Joseph Oliphant v Savills (NSW) Pty Ltd T/A Savills

[2014] FWC 6245

[2014] FWC 6245

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Joseph Oliphant
v
Savills (NSW) Pty Ltd T/A Savills
(U2014/6471)

DEPUTY PRESIDENT BOOTH SYDNEY, 16 SEPTEMBER 2014

Application for unfair dismissal remedy - jurisdictional objection - minimum period of employment - transfer of business - transfer of employee.

[1] Mr Oliphant was employed by CBRE Pty Ltd (‘CBRE’) in or around May 2008. He began in the role of Building Operations Supervisor for a Sydney city building known as 60 Carrington Street from about January 2010. In or around July 2013 that building was sold by GE Real Estate Investments Australia Pty Ltd and purchased by CC Nominees No. 1 Pty Ltd.

[2] CBRE was the building manager and building accounts manager at 60 Carrington Street and continued in this role following the purchase. Mr Oliphant continued in his role as Building Operations Supervisor.

[3] Savills (NSW) Pty Ltd T/A Savills (‘Savills’) was contracted by the new owner CC Nominees to take over the responsibility for the provision of property management services in or around August 2013. CBRE continued in its role of providing property accounting management services for the building.

[4] Mr Oliphant was approached by Savills to see if he wished to be employed by them as Building Operations Supervisor. Mr Oliphant agreed and on 30 September 2013 he left the employment of CBRE and on 1 October 2013 commenced employment with Savills. Mr Oliphant signed an employment contract with Savills on 16 October 2013.

[5] Mr Oliphant’s employment was terminated by Savills on 24 March 2014. Mr Oliphant has lodged an application for an unfair dismissal remedy with the Fair Work Commission. Savills objects to that application on the ground that Mr Oliphant’s period of employment with them is less than six months and therefore less than the minimum employment period prescribed by s.383 of the Fair Work Act 2009.

[6] Mr Oliphant contends that his period of employment should include the period of employment with CBRE because:

• there was a transfer of his employment from CBRE to Savills as provided by s.22(5) of the Act

• there was a transfer of business between CBRE and Savills as provided by s.22 (7) (b) of the Act

• the transfer of business satisfied the definition in ss.311(1) and (3) of the Act

[7] Savills says that no transfer of business occurred because, although the conditions of s.311 (1)(a) to (c) were met s.311(1)(d) requires a connection between CBRE and Savills and this condition was not satisfied. Mr Oliphant says that this condition was satisfied by the existence of an arrangement between CBRE and Savills of the kind described in s.311(3).

[8] Savills also says that the provisions of s.384(2)(b)(iii) of the Act apply in that it had informed Mr Oliphant in writing prior to his employment with Savills that his period of service with CBRE would not be recognised. Savills says Ms Oliphant was informed in an email from Mr O’Donnell (on behalf of Savills) of 17 September 2013. The email contains the following words:

“30 day probation period (this is industry standard)”

[9] That information was then corrected by a further email from Mr O’Donnell to Mr Oliphant dated 18 September 2013 which included the following sentence:

“The Savills standard probation term is 6 months not the 30 days that incorrectly stated.”

[10] Mr Oliphant says that s.384(2)(b)(iii) of the Act required that he be informed in writing that his period of service with CBRE would not be recognised and that the provision within a letter of offer or an employment contract of a probationary period does not suffice.

[11] The issues to be determined are whether there was an arrangement between CBRE and Savills and if so whether Mr Oliphant had been informed that his service with CBRE would not be counted as service with Savills. If there was an arrangement then by virtue of s.311 (3) of the Act Mr Oliphant’s service with CBRE would count towards his service for the purpose of calculating the minimum employment period 1 and he would be a person protected from unfair dismissal.2 If there was no arrangement I would have to dismiss Mr Oliphant’s application for an unfair dismissal remedy as he would not be a person protected from unfair dismissal.

Was there an arrangement between CBRE and Savills?

[12] Section 311(1) to (3) of the Act read as follows:

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.

[13] The submissions and evidence of the parties focussed on whether:

• there was an arrangement between CBRE and Savills; and

• Savills owned or had beneficial use of some or all of the assets that CBRE had owned or had beneficial use of; and

• such assets related to or were to be used in connection with the building management work; and

• change of ownership or beneficial use was in accordance with an arrangement.

[14] There is little difference between the parties as to what occurred during the handover period of August 2013 until 1 November 2013. The issue between the parties is the characterisation of the activities.

[15] The handover was initiated following an email of 4 September 2013 from CC Nominees’ representative, Ms Orgler. That request culminated in a meeting on 9 September 2013 between staff of CBRE and Savills. Mr Oliphant attended this meeting.

[16] As a consequence of that meeting, requests were made by Savills of CBRE for particular documents relevant to the property management. Mr Oliphant, for his part, provided some, but not all of what was requested on around 17 September 2013. Mr Oliphant had difficulty with his attempts to email some of the material and eventually placed the material onto a USB and handed it to Savills.

[17] As can be seen from the Schedule 1 attachment to the affidavit of Mr Oliphant of 28 July 2014 3 far and away the majority of the documents relevant to the building management operations were simply left on the premises by CBRE.

[18] On 1 October 2013, Savills commenced building operations management of the Carrington Street site. Mr Oliphant performed that work for them. At the same time CBRE continued in its role as building operations management. This dual management continued until 1 November 2013. CBRE had entered into a written Property Management Agreement with GE. It was not suggested by the parties that that Agreement did not continue in effect with regard to the obligations of CBRE following the purchase of the building by CC Nominees. In fact it was described as “assigned” to CC Nominees.

[19] Paragraph 8.5 of that Agreement provides, in part, as follows:

“If this agreement is terminated for any reason then, despite the termination of this agreement, the Property Manager must do anything reasonably required by the Principal in connection with transitioning the Property Manager from its role of providing Services in respect of the Property in accordance with this agreement and no remuneration for the provision of such assistance will be payable”

[20] Clause 11 of Schedule 2 of the Agreement provides, in part, as follows:-

“(a) All documents, whether historical or active, belong to the Principal.

(b)......

(c).....

(d) If the Property Manager is no longer required to provide Services to the Property, all Documents (whether historical or active) relevant to the property must be delivered to the Principal, or disposed of as otherwise directed, and copies of any documents relating to the Property which have been prepared by the Property Manager and adopted for use at the Property whether historical or active in such document must be delivered to the Principal, within a reasonable time after the end of this agreement.”

[21] Mr Oliphant submits, with regard to the obligations of the agreement, that the provision of information by CBRE to Savills was over and above any contractual obligation placed upon CBRE. In support of this contention Mr Oliphant points towards the provision of a small number of documents which, he submits, were not documents of CC Nominees and were in fact documents owned by CBRE and hence CBRE had no obligation to pass them over. In this regard Mr Oliphant relies upon the evidence of Ms Orgler.

[22] I found Mx Orgler to be a most unsatisfactory witness. She was argumentative and combative and despite a number of warnings, persisted on a number of occasions with unresponsive answers. Ms Orgler gave me the impression that she had attended the Commission for the purpose of giving her opinion or expressing a point of view rather than for the purpose of giving evidence. I find it difficult to attach much weight to Ms Orgler’s evidence.

[23] The second submission that is made by Mr Oliphant is that even if there was a contractual obligation upon CBRE to provide handover information, that contractual obligation does not stop there being an arrangement between CBRE and Savills as there may be an obligation arising from multiple sources.

[24] Both parties referred me to the Full Bench decision in John Lucas Hotel Management Services t/as World Square Pub v Ms Vanessa Hillie[2013] FWCFB 1198 where at paragraph 20 the Full Bench stated:-

“[20] In accordance with the Explanatory Memorandum the word “arrangement” should be interpreted broadly. It certainly need not imply a formal let alone legally enforceable agreement between the two parties. However, the expression must still be given some content. From the authorities it can be concluded that for an “arrangement” to exist one party must have assumed at least a moral obligation, or given an “assurance” or “undertaking” that it will act in a certain way.”

[25] The Full Bench at paragraph 19 extracted part of the decision of Lindgren J in Australian Competition & Consumer Commission v CC (NSW) Pty Limited (1999) 92 FCR 375 at 406 to 409. In that extract, His Honour refers to prior judgments and as part of that quotes from a judgment of Smithers J in Top Performance Motors Pty Ltd v Ira Berk(Qld)Pty Ltd (1975) 24 FLR 286 to the following effect:-

“… the existence of an arrangement of the kind contemplated in s.45 is conditional upon a meeting of the minds of the parties to the arrangement in which one of them is understood, by the other or others, and intends to be so understood, as undertaking, in the role of a reasonable and conscientious man, to regard himself as being in some degree under a duty, moral or legal, to conduct himself in some particular way, at any rate so long as the other party or parties conducted themselves in the way contemplated by the arrangement.”

[26] I have received no evidence from anyone representing CBRE. The intention and motivation of CBRE is plainly of importance in a determination with regard to s.311. Having regard to the evidence that is before me, I find that it is most probable that the primary motivation for CBRE to provide the relevant information so as to allow for a smooth handover of the role of building manager was the obligations contained in the Property Management Agreement at paragraph 8.5. CBRE continued in the role of building accounts manager and I think it is probable that they would have wanted to maintain a good relationship with CC Nominees and meet the obligations in their contract. It would appear to me that the provision of a small number of documents, the ownership of which is open for speculation, occurred as an incidental part of the obligation of CBRE to facilitate the handover process.

[27] I find that there was no arrangement, as that term is expressed in s.311(3), between CBRE and Savills. Further, I find that even if I am wrong about that and an arrangement did exist, the provision of the relevant documents to Savills by CBRE was not in accordance with that arrangement but in compliance with the contract between CBRE and CC Nominees.

[28] I find therefore that there was no transfer of business between CBRE and Savills and no transfer of employment of Mr Oliphant from CBRE to Savills. It therefore follows that Mr Oliphant was not employed by Savills for the minimum employment period pursuant to s.383 of the Act.

Was Oliphant informed that his service with CBRE would not be counted as service with Savills?

[29] As a consequence of my findings with regard to the first issue it is not necessary for me to make a finding regarding this question.

[30] However, I note that such a specific provision as is contained in s. 384 of the Act would seriously influence the decision-making of a prospective employee. Therefore I think the words should be stringently applied. Savills did not explicitly state that Mr Oliphant’s service with CBRE would not count as service with Savills. They submitted that there was a clear implication to be drawn from the imposition of the probationary period. I think it is incumbent upon persons in the position of Savills to explicitly state that which they say arises from an offer of employment, rather than rely upon what could be a contentious implication.

[31] I order that Mr Oliphant’s application for an unfair dismissal remedy pursuant to s.394 of the Act is dismissed.

DEPUTY PRESIDENT

Appearances:

A Woods, Henry Davis York, for Mr Joseph Oliphant

N Furlan of Counsel, for Savills T/A Savills (NSW) Pty Ltd

Hearing details:

2014.

Sydney

8, 14 August.

 1 Sections 383 and 384 Fair Work Act 2009.

 2 Section 382 Fair Work Act 2009.

 3   Exhibit W1

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