect of alleged resignation from first employment - jurisdictional objection dismissed.
[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009, (the Act). The application was made by Heidi Kefer, (“the applicant”) and the respondent employer has been identified as Tattersall’s Holdings Pty Ltd (ACN: 081925706) (“the employer” or “Tattersall’s Holdings”).
[2] The application was lodged at Brisbane on 11 November 2011. The application suggested that the date that the applicant’s dismissal took effect was 8 November 2011. However the applicant was notified of her dismissal on 31 October 2011. Consequently the application was made within the 14 day time limit prescribed by subsection 394 (2) of the Act.
[3] Scheduled conciliation of the claim was cancelled at the request of the employer who raised a jurisdictional objection and sought to have that objection determined before any other proceedings were held. On 2 December 2011, the employer filed an employer’s response to the application (Form F3), which interestingly, stated the incorrect name of the employer as Tatts Group Limited. The Form F3 identified that the jurisdictional objection that was raised by the employer contended that the applicant had not completed the minimum employment period at the date of the termination of employment. Consequently the matter proceeded to Jurisdictional Conference/Hearing before Fair Work Australia (“FWA”) conducted in Brisbane on 14 February 2012.
[4] At the Jurisdictional Hearing the employer was represented by Ms C Laird, a solicitor. Ms Laird advanced the case in support of the jurisdictional objection made by the employer and she called Ms J Capstaff to give evidence as a witness. In addition, Ms Laird tendered a witness statement of Ms B Martin which was admitted into evidence by consent and without requirement for cross-examination.
[5] Mr M J Tutt, solicitor, appeared on behalf of the applicant who was called as a witness to provide evidence as part of the case made against the jurisdictional objection.
Factual Background
[6] The key factual elements of the employment of the applicant including the chronology of events relevant to the jurisdictional objection were not contested.
[7] On 31 December 2009, the applicant commenced work with a company then called Unitab which is now identified as Tattsbet Limited (ACN: 085691783), (“Tattsbet”). The applicant worked for Tattsbet in a role described as casual race day controller. The applicant’s casual employment with Tattsbet was on a regular and systematic basis.
[8] In June 2011 the applicant responded to a job advertisement for a position of social networker/editor with Tattersall’s Holdings, the employer. The applicant was successful and after having been the only individual that underwent an interview out of some 41 applications, she was offered the position with the employer and commenced in the new role on 4 July 2011.
[9] There was no dispute that Tattsbet and the employer are associated entities established as subsidiary companies within the Tatts Group of companies (“Tatts Group”). On 31 October 2011 the employer dismissed the applicant from the position of social networker/editor. At the time of dismissal the applicant had been employed by the employer for less than 4 months.
[10] Consequently the essential issue for determination is whether the applicant’s period of employment with Tattsbet should be recognised for the purposes of the minimum employment period.
The Employer’s Case in Support of the Jurisdictional Objection
[11] Ms Laird, who appeared on behalf of the employer, claimed that the applicant’s period of employment with Tattsbet should not be recognised for the purposes of calculation of the minimum employment period contemplated by sections 383 and 384 of the Act. Therefore according to Ms Laird, the applicant was not a person protected from unfair dismissal as she had not completed the period of employment as required by subsection 382 (a) of the Act.
[12] The submissions made by Ms Laird relied strongly upon the Decision of Commissioner Roe in the case of Tebble v Rizmas Pty Ltd (Tebble) 1 wherein it was held that a resignation broke the period of continuous service as defined by section 22 of the Act. Ms Laird submitted that it was the applicant's decision to leave employment with Tattsbet and this represented her resignation. Therefore according to the submissions of Ms Laird, the period of employment with the associated entity of Tattsbet should not be recognised as a period of employment with the employer.
[13] Ms Laird said that the scheme of the Act intended to give employers, in this case the new employer being Tattersall’s Holdings, an opportunity of six months to assess whether or not the new employee was suited to the employment. Ms Laird said that the Act intended to give a protection to the new employer and that in this case it would be wrong if the employer should not get the benefit of that six month protection.
[14] Ms Laird also stressed that the two positions that the applicant worked in for the respective employers were very different. Ms Laird submitted that the new employer, albeit an associated entity of the old employer, was still entitled to the six months protection period during which the applicant would be assessed in the very different role of social networker/editor.
[15] Ms Laird referred to paragraph 1512 of the Explanatory Memorandum to the Fair Work Bill 2008 (“the explanatory memorandum”). Ms Laird noted that this paragraph of the explanatory memorandum mentioned that the minimum employment period enabled an employer to have a period of time to assess the capacity and conduct of a new employee without being subject to an unfair dismissal claim. According to the submissions made by Ms Laird, the new employer, in this case Tattersall’s Holdings, should have the benefit of that six-month period during which it would assess the capacity and conduct of the applicant in the position of social networker/editor.
[16] Ms Laird urged FWA to uphold the jurisdictional objection. She said that as the applicant had not completed the minimum employment period with the employer the applicant was not a person protected from unfair dismissal. Further, because the applicant had resigned her previous employment with an associated entity, the period of employment with the first employer was broken by the resignation and should not be recognised for the purposes of calculation of the minimum employment period.
The Applicant’s Case in Opposition to the Jurisdictional Objection
[17] Mr Tutt, who appeared for the applicant, made submissions opposing the jurisdictional objection raised by the employer.
[18] Mr Tutt submitted that the applicant was, for want of a better word, “poached” by the employer from her previous employment with Tattsbet. Mr Tutt said that there was no evidence before FWA of the applicant making any resignation from her employment with Tattsbet. Therefore according to Mr Tutt the primary basis upon which the employer sought to make out its jurisdictional objection could not be established as a fact.
[19] Mr Tutt made further submissions which concentrated specifically upon subsection 22 (7) of the Act. In these submissions Mr Tutt asserted that subsection 22 (7) of the Act was specifically designed to ensure that people in circumstances like that of the applicant's would not be denied an opportunity to make an unfair dismissal claim. Mr Tutt said that the Act contemplated a period of not more than three months between engagements with associated entities and in this case the applicant was employed by the employer on the next day after her employment with Tattsbet had finished.
[20] Mr Tutt also submitted that the Decision in Tebble involved a different set of factual circumstances where it was found that the applicant on that occasion had tendered her resignation. According to Mr Tutt, those circumstances were entirely different to the applicant's position where there was almost obvious joint agreement that she would continue employment within the Tatts Group.
[21] In further submissions Mr Tutt suggested that the applicant's knowledge with respect to her work undertaken with the first entity, Tattsbet, was advantageous to her work with the employer. According to Mr Tutt, this represented something like a transfer between departments or divisions of one company as opposed to the applicant having left employment and returning at a later time.
[22] Further, Mr Tutt submitted that the employer knew exactly who they were getting when they engaged the applicant. The employer as a related entity, had the benefit of assessment of the applicant during her first six months of employment with Tattsbet. Mr Tutt submitted that the rationale of subsection 22 (7) of the Act was to protect people from circumstances involving separate, convoluted corporate structures and leading employees between separate entities and then hiding behind the Act so as to remove rights to challenge any dismissal.
[23] Mr Tutt submitted that the circumstances of the employment of the applicant represented a transfer of employment between associated entities. Therefore he said that the jurisdictional objection of the employer should be rejected.
Consideration
[24] The consideration of the jurisdictional objection raised by the employer in this instance has, in simple terms, involved the assertion that the applicant was not a person protected from unfair dismissal because she had not completed a period of employment with the employer of at least the minimum employment period. This objection arises from the provisions of subsection 382 (a) of the Act which relevantly states:
“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; and ...”
[25] In this case the employer was not a small business employer and therefore pursuant to section 383 of the Act, the relevant minimum employment period was 6 months. Subsection 384 (1) of the Act elaborates further upon the period of employment and states:
(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.”
[26] The circumstances of this case involved the employment of the applicant with two different employers who were associated entities. The applicant had been employed by the employer for less than four months. Therefore unless the previous employment with the associated entity counted as a period of continuous service the applicant would not have completed at least the minimum employment period.
[27] Section 22 of the Act provides a definition for the meaning of service and continuous service. Section 22 contains four subheadings, namely; General meaning; Meaning for Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2; When service with one employer counts as service with another employer; Meaning of transfer of employment etc.
[28] Consequently, the factual circumstances of this case are directly relevant to, and must logically be considered by reference to, those subsections of section 22 under the subheadings of; When service with one employer counts as service with another employer; and Meaning of transfer of employment etc. The relevant subsections are 22 (5), 22 (6), 22 (7) and 22 (8) which read as follows:
“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.
Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).
(6) If the national system employee has already had the benefit of an entitlement the amount of which was calculated by reference to a period of service with the first employer, subsection (5) does not result in that period of service with the first employer being counted again when calculating the employee’s entitlements of that kind as an employee of the second employer.
Note: For example:
(a) the accrued paid annual leave to which the employee is entitled as an employee of the second employer does not include any period of paid annual leave that the employee has already taken as an employee of the first employer; and
(b) if an employee receives notice of termination or payment in lieu of notice in relation to a period of service with the first employer, that period of service is not counted again in calculating the amount of notice of termination, or payment in lieu, to which the employee is entitled as an employee of 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.”
[29] The factual circumstances of this case seemed to amply satisfy the meaning of transfer of employment as set out in subsection 22 (7) of the Act. The essential elements for that satisfaction being that; (a) the applicant became employed by the second employer (Tattersall’s Holdings aka the employer), not more than three months after the termination of the applicant's employment with the first employer (Tattsbet); and (b) the first and second employers were associated entities when the applicant became employed by the second employer.
[30] These elements having been satisfied there is simply no further qualification required. The circumstances of the applicant’s employment with the employer satisfied the meaning of transfer of employment as contained in subsection 22 (7) of the Act. That subsection does not require any particular qualification in respect to the termination of the employment with the first employer. The employer’s attempted reliance upon the resignation of the applicant from the first employment was misconceived and reliance upon the Decision in Tebble was misconstrued.
[31] It is irrelevant as to whether the termination of employment with the first employer was at the initiative of the employer or the employee. The employer’s contention that a resignation somehow disturbed the transfer of employment appeared to have emerged from a misconstrued interpretation of the approach adopted by Commissioner Roe in Tebble. In the case of Tebble, there was no transfer of employment involving two employers and Commissioner Roe was confining his consideration to that part of section 22 of the Act relating to the general meaning of service, specifically subsection 22 (1) and to some extent (2).
[32] Various provisions of the Act operate in respect to the transfer of employment and the transfer of business. Further, the transfer of employment and the transfer of business may or may not involve associated entities. The impact that either a transfer of business or a transfer of employment may have on the minimum employment period for purposes of unfair dismissal protection involves the combined operation of a number of different provisions of the Act depending upon the various factual scenarios that can exist.
[33] Despite the array of permutations that may be contemplated with transfer of business and transfer of employment circumstances, the various relevant provisions of the Act attempt to avoid the prospect that a transfer of business or employment might be used as a contrivance to circumvent protection from unfair dismissal which would otherwise apply. To the extent that s.15AB of the Acts Interpretation Act 1901, may permit extraneous material to be consulted, the following paragraphs from the explanatory memorandum, provide some clarification:
“1521. A period of employment with one employer can include periods of employment with another employer in certain circumstances due to the definition of service in clause 22. This occurs where the employee is a transferring employee in relation to a transfer of business or where the employee transfers between associated entities (as defined in clause 12).
1522. Under paragraph 384(2)(b) when a transfer of business occurs, a new employer can choose not to recognise service of the employee with the old employer for the purposes of the unfair dismissal provisions. However, they must inform the employee in writing before the new employment starts. This does not apply if the transfer of business was between associated entities.
1523. Consequently, where there is a transfer of employment between associated entities, service with the first employer will always count towards service with the second employer. This means that an employee can access unfair dismissal remedies without having to serve another minimum employment period when they are transferred between employers as part of a corporate restructure.
1524. Clause 22 is intended to be able to apply multiple times, so that an employee who had been a transferring employee in relation to a transfer of business or had been moved between associated entities more than once would be able to count service with each employer towards their minimum employment period.”
[Emphasis added]
[34] I have emphasised a particular part of paragraph 1523 because it deals with the particular factual circumstances of this case. Although there was no corporate restructure in this case there was undoubtedly a transfer of employment as defined in subsection 22 (7) of the Act. If the Act did not operate in this way, then an employer that was part of a multiple corporate structure, could offer a long standing employee a promotion involving employment in another associated company as a simple means to remove that employee’s protection from unfair dismissal. I stress that there is no suggestion that in this case the employer deliberately embarked upon a course of action to circumvent the applicant’s protection from unfair dismissal. The contrivance to remove unfair dismissal protection scenario is used only to illustrate the mischief that the relevant provisions of the Act are intended to address.
[35] It must also be acknowledged that the underlying rationale for the minimum employment period involves an assessment of capacity and conduct of a new employee. In circumstances where there is a transfer of employment between associated entities and if a new or different role is undertaken, the assessment of capacity and conduct in that different role would not be available to the new employer. However two aspects of this apparent loss of protection for an employer need to be recognised.
[36] Firstly, a distinction can be made between assessment of capacity and conduct as opposed to suitability for a particular role. By way of example, a person who was promoted to another position by the one employer does not lose protection from unfair dismissal in respect to the new position.
[37] Secondly, a new position will often involve a probationary period that would be utilised for assessment of suitability. The new employer does not lose the right to dismiss for valid performance and or conduct reasons which may be considered in the context of a probationary period. The new employer is not deprived of a capacity to dismiss, but instead only the capacity to dismiss with immunity from review.
[38] The letter of offer for the position of social networker/editor included the following mention of a probationary period:
“Probationary Period
You will undertake a probationary period of 3 months in this role. Mutual suitability will be determined during the probationary period and permanent appointment may be offered upon its successful completion. During the probationary period, either you or the Company may terminate your employment and this [sic] agreement by providing one weeks [sic] notice in writing. The Company may at its option make payment in lieu of all or part of the notice period.
This probation period does not impact on the minimum employment period under the Fair Work Act 2009.”
[39] The statement that, “This probation period does not impact on the minimum employment period under the Fair Work Act 2009”, contained in a letter of offer could not alter or somehow override the proper operation of the Act. Further the terminology “does not impact” is ambiguous and could be interpreted to mean that either, the minimum employment period was considered to be applicable and not disturbed by the probation period, or alternatively, the probation period did not operate so as to impose the minimum employment period when it would have otherwise not have applied. In passing I note that an unambiguous statement in a letter of offer might have great significance in circumstances involving a transfer of business, not involving associated entities, and so that the provisions of subsection 384 (2) (b) (iii) were invoked and the period of service with the old employer, as distinct from the first employer, would not be recognised.
[40] Further, I note that the applicant appeared to have completed the 3 months probationary period in the position of social networker/editor. The probationary period was apparently extended but there was, somewhat unusually, no mention in the letter of offer regarding any capacity to provide for such an extension.
[41] I should also recognise what appears to be something of an anomaly that seems to have emerged from the interpretation and application of s. 22 of the Act. If the approach adopted by Commissioner Roe in Tebble is correct, then the break of service occasioned by an employee who resigns and is re-employed by the same employer within 3 months, would not occur in a case where an employee resigns and is employed by an associated entity within 3 months.
[42] The anomaly that I have identified is unlikely to have been an intended consequence of the meaning given to service and continuous service by s. 22 of the Act. In my view, the logical corollary of the operation of subsections 22 (5) and (7) of the Act, is that if the same employer re-employs an employee within 3 months of the termination of employment, the period of service prior to termination counts as service. The period between termination and re-employment would not count towards the length of the employee’s continuous service but, importantly it would not break the service such that the employee would recommence the minimum employment period.
[43] The extension of the transfer of employment protections established by subsections 22 (5) and (7) of the Act to embrace re-employment with the same employer is also consistent with the terms of subsection 22 (3) of the Act. Further, the notion that continuous service would not be broken if re-employment occurs within 3 months, is congruous with the provisions of s.47 (2) of the Industrial Relations Act 1999 [Qld], which deals with continuous service for the purpose of long service leave.
[44] However, in the alternative, my concern about this apparent anomaly may be entirely misplaced and the legislation may have intended that re-employment with the same employer within 3 months would re-start the minimum employment period whilst new employment with an associated entity within 3 months would not.
Conclusion
[45] The determination of the jurisdictional objection raised in this matter has involved a contest about whether or not the applicant was a person protected from unfair dismissal. The absence of any such protection was asserted to have occurred because the previous employment of the applicant with an associated entity should not count as service for the purposes of the minimum employment period established under ss. 382, 383 and 384 of the Act.
[46] An analysis of the meaning given to service and continuous service by s.22 of the Act has produced a conclusion that the factual circumstances in this instance satisfy the terms of subsections 22 (5) and (7) in particular. Therefore the applicant was a person who was transferred in employment and the period of employment with the first employer, Tattsbet, must count as a period of service with the second employer, Tattersall’s Holdings, the employer.
[47] Consequently the applicant had completed the minimum employment period and is a person protected from unfair dismissal. The jurisdictional objection of the employer is dismissed.
[48] The matter will be re-listed for further proceedings upon the written request of the applicant’s representatives.
COMMISSIONER
Appearances:
Mr M J Tutt, solicitor for the applicant.
Ms C Laird, solicitor for the employer.
Hearing details:
2012.
Brisbane:
February, 14.
1 Ms Tarilee Tebble v Rizmas Pty Ltd [2011] FWA 6853.
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