Burdziejko v ERGT Australia Pty Ltd
[2015] FWC 2308
•1 APRIL 2015
| [2015] FWC 2308 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Nicole Burdziejko
v
ERGT Australia Pty Ltd
(U2015/139)
DEPUTY PRESIDENT GOOLEY | MELBOURNE, 1 APRIL 2015 |
Application for relief from unfair dismissal.
[1] Ms Nicole Burdziejko alleged the termination of her employment by ERGT Australia Pty Ltd was unfair. In her application she advised that she commenced employment on 10 June 2014 and his employment ended on 19 December 2014.
[2] In her application Ms Burdziejko advised that she had initially been employed by Hays to work at ERGT and after three months she was offered ongoing employment by ERGT which she accepted. She stated there had been a transfer of business from Hays to ERGT and ERGT did not advise her before she commenced employment that it would not recognise her service with Hays.
[3] ERGT filed an employer response to the application and objected to Ms Burdziejko’s employment because she had not served the minimum employment period. ERGT stated that Ms Burdziejko commenced employment on 3 September 2014. It denied there had been a transfer of business.
[4] ERGT advised that it would not participate in conciliation until its objection was determined.
[5] On 28 February 2015, ERGT provided a copy of the letter from Hays which advised that Ms Burdziejko would be assigned to ERGT from 3 June 2014. It also provided an employment summary for Ms Burdziejko dated 3 September 2014.
[6] Ms Burdziejko contends that there was a transfer of business from Hays to ERGT. She submitted that she had been employed by ERGT within three months of the termination of her employment with Hays. She further submitted that the work she performed for ERGT is the same as that performed for her for Hays. She further submitted that as a result of a labour hire agreement between Hays and ERGT her role had been outsourced to Hays in 2014. That outsourcing ended on 2 September 2014 when ERGT brought the work back in house. She submitted that she was a transferring employee. She further submitted that as ERGT did not provide her with written advice prior to her employment that her service would not count, her service with Hays counts towards her service with ERGT.
[7] ERGT accepted that it contracted Hays to provide labour. It submitted that ERGT and Hays are not associated entities. It submitted that it did not outsource work to Hays and it did not therefore cease to outsource any of its work to Hays.
[8] ERGT accepted that Ms Burdziejko performed the same work for ERGT as she did for Hays.
[9] ERGT submitted that there was no evidence that Ms Burdziejko’s casual employment with Hays was terminated.
[10] ERGT submitted that there was no transfer of business because there is no relevant connection between Hays and ERGT.
[11] It submitted that there is no evidence to support a finding that her work with Hays was a result of an outsourcing arrangement with ERGT and that her subsequent employment with ERGT arose because that outsourcing arrangement ended. It submitted that there is no evidence that Hays undertook any part of ERGT’s business or that ERGT terminated that arrangement. It was submitted that Hays did no more than contract with ERGT to provide labour.
[12] A conference was held on 25 March 2015. At that hearing I granted permission for ERGT to be represented by a lawyer as I considered that given the complexity of the issues raised it would enable the matter to be dealt with more efficiently.
Does Burdziejko’s service with Hays count as service with ERGT?
[13] The starting point for determining this is s.22 of the Fair Work Act 2009 which defines a period of service with a national system employer.
[14] S.22(5) provides that if there is a transfer of employment, the period of service with the first employer counts as service with the second employer.
[15] S.22(7) provides that there is a transfer of employment for non associated entities if the employee is a transferring employee in relation to a transfer of business from the first employer (Hays) to the second employer (ERGT).
[16] A transfer of business is not defined in s.22(7) and takes its meaning from s.311.
[17] S.311 defines when a transfer of business occurs.
[18] The following preconditions must exist:
(1) the employment with the old employer must have terminated.
(2) within 3 months the employee must become an employee of the new employer.
(3) the work of the employee must be the same or substantially the same.
(4) there must be a connection between the old and new employer as defined.
[19] In this case (2) and (3) are not disputed. While (1) was questioned, I accept that Ms Burdziejko’s acceptance of a full time position with ERGT was incompatible with continuing employment with Hays such that her employment with Hays terminated at that time.
[20] The parties are in dispute about whether there is a connection between the old and new employer.
[21] There was no submission that Hays outsourced work to ERGT, so s.311(4) has no application.
[22] S.311(5) provides:
(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.
So did Burdziejko perform the same work or substantial the same work as an employee of Hays because ERGT had outsourced the work to Hays and did then she perform the work as an employee of ERGT because ERGT had ceased to outsource the work to Hays?
[23] For the purposes of s.311(5), Hays is the old employer and ERGT is the new employer.
[24] Ms Burdziejko contended that ERGT outsourced work to Hays and then ceased to outsource the work to Hays. ERGT submitted that it did not outsource work to Hays because it never required Hays to perform work for it. It simply required Hays to provide it with “a warm body” to do the work. It was submitted that this was a straight labour hire arrangement and not caught by s.311(5).
[25] Because ERGT had gained a new client, it needed an additional employee. It sourced Hays to provide that labour as a labour hire company. Ms Burdziejko was then employed by Hays as a customer services officer at ERGT.
[26] Outsource is defined in the Macquarie dictionary as “to contract (work) outside the company rather than employ more in-house staff.”
[27] I was taken to three cases.
[28] In Whitehaven Coal Mining Ltd1 the applicant was seeking an order that the industrial instrument that applied to employees of TESA which provided labour hire services to Whitehaven not apply to the transfer of employees from TESA to Whitehaven no longer apply. While Whitehaven put that such an order may not necessary it sought one to put the question beyond doubt. Deputy President Sams found that there was a connection between the old and new employer by virtue of their outsourcing arrangements which are to continue; see 311(2) to (6).2
[29] In Kerry Thorne v Jura Australia Expresso Pty Ltd3 Commissioner Cargill in determining that Ms Thorne had been employed for the minimum employment period held that:
[47] The application or otherwise, of subsection (5), turns on whether the arrangement by which Global had been providing labour could be considered to be “outsourcing” or something else. The evidence of Mr Liakatos is that Global was the company by which labour was provided for the shareholders of Jura. In my view the fact that there was an arrangement by which other things such as vehicles and IT services were provided does not mean it was not an outsourcing arrangement.
[48] I am satisfied that Jura had outsourced the transferring work to Global and, as at the end of 2011, had ceased to outsource that work. It follows that subsection (5) is met and, consequently, so is subsection (1). There has been a transfer of business and the applicant is a transferring employee as contemplated by subsection (2).4
[30] ERGT distinguished Jura. Global provided other services unlike Hays which only provided labour.
[31] In Gausden v Silvan Pty Ltd5 Commissioner Spencer had to determine if Mr Gausden had been employed for the minimum period of employment. In that case like here Mr Gausden had been employed by Davidson Recruitment who provided his labour to Silvan. In that case Silvan submitted that the meaning to be given to “had outsourced .... work” is the contracting out of a business function or process to a third party entity.” Silvan submitted that Davidson Recruitment had no obligation to perform logistics and warehousing operations for the Respondent, that they were engaged purely as supplementary labour.
[32] Silvan further submitted that the application of the transfer of business provisions of the Act to labour hire arrangements “would be contrary to the object of Part 2-8 of the Act, which relates to the interests of employers in running their enterprises effectively.”6
[33] Commissioner Spencer found that there was no connection between Davidson Recruitment and Silvan except via the labour hire arrangement. She found that there was no evidence of a transfer of business or a transfer of assets, nor was Mr Gausden a transferring employee.7
[34] I was not taken to any full bench authorities dealing with this issue.
[35] It was submitted by ERGT that there would be a different outcome if Hays was contracted to provide wider services to ERGT.
[36] The difference is as follows. Company A decides it wants to contract out its maintenance work and it enters into a contract for the provision of maintenance services with Company B. This on ERGT’s contention would be an outsourcing of work. Alternatively Company A decides that it does not want to engage its maintenance workforce directly and engages a labour hire company, Company C, to provide workers only. In that situation on ERGT’s submission there would be no outsourcing of work. Subsequently in both examples Company A changes its mind and decides to again employ the workers doing the maintenance work directly. In the first example the employees’ service with Company B would count as service with Company A unless advised in advance in writing that it would not count. In the second example the employees’ service with Company B would not count.
[37] I do not accept the submission of ERGT that it did not outsource the work because prior to employing Ms Burdziejko the work performed by Ms Burdziejko was not required to be performed. ERGT employed customer service officers. Because it had gained a new client it had additional work that it needed to be performed. Instead of engaging an employee to perform that work, it engaged Hays to provide a person to perform that work. It outsourced the work to Hays. Further, after a period of time, it decided that it no longer wanted Hays to perform that work and decided to perform the work in house and employed Ms Burdziejko to do the same work.
[38] Unless the contract with Hays is a sham, upon engaging Hays to provide labour ERGT is no longer performing that work. Instead of ERGT engaging labour to perform the work Hays engaged the labour to perform work.
[39] The transfer of business provisions in the Fair Work Act 2009 were intended to have wider application than that provided for in the predecessor acts where the focus was on whether there was a transfer of the business between the old employer and the new employer. The application of the predecessor provisions focused the character of the business in the hands of the old employer and the new employer. The Explanatory Memorandum makes it clear that the new provisions do not focus on whether the new employer had taken over that business or part thereof but whether there has been a transfer of work between the two employers and the reason for the transfer of that work.8
[40] One only needs to take the words of the Act and apply it here.
(a) the transferring work had been performed by one or more transferring employees (Ms Burdziejko), as employees of the old employer (Hays), because the new employer (ERGT), had outsourced the transferring work to the old employer (Hays); and
(b) the transferring work is performed by those transferring employees (Ms Burdziejko), as employees of the new employer (ERGT), because the new employer (ERGT), , has ceased to outsource the work to the old employer (Hays).
[41] I therefore accept that there is a connection between the old employer (Hays) and the new employer (ERGT) such that there was a transfer of business from Hays (the first employer) to ERGT (the second employer).
[42] An employee is required to have served six months (one year if employed by a small business) employment to be protected from unfair dismissal.
[43] S.383 of the Fair Work Act 2009 provides as follows:
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.
[44] In this matter ,Ms Burdziejko commenced employment with Hays on 3 June 2014 and her employment with ERGT was terminated on 19 December 2014. Ms Burdziejko was not advised prior to the commencement of her employment with ERGT that her service with Hays would not be recognised. Because Ms Burdziejko was a transferring employee in relation to a transfer of business her service with Hays counts as service with ERGT.
[45] As Ms Burdziejko had served the minimum period of employment at the date of her dismissal, she was protected from unfair dismissal and ERGT’s objection is dismissed.
[46] Ms Burdziejko’s application is therefore referred to conciliation and if the application is not resolved, the application will be referred to a hearing/conference for determination by a member of the Commission.
DEPUTY PRESIDENT
Appearances:
N. Burdziejko on her own behalf.
S. Heathcote for the Respondent.
Hearing details:
2015.
Melbourne and Perth, by telephone:
25 March.
<Price code C, PR562735>
1 [2010] FWA 1142
2 Ibid at [12]
3 [2012] FWA 4954
4 Ibid at [47]-[48]
5 [2014] FWC 5337
6 Ibid at [26]-[28]
7 Ibid at [41]
8 Fair Work Explanatory Memorandum
Printed by authority of the Commonwealth Government Printer
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