Amanda Myburgh v Variety NSW the Children's Charity

[2011] FWA 7925

[2011] FWA 7925

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Amanda Myburgh
v
Variety NSW the Children’s Charity
(U2011/9823)

COMMISSIONER HARRISON SYDNEY, 16 NOVEMBER 2011

Termination of employment - minimum employment period - small business.

[1] This is an application by Amanda Myburgh (the Applicant) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of her employment by Variety NSW the Children’s Charity (the Respondent) on 30 June 2011.

[2] The Respondent lodged a jurisdictional objection to the application contending that at the time of termination, the Respondent was a small business employer pursuant to s.23 of the Act. Accordingly, the Applicant was required to be employed for a 12 month period not 7 months and 22 days as is the case in this matter.

[3] Subsection 396(b) of the Act states that before dealing with the merits of an application, the Tribunal must determine if the Applicant is protected from unfair dismissal.

[4] Section 382 of the Act reads as follows:

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.

[5] The Respondent further contends that the Applicant is not an employee who is protected against unfair dismissal because the Applicant, at the time of the notice of termination was an employee who was yet to complete the minimum employment period, as further set out at s.383 of the Act:

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.

[6] The Applicant’s submissions state that at the date of her termination being 30 June 2011, the Respondent “employed at least 18 employees” including herself and the Newcastle office. Moreover, it was submitted that Variety Australia Limited (VAL) is a related entity.

[7] An extract from the Respondent’s webpage states the international mission is “dedicated to promoting and protecting the health and well-being of children around the world. Through our network of 43 Tents (or Chapters) in 13 countries.” There are 80 branches worldwide with seven in Australia representing all States and Territories, each publishing identical statements and in total employing 52 full time staff around the country. It was submitted that the Respondent’s international and Australian branches all share common branding, names and logos.

[8] Having regard to s.4(a) of the Corporations Act 2001 (the CA), it was submitted the State offices work together as one under the auspices and governance of VAL.

[9] The Applicant submitted that VAL and the majority of the States share a national data base. VAL also shares office space with the Respondent at its premises located at Rozelle NSW.

[10] “Associated entity” is defined in s.12 of the Act as “the meaning given by section 50AAA of the Corporations Act 2001”.

[11] Section 50AAA of the CA reads as follows:

Associated entities

(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

(2) This subsection is satisfied if the associate and the principal are related bodies corporate.

(3) This subsection is satisfied if the principal controls the associate.

(4) This subsection is satisfied if:

(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

(5) This subsection is satisfied if:

(a) the associate has a qualifying investment (see subsection (8)) in the principal; and

(b) the associate has significant influence over the associate; and

(c) the interest is material to the associate.

(6) This subsection is satisfied if:

(a) the principal has a qualifying investment (see subsection (8)) in the associate; and

(b) the principal has significant influence over the associate; and

(c) the interest is material to the principal.

(7) This subsection is satisfied if:

(a) an entity (the third entity) controls both the principal and the associate; and

(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.

(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

(a) has an asset that is an investment in the second entity; or

(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.

[12] Mr David Small, Chief Executive Officer of the Respondent, provided sworn evidence regarding its operations, structure, membership and constitution. It was his evidence that at the date of termination, the Respondent employed 12 employees, excluding casual employees not employed on a regular and systematic basis and including the Applicant. In support he tendered a print out of the payroll for the period of October through December 2011. Whilst this document showed the current list of employees I requested a copy of the records for the period April through June which covered the actual period of the Applicant’s employment. This was subsequently provided to myself and the Applicant.

[13] In summary Mr Small’s evidence was:

• He is a non-voting member of a board of nine directors;



• The Respondent does not control or influence any other entity and no other entity controls the Respondent;



• The Respondent holds shares in VAL which is a public company, limited by guarantee;



• The Respondent is one of seven equal shareholders in VAL and has one casting vote at a general meeting;



• The other shareholders of VAL are the other State bodies of Variety;



• There is no formal relationship between any of the other State bodies of Variety and the Respondent nor is there any formal relationship between the Respondent and VAL save for its role as a shareholder;



• No cross investment occurs with any entity;



• All decisions of the Respondent are made independently by its board of directors. None of those directors have any control over, or are controlled by VAL or any other State Variety body.

[14] During cross examination Mr Small was questioned in detail about the employment status and duties of 18 employees nominated by the Applicant as being full time employees for the purpose of the small business definition.

[15] It is not necessary to record the precise detail of each employee’s particular circumstances save to record it was the evidence of Mr Small that seven persons listed by the Applicant were either not employed, were casual employees or were not employed on a systematic or regular basis.

[16] In further cross examination, Mr Small was questioned about the financial and organisational relationship between the Respondent and VAL. Mr Small’s evidence was that the only association is through goodwill and cooperation.

[17] In considering whether the Respondent is an associated entity of the States and National body (VAL) the question of control needs to be considered.

[18] Section 50AA of the CA defines control as follows:

Control

(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(4) If the first entity:

(a) has the capacity to influence decisions about the second entity’s financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;

The first entity is taken not to control the second entity.

Conclusion

[19] The Applicant relied on the presence of a common web site, shared publicity material and information sharing as the basis to establish an association of the various entities of the Respondent.

[20] In determining this matter it is necessary to look beyond organisational and logistical arrangements between state and national and separate the superficial from the factual. The evidence of Mr Small satisfies me that the Respondent does not exercise any control over VAL or vice versa nor can the State branches be considered as associated entities. I find that VAL is an unrelated entity to the Respondent.

[21] Further, having regard to the payroll records provided, I find that at the time of the termination of the Applicant, the Respondent employed 12 employees.

[22] On the basis of the above findings, the Respondent is a small business employer. In this matter the Applicant was employed for a period less than 12 months, therefore, the application pursuant to s.394 of the Act must be dismissed.

COMMISSIONER

Appearances:

A Myburgh, the Applicant

S Lynch, Somerville Legal with D Small, Variety NSW the Children’s Charity

Hearing details:

2011.
Sydney:
14 October 2011.

Final written material:

21 October 2011.

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