DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Wendy Paterson
v
Clariant Australia Pty Ltd T/A Clariant
(U2017/4526)

Application for an unfair dismissal remedy – minimum employment period not met – application dismissed.

[1] On 27 April 2017, Ms Wendy Paterson made an application for a remedy for an alleged unfair dismissal under s.394 of the Fair Work Act 2009 (the Act).

[2] Ms Paterson’s application did not detail her commencement date with Clariant Australia Pty Ltd T/A Clariant (Clariant), but advised that she was dismissed on 6 April 2017. A document attached to the application referred to the employment commencing on 16 May 2016.

[3] On 24 May 2017, Clariant lodged a Form F3 Employer Response which suggested the employment commenced on 10 October 2016 and raised a jurisdictional objection on the basis that Ms Paterson had not met the minimum employment period required by s.383 of the Act.

[4] There is no dispute that Clariant employs 15 or more persons and, accordingly, the relevant minimum employment period pursuant s.383 of the Act is 6 months.

[5] Directions were issued requiring the parties to file written submissions and witness statements – material was received from each party. A hearing by way of telephone conference was conducted on 14 July 2017. Ms Paterson represented herself and Ms Katherine Dennis, from AI Group, represented Clariant. The hearing was recorded.

[6] In order to be protected from unfair dismissal under s.382 of the Act, Ms Paterson must have been employed by the employer for at least the minimum employment period.

[7] Section 382 of the Act sets out when a person is protected from unfair dismissal:

“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

(b)  one or more of the following apply:

(i)  a modern award covers the person;

(ii)  an enterprise agreement applies to the person in relation to the employment;

(iii)  the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.” (emphasis added)

[8] Section 383 of the Act sets out the minimum employment period:

“383 Meaning of minimum employment period

The minimum employment period is:

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

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

(ii) immediately before the dismissal; or

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

[9] The facts in this matter are largely agreed.

[10] Ms Paterson was initially engaged as a Customer Service Coordinator at Clariant’s Office in Perth, through a labour provider Airswift on 16 May 2016. Ms Paterson expected that she would be offered employment by Clariant soon thereafter.

[11] It appears that Clariant uses Airswift to quickly engage staff and then after a review of their performance makes offers of direct employment. 1

[12] In July 2016, Ms Paterson had discussions with Mr Bernie Kelly, Head of Business Development, about taking on the role of Tank Manager with, and being directly employed by, Clariant. During the discussion process, a number of draft contracts of employment were exchanged and Ms Paterson persuaded Clariant to delete the obligation to complete a probationary period and to change the title from Tank Manager to Account Manager.

[13] Ms Paterson’s Account Manager role was based at a client’s premises, Woodside. In order to prepare for the Account Manager role, Ms Paterson was provided with additional training. The remuneration offered for the Account Manager resulted in a $10,000 per annum increase for Ms Paterson.

[14] Clariant submitted a document titled ‘Job Profile’ for the Account Manager Role and the Customer Service Coordinator role. 2 The duties and prerequisites of the two roles are different. Ms Paterson undertook training to assist her to meet the requirements of the new role.3 In addition, the new role was located in the client’s workplace and was accompanied by a significant salary increase as a result of increased responsibilities. At the hearing Ms Paterson contended that the roles were the same, Clariant conceded there was some overlap within a range of 10-30%. I have made allowance for the claim by Ms Paterson that her customer service role duties did not fit perfectly with the job profile. I find that the Account Manager role was not substantially the same as the Customer Service Coordinator role.

[15] On 4 October 2016, Ms Paterson agreed to commence employment with Clariant as an Account Manager commencing on 10 October 2016. For a period, Ms Paterson performed duties in both roles.

[16] It appears that Clariant filled the Customer Service Coordinator vacancy created by the employment of Ms Paterson via Airswift. 4 Ms Paterson assisted in training the Airswift employee until December 2016 to provide relief for her if required.

[17] Ms Paterson’s employment ceased on 6 April 2017.

[18] It is clear that Ms Paterson’s service with Clariant is insufficient to meet the minimum employment period. The fact that the probationary clause was removed from her Clariant employment contract does not change the obligations in s.382 of the Act.

[19] At the hearing, Ms Paterson also contended that her service with Airswift should be regarded as continuous with her Clariant service as she was subject to a transfer of employment. Ms Paterson accepts that there is no legal connection between Airswift and Clariant but that her role was ‘outsourced’ and then ‘insourced.’ Clariant dispute such a characterisation.

[20] Section 22(5) of the Act provides 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)).”

[21] Section 22(7), (8) of the Act provides as follows;

“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.”

[22] There is no doubt that Clariant is a national system employer. I have no information as to the status of Airswift. Ms Paterson accepts that Airswift and Clariant are not associated entities.

[23] As a result of s.22(8) of the Act, for there to be a transfer between Airswift and Clariant the requirements of s.22(7)(b) must be satisfied.

[24] The meaning of transfer of business is contained in s.311 of the Act which provides as follows:

“When does a transfer of business occur

Meanings of transfer of business, old employer, new employer and transferring work

(1)  There is a transfer of business from an employer (the old employer ) to another employer (the new employer ) if the following requirements are satisfied:

(a)  the employment of an employee of the old employer has terminated;

(b)  within 3 months after the termination, the employee becomes employed by for the new employer;

(c)  the work (the transferring work ) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d)  there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

Meaning of transferring employee

(2)  An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3)  There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a)  the old employer or an associated entity of the old employer; and

(b)  the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c)  that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d)  that relate to, or are used in connection with, the transferring work.

Old employer outsources work to new employer

(4)  There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.

New employer ceases to outsource work to old employer

(5)  There is a connection between the old employer and the new employer if:

(a)  the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and

(b)  the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.

New employer is associated entity of old employer

(6)  There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”

[25] Based on the material before me, I find that the requirements of s.311(1)(a) and (b) of the Act have been met.

[26] Based on the material before me, it does not appear that the role Ms Paterson performed whilst an employee of Airswift was substantially the same as the role Ms Paterson accepted with Clariant and thus the requirements of s.311(1)(c) have not been met.

[27] In addition, s.311(1)(d) requires there to be a connection between the old and new employer. Ms Paterson contends that the Clariant role was insourced then outsourced in a manner provided for by s.311(5) of the Act.

[28] The role at Woodside was ‘awarded’ to Clariant in September 2016. 5 The original discussions about Ms Paterson taking the role began in July 2016 in anticipation of the award. It appears to me that in respect of this role it was a new opportunity for Clariant to provide services to Woodside and did not represent a decision to either insource or outsource this function. There is no evidence before me to suggest that Ms Paterson’s role of Account Manager (or Tank Manager as it is variously described in the Statements submitted) was insourced or outsourced in a manner which would enliven s.311(5) of the Act.

[29] As the requirements of s.311(1)(c) and s.311(1)(d) have not been met, I find that a transfer of business has not occurred and thus the requirements of s.22(7)(b) of the Act have not been met and, accordingly, Ms Paterson’s service with Airswift cannot be counted as service with Clariant.

[30] I am satisfied that Ms Paterson has not completed the required minimum employment period and, therefore, is not a person protected from unfair dismissal under s.382 of the Act.

[31] Consequently, the application is dismissed and an Order 6 to this effect will be issued.

COMMISSIONER

Appearances (Telephone):

Ms W.Paterson the Applicant.

Ms K.Dennis of the Australian Industry Group on behalf of the Respondent.

Hearing details:

2017.

Adelaide:

14 July.

 1   Statement of David Shaw, paragraph 12

 2   Statement of Bernie Kelly, attachment BK2, BK3

 3   Statement of Wendy Paterson, paragraph 11

 4   Statement of Wendy Paterson, paragraph 17

 5   Statement of David Shaw, paragraph 6

 6   PR594668

Printed by authority of the Commonwealth Government Printer

<Price code C, PR594667>