Erin Thiele v Volando Group Pty Ltd

[2020] FWC 5345

[2020] FWC 5345

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Erin Thiele
v
Volando Group Pty Ltd
(U2020/8596)

COMMISSIONER SIMPSON BRISBANE, 8 OCTOBER 2020

Application for unfair dismissal – applicant does not meet minimum employment period – application dismissed

[1] Ms Erin Thiele has made an application to the Fair Work Commission (the Commission) under s. 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy against Volando Group Pty Ltd T/A Volando Tequila (the Respondent). From a letter from the Respondent to Ms Thiele, it was stated Ms Thiele was terminated by reason of redundancy.

[2] In the Form F3 – Employer Response to unfair dismissal application, the Respondent objected to the application on the basis Ms Thiele did not meet the minimum employment period under the Act.

[3] Following a directions hearing material was filed by both parties and correspondence was issued that I considered that it an appropriate matter to be dealt with on the papers.

Minimum Employment Period

[4] The Act provides the following:

“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.

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.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and

(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.

Small Business

[5] The Respondent submitted it was a small business that employed 5 employees at the time of Ms Thiele’s dismissal. In its submissions, the Respondent provided material in support of its claimed number of employees.

[6] Ms Thiele submitted that the Respondent is not a small business as defined by section 23 of the of Act. Ms Thiele submitted that the number of employees should be determined by the total number of employees that are employed by what she submitted were associated entities of the Respondent:

•  Auzmet Architectural LLC (Auzmet US), a company registered in the US; and/or

•  Auzmet Architectural Pty Ltd CAN 613 348 217 (Auzmet Aus).

[7] Section 50AAA(1) of the Corporations Act 2001 (Cth) provides that one entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

[8] Ms Thiele submitted that:

“…predominately 100% of Volando (the Respondent) funding comes from Auzmet Architectural or a dividend paid to shareholders (of both Auzmet and Volando), Shane Tucker and Jesse Ross could present as a qualifying investment and Volando without other funding is reliant on such to continue business without trading insolvent.”

[9] Ms Thiele submitted that Mr Shane Tucker was the director of Auzmet Aus, before it was liquidated, and was also a former director of the Respondent. It was also submitted by the Applicant that Auzmet US was started by Mr Shane Tucker and his father, Mr Robert Tucker, and is managed by Mr Jesse Ross. Ms Thiele submitted that Mr Zach Large was a former employee of Auzmet Architectural and is now an employee of the Respondent.

[10] The Respondent addressed these statements by disclosing the company searches of the Respondent (Volando), Auzmet US and Auzmet Aus. The Respondent submitted that:

“As the searches evidence:

1. there are five shareholders of Volando Group Pty Ltd;

2. there are two shareholders of Auzmet US, neither of which are a shareholder of Volando.

3. there is one shareholder of Auzmet Aus and that shareholder is one of the five shareholders of Volando;

4. there is presently one common director in Auzmet US, Auzmet Aus and Volando but Mr Tucker became a director of Volando after the date of termination of employment.”

[11] It appears the company searches are consistent with the above statement made by the Respondent.

[12] Ms Thiele additionally submitted that the Respondent’s operating costs were paid for by the Auzmet finance team and that at the time of her redundancy, all contributions to the Respondent that exceeded $1million AUD were received from Auzmet Architectural.

[13] In response, the Respondent submitted that any funds that were provided directly from Auzmet to the Respondent were incidental and done as a convenience. It was submitted that it was not an investment by Auzmet in the Respondent.

[14] The Respondent further submitted that both US Auzmet and Auzmet Aus provide steel fabrication and architectural, installation services, whereas the Respondent sells tequila. The Respondent maintained that the businesses are entirely unrelated and operate completely independently.

[15] I am satisfied that from the evidence provided, Auzmet US and Auzmet Aus are not associated entities of the Respondent. As such, at the time of Ms Thiele’s dismissal, there were 5 employees in the employ of the Respondent and thus the Respondent was a small business and the minimum employment period is one year in this case.

Period of Employment

[16] The agreed facts between the parties include that Ms Thiele worked for the Respondent as a casual employee from 1 July 2019, Ms Thiele undertook tasks for the Respondent prior to 1 July 2019, and on 26 December 2019 Ms Thiele became a permanent employee of the Respondent. The parties also agree Ms Thiele’s employment came to an end on 5 June 2020, which was the same date she was notified of her dismissal. The dispute lies in the whether any time prior to 1 July 2019 can be counted for the purposes of the minimum employment period.

[17] Section 384 of the Act provides:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at the time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[18] As stated above, Ms Thiele was employed full-time from 26 December 2019 to the time of her dismissal, 5 June 2020. This does not fulfil the minimum employment period of 12 months for a small business.

[19] However, for the purpose of unfair dismissal, it is the period of services rather than the period of employment that is relevant. Therefore, if the conditions of s.384(2)(a) are satisfied, then a period of employment by Ms Thiele, as a casual employee, will count towards the period of continuous service. 1

[20] In order for Ms Thiele’s casual employment to be included, the employment must be on a regular and systematic basis and is determined not by the hours worked. 2

[21] Ms Thiele has made submissions attesting to work she says she performed prior to 1 July 2019 being employment rather than contracting. The Respondent submits no such work was performed. In my view consideration of whether any such services were either a favour, (as submitted by the Respondent) or casual employment rather than contracting (as submitted by Ms Thiele) only becomes necessary to consider, if the engagement whatever it was, can be considered to have been occurring on a regular and systematic basis. If the engagement was not on a regular and systematic basis the other questions are moot.

[22] I have reviewed the material provided by the parties and am satisfied on the basis of the material that regardless of whether any services provided by Ms Thiele for the Respondent prior to 1 July 2019 were in the form of favours for a new venture that her partner was involved in, or contract work, or casual work, I agree with the Respondents submission that they appeared to be ad hoc in nature.

[23] To satisfy the exception in s.384(2) it is necessary to demonstrate a pattern of employment and for it to be part of a system or method or plan. Alternatively, evidence is required of the employer offering work at times it is available and the employee making themselves available, and work being offered regularly enough that it could no longer be regarded as occasional or irregular.

[24] It is sufficiently clear from the material provided that whatever the character of the services Ms Thiele may have provided to the Respondent prior to 1 July 2019, they were not on a regular and systematic basis as contemplated by s.384(2), and on that basis Ms Thiele does not satisfy the 12 months minimum period of employment even if it was to be found to have been casual employment. On that basis the application is not within jurisdiction and is dismissed.

[25] It is worth noting that even if the finding above is wrong, there was nothing in the material filed to indicate a written or oral agreement for the payment of wages prior to 1 July 2019, or that any wages were paid, or that would tend to support a conclusion that the parties intended to create a legally binding employment relationship prior to 1 July 2019. Ms Thiele relies on payment of an air ticket for a trip to Mexico that occurred in the weeks prior to 1 July 2019, and various emails indicating she was involved in performing a number of tasks in connection with the new enterprise. However, that material of itself does not establish an employment relationship. I am inclined to the view that even if services provided before 1 July 2019 were being provided regularly, the application would still be outside jurisdiction because no employment relationship was formed prior to 1 July 2019.

COMMISSIONER

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 1   Shortland v Smiths Snackfood Co Ltd [2010] FWAFB 5709 para 12 (Lawler VP, Drake DP, Lewin C, 16 September 2010).

 2   Yakara Holdings Pty Limited v Giljevic [2006] ACTCA 6 at para. 65.