What is a person conducting a business or undertaking (PCBU)?

The term person conducting a business or undertaking or PCBU refers to the legal entity running the business or undertaking, and includes incorporated entities, sole traders, partners of a partnership and certain senior ‘officers’ of an unincorporated association. It also refers to the Commonwealth including its Departments, local governments and other government businesses and undertakings.

Not all PCBUs are covered by the laws to stop bullying and/or sexual harassment in the Fair Work Act.

Public and private sector employers (including the self-employed) are the largest category of PCBU, but the term is broader and also includes principals that use contractors or subcontractors as well as franchisors and bailors.

A person (including a corporate entity)[38] may conduct a business or undertaking alone or with others[39]. It is irrelevant whether the business or undertaking is conducted for profit or gain[40].

The following are examples of persons or bodies that are not a business or undertaking under these laws:

• a person engaged solely as a worker in, or as an officer of, that business or undertaking[41]
• an elected member of a local authority (acting in that capacity),[42] or
• a wholly ‘volunteer association’ that does not employ anyone (whether incorporated or not).[43]

Volunteer associations (whether incorporated or not) that do not employ anyone, do not conduct a business or undertaking.[44] The Commission does not have power to deal with workplace bullying and/or sexual harassment claims made by persons who may be at work in a volunteer association.

‘Acting together for one or more community purposes’ includes ‘philanthropic or benevolent purposes, including the promotion of art, culture, science, religion, education, medicine or charity’ and ‘sporting or recreational purposes, including the benefiting of sporting or recreational clubs or associations’.[45]

If a person is employed to carry out work,[46] the volunteer association may be considered a business or undertaking.

Related information

• What is a Territory or a Commonwealth place?
• What is the Commonwealth?
• What is a Commonwealth authority?
• What is a body corporate incorporated in a Territory?

The following case examples are drawn from Commission decisions in relation to applications to stop bullying at work. The phrase ‘at work in a constitutionally-covered business’ and the definition of ‘constitutionally-covered business’ (in s.789FD of the Fair Work Act) apply to the Commission’s workplace bullying and sexual harassment jurisdiction.

Summary of case examples

Caretaker/owner of holiday resort business - Constitutionally-covered business

Re Manderson [2015] FWC 8231 (Hampton C, 7 December 2015).

Facts

The applicant was both a director and a worker of a business that provided caretaking services at a holiday resort that also had long term owners of properties.

The applicant alleged that he was experiencing unreasonable behaviour from some of the owners of the properties, some of whom were also committee members for the bodies corporate for the resort.

The applicant and the respondent parties were in dispute as to whether the bodies corporate were constitutionally-covered businesses.

Outcome

The Commission did not need to determine whether the bodies corporate were constitutionally-covered businesses because it found that, as the applicant was an employee of his own business which also employed other people, he was engaged by a PCBU and was therefore a ‘worker’ for the purposes of the WHS Act and the Fair Work Act. The applicant’s business was also a trading corporation. These 2 elements taken together meant that the applicant was at work in a business which was constitutionally covered. The necessary jurisdiction for the applicant to pursue his application was met.

Relevance

In this case, it was irrelevant whether the respondent parties were persons conducting a business or undertaking that is a constitutionally-covered business. Rather, what was significant was that the worker was at work in a constitutionally-covered business (when allegedly being bullied).

State Government – NOT a constitutionally covered business

Re A.B. [2014] FWC 6723 (Hampton C, 30 September 2014).

Facts

A.B. made an application under s.789FC of the Fair Work Act for an order to stop bullying. The application cited the Department of Education in New South Wales (the NSW Department) as his employer. The workplace was a New South Wales public school.

Outcome

The Commission found that A.B. was at work in an undertaking conducted by the NSW Department and the employer of A.B. was the Crown in the right of the State of New South Wales. The Department and/or the State of New South Wales are not corporations (and therefore not constitutional corporations). Accordingly, A.B. was not at work in a constitutionally-covered business. The Commission had no jurisdiction to deal with the application. The application was dismissed.

Relevance

A business can be a ‘national system employer’ but not a ‘constitutionally-covered business’. The 2 concepts are defined differently in the Fair Work Act. In order for the Commission to deal with an application to stop bullying and/or sexual harassment, the alleged conduct must take place while the worker is at work in a constitutionally-covered business.

Foreign Government Ministry – NOT a constitutionally covered business

Re Stancu [2015] FWC 1999 (Lee C, 26 March 2015).

Facts

The applicant made an application under s.789FC of the Fair Work Act for an order to stop bullying. He was a volunteer with Australian Volunteers International (AVI). The bullying was alleged to have taken place while he was engaged as a volunteer to perform work as a Sanitation Engineer in The Ministry of Public Works and Utilities (The Ministry) in South Tarawa, Kiribati. The applicant did not dispute that he performed work for The Ministry; however, he claimed that AVI also assumed an employer role and acted as the main employer ‘sub-contracting’ volunteers to the host organisation.

Outcome

The Commission found that, as a volunteer with the Australian Volunteers for International Development Program, the applicant was placed with a host organisation, The Ministry, for which the applicant worked.

The Ministry was located in Kiribati and was not a constitutionally-covered business. As the applicant was not at work in a constitutionally-covered business when the alleged behaviour occurred, the application fell outside the Commission’s jurisdiction to deal with bullying at work. The Commission found there was no jurisdiction for the application to proceed and the application was dismissed.

Furthermore, the applicant would have been outside the geographic application of the Fair Work Act. The applicant was not an Australian-based employee within the meaning of s.35 of the Fair Work Act. His primary place of work was not in Australia and his attendance at pre-departure briefings in Australia was an insubstantial part of his duties.

Relevance

Although AVI was a constitutionally-covered business, the applicant was not at work in that business but was instead at work in the Ministry.

Where workers are located outside of Australia, it may be necessary to consider both the geographical limits on the application of the Fair Work Act and whether the applicant was at work in a constitutionally-covered business when the alleged bullying and/or sexual harassment took place.

Local government employer - NOT a constitutionally-covered business

Applications by Mr Martin Cooper and Mr Lancelot Bagster [2017] FWC 5974 (Anderson DP, 15 November 2017)

Facts

The applications for orders to stop bullying were made against a local government employer in South Australia.  The City of Burnside objected to the Commission’s jurisdiction on the grounds that the applicants were not at work in a constitutionally-covered business.

Outcome

The workplace bullying applications were dismissed. The Commission found that the applicants were not working in a ‘constitutionally-covered business’ and it had no jurisdiction to hear the applications.

The Commission was satisfied that the City of Burnside, a local government authority, conducted a ‘business or undertaking’ within meaning of s.789FD(3) of the Fair Work Act as it had elements of organisation, systems and continuity.

The Commission held that the City of Burnside provided services overwhelmingly funded by mandated rate revenue and its activities primarily concerned community services and local representation.

The Commission noted that the fact that trading activities were not a predominant activity of the City and that it did not return a profit of any significance from its trading activities were not determinative of whether it should be classed as a trading corporation. The test is whether the trading activities are substantial rather than peripheral. Ultimately this is a question of fact and degree.

The City of Burnside’s trading activities were incidental and supplementary to its purposes as well as its operations. The Commission concluded that the trading activities of the City, at least as currently undertaken, were peripheral − they were neither substantial nor sufficiently significant for the local council to be reasonably characterised as a trading corporation.

Relevance

The Commission observed that while this decision may be of some interest to the broader local government sector in South Australia, it was based on the facts presented concerning the activities of the City of Burnside at that point in time.

Whether other councils are trading corporations will also be a question of fact and degree based on their particular circumstances and activities, and the Commission made no assessment either in-principle or in practice on this.

Local government employer – Constitutionally-covered business

Matina Bastakos [2018] FWC 7650 (McKinnon C, 18 December 2018)

Facts

The City of Port Phillip objected to the application for an order to stop bullying on jurisdictional grounds. The City argued that it was not a trading corporation and thus not a 'constitutionally-covered business’ for the purpose of s.789FD of the Fair Work Act.

Outcome

The jurisdictional objection was dismissed.

The Commission noted that the City was established to operate for the benefit of its local community and municipal district, and has a range of powers and functions, many of which are regulatory in nature. The City performs its regulatory functions in addition to, and in conjunction with, its trading activities.

The Commission noted that the City engages in trading activity for the benefit of its community, providing services to that community but also to consumers at large who engage with the City in a multitude of ways, including as visitors, customers and tenants.

The Commission held that while trading may not be its predominant activity, it is a significant one. On the Commission’s assessment, and notwithstanding the limited evidence, the value of the City’s trading activities was almost $56 million per year, or more than a quarter of total revenue. That is an amount that is not minimal, trivial or insignificant, either in an absolute or relative sense.

Relevance

The Commission noted that it was not the point that the City is a local government entity, or that some of its activities may be subject to Ministerial direction, or that its functions are predominantly to be exercised for the public good. The City was found to trade in services in a way that was considered a substantial, and not merely peripheral activity of the City.