John Santorelli v Rush Group

[2015] FWC 5866

[2015] FWC 5866

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

John Santorelli
v
Rush Group
(U2015/8837)

DEPUTY PRESIDENT BARTEL ADELAIDE, 25 AUGUST 2015

Termination of Employment – Minimum employment period.

[1] John Santorelli (the applicant) has filed an application for an unfair dismissal remedy relating to his alleged dismissal by Rush Group (the respondent) on in 24 June 2015. The respondent has raised two jurisdictional objections, namely that the applicant was not dismissed at the initiative of the employer and that the applicant did not have the requisite minimum employment period.

[2] The respondent is not a small business employer as defined in s.23 of the Fair Work Act 2009 (the Act), having in excess of 15 employees as at the date the applicant contends he was dismissed. Accordingly the minimum employment period that is required to have been met is six months pursuant to 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.”

[3] If the minimum employment period has not been completed, the applicant is not a person protected from unfair dismissal and the claim for an unfair dismissal remedy is beyond the jurisdiction of the Fair Work Commission (the Commission). 1

[4] The relevant facts of the matter are not in dispute. The applicant commenced employment with Toll Group in February 2013, as a labour hire employee working at the Valspar site in South Australia. Toll Group lost the contract to supply labour at the site and the respondent was awarded the contract. The applicant’s employment was terminated by Toll Group and he was employed by the respondent on 29 March 2015. He continued to work at the Valspar site.

[5] The applicant views his employment with Toll Group and the respondent as secondary to the fact that he performed the same work at the same location for a continuous period in excess of two years and thus satisfies the minimum employment period. In certain circumstances a period of service with two or more employers can count as continuous service for the purposes of the minimum employment period. For example, if the old employer and new employer are associated entities within the meaning of s.50AAA of the Corporations Act 2001 (Cth) the service of the employee will be deemed to be continuous if the employee was employed by the new employer within three months of the cessation of employment with the old employer.

[6] The effect of s.50AAA of the Corporations Act 2001 is that an entity (the associate) may be an associated entity of another entity (the principal) in the following circumstances:

• the associate and principal are related bodies corporate



• the principal controls the associate



• the associate controls the principal and the operations, resources or affairs of the principal are material to the associate



• the associate has a qualifying investment in the principal, has significant influence over the principal and the interest is material to the associate



• the principal has a qualifying investment in the associate, has significant influence over the principal and the interest is material to the principal



• a third entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the third entity.

[7] There is no evidence before the Commission to suggest that Toll Group and the respondent are associated entities.

[8] The other circumstance where service with two or more employers will be deemed to be continuous service for the purposes of the employment period is where there is a transfer of business between non-associated entitles and the employee is a transferring employee. Section 12 of the Act refers the reader to s.311(1) of the Act for the definition of a transfer of business between national system employers. Section 311 provides as follows:

“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) ….”

[9] There is no evidence before the Commission that would enable me to conclude that the requisite connection exists between the old and new employers, such that there was a transfer of business between the old and the new employer.

[10] I appreciate the applicant’s frustration with this outcome. I have no reason to doubt that the change in his employment arrangements between Toll Group and the respondent was regarded by the applicant as an administrative detail which had little if any practical effect on his work and working arrangements at the Valspar site. However the legislation is primarily concerned with the employment relationship and it is only in the exceptions set out above that service with two or more employers will meet the definition of continuous service upon which the minimum employment period is based.

[11] In these circumstances it is unnecessary to consider the respondent’s other jurisdictional objection. The application for an unfair dismissal remedy is dismissed on the basis that the applicant is not a person protected from unfair dismissal because he has not served the minimum employment period.

DEPUTY PRESIDENT

 1   Section 383 of the Act.

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