[2013] FWCFB 1198

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The attached document replaces the document previously issued with the above code on 22 February 2013.

Paragraph 25 has been deleted and a new paragraph 25 inserted.

Susan Robertson

Associate to Senior Deputy President Hamberger

Dated: 22 February 2013

[2013] FWCFB 1198



Fair Work Act 2009
s.604 - Appeal of decisions

John Lucas Hotel Management Services T/A World Square Pub
Ms Vanessa Hillie



Appeal against decision [2012] FWA 6806 of Commissioner Cambridge at Sydney on 10 August 2012 in matter number U2012/15092.

[1] This is an appeal pursuant to s.604 of the Fair Work Act 2009 (the Act), by John Lucas Hotel Management Pty Ltd (trading as World Square Pub) (the appellant) against a decision by Commissioner Cambridge given at Sydney on 10 August 2012 1. In his decision, the Commissioner found that there was an arrangement between Ms Hillie’s (the respondent’s) previous employer and the appellant, such that Ms Hillie was a person who was a transferring employee in relation to a transfer of business (within the meaning of s.384 of the Act.) The effect of this finding was that the respondent’s period of service with her previous employer would count towards her period of employment with the appellant, thereby rendering her a person protected from unfair dismissal.

[2] A hearing was conducted in Sydney (with a video link to Melbourne) on 23 October 2012. The appellant was represented by Mr Cross, of counsel. Ms Hillie had only just obtained representation and her solicitor, Ms Lloyd, was unable to attend the hearing. It was agreed that the appellant would be heard on its submission at the hearing and the transcript then forwarded to Ms Lloyd. Ms Lloyd filed written submissions on behalf of the respondent on 26 November 2012. Mr Cross filed written submissions in reply on 29 November 2012.

The relevant legislation

[3] Section 400 of the Act governs appeals arising from matters involving applications for unfair dismissal remedies, as follows:

[4] As stated in Transport Workers Union of Australia v Linfox Australia Pty Ltd  2:

[5] Section 382 of the Act provides that a person is protected from unfair dismissal at a time, if at that time the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period. Where the employer is a small-business employer (as in this case) the relevant minimum employment period is 12 months. Section 384 further provides that:

[6] Section 311 defines when a “transfer of business” occurs.

The Commissioner's decision

[7] The relevant factual background was summarised by the Commissioner in his decision thus:

[8] The Commissioner found that:

[9] After citing the relevant legislation, the Commissioner stated:

The appellant's submissions

[10] The appellant submitted that permission to appeal should be granted because it would be in the public interest to do so, and the Commissioner's decision contained significant errors of fact. It was accepted by the parties and the Commissioner that the issue for determination in the proceedings before him was whether a transfer of business had occurred pursuant to s.311 (3) of the Act. The appellant submitted that the correct application of term "arrangement" had not been considered by a Full Bench, and that there was a public interest in this occurring.

[11] The appellant submitted that the Commissioner correctly identified the decision of Commissioner Bissett in Zabrdac as outlining the necessary elements of an “arrangement” pursuant to the Act. The three elements so identified formed a convenient and correct basis to test the evidence and whether it could be said that the facts as found by the Commissioner could be said to exist, those elements being (Zabrdac at [74]):

[12] The appellant submitted that the only communication that occurred between Wanslea Grove and the appellant was directed to the establishment of the management agreement between the owner of the hotel and the appellant, and not to any possible arrangement with Wanslea Grove.

[13] The appellant referred to the Commissioner’s finding that there was "an explicit understanding that the [appellant] would be taking over the operation of the hotel on Monday, 29 August, 2011." 3 It was submitted that for any "explicit understanding” to enliven s.311 (3) it would have to be with Wanslea Grove, but there was simply no evidence of such an understanding. There was no evidence that the appellant assumed an obligation, or gave an assurance or undertaking, to Wanslea Grove, that he would act in a certain way. While the appellant did expect to be taking over the operation of the hotel on Monday 29 August, 2011 that was pursuant to its dealings with the owner. Any expectation in relation to the keys being passed from Wanslea Grove to Mr Lucas (which did not in fact occur) did not arise from an arrangement between the two parties, but merely from a statement by Wanslea Grove that it would vacate the premises on 29 August, 2011.

[14] The appellant also submitted that the Commissioner erred significantly by relying on the absence of communication with Ms Hillie in interpreting the term "arrangement". It submitted that it was difficult to conceive how it would be apparent to the appellant to correspond with Ms Hillie. The appellant began managing the hotel on 29 August 2011, though it could only open the gaming room for the first few weeks. On Monday 29 August, Mr Lucas contacted a person he knew that he had seen working at the hotel at least a year earlier, and enquired as to whether he was looking for work. That contact recommended Ms Hillie as another person who could work at the hotel. Ms Hillie was subsequently employed. It would not have occurred to the appellant to write to Ms Hillie about her employment with someone with whom he had no arrangement or dealings with, and advise her that he was not recognising her prior service. This was not a case of incoming employer engaging and existing workforce. The appellant was entering an abandoned and dilapidated premise, and doing what it could pursuant to its management agreement with the owner to get those premises operating, albeit on an initially significantly reduced basis.

The respondent’s submissions

[15] The respondent submitted that the request by Mr Lucas for lists of utilities, assets, and employees and the e-mails sent by Wanslea Grove in response, constituted evidence of a direct arrangement between the appellant and the respondent's former employer. In particular, an arrangement was made for Mr Lucas to use some of Wanslea Grove’s assets, including $1000 worth of stock, poker machine hardware and past employees.

[16] The respondent submitted that when the hotel was reopened on 29 August 2011, the appellant obviously needed staff to work and contacted one of the employees who recommended Ms Hillie to work in the gaming room. The appellant had in his possession the e-mail from Wanslea Grove which had the list of employees’ names and contact details. Ms Hillie began work that day and continued working there until her dismissal on or around 16 December 2011.

[17] The respondent submitted that s.382 of the Act is beneficial legislation for the employee and if the onus is met by the employee, entitles the employee to make a claim for unfair dismissal. Section 384 (2) exists to protect regular and systematic employees from being dismissed unless the new employer informs them in writing that their period of service with the old employer is not recognised. While there was a change of management, Ms Hillie's job did not change and she did not receive written notification that she was not in continuous employment.


[18] For Ms Hillie to be protected from unfair dismissal she would need to be a “transferring employee in relation to a transfer of business” from Wanslea Grove to the appellant within the meaning of s. 384 (2) (b) (i). In the circumstances of this case, for a “transfer of business” to have occurred there would need to be “a connection” between Wanslea Grove and the appellant within the meaning of s. 311 (3). For such a connection to exist the appellant would need in effect to own or have the beneficial use of some or all of the assets (whether tangible or intangible) that Wanslea Grove owned or had the beneficial use of “in accordance with an arrangement” between Wanslea Grove and the appellant. The evidence concerning the appellant having the beneficial use of some assets which Wanslea Grove previously had the beneficial use is fairly sketchy. However the only point of contention in this appeal is whether the appellant obtained the beneficial use (or ownership) of those assets “in accordance with an arrangement” between Wanslea Grove and the appellant.

[19] We agree with Commissioner Bissett in Zabrdac 4 that guidance as to the use and meaning of the word “arrangement” can be found in a previous judgements concerning trade practices and taxation matters. In Australian Competition & Consumer Commission v CC (NSW) Pty Ltd5 Lindgren J considered the meaning of “arrangement or understanding”. He noted:

[20] In accordance with the Explanatory Memorandum the word “arrangement” should be interpreted broadly. It certainly need not imply a formal let alone legally enforceable agreement between the two parties. However the expression must still be given some content. From the authorities it can be concluded that for an “arrangement” to exist one party must have assumed at least a moral obligation, or given an “assurance” or “undertaking” that it will act in a certain way.

[21] Did the transfer of assets (such as they were) between Wanslea Grove and the appellant occur in an accordance with an “arrangement” between them? The respondent cited as evidence of such an arrangement the request by Mr Lucas for Wanslea Grove to provide him with certain information, and the subsequent provision of that information. However that in no way created any obligation, legal, moral or otherwise on the part of the appellant. For example, while a list of employees was sent to the appellant, there was no evidence that this created an obligation on the part of the appellant to employ anyone on that list. In fact there is no evidence that the list was used at all. The uncontested evidence is that Mr Lucas contacted a person named Mosan whom he had employed previously and who he had seen working at the hotel and enquired whether he was looking for work. Mosan recommended Ms Hillie as another person who could work at the hotel 6.

[22] The Commissioner referred in his decision [at 45] to an explicit understanding that the appellant would be taking over the operation of the hotel on Monday 29 August 2011. However that reflected an arrangement between the owner of the hotel and the appellant. Nor is there any evidence that Mr Lucas’s misplaced expectation that he might receive the keys from Wanslea Grove suggest any arrangement he had with Wanslea Grove. Whatever arrangement existed was between the owner of the hotel and the appellant. This does not establish a connection between the “old employer” and the “new employer” as required by s.311 (3).


[23] This appeal provides an opportunity for this full bench to consider the correct application of the word arrangement in section 311 of the Act. For this reason we consider it in the public interest grant permission to appeal and we do so.

[24] Having considered the evidence before Commissioner Cambridge we are satisfied that there was no evidence to support his finding that there was an arrangement between Ms Hillie’s previous employer and the respondent involving a transfer of assets as contemplated by ss 311(3). The finding was not available on the evidence. It follows that Ms Hillie did not complete the minimum of employment period as required by the Act and is not therefore a person protected from unfair dismissal.

[25] The appeal is upheld.



B. Cross of counsel with R Kakwani and P Ryan for the appellant.

E. Lloyd for the respondent.

Hearing details:



23 October

Final written submissions:


29 November

 1   Ms Vanessa Hillie v World Square Pub [2012] FWA 6806

 2   [2012] FWAFB 1891 at [10] Boulton J, Harrison, SDP, Deegan C

 3   At [45]

 4   Peter Zabrdac v Transclean Facilities Pty Ltd [2011] FWA 4492

 5   (1999) 92 FCR 375, 406-409

 6   PN280

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