Frederick Curby v Connected Advice Pty Ltd

[2018] FWC 1903

[2018] FWC 1903

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Frederick Curby
v
Connected Advice Pty Ltd
(U2017/13032)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 5 APRIL 2018

Application for an unfair dismissal remedy – jurisdictional objection – minimum employment period – whether respondent was a small business employer – associated entities - respondent found to be a small business employer – applicant had not served minimum employment period – jurisdictional objection upheld – application dismissed.

Background

[1] Frederick Curby (the applicant) filed an application for an unfair dismissal remedy on 7 December 2017 in relation to the termination of his employment by Connected Advice Pty Ltd (the respondent) on 5 December 2017.

[2] The applicant commenced employment with the respondent on 22 March 2017. He had therefore worked for the respondent for about eight-and-a-half months when his employment was terminated.

[3] The respondent made a jurisdictional objection that it was a small business employer, and the applicant had not completed the minimum employment period at the time of his dismissal.

[4] The jurisdictional objection was heard in Sydney on 27 March 2018. The applicant represented himself and the respondent was represented by its Company Secretary, Natalie Wewer. At the conclusion of the hearing, I indicated that I was satisfied that the applicant had not been employed for the minimum employment period, and issued an order dismissing his application for an unfair dismissal remedy. 1 These are the reasons for my decision.

The legislation

[5] Sections 382 and 383 of the Fair Work Act 2009 (Cth) (the FW Act) collectively provide that the relevant minimum period of employment that an employee must complete to be protected from unfair dismissal is 12 months for an employee of a small business employer, and six months for other employees. The issue to be determined in this case is whether the respondent was a small business employer when the applicant was dismissed. If the respondent was a small business employer at that time, then the applicant had not completed the 12-month employment period required to be eligible to make an unfair dismissal claim.

[6] ‘Small business employer’ is defined in s.23 of the FW Act:

‘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.’

[7] Section 12 of the FW Act provides that the term ‘associated entities’ has the meaning given by section 50AAA of the Corporations Act 2001 (Cth) (the Corporations Act).

[8] Section 50AAA of the Corporations Act is as follows:

‘50AAA 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 principal; 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.’

The evidence

[9] Ms Wewer gave evidence that at the time of the applicant’s dismissal, the respondent employed seven people. 2 Mr Curby disputed this and claimed there was ‘a lot more’.3 While he worked from home at the time of his dismissal, he had been in the office at some stage of his employment for a month.4 He referred to ‘an adviser out the back, Andrew Grinsell’, Daniel White, and ‘his PA’, Ms Wewer. ‘We also had six admin., as far as I know, that did the pays and we always referred to them for different things.’5

[10] When asked whether he knew for certain that the administrative staff to which he was referring were employed by the respondent, he answered:

‘Well, they were on our floor.

SENIOR DEPUTY PRESIDENT: That’s all you know, they were on your floor?

MR CURBY: Yes, yes. Then we also had our manager which at that time was Etienne Fourie, when I was there…

MR CURBY: Then we had in front of Etienne Fourie there was Tyrone Peters, sat there. There was another girl which she left after I was there. I can’t remember her name…

MR CURBY: Then there was [sic] two other girls beside me on this side.

THE SENIOR DEPUTY PRESIDENT: But you don’t know who they were employed by, do you?

MR CURBY: Well, as far as I know it’s Cooee Wealth…’ 6

[11] Mr Curby also referred to ‘two other girls’ who would finalise appointments for Mr Grinsell. 7 When asked how many people were employed by the respondent, he said ‘… I reckon it was probably close to 15, all up, that I could see.’8

[12] Ms Wewer explained the company structure, with the assistance of ASIC documents. CMH Financial Group (owned by Daniel White) was the Australian Financial Services licensee. Her initial evidence was that it employed seven employees. 9 However, she subsequently said that of those seven, two or three were ‘unpaid interns’.10 The respondent had seven employees. It rented space from CMH Financial Group. There was also a separate entity, Independent Adviser Services Pty Ltd, trading as Cooee Wealth Partners. This entity, however, had no employees.11 Ms Wewer’s evidence is that all these entities were under the control of Daniel White. The employees of CMH Financial Group provided administrative services to the respondent.

[13] In addition, there was a further entity, Cooee Mortgages, which had two employees. 12 When asked where Cooee Mortgages fitted in Ms Wewer responded:

‘They – Cooee Mortgages have another licensee, which is Finsure, and they are obviously a broker company and they administer any mortgage applications. Daniel White is a director in that company.’ 13

[14] Ms Wewer said that Cooee Mortgages did not work with the CMH Financial Group or the respondent. 14

Consideration

[15] The applicant appeared to have little, if any, knowledge of who was employed by whom. I can give little weight to his evidence in comparison to that of Ms Wewer, who had a good understanding of the operations of each of the relevant entities and who they employed.

[16] I am satisfied that the respondent employed seven employees, CMH Financial Services no more than five employees (as opposed to unpaid interns) and Cooee Mortgages two employees.

[17] I am satisfied that the respondent and CMH Financial Group are associated entities. They both appear to be controlled by Daniel White and the operations, resources or affairs of the two entities are both material to him, thus satisfying s.50AAA(7) of the Corporations Act. I am less satisfied that Cooee Mortgages is an associated entity of the respondent. While it also appears to be controlled by Daniel White, it is not clear that it satisfies s.50AAA(7)(b). In Fair Work Ombudsman v Priority Matters Pty Ltd & Ors, 15Street J observed in relation to that subsection:

‘The word “both” has work to do and requires a conjoint materiality in relation to operations, resources or affairs. In other words there must be shown to be joint materiality. It is not enough to make out the second limb to merely assert that separately the operations, resources or affairs of the alleged associated entities are material to the third entity. There must be a nexus between the associated entity in their respective operations, resources or affairs that are jointly material to the third entity. The interconnection must be in respect of operations, resources or affairs of the principal and the associate that jointly combined can be said to be material to the third entity.’

[18] There appears to be no ‘interconnection’ in respect of the operations, resources or affairs between Cooee Mortgages and the respondent. If one adopts Street J’s approach to the construction of s.50AAA, Cooee Mortgages is not an associated entity of the respondent. However even if one included the two employees employed by Cooee Mortgages, the total number of employees would still only be 14.

Conclusion

[19] I am satisfied that the respondent and its associated entities employed fewer than 15 employees altogether at the time the applicant was dismissed. It was therefore a small business employer, and the applicant had not completed 12 months’ service. Accordingly, he was not protected from unfair dismissal when his employment was terminated. For these reasons, I upheld the respondent’s jurisdictional objection and dismissed the application.

SENIOR DEPUTY PRESIDENT

Appearances:

F Curby, the applicant, in person.

N Wewer for Connected Advice Pty Ltd.

Hearing details:

Sydney.

2018.

March 27.

Printed by authority of the Commonwealth Government Printer

<PR601668>

 1   PR601524.

 2   PN38.

 3   PN45.

 4   PN61.

 5   PN45-53.

 6   PN57-71.

 7   PN103.

 8   PN139.

 9   PN161.

 10   PN267-269.

 11   PN173.

 12   PN191.

 13   PN241.

 14   PN246-253.

 15 [2016] FCCA 1474.