Carol Haslam v Fazche Pty Ltd T/A Integrity New Homes
[2013] FWC 7595
•30 SEPTEMBER 2013
[2013] FWC 7595 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Carol Haslam
v
Fazche Pty Ltd T/A Integrity New Homes
(U2013/1575)
COMMISSIONER WILSON | MELBOURNE, 30 SEPTEMBER 2013 |
Application for Unfair Dismissal Remedy; whether employer a small business employer.
[1] The question to be decided in this matter is whether Ms Carol Haslam is a person protected from unfair dismissal within the meaning of section 382 of the Fair Work Act 2009 (the Act) in respect of her employment with Fazche Pty Ltd, trading as Integrity New Homes Adelaide (Fazche).
[2] If Ms Haslam is a person protected from unfair dismissal, a consequential preliminary issue for me to determine is whether she has been dismissed within the meaning of section 385 of the Act. The question in relation to that issue is whether Ms Haslam was dismissed or whether she resigned.
[3] Ms Haslam was employed by Fazche on 1 August 2012 and her employment finished on 10 May 2013. In recording these dates I make no finding as to whether the termination was either a resignation or dismissal. The period of her employment therefore was just over nine months and one week.
[4] The significance of this period of employment is that her former employer asserts it was a small business employer which as a result of s.383(b) of the Act means the minimum employment period applicable to Ms Haslam is one year. If Fazche is not a small business employer, it follows that the minimum employment period is six months. Because of the provisions of s.382, a person is not protected from unfair dismissal unless they have been employed for at least the minimum employment period. Sections 382 and 383 provide as follows;
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.
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.
[5] Section 396 of the Act requires the determination of certain matters before considering the merits of the application. The construct of the provision is mandatory;
396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
[6] While Fazche asserts that the company is a small business employer, with the consequence that Ms Haslam is not a person protected from unfair dismissal, the company does not assert there has been a dismissal consistent with the Small Business Fair Dismissal Code.
[7] I therefore turn to determine whether Ms Haslam is a person protected from unfair dismissal.
[8] Section 23 of the Act deals with the meaning of small business employer. For the purposes of this decision, it is only s.23(1) that is directly relevant;
23 Meaning of small business employer
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
...
[9] The evidence on this matter is confined. The evidence provided by Fazche is that at the time Ms Haslam’s employment ended, it employed 11 people, and that while it engaged a number of other people during the time of Ms Haslam’s employment, those people were independent contractors and not employees. The witness evidence of Mr Fazzari, who is a Director of Fazche, supported this contention, as did the evidence of Mr Michael O’Callaghan, who was a colleague of Ms Haslam’s during the period of her engagement.
[10] In these proceedings, Fazche concedes that Ms Haslam was an employee 1. However that concession was only given after her engagement with Fazche ended. One point of significant tension between Ms Haslam and Fazche during the time she worked for the company was its desire for her to be treated as an independent contractor. This is significant in that the nature of Mr O’Callaghan’s work and the manner in which it was performed have some similarity to Ms Haslam’s, as perhaps do the terms of his engagement.
[11] Mr Fazzari is a director of Fazche Pty Ltd, but does not consider himself an employee. His evidence was that Fazche had 11 employees on 10 May 2103 2.
[12] In contrast, part of Ms Haslam’s evidence was that she recollected 26 people working for the company 3, and the documents she submitted in response to the Commission’s Directions for preparation for arbitration included a list of people by name and job title4. She conceded it was feasible that there might be some people on the list who are employees and some people who are contractors5. In addition to people’s names, the list is numbered from 1 to 26, and it reconciles to Mr Fazzari’s evidence in the following way, noting firstly that Mr Fazzari identifies 2 further people not included on Ms Haslam’s list; and secondly, that I have chosen to de-identify most of the individuals in order to protect their privacy;
- 11 people categorised as employee by Mr Fazzari; who have these numbers in Ms Haslam’s list - 3, 5, 9, 11, 12, 13, 14, 15, 26, together with two other people not included in Ms Haslam’s list;
- 9 people categorised as contractor by Mr Fazzari; who have these numbers in Ms Haslam’s list - 1 (being Mr Fazzari); 4, 6, 8, 20, 21, 22, 23 (Mr O’Callaghan) and 24 (Ms Haslam);
- 6 people categorised as having left Fazche before Ms Haslam left the company; who have these numbers in Ms Haslam’s list - 2, 7, 10, 16, 17, 19;
- 2 other people; one of whom it is Mr Fazzari’s evidence only attended for an interview and never worked for the company, and the other who he does not know. 6
[13] The 11 people categorised by Mr Fazzari as being employees are described in Ms Haslam’s list as having the following job/title (noting that two employees were not mentioned on Ms Haslam’s list and their occupations were not provided in the evidence). The numbers refer to the corresponding number of the person on Ms Haslam’s list;
3 Draughtsman then general manager
5 Accounts
9 Marketing
11 Selections
12 Project manager
13 Project manager
14 Estimator
15 Draughtsman
26 Contract administrator
[14] The 9 people categorised as contractors by Mr Fazzari are described by him as having the occupation indicated in the left-hand column of the table below, and in Ms Haslam’s list as having the job/title indicated in the right-hand column. For the purposes of identification, the numbers in the left-hand column refer to the relevant paragraph of Mr Fazzari statement, and the numbers in the right-hand column refer to the number of the person on Ms Haslam’s list:
7.1 Director (Mr Fazzari) | 1 Managing Director (Mr Fazzari) |
7.2 Integrity New Homes Support Consultant | 4 Assist |
7.3 Energy Ratings Consultant | 6 Designer |
7.4 Projects Manager | 8 Project Manager |
7.5 Sales Consultant | 20 Sales |
7.6 Sales Consultant | 21 Sales |
7.7 Sales Consultant | 22 Sales |
7.8 Sales Consultant (Mr O’Callaghan) | 23 Sales (Mr O’Callaghan) |
7.9 Sales Consultant (Ms Haslam) | 24 Sales (Ms Haslam) |
[15] Mr Fazzari provided evidence in respect of his own circumstances, indicating that he is a contractor to Fazche, which I accept. I also accept the evidence that he provided in respect of the three people he identifies as the Integrity New Homes Support Consultant (7.2), the Energy Rating Consultant (7.3) and the Project Manager (7.4).
[16] Five people are referred to within Mr Fazzari’s statement as being Contractor Sales Consultants, one of whom is Ms Haslam. After removing Ms Haslam from this group on the basis that she is conceded by Fazche to be an employee, the task turns to whether or not the four remaining sales consultants should, in all the circumstances be regarded as employees for the purposes of determining whether or not Fazche was a small business employer, one of whom is Mr Michael O’Callaghan.
[17] Mr O’Callaghan gave evidence on behalf of Fazche about the circumstances of Mr O’Callaghan’s engagement with the company, as did Mr Fazzari. The three remaining sales consultants (7.5, 7.6 and 7.7) did not give evidence in these proceedings. The evidence given by Mr Fazzari and Mr O’Callaghan on the topic included;
- Mr O’Callaghan is a contractor remunerated through commission only; 7
Fazzari’s evidence
In respect of Mr O’Callaghan
He supplies his own vehicle; 8
He has no minimum number of working hours; 9
He has the right to assign or appoint other staff and to have his own employees; 10
Mr O’Callaghan presents invoices to Fazche, which are the basis of the company’s payment to him. 11
- In respect of a sales consultant other than Mr O’Callaghan, that sales consultant has brought in another person to work for them; 12
Generally
Fazche does not pay workers’ compensation premiums on the remuneration of sales consultants; 13
Sales consultants can choose how many hours they work each week, with their payment relating to the number of leads they obtained. 14
- He works for entities other than Fazche; 15
O’Callaghan’s evidence
He has provided an Australian Business Number (ABN) to Fazche for the purposes of payment both by Fazche 16 and other entities for whom he provides services;17
He was presented with a “sales employment contract” by Fazche which he read but did not accept 18. After considering it, he discussed it with Mr Fazzari and the former General Manager and the three jointly came to the conclusion that he would not sign it, but would instead be paid through a retainer and a commission19; and that he would be paid the commission on presentation of an invoice;20
A copy of an invoice he presented to Fazche is included in Mr Fazzari’s statement 21. Mr O’Callaghan drew the invoice up himself;22
The invoice includes a statement that says “This is a payment claim made under the Building and Construction Industry Security of Payment Act.” 23 The statement is common practice for inclusion by all subcontractors to builders and means he gives notice of his right to pursue non-payment of the invoice through a tribunal.24
[18] The context within which this issue must be decided includes that of the different treatment afforded to small business within the Act, and in particular a recognition that small businesses do not have the same resources available to them as larger businesses in order to structure and conduct their affairs. For example, the Objects of Part 3-2 of the Act, dealing with Unfair Dismissal, refer to the establishment of a framework that balances the needs of employees with the needs of business generally and small business in particular 25. The Objects also include establishing procedures for dealing with unfair dismissal that are quick, flexible and informal26. In addition, a small business employer may be protected from action against them if they can show they have complied with the Small Business Fair Dismissal Code27; an employee must work in a small business for a longer time in order to be a person protected from unfair dismissal28; and factors that the Commission must take into account in determining whether a dismissal is harsh include the size of the business from which the employee was dismissed and whether the business had available to it dedicated human resource management specialists or expertise in making its decision29.
[19] Fazche submitted that the Commission should approach the task of resolving the number of people employed by the company bearing in mind the objects of the Act and in particular those applying to small businesses which include resolving the disputes which arise quickly, efficiently and without undue expense or delay 30. Consistent with this obligation, the Commission should infer the arrangements for the three sales consultants remaining in question to have a similar effect to Mr O’Callaghan’s arrangements31.
[20] This was submitted to be consistent with two other occasions on which the Commission has had to determine an issue of this type, in which, Fazche submitted, the analysis was conducted not with the same sort of rigour that might be conducted in a Court facing a sham contracting allegation or the like 32. In Chee v Renown Business Solutions Pty Ltd33 the tribunal had the benefit of evidence from the two individuals about whom there was a contest as to whether they were an employee or contractor, and found that both were employees. In Welfelt and Goodman v Cantina Mobil Pty Ltd34 the Commission made an assessment of the employment status of four individuals without receiving evidence directly from them.
[21] In both cases, the indicia developed in Viewdaze 35 was considered and applied.
[22] Mr O’Callaghan’s arrangements allow him considerable freedom about when he works and how long he works and whether he engages other people to assist him. He can work for other entities and is not closely controlled about how he does his work, however he does not provide significant tools or equipment. He provides invoices to Fazche which generate payment and asserts the right to use specialist State legislation to his benefit in the event the invoices are not paid.
[23] While Fazche concedes that Ms Haslam is an employee, the evidence indicates that for the period of her engagement and after, the company regarded her as a contractor. A central part of the dispute between them surrounds Ms Haslam’s unwillingness to be treated as a contractor, which led to considerable tension between her and the company. The evidence indicates that in some, but not all, respects the factual base of her arrangement with Fazche were similar to those of Mr O’Callaghan. The similarities include the nature of the work and the manner in which it was performed 36 and the method of remuneration. The differences include that a “sales consultant agreement” was signed by Ms Haslam37, whereas Mr O’Callaghan discussed but did not sign a “sales employment contract”; and Ms Haslam did not provide Fazche with an ABN, despite being asked to do so.
[24] I am satisfied, after taking into account the evidence provided in this matter and considering the Viewdaze indicia as it applies to Ms Haslam that the concession by the company about Ms Haslam’s status does not disturb the finding I should make about Mr O’Callaghan. I am not asked to find whether Ms Haslam was properly an employee or a contractor, and I make no finding in that regard.
[25] After considering the indicia, I am satisfied that Mr O’Callaghan is properly classified as a contractor, and I do so after considering the totality of the relationship between him and Fazche.
[26] While there is little evidence before me in respect of the three other sales consultants, their situation is referred to in Mr Fazzari’s statement. Each has provided an ABN to Fazche 38; none receives annual leave, sick leave, long service leave or other statutory leave; they are entitled to work elsewhere provided it does not conflict with Fazche’s work; they have no minimum hours of work; and Fazche makes no PAYG tax deductions on their behalf39.
[27] After taking into account the small business object of Part 3-2 of the Act, which deals with unfair dismissal, and the evidence before me, I am satisfied that each of the three sales consultants (referred to for the purposes of identification as 7.5, 7.6 and 7.7 in the summary of Mr Fazzari’s evidence above) are contractors and not employees.
[28] The summary above of people working for Fazche indicates Mr Fazzari categorised 11 people as employees. With the concession by Fazche that Ms Haslam was also an employee, the number of people I find to have been employed by Fazche is 12, which is within the threshold of a small business employer.
[29] I find that Fazche at the time Ms Haslam’s employment ended employed fewer than 15 employees 40. As a result, I find that the minimum employment period required to have been served by Ms Haslam before she is a person protected from unfair dismissal is 12 months41.
[30] For the reason she was employed only between 1 August 2012 and 10 May 2013, a period of just over nine months I find that Ms Haslam is not a person protected from unfair dismissal, and accordingly I must dismiss her application.
[31] Because of this finding, it is not appropriate for me to consider whether Ms Haslam resigned her employment from Fazche.
[32] An Order dismissing Ms Haslam’s application has been issued in conjunction with this decision.
COMMISSIONER
Appearances:
Ms C. Haslam on her own behalf.
Mr A. Manos, of Counsel, instructed by Ms N. Nemer, solicitor, for Fazche Pty Ltd, trading as Integrity New Homes Adelaide.
Hearing details:
2013.
Adelaide:
August, 12 and 13.
1 transcript, PN 89
2 Witness statement of Nicola Fazzari, Exhibit R4, para 5
3 transcript, PN 293 - 297
4 This was not tendered as an exhibit, and I have subsequently marked it for identification as MFI-1
5 transcript, PN 297
6 Witness statement of Nicola Fazzari, Exhibit R4, para 10.7 and 10.8
7 transcript, PN 1213
8 transcript, PN 1232
9 transcript, PN 1248
10 transcript, PN 1253
11 Witness statement of Nicola Fazzari, Exhibit R4, Annexure NF-1A
12 transcript, PN 1256 - 1259
13 transcript, PN 1262
14 transcript, PN 1277
15 transcript, PN 1309
16 transcript, PN 1308
17 transcript, PN 1312
18 transcript, PN 1321
19 transcript, PN 1334
20 transcript, PN 1346
21 Witness statement of Nicola Fazzari, Exhibit R4, Annexure NF-1A
22 transcript, PN 1349
23 transcript, PN 1353
24 transcript, PN 1355 and 1362
25 Fair Work Act, s.381(a)
26 ibid, s.381(b)(i)
27 ibid, s.385(c) and s.388
28 ibid, s.382 and s.383
29 ibid, s.387(f) and (g)
30 transcript, PN 2048
31 transcript, PN 2116
32 transcript, PN 2129
33 [2012] FWA 5137
34 [2013] FWC 4668
35 Abdalla v Viewdaze Pty Ltd, AIRCFB, (2003) 121 IR 215, Print PR927971 at [34]
36 PR927971 at [34]
37 transcript, PN 272 - 274
38 Witness statement of Nicola Fazzari, Exhibit R4, para 7.5 - 7.77
39 ibid, para 9
40 Fair Work Act, s.23(1)
41 ibid, s.383(b)
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