Effie Hondrokostas v Pakenham Oil Pty Ltd

[2019] FWC 8178

[2019] FWC 8178

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Effie Hondrokostas
v
Pakenham Oil Pty Ltd
(U2019/9140)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 4 DECEMBER 2019

Application for unfair dismissal remedy – jurisdictional objection – not the employer.

Introduction

[1] On 16 August 2019, Ms Effie Hondrokostas made an application to the Fair Work Commission (the Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy in respect of her alleged dismissal by Pakenham Oil Pty Ltd.

[2] Ms Hondrokostas was dismissed from her employment on 26 July 2019.

[3] The Respondent objects to the application made by Ms Hondrokostas on the basis that she was not an employee.

[4] Ms Hondrokostas submits that she performed work for Pakenham between 17 July 2019 and 26 July 2019 when she was dismissed.

[5] It is a matter of regret that the application made by Ms Hondrokostas must be dismissed for the reasons set out below. She was employed by S.H. Petroleum Pty Ltd (S.H. Petroleum) at the date of dismissal, and not by Pakenham Oil Pty Ltd (Pakenham). The complexity of the matter is such that she lodged an application naming the wrong entity, and she is not represented. She may conceivably have a remedy against S.H. Petroleum. However, that is a matter for her.

Procedural background

[6] A mention hearing was held on 20 July, and a full hearing on 22 November 2019. Both parties were unrepresented. However, given that the factual background had been discussed in detail at the mention hearing, both sides had the opportunity to seek further advice if they wished. Despite this both sides continued to be unrepresented.

Consideration – Jurisdictional Objection

[7] Section 385 provides that a person must have been dismissed, and s.386 defines dismissal. In this case the respondent submits that the applicant was not dismissed, and the applicant disagrees.

[8] On 28 October 2019, the Respondent filed a signed and dated letter of 26 October 2019 as their outline of argument which provided as follows:

“To whom it may concern,

Effie Hondrokostas was employed to S.H Petroleum Pty Ltd, who was the commission agent of Pakenham oil pty ltd.

Pakenham Oil Pty Ltd is not the employer of Effie Hondrokostas and has no obligation to her employment.

Regards,

Sam Christofides
Director of S.H Petroleum Pty Ltd.”

[9] The applicant filed a detailed statement of facts and submissions, and a witness statement of Mr Palle and the applicant.

[10] Three people gave evidence: the applicant, Mr Zhang, and Mr Palle. Mr Christofides did not give evidence.

[11] At the hearing on 22 November 2019, Mr Zhang gave evidence that he disagreed only with two aspects of the applicant’s evidence. The first was that the applicant, in the employer’s view, was not an employee of the new business Pakenham, but only of the previous business, S.H. Petroleum. The second was that at the meeting on 25 July 2019 staff were advised in some way that employment was subject to a decision by the new business Pakenham. Mr Zhang and the applicant gave the following evidence about the meeting on 25 July and other meetings:

“MR ZHANG: … To Effie, we did tell everyone if everyone happy stay work here we happy to keep all of you, but we have to interview each and every person. Spoke to everyone individually and in a group. We found Effie not suitable for the job and we asked Sam to give her a call to tell her that we are happy to keep Effie on until she finds another job elsewhere. Effie was upset from the call form Sam and did not come to work the next day. I called her later to give her a present and had a meeting with her. She still put us on the fair work which we didn’t become her employer. Rest of the staff we did keep them because they are suitable for the job.” 1

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“THE DEPUTY PRESIDENT: I'll ask a question before you do that. You heard her version of events?---Yes.

Is there any part of that you disagree with or - it seems pretty consistent, that's all? No? You don't wish to contradict - sorry, I'll ask the question again. You heard her version of events, correct?---Yes.

Twice - today and on - when was it? Monday, I think it was? Tuesday - is there anything you disagreed with or not? No?---I disagree with - she is our employee.

I understand that, that's a legal issue. But as to the facts, you don't disagree with anything she said, correct? Putting aside the interpretations as to whether she's an employee or not - that's a legal question. That's not a factual issue. Are there any factual issues you disagree with, having heard her version of events twice?---There is one misunderstanding, I think. In the meeting - we had a meeting, okay?

Yes?---With that meeting we told - - -

This is on 25 July?---25 July.

What is the difference?---We say the transition period - we just finish the stock take. Then during that time we did an interview to every staff. So at that time we did tell if everyone happy, welcome to work here. But they didn't remember what I said. I said but if there are any changes, or there is anyone does not pass on the interview, I'm sorry, we can't keep you here.

I understand. That's the only difference of fact, is that correct?---Yes..” 2

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“THE DEPUTY PRESIDENT: The business transferred on 17 July, correct?---No, the business - the stocktaking, yes.

Just listen to my question. The business transferred on 17 July 2019, correct?---No, the business never - - -

She said that's what it did, and you agreed with her so when did the business transfer, in your opinion?---There is no business transfer between Pakenham Oil and SH Petroleum.

All right?---SH Petroleum doesn't own any business.

I understand. Thank you. Anything else?---That's it.” 3

[12] On the previous occasion he said that he did not wish her to work for the new business. 4

[13] Ms Hondrokostas had some 17 years’ service with S.H. Petroleum. From 17 July to 26 July the applicant continued in her previous job and was paid by Mr Christofides for doing so. She was paid by cash provided in an envelope by Mr Christofides. Mr Christofides was, according to his letter, a Director of S.H. Petroleum. According to Mr Christofides in his letter of 28 October 2019 the applicant was employed by S.H. Petroleum, not Pakenham, although he did not give sworn evidence, was not called as a witness, and the applicant was not given the opportunity to cross examine him on his version of events, which makes his evidence of little or no value where it is contradicted by the applicant’s evidence. However, there is nothing in his letter which directly contradicts anything put by the applicant by way of fact.

[14] Employees were asked to provide tax file documents and the applicant did so. It is agreed that Pakenham purchased and used in the new business stock from S.H. Petroleum. It is agreed that Pakenham is not a small business. The applicant listed 15 regular employees of Pakenham, which was not contested, and Mr Zhang said that there was a group of up to 7 service stations which were associated entities within s.50AA of the Corporations Act 2001 (Cth), each apparently with employees.

[15] On 25 July 2019, a staff meeting was held where it was indicated to staff by Mr Zhang that there would be no change to their work and employment status. However, Mr Zhang said that employment with Pakenham would be subject to an ‘interview’, which the applicant never received, and the applicant did not deny that Mr Zhang said this. In fact, the employee complained about the lack of an interview. I accept the evidence of Mr Zhang.

[16] On 26 July 2019, Ms Hondrokostas received a phone call from Mr Christofides on her rostered day off to advise that she would be dismissed on the basis that her ‘personality was too strong’.

[17] Was the applicant ever employed by Pakenham, or did she remain employed by S.H. Petroleum until her dismissal on 26 July?

[18] Firstly I find, and it is not in contest, that the applicant performed work at the premises between 17 July 2019 and 26 July 2019. Secondly I find, and it is not in contest, that Pakenham bought stock from S.H. Petroleum worth about $57,757.85. 5 There was a transfer of assets between the old and new business, and this is not in contest. Thirdly, it is also agreed that the applicant worked from 17 July until 26 July when she was orally dismissed by Mr Christofides and was paid in cash by Mr Christofides for that work.

[19] Was Mr Christofides acting on behalf of the old or new business when he paid her and dismissed her?

[20] The question therefore arises of when the new business, Pakenham, began work, and the old business S.H. Petroleum, ceased work. The tax invoice for the transfer of stock issued by S.H. Petroleum to Pakenham issued on 26 July 2019, with a ‘due date’ for payment of 31 July 2019. This suggests that Pakenham did not commence work until the stock was transferred, perhaps as early as by no earlier than 26 July 2019, the date that the applicant was dismissed without notice. According to the application lodged by the applicant, she was dismissed on 26 July 2019, and this took effect on 26 July 2019. There is no suggestion anywhere that notice was provided. The ‘stocktake’ was done according to that invoice on 17 July 2019. The transfer of assets was at least planned from 17 July but appears to have taken place on 26 July or later.

[21] What appears to be an undated letter 6 concerning ‘the SA Agreement’ concerns the engagement of Commission Agents, who ‘receive and keep all dry stock sales (as defined in the Sale of Assets Agreement) in the service stations’. The Commission Agents appear to be a number of entities including Pakenham, and each Agent ‘is its own entity and employs and pays its own staff’. Each Agent will take ‘all dry stock sales at each site’ and pay a stated amount (eg. 2% of ‘weekly shop sales’ at Pakenham).

[22] Mr Palle gave evidence that he ‘started work’ with Pakenham on 17 July 2019, and was formerly employed by S.H. Petroleum. He said that the applicant ‘and all the staff got transferred to Pakenham and employed’. The applicant gave similar evidence. Both were under the impression that they were working for Pakenham not S.H. Petroleum from 17 July. However, there was no real basis for this belief. Mr Palle appeared to agree that he did not understand the nature of the relationship between the old and new business:

“MR ZHANG: So you don't understand there is no transfer of staff in agreement?---Sam said we are being transferred from his business to your business, so we work same, the way we used to work. So it's transfers from employer to employer. We don't know what is the legal bindings between you and your business.” 7

[23] Mr Zhang said that there was no transfer of business:

“THE DEPUTY PRESIDENT: She said that's what it did, and you agreed with her so when did the business transfer, in your opinion?---There is no business transfer between Pakenham Oil and SH Petroleum.” 8

[24] I accept the evidence of Mr Zhang that he told staff on 25 July 2019 that each would be individually told if they were to be employed by Pakenham or not. The applicant was not told that she was to work for Pakenham. Instead she was told by Mr Christofides that she was dismissed. Pakenham did not issue each employee with a payslip or other notification. Instead Mr Christofides paid in cash. The only evidence that she was employed by Pakenham was that she performed work for a period and was under the impression, like Mr Palle, that she worked for Pakenham. However, there is no reliable basis for that impression. The key statement made by Mr Zhang on 25 July did not offer her employment, and there is no evidence anywhere that she was offered employment by Pakenham. If she was there would have been an ‘interview’ with her. Instead there was what Mr Zhang called a ‘transitional period’ during which the operation was assessed, there was a stocktake, and most employees were then offered employment by Pakenham, and the applicant was not. There were preparations to employ people by, for example, asking for tax file declarations, but this was simply preparation in case they decided to employ people. For example Mr. Zhang said:

“THE DEPUTY PRESIDENT: Is there anything else you want to say or is that it?---Just the thing she just pointed out, the tax file declaration because we tried to keep everything legal. That is why we ask the former employer, Sam, to get everyone to file tax file number, just in case we will employ them. That's what we did.” 9

[25] In relation to the 25 July meeting, Mr.Zhang said:

“THE DEPUTY PRESIDENT: ‘What is the difference?---We say the transition period - we just finish the stock take. Then during that time we did an interview to every staff. So at that time we did tell if everyone happy, welcome to work here. But they didn't remember what I said. I said but if there are any changes, or there is anyone does not pass on the interview, I'm sorry, we can't keep you here.” 10

[26] An essential pre-requisite for a valid contract to exist between an employer and employee is that there must be an intention to create a legal relationship. Determining whether an intention to create a legally binding relationship exists is one that is to be viewed objectively with regard to the words and conduct of the parties. In Ermogenous v Greek Orthodox Community of SA Inc, 11 the High Court said:

“It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened … It is not a search for the uncommunicated subjective motives or intentions of the parties.”

[27] On the limited evidence before me the applicant was not employed by Pakenham. Rather she was dismissed by Mr Christofides on behalf of S.H. Petroleum, and she was still employed by them at that date with 17 years’ service.

[28] She may have a remedy against S.H. Petroleum, but that is a matter for her. There would be a question, for example, of whether or not having a ‘strong personality’ is a valid reason for termination of employment within s.387(a), if S.H. Petroleum is not a small business, and if the 21 day time limit for applications has not been complied with.

[29] I am not satisfied on the evidence before me that Pakenham employed her, and therefore it did not dismiss her. I am therefore required to issue an order dismissing the application. An order is contained in PR174800.

DEPUTY PRESIDENT

Appearances:

Ms E. Hondrokostas, the Applicant

Mr R. Zhang, the Respondent

Hearing details:

2019.

Melbourne.

22 November.

Printed by authority of the Commonwealth Government Printer

<PR714799>

 1   Transcript of Proceedings, 22 November 2019 at PN551.

 2   Ibid at PN559 to PN566.

 3   Ibid at PN591 to PN595.

 4   Transcript of Proceedings, 19 November 2019 at PN262.

 5   Exhibit H4, stock assessment made on 17 July 2019; Tax Invoice issued by S.H.Petroleum for stock purchase on 26 July 2019 attached to witness statement of H3.

 6   Exhibit P1.

 7   Transcript of Proceedings, 22 November 2019 at PN527.

 8   Ibid at PN593.

 9   Ibid at PN589.

 10   Ibid at PN565.

 11 (2002) 209 CLR 95 at [25].