[2018] FWC 2300
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394 - Application for an unfair dismissal remedy

Mrs Young Sun Kim-Walker
v
Trisap Group Pty Ltd
(U2018/763)

DEPUTY PRESIDENT COLMAN

MELBOURNE, 23 APRIL 2018

Unfair dismissal application – applicant not an employee – application dismissed

[1] This decision concerns an application by Mrs Young Sun Kim-Walker for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Act). The respondent, Trisap Group Pty Ltd (Trisap), objects to the application on two jurisdictional grounds. First, it contends that Mrs Kim-Walker was not an employee of the company. Secondly, it says that, even if she was an employee, her unfair dismissal application was filed outside the 21 day period prescribed by s.394(2).

[2] The company’s jurisdictional objections were listed before me on 13 April 2018. I conducted the proceeding by way of determinative conference. The company was represented by Mr D. Ramsay, its managing director, and Mr C. Watts, a director. Mrs Kim-Walker appeared for herself. All three gave evidence and made submissions.

[3] Section 396 of the Act provides that the Commission must decide four matters before considering the merits of an unfair dismissal application. One of these is the question of whether the applicant was a person protected from unfair dismissal. A person can only be protected from unfair dismissal if she or he was an employee who had completed a minimum period of employment (see s.382). An unfair dismissal application cannot proceed if the applicant was not an employee. Another of the four preliminary matters that the Commission must decide before considering the merits of an application is whether the application was made within 21 days after the dismissal took effect. The other two preliminary matters are not presently relevant.

Background

[4] Trisap is a private company founded in 2015 by Mrs Kim-Walker and her husband, Dr Alan Walker. The company mines and distributes an industrial mineral that is used in the production of fertiliser. Mrs Kim-Walker is a director of the company. Her husband is the chairman of the board.

[5] Until January 2018, Mrs Kim-Walker was the company secretary of Trisap. In late 2017, the board considered listing the company on the Australian Securities Exchange. The company conducted an audit and due diligence. These indicated to Mr Ramsay that the company’s accounts were not in good order, and that there had been a lack of corporate governance. He considered that this was a result of Mrs Kim-Walker not performing her role of company secretary to an acceptable standard. Mr Ramsay believed that the company would need a suitably qualified and experienced company secretary in order to be ready for a public listing, and that Mrs Kim-Walker should be replaced. I note that Mrs Kim-Walker does not accept that her performance as company secretary was deficient.

[6] There appear to have been some discussions between members of the board and Mrs Kim-Walker about her resigning from the position of company secretary, however she did not resign. The board of the company then decided to remove her from this position.

[7] On 3 January 2018, a board resolution was passed to remove Mrs Kim-Walker immediately from the position of company secretary. The resolution also requested Mrs Kim-Walker to resign her position as a director of Trisap, and stated that if the resignation was not received by 5.00pm on 4 January 2018, the board would take action to remove her as a director.

[8] According to Mrs Kim-Walker, on 4 January 2018, Dr Alan Walker told her that the board wanted her to resign both from her role as company secretary and as a director. She says that it was not until the following evening that Dr Walker told her that the board had removed her as company secretary.

[9] The company contends that Mrs Kim-Walker was not an employee, and that even if she was, the dismissal took effect on 3 or 4 January 2018. This would put her application for an unfair dismissal remedy, which was lodged on 26 January 2018, out of time. Mrs Kim-Walker says that she was an employee of the company, and that her dismissal took effect on 5 January 2018, such that her application was filed within the 21 day period prescribed by s.394(2).

Was Mrs Kim-Walker an employee of Trisap?

[10] Trisap submitted that Mrs Kim-Walker was not and had never been an employee of the company. Mr Ramsay said that, as is common for small start-up companies, its directors and shareholders have performed work for the company without entering into any employment relationships. The reward for their labour is a share in the company.

[11] Mr Ramsay’s evidence was that he was not aware of anything pointing to the existence of an employment relationship between the company and Mrs Kim-Walker. There was no written contract of employment, and company directors had made no representations to Mrs Kim-Walker that she was an employee.

[12] Mr Ramsay said that between March 2016 and November 2017, Trisap had made seventeen payments to a company owned by Mrs Kim-Walker, Carillon Group Pty Ltd (Carillon), for various services. However, he said that, having reviewed the company’s accounts, he could identify only one instance where the company had ever made a payment directly to Mrs Kim-Walker. This was for an amount of $450, which Mr Ramsay understood to have been a reimbursement.

[13] Mr Ramsay said that Mrs Kim-Walker had not been afforded annual, personal or other leave, or any other employment-related benefit. The company did not make superannuation payments to a nominated fund on her behalf. Nor did it deduct tax from any of the payments made to her company.

[14] Mrs Kim-Walker gave evidence that she considered herself to be an employee. She said that her husband had told her that if she supported the business, she would be rewarded. She said that she had built the company website, managed the company’s dealings with ASIC, carried out business administration, performed IT and accounts tasks, assisted the board generally and corresponded with shareholders internationally.

[15] Mrs Kim-Walker contended that on 1 October 2017, the other directors signed employment contracts that provided that they would be paid salaries and afforded certain other benefits. Mr Ramsay said that the payments under these contracts were contingent on the company’s cash position, and that no payments would be made until the company is in a position to afford them. He said that the board had in any event decided to replace these contracts.

[16] It was not contended that Mrs Kim-Walker was a party to any of these contracts.

[17] Mrs Kim-Walker contended that one indication of her status as an employee was that she was not able to delegate her work to others. In this regard, she stated that she alone was the company secretary, and there was no money to pay anyone else to do the work. However, as I explained in the proceedings, the inability to delegate is an indication of an employment relationship, insofar as employees are not usually permitted to delegate their work to others. The fact that there was no one else available to whom the work might be delegated is not a relevant factor.

[18] In my opinion Mrs Kim-Walker was not an employee of Trisap. There is simply no evidence to suggest otherwise. There is no written contract of employment. There is no evidence or contention as to the existence of an oral contract of employment. Nor do the facts in evidence establish the existence of an implied contract.

[19] Mrs Kim-Walker was not paid a salary. Other than the $450 reimbursement, she was not paid directly at all. The seventeen payments made by Trisap to Mrs Kim-Walker’s company Carillon do not support an inference that an employment relationship existed. In theory, there is nothing to preclude a person working as an employee for a company, and separately providing services to the company through their own corporate entity. But this is not what occurred here.

[20] Mrs Kim-Walker was not able to identify when she believed her employment commenced, who told her she was an employee, or otherwise how she became or was an employee. There is no documentary evidence to point to the existence of an employment relationship, nor was anything done or said by a director or representative of the company to suggest that she was an employee.

[21] Mrs Kim-Walker stated in her evidence that she had worked very hard for the company and that she did everything possible to attract investors. However, this is what the founders and shareholders of a new business commonly do. The compensation for effort is equity, and a share in the success of the business. In this regard, it was uncontested that Mrs Kim-Walker is the largest shareholder in the company.

[22] A company secretary is an officer of a company, the responsibilities of which are regulated by the Corporations Act 2001. An officer of a company can also be an employee of a company, but this is not necessarily the case. In small private companies, it is common for a person to undertake the role of company secretary without entering into any employment relationship with the company. This is what occurred in the present case. No doubt Mrs Kim-Walker has worked hard for the company she founded with her husband in 2015. But she was not an employee of that company.

[23] Finally, Mrs Kim-Walker contended that between 2010 and 2015, she worked for a company called Trident Resources Group Pty Ltd (Trident). Her written materials enclosed an invoice that she had submitted to this company from 2013 in respect of ‘salary’. However, this is a separate entity from Trisap. Trident was apparently established in Singapore by Dr Walker and Mrs Kim-Walker some years ago. That company is not a party to the present proceedings. Any work Mrs Kim-Walker may have performed for that company is not relevant to the question of whether she is an employee of Trisap.

[24] In light of my conclusion that Mrs Kim-Walker was not an employee of Trisap, it is not necessary for me to consider whether her unfair dismissal application was lodged within the 21 day period prescribed by s.394(2). As she was not an employee of Trisap, Mrs Kim-Walker cannot bring an unfair dismissal application under s.394 of the Act.

[25] Accordingly, Mrs Kim-Walker’s application for an unfair dismissal remedy is dismissed.

Seal of the Fair Work Commission with member's signature

DEPUTY PRESIDENT

Appearances:

Mrs Kim-Walker, Young Sun, for herself

Mr D. Ramsay and Mr C. Watts for Trisap Group Pty Ltd

Hearing details:

2018

13 April

Melbourne

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