[2017] FWC 2937
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Unfair dismissal

Janet Allan
v
Celesty Pty Ltd ATF Celesty Family Trust T/A Toukley Family Doctor
(U2017/2673)

COMMISSIONER SAUNDERS

NEWCASTLE, 1 JUNE 2017

Application for an unfair dismissal remedy – minimum employment period – transfer of business – service as a casual employee - minimum employment period satisfied - jurisdictional objection dismissed.

[1] Ms Janet Allan was employed by Celesty Pty Ltd (Respondent) in the period from 6 June 2016 until 22 February 2017, at which time Ms Allan contends that she was dismissed harshly, unjustly and unreasonably. The Respondent denies those allegations. In addition, the Respondent denies that Ms Allan was dismissed, and contends that she was not employed for the minimum employment period. This decision is solely concerned with the question of whether Ms Allan had completed at least the minimum employment period at the time of her alleged dismissal on 22 February 2017.

Jurisdictional hearing

[2] On 31 May 2017, a hearing was conducted in relation to the jurisdictional question of whether Ms Allan had completed at least the minimum employment period at the time of her alleged dismissal. Ms Allan gave evidence in support of her case. Dr Younes Ismail gave evidence on behalf of the Respondent, as did Mr Michael Doueihi, solicitor for the Respondent.

Non-contentious matters

[3] There is no real dispute between the parties and I am satisfied on the evidence that:

Issues in dispute

[4] The following issues require determination in this matter:

Legislative regime

[5] Section 382 of the Act provides:

[6] Section 383 of the Act provides:

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

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

[9] Section 311 of the Act governs when a transfer of business occurs:

Meaning of transferring employee


New employer is associated entity of old employer

[10] The relevant statutory regime insofar as it relates to the present case may be summarised in the following way:

Transfer of employment

[11] There is no dispute that the Respondent and Shivalik were not associated entities when Ms Allan became employed by the Respondent on 6 June 2016. Accordingly, it is necessary to determine whether Ms Allan was a transferring employee in relation to a transfer of business from Shivalik to the Respondent (s.22(7)(b) of the Act).

[12] As to the requirements for a transfer of business within the meaning of s.311(1) of the Act, there is no real dispute between the parties and I am satisfied on the evidence that:

[13] The real issue in relation to whether there has been a transfer of business within the meaning of s.311(1) of the Act is whether there is a connection between the old employer, Shivalik, and the new employer, the Respondent, as described in any of subsections 311(3) to (6) of the Act (s.311(1)(d)). Subsections 311(4), (5) and (6) are clearly not relevant to this case. That leaves subsection 311(3) of the Act for consideration.

[14] The parties to the contract for the sale of Business were Dr Suri, as the vendor, and the Respondent, as the purchaser. Ms Allan’s previous employer, Shivalik, was not a party to that contract, nor is there any evidence of an arrangement of the relevant kind between Shivalik and the Respondent. However, paragraphs 311(3)(a) and (b) of the Act will be satisfied if there was an arrangement between the Respondent and an associated entity of Shivalik. That gives rise to a question as to whether Dr Suri was an associated entity of Shivalik at the relevant time.

[15] The expression “associated entity” has the meaning given by s.50AAA of the Corporations Act 2001 (Cth) (Corporations Act), 4 which provides as follows:

[16] Section 50AA of the Corporations Act defines “control” as follows:

[17] The concept of “control” is concerned with the practical ability of an entity to determine the outcome of decisions of another entity, taking into account any relevant practice or pattern of behaviour. 5

[18] Except in chapter 2E of the Corporations Act (related party transactions), a reference to an “entity” in the Corporations Act is a reference to “a natural person, a body corporate (other than an exempt public authority), a partnership or a trust” (s.64A of the Corporations Act). Accordingly, Dr Suri is an “entity” within the meaning of the Corporations Act.

Were Dr Suri and Shivalik associated entities?

[19] Ms Allan gave evidence, which I accept, that during her employment with Shivalik:

[20] In light of the matters referred to in the previous paragraph, coupled with the fact that Dr Suri was the sole owner of the Business and in that capacity he obviously decided to use Shivalik, a company in which Dr Suri is a 50% shareholder and one of two directors (Dr Suri’s wife being the other shareholder and director), to own the Premises and employ the staff working in the Business, I am satisfied that Dr Suri controlled Shivalik at the time the Business was sold to the Respondent. Further, given that Shivalik was both the entity Dr Suri used to employ staff in his Business and the trustee of the Suri Superannuation Fund, I am satisfied that the operations, resources and affairs of Shivalik were material to Dr Suri at the time the Business was sold to the Respondent. It follows that subsection 50AAA(4) of the Corporations Act is satisfied, with the result that Dr Suri and Shivalik were “associated entities” at the time the Business was sold to the Respondent.

[21] Having found that subsection 50AAA(4) of the Corporations Act is satisfied, I need not consider subsections 50AAA(2), (3), (5), (6) or (7). However, in the event that there is a challenge to my finding concerning subsection 50AAA(4) of the Corporations Act, I also find that subsection 50AAA(5) of the Corporations Act is satisfied in this case, because, at the time of the sale of the Business to the Respondent, Dr Suri had a qualifying investment in Shivalik (being his 50% shareholding in Shivalik), Dr Suri had significant influence over Shivalik (for the reasons set out in the previous two paragraphs), and Dr Suri’s interest in Shivalik was material to him (also for the reasons set out in the previous two paragraphs).

[22] The contract for the sale of the Business is clearly an arrangement between Dr Suri, being an associated entity of the old employer, Shivalik, and the new employer, the Respondent. In accordance with that arrangement, the Respondent became the owner, and had the beneficial use, of assets that Dr Suri owned, and had the beneficial use of, prior to the sale of Business, namely the items of equipment referred to in the inventory of equipment attached to the contract for the sale of Business and the goodwill of the Business. Further, I am satisfied that those assets relate to, and are used in connection with, the work Ms Allan has at all material times performed in the Business. By way of example, the ECG machine, steriliser, vaccination fridge, computers, medical software, and telephones relate to, and were used in connection with, the work Ms Allan did in the Business both prior to the sale on 3 June 2016 and thereafter. It follows that subsection 311(3) of the Act is satisfied.

[23] Because there is a connection between Shivalik and the Respondent as described in s.311(3) and the other requirements of s.311(1) of the Act have been satisfied, there was a transfer of business from Shivalik to the Respondent within the meaning of s.311 of the Act and Ms Allan was a transferring employee in relation to that transfer of business (s.311(2)). As a consequence, there was a transfer of employment of Ms Allan from Shivalik to the Respondent within the meaning of s.22(7) of the Act. It follows that, subject to the outcome of the following two issues, Ms Allan’s period of service with Shivalik counts as service of Ms Allan with the Respondent and the period between the termination of Ms Allan’s employment with Shivalik on 3 June 2016 and the start of her employment with the Respondent on 6 June 2016 does not break her continuous service with the Respondent, but does not count towards the length of Ms Allan’s continuous service with the Respondent (s.22(5) of the Act):

[24] The Respondent did not inform Ms Allan of anything in writing before her employment with the Respondent started, let alone that her period of service with Shivalik would not be recognised.

[25] The Respondent relies on the termination letter from Shivalik to Ms Allan dated 23 May 2016 to satisfy s.384(2)(b)(iii) of the Act. I reject that argument for the following reasons:

[26] Accordingly, Ms Allan’s period of service with Shivalik counts as service with the Respondent, subject to the outcome of the casual employment issue addressed below. The fact that the Respondent elected that it did not wish to recognise the service of an employee such as Ms Allan with Dr Suri, it informed Dr Suri and Shivalik of its position in that regard, and it ensured that Shivalik gave written notice of the termination of the employment of Ms Allan prior to employing her on 6 June 2016 does not alter my conclusion in relation to these matters. The Respondent did not notify Ms Allan in writing of the matters required by s.384(2)(b)(iii) of the Act.

Service as a casual employee

Legal principles concerning s.384(2)(a) of the Act

[27] It is the employment that must be on a regular and systematic basis, not the hours worked. 6 However, a clear pattern or roster of hours is strong evidence of regular and systematic employment.7

[28] The absence of any contractual requirement for the employee to work at set times or of any assumption that the employee be present on a daily, weekly or monthly basis unless told otherwise does not preclude a finding that the employee’s engagements were regular and systematic. 8

[29] The term “regular” should be construed liberally. 9 It implies some form of repetitive pattern and does not mean frequent, often, uniform or constant.10 Employment on a “regular” basis may be constituted by frequent though unpredictable engagements.11

[30] The term “systematic” requires that the engagement be “something that could fairly be called a system, method or plan”. 12 The concept of engagement on a “systematic” basis does not require the employee to be able to foresee or predict when his or her services may be required. It is sufficient that the pattern of engagement occurs as a consequence of an ongoing reliance on the employee’s services as an incident of the business by which he or she is engaged.13

[31] In Ponce, Commissioner Roe stated (at [76]):

[32] I agree with the approach taken by Commissioner Roe in Ponce, subject to the following caveat identified by Vice President Lawler in Burke v Marist Brothers St Joseph’s College t/a St Joseph’s College (at [18]): 14

Application of legal principles to the facts

[33] The evidence revealed the following in relation to Ms Allan’s working arrangements in the Business, both when Dr Suri owned the Business and when it was owned by the Respondent:

[34] The payslips tendered by Ms Allan demonstrate that she worked the following hours each fortnight in the Business in the period from 31 December 2015 until 3 June 2016:

Fortnight period

Hours worked

31 December 2015 to 13 January 2016

30

14 January 2016 to 27 January 2016

26.5

28 January 2016 to 10 February 2016

52.5

11 February 2016 to 24 February 2016

43.5

25 February 2016 to 9 March 2016

46

10 March 2016 to 23 March 2016

48.5

24 March 2016 to 6 April 2016

41

7 April 2016 to 20 April 2016

47

21 April 2016 to 4 May 2016

43.5

5 May 2016 to 18 May 2016

36.5

19 May 2016 to 1 June 2016 and 2 to 3 June 2016

57.5

Total hours

472.5

Average hours per fortnight

42.2

[35] The payslips tendered by Ms Allan demonstrate that she worked the following hours each fortnight in the Business in the period from 6 June 2016 until 8 February 2017:

Fortnight period

Hours worked

6 June 2016 to 15 June 2016

34

16 June 2016 to 29 June 2016

54.5

30 June 2016 to 13 July 2016

53

15 July 2016 to 27 July 2016

49

28 July 2016 to 10 August 2016

46

11 August 2016 to 24 August 2016

50.5

25 August 2016 to 7 September 2016

50.5

8 September 2016 to 21 September 2016

55

22 September 2016 to 5 October 2016

50

6 October 2016 to 19 October 2016

54

20 October 2016 to 2 November 2016

58

3 November 2016 to 16 November 2016

59.5

17 November 2016 to 30 November 2016

61.5

1 December 2016 to 14 December 2016

59

15 December 2016 to 28 December 2016

60.5

29 December 2016 to 11 January 2017

57

12 January 2017 to 25 January 2017

49

26 January 2017 to 8 February 2017

70

Total hours

971

Average hours per fortnight

54.6

[36] On the basis of the evidence summarised in the previous three paragraphs, together with subparagraph [3(l)] above, I am satisfied that Ms Allan’s employment as a casual employee throughout the periods from 7 January 2014 to 3 June 2016 and 6 June 2016 to 22 February 2017 was on a regular and systematic basis, for the following reasons:

[37] Ms Allan gave evidence that, throughout her service as a casual employee in the Business from January 2014 to February 2017, she had an expectation of continuing employment by Dr Suri and later by the Respondent on a regular and systematic basis. In my view, Ms Allan’s expectation in that regard was reasonable for the following reasons:

[38] For the reasons set out above, I am satisfied that, throughout the periods from 7 January 2014 to 3 June 2016 and 6 June 2016 to 22 February 2017:

[39] It follows that Ms Allan’s period of service as a casual employee in the periods from 7 January 2014 to 3 June 2016 and 6 June 2016 to 22 February 2017 count towards her period of employment. These periods combine to exceed one year.

Conclusion

[40] For the reasons set out above, I am satisfied that Ms Allan completed a period of employment with the Respondent of at least the minimum employment period at time of her alleged dismissal (s.382(a) of the Act). I therefore reject the Respondent’s jurisdictional objection concerning the minimum employment period. The matter will shortly be listed for further directions to deal with the balance of the issues in dispute between the parties in the proceedings.

tle: Seal of the Fair Work Commission with member's signature - Description: N:\05MembersAssociates\Saunders C\Chambers\Saunders C - Signature and Seal.tif

COMMISSIONER

Appearances:

Allan, J, on her own behalf

Dr Ismail, on behalf of the Respondent

Hearing details:

2017

Newcastle

31 May

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

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

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

 4   Section 12 of the Act

 5   Amcor Ltd & Ors v Barnes & Ors [2016] VSC 707 at [1275]-[1282]

 6   Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 399 (Yaraka) at [65]; cited in Ponce v DJT Staff Management Services Pty Ltd t/a Daly’s Traffic [2010] FWA 2078 (Ponce)

 7   Ibid

 8   Yakara at [67]

 9   Yaraka at [68]

 10   Yaraka at [68]; cited in Grives v Aura Sports Pty Ltd [2012] FWA 5552 at [32]

 11   Yaraka at [89]

 12   Yaraka at [68]

 13   Yaraka at [69]

 14   [2015] FWC 7324

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