Grace Czapnik v Pets Haven Veterinary Services Pty Ltd
[2022] FWC 1382
•1 JUNE 2022
| [2022] FWC 1382 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Grace Czapnik
v
Pets Haven Veterinary Services Pty Ltd
(U2022/3495)
| COMMISSIONER CIRKOVIC | MELBOURNE, 1 JUNE 2022 |
Unfair dismissal application – jurisdictional objection – minimum employment period - transfer of business – objection dismissed.
On 23 March 2022, Ms Grace Czapnik (the Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that she had been unfairly dismissed from her employment with Pets Haven Veterinary Services Pty Ltd (the Respondent). The Applicant was employed in the position of procurement and animal welfare manager.[1]
The Respondent disputes that the Applicant’s application satisfies the requirement of the minimum employment period pursuant to s.382 of the Fair Work Act 2009 (Cth) (the Act). In the Respondent’s Form F3 – Employer Response, the Respondent raised a further jurisdictional objection that the Respondent complied with the Small Business Fair Dismissal Code. At the hearing, the Respondent conceded that at the time immediately preceding the Applicant’s termination, the Respondent employed in excess of 15 employees and as such the small business dismissal code does not impact the substantive matter. The Applicant submits that she had satisfied the minimum employment period due to a transfer of business and that her prior service counts toward the minimum employment period. It is not in dispute that the Applicant’s employment was terminated on 2 March 2022.
The Applicant was terminated on the grounds of conduct described by the Respondent as “serious misconduct warranting summary dismissal without notice.”[2] The Applicant denies the allegations and submits that she was “targeted”[3] by the Respondent for allegedly reporting the Respondent’s business to relevant authorities for investigation.
Directions were issued by my Chambers for the filing of material as to the Respondent’s jurisdictional objection. Both parties filed materials in response to the directions I issued.
I conducted a hearing on 1 June 2022 at which the Applicant gave evidence and made submissions and Mr Fourie gave evidence and made submissions for the Respondent.
Background
The Respondent states that the “closing” of the sale of business occurred on 11 October 2021.
Mr Fourie gave evidence that the work conducted by the business included a business animal rescue shelter operating from Woodend and a veterinary clinic operating from a location in Bayswater North, Victoria. Further, Mr Fourie states that the work performed by the Respondent was exactly the same by the previous owner of the business, Pets Haven Foundation Limited (the previous owner).
The Applicant submits that she commenced employment with the previous owner of the business in 2019 as a shelter manager. There is no contest that the Applicant was provided with a contract of employment by the Respondent dated 11 October 2021 providing her employment commencement date of 11 October 2021 in the position of a Procurement and Animal Welfare Manager. It is uncontroversial that the Applicant’s employment with the previous owner terminated upon the closure of the sale of the business on 11 October 2021 and the acquisition of the previous business by the Respondent on 11 October 2021.
Submissions of the Applicant
The Applicant gave evidence that she commenced employment with the previous owner on or about December 2019 as a shelter manager. Further, the Applicant gave evidence that she was offered full-time employment with the Respondent following the Respondent’s “taking over the business” with continuing employment upon the transfer of business. The Applicant submits that all previous employees of the business were transferred with the business and referred the Commission to sections 9.1 and 23.1.1 of the contract of sale between Pets Haven Foundation Limited and Pets Haven Veterinary Services Pty Ltd.
I note the Respondent’s objection to the admission of the contract of sale in evidence on the grounds of confidentiality. Further, I note that the parties are currently in dispute as to the employee related terms of the contract and these are matters the subject of proceedings not currently before me.
The Applicant also provided payslips for the periods 8 November 2021 to 14 November 2021 and 16 December 2019 to 22 December 2019. Further, the Applicant provided a screenshot of a bank remittance from the Respondent to the Applicant dated 8 March 2022 titled “Salary Pets Haven Veter Pets Haven Wages”[4]
Submissions of the Respondent
Mr Fourie submitted that the Respondent took over the business of the previous owner upon the closure of the sale of business on 11 October 2021. The Respondent further submits that
·“The Applicant made representations that she has been employed by her mother since 2019. To date, the respondent has not received ANY information form (sic) the vendor (and mother of the Applicant) detailing any of the long service entitlement of any employee. In the absence of receiving the books and records from the vendor, the company proceeded to issue new employment contracts to employees and refer them back to the vendor to resolve historic entitlements.”[5]
·“No sufficient provision adjustment was made by the vendor for the transfer of employee entitlements, and it is therefore deemed that the vendors entities, which remains intact, assumes responsibility for settling historic entitlements.”[6]
·It is the view of the business that the responsibility lies with the Applicant to substantiate this statement with the relevant supporting documents.
·That there is an ongoing civil matter between the Respondent and the previous owner.
Is the Applicant protected from unfair dismissal?
Section 382 of the Act outlines when a person is protected from unfair dismissal:
“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.”
There is no dispute that the Applicant earned less than the high income threshold. Therefore, the only issue I must determine in order to be satisfied that the Applicant is protected from unfair dismissal is whether she has completed a period of employment with the Respondent of at least the minimum employment period.[7]
The “minimum period of employment” is defined in s.383 of the 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.
As stated at paragraph two, there is no contest that the Respondent is not a small business employer. For the purposes of determining this jurisdictional objection, I am satisfied that the Respondent is not a small business employer. Therefore, the minimum employment period in the case of the Applicant is 6 months.
A “period of employment” is defined in s.384 of the Act:
“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 that time as an employee.
(2) However:
…
(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.”
Accordingly, I must consider whether the Applicant’s service with the previous owner may be attributed to her service with the Respondent.
Has there been a transfer of business?
Section 311 of the Act relevantly provides:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
…”
The Applicant submits that she commenced employment with the Respondent on 11 October 2021. It is not disputed that the work the Applicant performed for the Respondent was the same or mostly the same as the work she performed for the previous owner.
I must also consider in determining whether a transfer of business has occurred whether there is a connection between the previous owner as described in any of subsections (3) to (6) of s.311 of the Act. Pursuant to s.311(3), there will be a connection between the Respondent and the previous owner if, in accordance with an arrangement between them, the Respondent owns or has the beneficial use of some or all of the assets (whether tangible or intangible) that the previous owner owned or had the beneficial use of and that relate to, or are used in connection with, the transferring work.[8] Mr Fourie gave evidence that the Respondent acquired the assets of the previous business including vehicles, furniture and intellectual property. Mr Fourie also gave evidence at hearing that the Respondent acquired the entire business of the previous owner. I am satisfied therefore that the Respondent has the beneficial use of at least some of the assets the previous owner owned or had the beneficial use of them and that they related to or were used in connection to the transferring work.
Consequently, I am satisfied a transfer of business has occurred[9] and that the Applicant was a transferring employee.[10]
Has there been a transfer of employment such that the Applicant’s service with the previous owner counts as service with the Respondent?
Section 22 of the Act provides:
“22 Meanings of service and continuous service
…
When service with one employer counts as service with another employer
(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:
(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and
(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.
…
Meaning of transfer of employment etc.
(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:
(a) the following conditions are satisfied:
(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;
(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or
(b) the following conditions are satisfied:
(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;
(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.
(8) A transfer of employment:
(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and
(b) is a transfer of employment between non‑associated entities if paragraph (7)(b) applies.”
As outlined above at paragraph 22, I am satisfied the Applicant is a transferring employee in relation to a transfer of business from the previous owner to the Respondent.
At hearing, Mr Fourie submitted that the Respondent and the previous owner are not related entities. The Applicant has not challenged this submission nor is there any material submitted in evidence to support a finding to the contrary. I am satisfied the businesses are not associated entities under s.50AAA of the Corporations Act 2001 (Cth).
Consequently, I find there has been a transfer of employment pursuant to s.22(7)(b) of the Act. Therefore, as there has been a transfer of employment, pursuant to s.22(5) of the Act the Applicant’s period of service with the previous owner counts as service with the Respondent.
Has the Applicant completed a period of employment with the Respondent of at least the minimum employment period?
It is worth restating the relevant provisions of s.384 of the Act:
“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 that time as an employee.
(2) However:
…
(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.”
As found above, the Applicant is a transferring employee in relation to a transfer of business and the previous owner and the Respondent are not associated entities. The Applicant’s period of service with the previous owner, approximately 1 year and 10 months, does not count towards her period of service with the Respondent if the Respondent informed her in writing before the new employment started that her period of service with the previous owner would not be recognised. Mr Fourie conceded at hearing that he did not inform the Applicant in writing that her previous service with the previous owner would not be recognised. Mr Fourie gave evidence at the hearing that he discussed the matter with the Applicant. I accept that Mr Fourie may have expected there to be no recognition of the Applicant’s service with the previous owner, however, he conceded he did not inform the Applicant in writing before she started employment with the Respondent that her service with the previous owner would not be recognised.
Consequently, I am satisfied the Applicant’s period of service with the previous owner counts towards her period of employment with the Respondent. Having been employed with the previous owner for over 1 year and 10 months and with no evidence of significant excluded periods which would reduce her service during her time with the previous owner, the Applicant has completed the relevant minimum employment period of six months.
The Respondent’s jurisdictional objection that the Applicant has not served the minimum employment period is therefore dismissed and the matter will now be remitted to the Unfair Dismissal Case Management Team for further programming.
COMMISSIONER
Appearances:
Ms Czapnik on her own behalf.
Mr Fourie for the Respondent.
Hearing details:
Melbourne (by Microsoft Teams Video)
10:00AM AEST, Wednesday, 1 June 2022.
[1] Digital Court Book (DCB) page 81.
[2] DCB 106.
[3] DCB 6.
[4] DCB 84 – 88.
[5] DCB 136.
[6] DCB 136.
[7] Fair Work Act 2009 (Cth) s 382(a).
[8] Fair Work Act 2009 (Cth) s 311(3).
[9] Fair Work Act 2009 (Cth) s 311(1).
[10] Fair Work Act 2009 (Cth) s 311(2).
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