James Graham v HL Mullanes Plumbing Pty Ltd
[2020] FWC 3688
•14 JULY 2020
| [2020] FWC 3688 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
James Graham
v
HL Mullanes Plumbing Pty Ltd
(U2020/5092)
DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 14 JULY 2020 |
Unfair dismissal application – minimum employment period not satisfied – application dismissed.
[1] This decision concerns whether Mr James Graham was employed by the Respondent for the minimum employment period prior to his dismissal on 31 March 2020.
Relevant facts
[2] Mr Graham commenced employment with Mullane Construction Plumbing Pty Ltd (Mullane Construction) in February 2018 as a labourer. Mullane Construction is an associated entity of the Respondent. Mr Graham remained employed by Mullane Construction as a labourer until about 30 January 2019, at which time he was employed by Newcastle MBA Group Training Pty Ltd (MBA) as an apprentice plumber.
[3] The MBA placed Mr Graham on daily hire with HL Mullane & Son Pty Ltd, another associated entity of the Respondent, in the period from about 30 January 2019 until 10 December 2019. Mr Graham’s apprenticeship was cancelled at that time at his request and he ceased working for the Respondent and its associated entities.
[4] The Respondent and its associated entities do not employ apprentices; they use the MBA or another training provider to supply apprentices because their workload varies and they may need to send the apprentice back to the MBA for placement at another host employer if the work within the Mullane Plumbing Group dries up.
[5] In January 2020, Mr Graham contacted Mr Anthony Rhodes, the Managing Director of the Respondent, to ask if he had any work available. The Respondent offered, and Mr James accepted, work as a labourer, commencing on 13 January 2020. Mr James remained employed by the Respondent as a labourer until his dismissal on 31 March 2020.
Legislative framework
[6] A person must have completed a period of employment with his or her employer of at least the minimum employment period to be protected from unfair dismissal (s 382(a) of the Fair Work Act 2009 (Cth) (Act)). The minimum employment period for a business such as the Respondent which is not a small business is 6 months (s 383 of the Act).
[7] 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 (s384(1) of the Act).
[8] The meaning of continuous service is dealt with in s 22 of the Act. If there is a transfer of employment within the meaning of s 22(7) of the Act, any period of service of the employee with the first employer counts as service of the employee with the second employer (s 22(5)(a) of the Act). Section 22(7) of the Act provides:
“(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.
Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.
[9] The meaning of transfer of business is governed by s 311 of the Act. It 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.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
[10] Section 384(2)(b) of the Act is also relevant. It provides:
“(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.”
Consideration
[11] There is no dispute that the MBA is not an associated entity of the Respondent or any of its associated entities. It is also clear that the Respondent did not inform Mr Graham in writing that his period of service with the MBA would not be recognised by the Respondent (s 384(2)(b) of the Act).
[12] In order for Mr Graham’s service with the MBA to count as service with the Respondent, there must have been a transfer of business within the meaning of s 311 of the Act. As to the requirements of s 311(1):
• paragraph 311(1)(a) of the Act is satisfied because the employment of Mr Graham with the MBA terminated;
• within 3 months after the termination of Mr Graham’s employment with the MBA, Mr Graham became employed by the Respondent. Accordingly, paragraph 311(1)(b) of the Act is satisfied;
• the evidence demonstrates that Mr Graham was employed by the Respondent as a labourer and he was previously employed by the MBA as an apprentice plumber, placed on daily hire with an associated entity of the Respondent as the host employer. But the evidence did not reveal in any detail the nature of the work performed by Mr Graham in his employment with either the Respondent or the MBA. I accept as a general proposition that apprentices usually perform some work which may be classified as labouring work, they do that work in the context of learning their trade as an apprentice. On the evidence adduced I am not satisfied that Mr Graham’s work for the MBA as an apprentice plumber, while he was on placement with an associated entity of the Respondent, was the same, or substantially the same, as the work he performed for the Respondent as a labourer. Accordingly, paragraph 311(1)(c) of the Act is not satisfied; and
• as to paragraph 311(1)(d) of the Act, I am not satisfied that there is a connection between the MBA and the Respondent as described in any of subsections (3) to (6) of s 311. In particular:
• there is no evidence concerning the ownership or beneficial use of assets (s 311(3);
• there is no evidence that the MBA outsourced work to the Respondent or any of its associated entities (s 311(4)). Mr Graham had his plumbing apprenticeship terminated for his own reasons and then sought labouring work from the Respondent;
• there was no outsourcing of the transferring work from the Respondent or any of its associated entities to the MBA and then a cessation of the outsourcing work such that it was then performed by employees of the Respondent (s 311(5)). The Respondent and its associated entities did not outsource any work to the MBA. They made a decision some considerable time ago not to employ apprentices because they could not guarantee continuous work for them, but to instead arrange for apprentices to be employed by the MBA. The MBA entered into a written training contract with Mr Graham and placed him with an entity in the Mullane Plumbing Group as the host employer. 1 In the event that the Respondent or its associated entities did not have any further work for Mr Graham, he would have been placed by his employer, the MBA, with one or more other host employers for the balance of his apprenticeship. That situation did not arise because Mr Graham requested, and the MBA agreed, to cancel his apprenticeship in December 2019. Mr Graham then approached the Respondent to request labouring work and he commenced employment with the Respondent as a labourer on 13 January 2020. The Respondent and its associated entities did not cease to outsource any work to the MBA (s 311(5)); and
• the MBA and the Respondent are not, and were not at the relevant time, associated entities (s 311(6)).
[13] Mr Graham relies on the decision of Deputy President Gooley in Burdziejko v ERGT Australia Pty Ltd. 2 That decision concerned an employee who had initially been employed by Hays to work at ERGT and after three months she was offered ongoing employment by ERGT. Deputy President Gooley found that there was a transfer of business. The present case is distinguishable on the facts from Burdziejko v ERGT Australia Pty Ltd. In particular, there is a material distinction between the engagement of an employee through a labour hire agency such as Hays and the employment of an apprentice by a registered training organisation such as the MBA.
Conclusion
[14] Mr Graham was employed by the Respondent as a labourer for about 2.5 months from 13 January 2020 until 31 March 2020. His employment as an apprentice plumber by the MBA in 2019 does not count towards his period of employment with the Respondent because there was no transfer of business within the meaning of s 311 of the Act. In particular, neither paragraph 311(1)(c) nor 311(1)(d) was satisfied on the evidence adduced. It follows that Mr Graham did not complete a period of employment with his or her employer of at least the minimum employment period. He was therefore not protected from unfair dismissal and his unfair dismissal application must be dismissed.
DEPUTY PRESIDENT
Appearances:
Ms Charles on behalf of the Applicant
Mr Rhodes on behalf of the Respondent
Hearing details:
2020.
Newcastle:
13 July (by telephone)
Printed by authority of the Commonwealth Government Printer
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1 Ex 9
2 [2015] FWC 2308
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