Kosta Allen v Aldinga Bakehouse

[2018] FWC 6834

[2018] FWC 6834

FAIR WORK COMMISSION

DECISION

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

Kosta Allen
v
Aldinga Bakehouse
(U2018/6703)

COMMISSIONER HAMPTON ADELAIDE, 8 NOVEMBER 2018

Application for an unfair dismissal remedy – jurisdictional issue – whether applicant protected from unfair dismissal – whether minimum employment period met – length of service not in dispute – employer small business within the meaning of the Act – service just over six months not sufficient to meet the relevant minimum employment period – applicant not protected – no capacity for the Commission to ignore the statutory limitation – no jurisdiction – application dismissed.

1. Background

[1] Mr Kosta Allen has made an application under s.394 of Fair Work Act 2009 (the FW Act) for a remedy in connection with an alleged unfair dismissal by his former employer, described in the original application as the Aldinga Bakehouse. I note that the bakehouse is apparently owned and operated by Kaross Enterprises Pty Ltd ATF Kaross Family Trust T/A The Bakehouse Aldinga. 1 In other circumstances I would have considered amending the application to correct the proper name of the employer; however, I have not been requested to do so and there is no utility in that course of action given my ultimate findings in this matter. I will for convenience in this decision describe the respondent employer in the original terms; namely, Aldinga Bakehouse.

[2] It is common ground that Mr Allen commenced employment as a Baker on 18 December 2017. It is also common ground that Mr Allen’s employment concluded on 28 June 2018; however there is a dispute about the circumstances and characterisation of that cessation. Mr Allen contends that he was dismissed and Aldinga Bakehouse contends that the applicant resigned. In any event, Mr Allen’s employment ran from December 2017 to June 2018, being a period of approximately 6 months.

[3] Amongst other objections to the application, Aldinga Bakehouse contends that it is a small business within the meaning of the FW Act and that, as a result, Mr Allen must have completed a minimum employment period (MEP) of 12 months in order to bring this application.

[4] Having conducted a directions conference on 17 October 2018, 2 I issued directions for the filing and service of materials about the status of the employer as a putative small business and the consequences of that status for this application given the applicant’s period of employment.3

[5] Aldinga Bakehouse subsequently provided written submissions and evidence in the form of a Statutory Declaration from Mr Ross Wilson, its Director, confirming, amongst other matters, the level and nature of employment undertaken by the employer as at June 2018 and the absence of any relevant associated entities.

[6] Mr Allen also provided a submission in response to the directions and indicated amongst other matters that he was employed from December 2017, that he was offered and accepted a full-time apprenticeship (in May 2018) and that he was unfairly dismissed. Mr Allen acknowledged “the meaning of small business employer”, but contended that “under these circumstances … the Fair Work Commission (should) consider my application fairly.” 4

[7] Based upon the submissions, there are some disputed matters including some aspects of the nature of the applicant’s service, the alleged dismissal, and the fairness of any such action. These issues are not raised by the immediate jurisdictional matter and there has been no evidence provided by the applicant beyond a copy of the apprenticeship agreement apparently signed by the parties. Assuming that these and the other assertions are disputed facts, it was not necessary for the Commission to conduct a hearing or determinative conference in this particular matter. 5 As will become clear, the various apparently disputed issues are not relevant or decisive in this matter given the terms of the FW Act and the facts that are not in dispute. In effect, even assuming all of the factual assertions of the applicant are correct, these do not impact upon the decision required by the legislation in the circumstances of this matter. Accordingly, the particular narrow jurisdictional matter that is actually being determined by the Commission does not involve the apparent factual disputes.6

2. The requirement to complete a minimum employment period under the Act

[8] In establishing the unfair dismissal jurisdiction of the Commission, the Parliament through the FW Act, has also created some limitations on the circumstances in which an application of that sort can be brought. One of those limitations is the requirement for an applicant employee to have completed a MEP. The length of that period depends upon the size of the employer.

[9] Section 382 of the FW Act 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; 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.”

[10] This means that unless an applicant employee has completed a period of employment with his or her employer of at least the relevant MEP, they will not be a person who is protected from unfair dismissal and thereby not eligible to bring an unfair dismissal application. Section 390(1)(a) of the FW Act also confirms that an applicant employee cannot be found to have been unfairly dismissed if they are not “protected” within the meaning of the relevant Part of the legislation.

[11] The length and nature of the MEP is defined in s.383 of the FW Act in the following terms:

“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] Section 384 of the FW Act relevantly defines the period of employment in the following terms:

“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:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

… …”

[13] The “particular time” for present purposes is the time of the alleged dismissal. 7

[14] Assuming all of the stated service of Mr Allen is treated as continuous service, 8 this means that his period of employment was just over six months, but well short of 12 months.

[15] Accordingly, given the length of Mr Allen’s employment, if Aldinga Bakehouse is a small business, he will not have been protected from unfair dismissal under the terms of the FW Act.

3. Was Aldinga Bakehouse a small business at the time of the alleged dismissal?

[16] Section 23 of the FW Act provides as follows:

“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.”

[17] Section 12 of the FW Act states that an “associated entity” has the meaning given by section 50AAA of the Corporations Act 2001(the Corporations Act).

[18] Section 50AAA of the Corporations Act defines an associated entity in the following terms:

“50AAA Associated entities

(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

(2) This subsection is satisfied if the associate and the principal are related bodies corporate.

(3) This subsection is satisfied if the principal controls the associate.

(4) This subsection is satisfied if:

(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

(5) This subsection is satisfied if:

(a) the associate has a qualifying investment (see subsection (8)) in the principal; and

(b) the associate has significant influence over the principal; and

(c) the interest is material to the associate.

(6) This subsection is satisfied if:

(a) the principal has a qualifying investment (see subsection (8)) in the associate; and

(b) the principal has significant influence over the associate; and

(c) the interest is material to the principal.

(7) This subsection is satisfied if:

(a) an entity (the third entity) controls both the principal and the associate; and

(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.

(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

(a) has an asset that is an investment in the second entity; or

(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.”

[19] For the purposes of the Corporations Act, an entity is defined in s.9 in the following terms:

“entity: for the purposes of Chapter 2E an entity is any of the following:

(a) a body corporate;

(b) a partnership;

(c) an unincorporated body;

(d) an individual;

(e) for a trust that has only 1 trustee—the trustee;

(f) for a trust that has more than 1 trustee—the trustees together.

Otherwise, entity has the meaning given by section 64A.”

[20] Section 64A of the Corporations Act states:

“64A Entities

Except in Chapter 2E, a reference to an entity:

(a) is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and

(b) includes, in the case of a trust, a reference to the trustee of the trust.”

[21] Although the parties dispute the circumstances of the alleged dismissal, the following sworn evidence provided by Mr Wilson that is directly relevant to the immediate issue has not been disputed. Namely, that at the time Mr Allen’s employment ceased:

•  The employer had a total of 10 employees, including the applicant, with the names and positions of each employee declared;

•  None of the Directors of the company were employees; and

•  There were no associated entities with employees.

[22] On that basis, I am satisfied that the employer was a small business within the meaning of the FW Act.

4. Conclusions and Order

[23] Given my findings, Mr Allen’s period of employment does not meet the relevant MEP and as a result he was not protected from unfair dismissal and this application cannot be further considered by the Commission.

[24] To the extent that Mr Allen implies that the Commission has some other basis to ignore the requirements of the FW Act, this has not been identified. In any event, as would be clear from the statutory meaning of the MEP and the definition of continuous service set out earlier in this decision, it is the actual service of Mr Allen at the time of the alleged dismissal that must be considered. Although the apparent apprenticeship agreement, and the expectations that might well have flowed from that, may be important for other purposes, this does not extend the period of employment and is not relevant to the MEP in this case.

[25] The Commission is a Statutory Tribunal and has no inherent jurisdiction. It is empowered to deal with matters, and limited not to determine matters, by the terms of the FW Act. It has no power to waive the express statutory limitations upon its jurisdiction of the nature being considered in this case.

[26] In all of these circumstances, the unfair dismissal application is beyond the jurisdiction of the Commission and must be dismissed. An Order⁹ to that end is being issued in conjunction with this decision.

COMMISSIONER

Appearances:

No appearance by or on behalf of Mr Allen, the Applicant.

J Ambara, with permission, and R Wilson and K Tosse for and on behalf of Aldinga Bakehouse.

Conference (by telephone) details:

2018

Adelaide

17 October.

Written submissions:

Aldinga Bakehouse – 29 October 2018

Mr Kosta Allen – 6 November 2018.

Printed by authority of the Commonwealth Government Printer

<PR702083>

 1   Confirmed in written submissions and in a Statutory Declaration provided by Mr Ross Wilson, Director of the employer.

 2   Mr Allen was given proper notice but did not participate in the conference.

 3   The directions outlined the issues and provided reference to the relevant statutory provisions.

 4   Written submissions dated 6 November 2018.

 5   Section 397 provides that the Commission must conduct a conference or hold a hearing in relation to a matter arising under Part 3-2 of the Act (an unfair dismissal matter including matters of this kind), if and to the extent that, the matter involves facts the existence of which is in dispute.

 6   See Ryan v Power & Data Support Services Pty Ltd[2015] FWCFB 4393 at [7].

 7 Section 383 of the FW Act.

 8   Mr Allen described his employment as being a “Casual Full-time Baker” with regular hours whereas the employer described the employment as a casual employee with no ongoing expectation of continuing regular and systematic employment. It is not necessary to determine this matter for present purposes.

9 PR702100.