Geordine De LisenvBond Store Wallaroo

[2020] FWC 6732

[2020] FWC 6732

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy

Geordine De Lisen
v
Bond Store Wallaroo
(U2020/14225)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 17 DECEMBER 2020

Application for an unfair dismissal remedy – minimum employment period – whether a small business – status of working directors – whether school casuals regular and systematic – minimum employment period not served – application dismissed

[1] On 29 October 2020 Geordine De Lisen (Ms De Lisen or the Applicant) applied to the Commission under section 394 of the Fair Work Act 2009 (FW Act) for an unfair dismissal remedy concerning a dismissal on 11 October 2020 by her then employer, Bond Store Wallaroo 1 (Bond Store, the Employer or the Respondent).

[2] The application is opposed by Bond Store which raises a jurisdictional objection that Ms De Lisen did not serve the minimum employment period to be eligible to make a claim.

[3] In this matter, the minimum employment issue requires the Commission to determine whether Bond Store was, at the relevant time, a small business as defined by the FW Act.

[4] Ms De Lisen’s application was not conciliated as the Employer sought determination of Ms De Lisen’s eligibility to make the claim before further proceedings (if any).

[5] Bond Store was self-represented, through its owners Derek and Nicole Matthewman. Ms De Lisen was represented by Ms McCarthy of the United Workers’ Union (UWU).

[6] I issued directions on 18 November 2020.

[7] On 25 November 2020 Ms De Lisen sought a production order for documents concerning the employment of a casual employee (Ms van Paridon) and documents related to payments (if any) by the employing entity’s Unit Trust to the owners. I dealt with the production order application on 30 November 2020. Orders were not required. By consent, the Employer agreed to provide a relevant email concerning the employment of Ms van Paridon. The order concerning distribution (if any) by the Unit Trust was not pressed given the advice of the owners that no funds had been paid.

[8] Materials were filed by Ms De Lisen and by the Employer (including reply materials by the Employer for which leave was given).

[9] By consent, the minimum employment issue was determined on the papers.

Facts

[10] In light of the matter being determined without need for cross examination, I bring into evidence the unsworn statement of Ms De Lisen and also the statement and reply statement of Bond Store Wallaroo as if each were sworn evidence in these proceedings.

[11] The facts are not largely in dispute though both parties disagree on the application of the facts to the law.

[12] Bond Store is a microbrewery, distillery and restaurant located in the town of Wallaroo on the Yorke Peninsula in regional South Australia.

[13] Bond Store is owned by Derek and Nicole Matthewman who established the business in December 2019. It closed between March and May 2020 due to COVID-19 restrictions, but has traded since. In recent months, in light of interstate border closures, it has experienced an uptake in trade due to intrastate travel. Although opening year round, it is a coastal business with seasonal fluctuations. It is busier in summer and quieter in winter.

[14] Ms De Lisen lives locally in Wallaroo. She was employed as a head chef from 1 November 2019 upon commencement of the business. She was dismissed on 11 October 2020.

[15] Matters associated with the merit of the dismissal are not relevant to the jurisdictional issue. A letter of termination dated 11 October 2020 was provided to Ms De Lisen with dismissal effective that day. Two weeks were paid in lieu of notice (beyond the one week said by the Employer to be required).

[16] Ms De Lisen filed these proceedings on 29 October 2020, claiming she had been unfairly dismissed.

Consideration

[17] Ms De Lisen was employed for a period of eleven months and three weeks.

[18] Section 382 of the FW Act provides that a person is only protected from unfair dismissal if they have completed at least the minimum employment period.

[19] Where the employer is a small business, that period is twelve months. Where the employer is not a small business, that period is six months. This rule is set out in section 383 of the FW Act:

“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.”

[20] Thus, if Bond Store is a small business (as defined by the FW Act), Ms De Lisen is not eligible to make an unfair dismissal claim. If Bond Store is not a small business, Ms De Lisen is eligible and her application can proceed.

[21] The obligation to establish that a business is a small business rests on the employer seeking to rely on that fact.

[22] Section 23 of the FW Act provides:

“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.”

[23] The relevant time for making the calculation is the time “immediately before the time of the dismissal or at the time the person was given notice” (section 388(2)). In this matter, that is 11 October 2020.

[24] I now consider how many persons were employed by Bond Store at the relevant time.

[25] Four issues require consideration:

•  the number of permanent employees employed by Bond Store on 11 October 2020;

•  whether any persons were employed by an associated entity within the meaning of section 23(3);

•  whether Mr and Mrs Matthewman are to be included in this count; and

•  whether any or all of the casual employees employed by Bond Store on 11 October 2020 fall within the meaning of section 23(2)(b) and are to be included in the count.

Permanent employees

[26] It is not in dispute that at 11 October 2020 eleven (11) permanent employees were employed by Bond Store (including Ms De Lisen).

[27] They are included in the count.

Associated entities

[28] Mr and Mrs Matthewman operate another small business in Wallaroo. It has common directorship (being the same two owners). It is thus an “associated entity” for the purposes of the FW Act). However, the evidence before me is that the associated entity employed no persons at the relevant date.

[29] No employees of the associated entity exist to be included in the count.

Status of Mr and Mrs Matthewman

[30] Mr and Mrs Matthewman are directors of the corporate trustee of the unit trust which operates Bond Store Wallaroo, and are also directors of the associated entity.

[31] Each works from time to time across both their businesses.

[32] Persons to be included are required by section 23 to be “employees”. This requires a contract of employment. Whether a working director is an employee is a mixed question of fact and law. Each matter is determined according to its particular circumstances. In some businesses a working director has been found to hold a contract of employment; 2 in other circumstances, not so.3

[33] Where working directors are employees, they are included in the count.

[34] The evidence of Bond Store is that neither Mr or Mrs Matthewman receive a wage from either Bond Store or the associated entity, or have received any income distribution from either business or have entered into any relevant contract of employment.

[35] In these circumstances I do not find that either Mr or Mrs Matthewman were employees of either Bond Store or the associated entity on 11 October 2020.

[36] Ms De Lisen submits that Mr Matthewman should be included in the count because he was in receipt of Jobkeeper payments during the COVID-19 induced business closure earlier in 2020. I do not agree. That Mr (not Mrs) Matthewman received Jobkeeper payments prior to the reopening and uptake in intrastate trade does not render Mr Matthewman an employee for the purposes of the FW Act. The eligibility of a working director of a business for Jobkeeper is separately determined by the relevant authority (ATO) based on criteria applicable to the Jobkeeper scheme. Payment (whether classed director’s fees or otherwise) by the ATO under that scheme is not a determination for broader purposes. In any event, Mr Matthewman was not in receipt of Jobkeeper at the relevant date.

[37] Not being employees, Mr and Mrs Matthewman are not included in the count.

Status of casual persons employed by Bond Store

[38] The FW Act requires a casual employee not to be counted unless, at the relevant time, he or she “has been employed by the employer on a regular and systematic basis”. 4

[39] The manner in which section 23(2)(b) is expressed suggests that a casual is not to be included in the count “unless” a positive finding is made that at the relevant time they were employed on a regular and systematic basis.

[40] The FW Act also requires any such casuals to have had a reasonable expectation of continuing employment on that basis. 5

[41] The principles governing what is “regular and systematic” employment are well established. The consideration is not merely quantitative. It is also qualitative. What is required is a pattern or system of rostering of work that objectively could be said to be regular and systematic. The approach to applying these terms has been set out by a full bench of the Commission as follows: 6

“The word “regular” should be construed liberally. It implies some form of repetitive pattern and does not mean frequent, often, uniform or constant. Employment on a “regular” basis may be constituted by frequent though unpredictable engagements. The word “systematic” requires that the engagement be “something that could fairly be called a system, method or plan”. The concept of engagement on a “systematic” basis does not require the employee to be able to foresee or predict when his or her services may be required. It is sufficient that the pattern of engagement occurs as a consequence of an ongoing reliance on the employee’s services as an incident of the business by which he or she is engaged.” (endnotes omitted)

[42] This approach has been applied by subsequent full benches of the Commission. 7 In Greene v Floreat Hotel Pty Ltd the full bench observed that the degree of regularity in the pattern of hours of a casual employee is merely one of a number of relevant considerations, and not the singular decisive consideration. The principle to be applied was that “while the expression required the engagement of the casual worker to be regular, the pattern of hours worked pursuant to the engagement did not necessarily need to be regular, predictable or assured.”8

[43] The evidence of Bond Store is that it employed school casuals to supplement its permanent workforce. The regularity of the school casuals depended on two factors:

•  the needs of the business. Seasonal factors affected the number of casuals and the rostered hours they were provided; and

•  the availability of the casuals to work shifts in the business. For example, exams and schooling (year 12) commitments saw some casuals decline shifts.

[44] Bond Store has brought into evidence the pro forma of its casual contract. That letter of engagement provides:

“as a casual, there is no ongoing guarantee of ongoing or regular work.”

[45] Terms of the casual contract under which Bond Store employed its school casuals are relevant. They are one of the matters to be taken into account. However, I determine the status of the school casuals not just on the contract or the aforementioned context in which the casuals were employed, but also having regard to their regularity and the specific working pattern of each in the preceding months. The substance of the rosters worked is relevant, not just the label or the underpinning terms. Those details are in evidence and have been the subject of submissions.

[46] The employment of school casuals was not indiscriminate. There was a roster prepared using an on-line system (Deputy) though Ms De Lisen also rostered some kitchen casuals using an excel spreadsheet. However, the evidence is that the rostered hours of the casual pool did not always match their worked hours. Hours worked, drawn from time books which ultimately were the basis for payment, varied based on workload, including daily trade and sudden absences. In evidence are the rostered hours, and separately a schedule of hours actually worked and paid.

[47] The evidence before me is that in addition to eleven part time employees 9, five school casuals10 were ‘on the books’ at the relevant time. The evidence also is that the employer preferred to employ persons as part time (rather than casual) employees where it believed there would be an ongoing expectation of regular work.

[48] If it is found that four or more of these casuals were employed on a regular and systematic basis and had a reasonable expectation of continuing employment on that basis, in light of my earlier findings, Bond Store Wallaroo will not be a small business as defined. If three or less (or none) of these casuals were employed on a regular and systematic basis with that continuing expectation, Bond Store Wallaroo will be a small business as defined.

Ms van Paridon (part time)

[49] Ms van Paridon had been interviewed on 7 October 2020 for work in the business. An offer of part time employment was formally made by letter dated 13 October 2020. 11 Ms Van Paridon was unavailable to start until 15 October 2020. Her contract expressed 15 October as her commencement date. At the relevant date (11 October 2020) she had not commenced employment or worked any shifts.

[50] On this basis it is not open to find that Ms van Paridon was an employee on 11 October 2020.

[51] She is not included in the count.

Casual Ms Webb

[52] Ms Webb started casual shifts on 15 March 2020 immediately prior to the COVID-19 shutdown and recommenced shifts after the COVID-19 shutdown. Upon recommencing, she commonly worked on weekends but the actual shifts worked varied. She was available to work more shifts during school holidays and was rostered, but wasn’t available to work those same shifts during school term.

[53] Although only a school casual, and notwithstanding the terms of the casual contract that underpinned this employment, there is a sufficient period of frequency of shifts worked by Ms Webb giving rise to a pattern of regularity. After a first month of working one Saturday shift only, by the relevant date Ms Webb was regularly working three shifts per week, usually (but not always) Friday, Saturday and Sunday. There was also a rostering system associated with the employment of Ms Webb that could be said to be systematic employment. Whilst Ms Webb was not made a part time employee, I am satisfied that her length of service as a regular casual according to a pattern of regularity created a reasonable expectation of continuing employment on that basis.

[54] I include her in the count.

Casual Mr Webb

[55] Mr Webb only started working on 19 July 2020. Mr Webb worked eleven shifts across at least five different days of the week. He made himself unavailable to work in four of the weeks between 19 July and 11 October, and was not rostered. In one of his working weeks he worked three shifts (8, 9 and 10 October) but in all previous weeks he either was unavailable to work or worked only one shift (often but not always on Sundays). His total number of hours worked per shift varied, as did his starting times. (except that Sunday shifts commenced at 12 noon).

[56] Given these variations in frequency, hours worked and days worked, together with he relatively short period that Mr Webb has been working (as well as the terms of the casual contract that underpinned this employment), I do not conclude that he was regularly and systematically employed as a casual employee. Nor do I conclude that he had, at the relevant date, a reasonable expectation of continuing employment on that basis.

[57] He is not included in the count.

Casual Ms Jessop

[58] Ms Jessop was only very recently accepted into employment. She had only worked one shift, being an evening shift on 10 October 2020, the day prior to Ms De Lisen’s dismissal. She was employed on the terms of the pro forma casual contract.

[59] On this basis (as well as having regard to the terms of the casual contract that underpinned this employment), it is not open to find that Ms Jessop had been employed on a regular and systematic basis. Nor do I conclude that she had, at the relevant date, a reasonable expectation of continuing employment on that basis.

[60] She is not included in the count.

Casual Ms Nash

[61] Ms Nash had been employed for one month only prior to Ms De Lisen’s dismissal. Her first shift was on 13 September 2020. She worked on each of the five weekends since commencing, but her pattern of rosters, working hours and days of the week each varied. On two out of five weeks she worked one shift only, on one week she worked two shifts, and in the remaining two weeks she worked three shifts. Her starting times varied as did the length of shifts (between 3 and 10.5 hours). These variations were in part a product of school holidays and the public holiday weekend (October 2020) when Ms Nash’s rostered hours were increased. She filled in for employees on annual and sick leave.

[62] Having regard to the short period of employment and variations in the quantum and pattern of work during this short period (as well as the terms of the casual contract that underpinned this employment), it is not open to find that Ms Nash had been employed on a regular and systematic basis. Nor do I conclude that she had, at the relevant date, a reasonable expectation of continuing employment on that basis.

[63] She is not included in the count.

Casual Ms Edmiston

[64] Ms Edmiston had been employed for less than one month prior to Ms De Lisen’s dismissal. Her first shift was on 18 September 2020. She worked on each of the four weekends since commencing, but her pattern of rosters, working hours and days of the week each varied. On one out of four weeks she worked one shift only, on two weeks she worked two shifts, and in the remaining week she worked three shifts. Her starting times varied as did the length of shifts (between 3 and 8 hours). These variations were in part a product of school holidays and the public holiday weekend. She also filled in for employees on annual and sick leave.

[65] Having regard to the short period of employment and variations in the quantum and pattern of work during this short period (as well as the terms of the casual contract that underpinned this employment), it is not open to find that Ms Edmiston had been employed on a regular and systematic basis. Nor do I conclude that she had, at the relevant date, a reasonable expectation of continuing employment on that basis.

[66] She is not included in the count.

[67] I add for the sake of completeness that the son of Mr and Mrs Matthewman, who irregularly worked in the business, was not working as an employee, not paid a wage and is not included in the count.

[68] I therefore conclude that one of the school casuals is to be included in the count. The other four are not included.

Conclusion

[69] As there were twelve persons included in the count who were relevantly employed by the Respondent at the date of dismissal, Bond Store Wallaroo was a small business employer within the meaning of the FW Act.

[70] As Ms De Lisen had served eleven months and three weeks and not served the minimum employment period of twelve months required of an employee working for a small business employer, she is not eligible to make an unfair dismissal claim under section 394 of the FW Act.

[71] The Applicant not being so eligible, her application must be dismissed. An order 12 giving effect to this decision will be issued in conjunction with its publication.

DEPUTY PRESIDENT

Final written submissions:

M McCarthy (UWU) for Geordine De Lisen – 2 December 2020

Bond Store Wallaroo – 21 November 2020 and (reply) 8 December 2020

Printed by authority of the Commonwealth Government Printer

<PR725416>

 1   The Employer’s response indicates that the legal name of the business is Bond Store Wallaroo as trustee for the Bond Store Wallaroo Unit Trust

 2   For example, Finch v Tiles Strata Management Pty Ltd[2020] FWC 3675

 3   Taylor v Auto Loans Group Pty Ltd t/a Autocarloans.com.au [2018] FWC 1950

 4 Section 23(2)(b) FW Act

 5   Section 384(2)(a)(ii)

 6   Bell v Aboriginal Legal Service (NSW/ACT) Ltd[2018] FWCFB 6102 at [11]

 7   For example, Greene v Floreat Hotel Pty Ltd[2020] FWCFB 6019; Chandler v Bed Bath N Table[2020] FWCFB 306

 8   [2020] FWCFB 6019 at [14]

 9   Roberts, Wreford, Williams, Cook, Sanchez, De Lisen, Stewart, Trewin, Karatepelief, Cini, Terreux

 10   Jessop, Mr Webb, Ms Webb, Nash, Edmiston

 11   Letter 13 October 2020 attached to email from Bond Store to Applicant’s representative 30 November 2020 3.25pm

 12   PR725417.