John Oakley v Gazzi Restaurant & Bar, a partnership between Con and Joanna Lepouris (trading as Gazzi Co. Café)
[2015] FWC 5111
•3 AUGUST 2015
[2015] FWC 5111
The attached document replaces the document previously issued with the above code on 3 August 2015.
An un-numbered paragraph between [15] and [16] has now become [16]. All paragraph numbers beyond this point have been altered to reflect this change.
Associate to Commissioner Johns
4 August 2015
| [2015] FWC 5111 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
John Oakley
v
Gazzi Restaurant & Bar, a partnership between Con and Joanna Lepouris (trading as Gazzi Co. Café)
(U2015/5057)
COMMISSIONER JOHNS | MELBOURNE, 3 AUGUST 2015 |
Application for relief from unfair dismissal.
Introduction
[1] This decision concerns an application made by Mr John Oakley (Applicant) to the Fair Work Commission (Commission) under s.394 of the Fair Work FW Act 2009 (the FW Act). Gazzi Restaurant & Bar (Respondent) has raised a jurisdictional objection to the matter proceeding on the basis that it is a small business employer and the Applicant was employed for less than the minimum employment period, enlivening ss.23 and 383 of the FW Act.
[2] The matter was listed for hearing on 16 June and 10 July 2015 and the Commission issued directions on 16 and 29 June, and 14 July, for the parties to file submissions, witness statements and any evidence in relation to the jurisdictional objection.
Preliminary matter - permission to be represented
[3] On 16 June 2015, the Respondent sought permission from the Commission for it to be represented by a lawyer. It was necessary to determine this preliminary matter at the outset to ensure that the manner in which any jurisdictional hearing was conducted was fair and just, having regard to the decision of the Federal Court of Australia in Warrell v FWC [2013] FCA 291.
[4] The Respondent primarily relied upon section 596(2)(a) of the FW Act, arguing that permission should be granted on the basis that it would enable the matter to be dealt with more efficiently taking into account the complexity of the matter involving a jurisdictional objection.
[5] The Applicant, representing himself, did not object to the Respondent being represented by a lawyer. 1
[6] In all the circumstances, the Commission, as presently constituted, granted the Respondent permission to be represented by a lawyer pursuant to s596(2)(a). The Commission, as presently constituted, was satisfied that it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.
The jurisdictional objection
[7] On 1 May 2015, the Respondent notified the Commission of its jurisdictional objection. 2 In doing so, the Respondent raised the question of whether the Applicant is protected from unfair dismissal within the meaning of the FW Act and whether, as a result, he is eligible to have his s.394 application determined given the scope of the Commission’s unfair dismissal jurisdiction.
[8] The importance of being protected from unfair dismissal is confirmed by ss.390 and 396 of the FW Act, which relevantly provide:
- “390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
....”
“396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) ...
(b) whether the person was protected from unfair dismissal;
…”
[10] Section 382 of the FW Act defines when a person is protected from unfair dismissal and relevantly provides as follows:
“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....”
[11] Section 383 of the FW Act provides as follows:
“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.”
[12] The term “small business employer” is defined in the FW Act in the following manner:
“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.”
[13] It is agreed between the parties that the Applicant commenced his employment at the Respondent from sometime between late August 2014 and October 2014. The Respondent provides conflicting accounts of this date. 3 Nevertheless, it is an agreed FW Act that the Applicant was dismissed on 16 April 2015. On that basis, the employment relationship lasted at least seven months.
[14] The question thus becomes whether the respondent is a small business employer for the purposes of s.23 of the FW Act. If the Commission determines the Respondent is a small business employer, the Applicant must have been employed for a minimum of 12 months to allow the Commission to exercise its unfair dismissal jurisdiction. If the Respondent is not deemed to be a small business employer, the minimum employment period is six months and the merits of the Applicant’s claim can be tested by this Commission.
[15] On 17 May 2015, the Applicant sent an email to the Commission which, for the purposes of the jurisdictional hearing, was treated as a submission. In short, the Applicant submits that there were 18 persons employed when he was terminated and lists those individuals (Applicant’s List). For completeness, the Applicant’s List is reproduced below.
[16] The Applicant also submitted unsworn statements from colleagues at the Respondent, Mr H. Wootton and Mr R. Rusakov, both of which attest to the Respondent not being a small business employer but are otherwise inconsistent regarding the precise figure. In any case, both men appear to have ceased employment with the Respondent a substantial period before the Applicant’s termination 4 and are thus unable to provide an entirely contemporaneous account of the staffing structure at the time of the dismissal. A roster Mr Rusakov provides, for example, refers to a period in early November 2014. Accordingly, these documents are of little relevance to the determination of this jurisdictional point.
[17] In its “Employer Response”, the Respondent indicated there were eight persons employed by the Respondent at the time of the Applicant’s termination. 5 Mr C. Lepouris, principal at the Respondent, later filed a statement listing 11 persons as having been employed by the Respondent.6 Nothing of substance turns on this inconsistency.
[18] Mr Lepouris provided Payroll Activity summaries for the Respondent which further demonstrate that, for the period between 2 March 2015 to 19 April 2015, 11 persons were in receipt of payments from the Respondent. 7 A Superannuation Accrual summary for the period 1 March 2015 to 26 April 2015 also indicates the same 11 employees were accruing superannuation entitlements from their employment at the Respondent.8
[19] The Respondent submitted that the following 11 persons were employed by the Respondent at the time of the dismissal (Respondent’s List). For ease of comparison, the Respondent’s List is reproduced next to the Applicant’s List:
Respondent’s list | Applicant’s List |
1. Tran Cao 2. Dedi Dedi 3. Diego Floreze Novoa 4. Clint Jaegar 5. Jim-Quang Nguyen 6. John Oakley 7. Hartono Tan 8. Alison Tanes Vallestos 9. Triwati Triwati 10. Corey Van Spanje 11. Vasilli Zigouri | 1. John Oakley 2. Con Lepouris 3. Diego [Floreze Novoa] 4. Tran [Cao] 5. Jimmy [Jim-Quang Nguyen] 6. Cory [Van Spanje] 7. Dedi [Dedi] 8. Kendra 9. Clint [Jaegar] 10. Nick Lepouris 11. Tre [Triwati Triwati] 12. Max 13. Sylvia 14. Tommy 15. Vasili [Zigouri] 16. Tono [Hartono Tan] 17. Mari [Alison Tanes Vallestos] 18. Joanna Lepouris |
[Bold = disputed by Respondent] | |
[20] In disputing the Applicant’s List, the Respondent submits:
● both Con Lepouris and Joanna Lepouris, as principals of the Respondent, are not to be considered “employees” 9;
● Nick Lepouris, the principals’ son, “assisted in the setting up of the business and worked approximately five times for [the Respondent]” 10;
● Maximilian Markus and Tommy Harianto worked on a “temporary/trial basis” and only for a few weeks, respectively 11; and
● there was never an employee named “Kendra” 12.
[21] It should be noted at this point that, although Clint Jaegar appears on the Payroll Activity summaries, he does not appear on the Superannuation Accrual summary. The Respondent submitted that “he obviously didn’t do any of the hours.” 13 Nothing of substance turns on this inconsistency.
[22] In light of the Applicant’s absence from the 10 July 2015 hearing due to medical issues for which a medical certificate was provided, each of the marked exhibits were sent to him. The Commission afforded him the opportunity to respond.
[23] In his response via email dated 14 July 2015, the Applicant maintained there were additional persons employed by the Respondent who do not appear in the payroll and superannuation documents filed in evidence by the Respondent. He submitted he worked with a “Kendra” and Max in the last week of his employment, up to “19 others” and that the November roster provided was “pretty consistent up until the date of my termination.” He referenced the inconsistencies in the Respondent’s submissions over the course of the proceedings regarding the precise number of persons it employed.
[24] The Commission, as presently constituted, is satisfied by and accepts the evidence of the Respondent. In the absence of any documentary or other evidence led by the Applicant to contradict the Respondent’s business records, the Commission is entitled to rely upon them as accurate and notes that payroll data is generally a very useful prima facie indicator of who was an employee of an enterprise at a particular time. 14
[25] Inherent in the definition of “employee” is the notion that the individual draws a wage or salary from the enterprise at which they are employed. 15 A person’s status as director or principal of an employer, without more, is irrelevant to the question of whether s/he is an employee. Focusing on that status clouds the issue to be determined. A person may be a director or principal without being an employee,16 and s/he may certainly be an employee without being a director or principal. If the director or principal/s were involved in the oversight and/or general running of the business, but were not directly remunerated for the labour they provided, they would not fall within the natural and ordinary definition of employee. They should therefore be excluded from the head count conducted to determine whether an employer is a small business employer. A review of the Payroll Activity summaries does not indicate Con and Joanna Lepouris drew a salary for the period provided these summaries cover,17 nor did they accrue superannuation entitlements in the same manner an employee ordinarily would.18 The Commission, as presently constituted, excludes them from the head count.
[26] Further, the Commission, as presently constituted, is not satisfied the evidence before it demonstrates that Nick Lepouris, Maximilian Markus, Tommy Harianto and “Kendra” worked for the Respondent on the type of “regular and systematic basis” envisioned by superior courts 19 and prescribed by s.23(2)(b) of the FW Act as being a pre-requisite for inclusion in any calculation of persons employed by a small business employer. The Commission, as presently constituted, excludes these four individuals from the head count.
[27] Accordingly, the Commission, as presently constituted, finds that the Respondent employed 11 persons at the time of the Applicant’s termination.
Conclusion
[28] Based on the information submitted and evidence before me, the Commission, as presently constituted, is satisfied and finds that the Respondent is a small business employer. The Respondent employed less than 15 persons at the time of the Applicant’s dismissal.
[29] It is clear that, even if the Commission, as presently constituted, were to accept the foundation of the Applicant’s contentions in relation to the unfairness of the dismissal, there is no basis upon which the Commission can deal with his application given the express minimum service requirements established by the FW Act as a prerequisite for this matter to progress to such a merits hearing.
[30] The unfair dismissal application is therefore beyond the jurisdiction of the Commission and must be dismissed. An order to that end is being issued in conjunction with this decision.
COMMISSIONER
Appearances:
J. Oakley on his own behalf.
S. Freeman, solicitor, for the Respondent.
Final written submissions:
2015.
Applicant’s final submissions: 14 July.
Hearing details:
2015.
Sydney.
16 June.
10 July.
1 PN34.
2 Form F3 Employer Response at Q2.
3 16 June at PN45-48, 10 July at PN23-28.
4 10 July at PN87-91
5 Form F3 at Q2.2.
6 Exhibit R1.
7 Exhibit R2.
8 Exhibit R2 and Exhibit R3.
9 10 July PN51 and PN85.
10 Exhibit R1.
11 Exhibit R1 and 10 June PN72, PN74, PN78.
12 10 June PN65-67.
13 10 July PN100.
14 See, e.g. Lahoud v OX Metal Fabrication[2011] FWA 6226 at [6]-[11]; Hughes v Captiv8 Pty Ltd[2012] FWA 2167 at [14].
15 On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No. 3) (2011) 206 IR 252 at [201].
16 See, e.g. Guddaye v Padmanabham Venkata Lakshmi Mannapuri T/A Tri Orion Pty Ltd[2014] FWC 463 at [26]-[34]; Langford v Transformer Services Pty Ltd [2014] FWC 6599 at [37]-[43].
17 Exhibit R2.
18 Exhibit R3.
19 Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 399 at [68] and [91].
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