Larry Young v Expo Signage and Digital Pty Ltd

[2020] FWC 3595

[2020] FWC 3595

The attached document replaces the document previously issued with the above code on 16 July 2020.

Paragraph 41 of the Decision incorrectly had the name Mr. Wright, this has been replaced to the correct name, Mr. Young.

Associate to Deputy President Binet

Dated 17 July 2020.

[2020] FWC 3595

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Larry Young
v
Expo Signage and Digital Pty Ltd
(U2020/2138)

DEPUTY PRESIDENT BINET PERTH, 16 JULY 2020

Application for an unfair dismissal remedy - jurisdictional objection – minimum employment period – objection dismissed.

[1] On 25 February 2020 Mr Larry Young (Mr Young) made an application to the Fair Work Commission (FWC) pursuant to section 394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Expo Signage and Digital Pty Ltd (Expo).

[2] On 6 March 2020 Expo filed a Form F3 Employer Response to the Application objecting to the Application on the grounds that Mr Young had not completed the minimum employment period to be eligible to make the Application.

[3] On 27 March 2020 and 20 April 2020, the parties participated in conciliation however the matter remained unresolved.

[4] Taking into account the parties wishes and circumstances it was determined that a hearing rather than a determinative conference would be the most effective and efficient way to determine the Application. Consequently, the Application was listed for a Hearing in Perth on 10 July 2020 (Hearing).

[5] Directions for the filing of materials in advance of the Hearing were issued to the parties on 7 May 2020 (Directions).

Permission to be represented

[6] The Directions invited the parties to make submissions as to whether the FWC should grant permission to the parties to be represented. A determination of this issue is necessary to ensure that the manner in which the Conference is conducted is fair and just.¹

[7] Having considered the submissions of the parties I exercised my discretion to grant both parties leave to be represented by a lawyer because I was satisfied that it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

[8] At the Hearing, Mr Young gave oral and written evidence on his own behalf and was represented by Mr Patrick Mullally, a paid agent.

[9] At the Hearing, Expo was represented by Mr Rahul Kumar a solicitor (Mr Kumar). Mr Kumar called the following witnesses:

a. Ms Yvonne Leaper (Ms Leaper) - Graphic Designer

b. Ms Jessica Maiden (Ms Maiden) - Business Solutions Manager.

Background

[10] Galena Nominees Pty Ltd as trustee for the Jason Signmakers Unit Trust (Jason Signmakers) is a signage manufacturing business based in Welshpool, Western Australia. It is the parent company of Expo.

[11] Mr Young commenced employment with Bokay Signage (Bokay) in the role of Business Development Manager on 11 February 2019 pursuant to a written contract of employment. 2

[12] In November 2019 negotiations took place between Jason Signmakers and Bokay which resulted in an asset transfer which was completed on 16 December 2019.

[13] As a part of these negotiations, Jason Signmakers decided that the assets of Bokay would be managed by Expo directly. The intent was to continue to use the Bokay brand and website during a period of review to decide whether to rebrand Bokay and Expo Signage and Digital into one brand.  3

[14] Prior to 16 December 2019, Bokay employees were interviewed for available roles at Expo. An offer of employment with Expo was made to a number of Bokay employees including Mr Young, Ms Leaper and Ms Maiden. Bokay employees such as Mr Young, Ms Leaper and Ms Maiden, who accepted employment with Expo were not paid severance pay. Bokay employees such as Mr Young, Ms Leaper and Ms Maiden, who accepted employment with Expo were also not paid their accrued leave entitlements on the termination of their employment with Bokay. Instead they were informed that their leave accruals would be recognised by Expo.

[15] On 16 December 2019 Mr Young commenced employment with Expo in the role of Business Solutions Manager pursuant to a written contract of employment (Expo Employment Contract).  4

[16] Appendix 1 of the Expo Employment Contract at Item 13 records Mr Young’s leave entitlements owing as at his commencement date with Expo as annual leave 119 hours and sick leave 23 hours. It is not contested that these amounts are those which he accrued during his service with Bokay.

[17] The role of Business Development Manager at Bokay and the role of Business Solutions Manager at Expo involved the performance of substantially the same duties.  5

[18] Mr Young’s employment with Expo was terminated effective 21 February 2020.

Consideration

[19] Section 390 of the FW Act provides that the FWC may only make an order for reinstatement or compensation if the applicant was protected from unfair dismissal at the time of his or her dismissal.

[20] Section 382 sets out the circumstances that must exist for an applicant to be protected from unfair dismissal:

“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.”

[21] The ‘minimum employment period’ is defined in section 383 of the FW Act 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.”

[22] It was not in dispute and I find that Expo is not a small business employer, having 15 or more employees at the relevant time. The minimum employment period which Mr Young must complete in order to be eligible to seek a remedy for unfair dismissal is therefore six months.

[23] Section 384 provides as follows:

“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

(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.”

[24] Mr Young asserts that he is a transferring employee in relation to a transfer of business between Bokay and Expo. He says that Bokay and Expo were not associated entities when he became employed by Expo. He denies that Expo informed him in writing that his period of service with Bokay would not be recognised. He therefore submits that his period of service with Bokay should be taken into account when determining whether he has completed the minimum employment period.

[25] Expo concede that Mr Young is a transferring employee in relation to a transfer of business from an old employer to a new employer for the purposes of section 384 of the FW Act. Expo also concede that itself and Bokay were not associated entities at the time Mr Young became an employee of Expo. The parties agree that if Expo cannot establish that it discharged its obligation under section 384(2)(b)(iii) that Mr Young’s service with Bokay will count towards his period of employment with Expo and that he will have completed the minimum employment period necessary to be eligible to seek a remedy for unfair dismissal.

[26] Expo submit that it informed Mr Young in writing before his employment started that his period of service with Bokay would not be recognised by Expo by way of Clause 3 of the Expo Employment Contract. Clause 3 of the Expo Employment Contract provides as follows:

“Clause 3. Probation

3.1 A probation period will apply in all cases of new employment. See item 8 of Appendix 1. During this time, we will assess your progress and performance in the position.

3.2 During the probation period, you or the Company may end your employment by providing notice in accordance with the table in clause 14.1 below.”

[27] Appendix 1 of the Employment Contract provides that:

“Appendix 1 – Employment Schedule

…

Item 8 Probationary Period 6 Months

…”

[28] Clause three of the Expo Employment Contract does not expressly state that Mr Young’s prior period of service with Bokay would not be recognised by Expo.

[29] Expo submits that the written notification required by section 384(2)(b)(iii) of the FW Act need not expressly state that the prior period of service will not be recognised provided that it can be implied from the words of the written notice that the prior service will not be recognised.

[30] Mr Kumar cites as authority for this proposition Ahmed v Serco Australia Pty Ltd [2020] FWA 5121 (Serco Case).

[31] Mr Kumar submits that the wording of the employment contracts in the Serco Case and the present case bear the following similarities:

a. both refer to the employment with the New Employer as ‘new employment’; and

b. both refer to a qualifying time period in keeping with the provisions of the FW Act.

[32] In the Serco Case the written notification relied upon was contained in a letter of employment provided by Serco which included the following term:

“1. Position/classification & contract of employment

…

(c) You will not be required to serve a period of probationary employment. Nevertheless, as your position at Serco is a new contract of employment, all qualifying periods set out in the Fair Work Act 2009 and the Serco Immigration Detention Centres Agreement 2009 will apply.”

[33] In the Serco Case Vice President Watson found that the inclusion of this term in the letter of employment satisfied the requirements of 384(2)(b)(iii) of the FW Act as follows:

“I have considered the matter and the submissions of the parties and in my view the wording used by the employer in paragraph 1(c) of the letter of employment when fairly and objectively construed does fall within the description of s 384(2)(b)(iii). In stating that qualifying periods in the Act will apply, employees should have known that the qualifying period of service for an unfair dismissal remedy applied to their employment with Serco. That was clearly the intention of Serco. In my view employees in receipt of that letter would and should have understood that the qualifying period of, in this case, six months’ employment would need to be served with Serco in order for employees to be able to access the unfair dismissal remedy in the Act.”

[34] In my view section 384(2)(b)(iii) of the FW Act requires a clear statement that prior service will not be recognised and that words that explain the consequence of a lack of recognition of prior service (such that the employee might not qualify for an unfair dismissal remedy) are not sufficient to discharge the requirement set out in section 384(2)(b)(iii).

[35] If I am wrong in this regard the wording relied on in Mr Young’s contract can be clearly distinguished from the language relied on in the Serco Case. In that case the Vice President relied exclusively on an express reference in the relevant employment contracts to the statutory qualifying periods to conclude that the employees had been notified of the consequence of a lack of recognition of prior service (namely that they would be ineligible to make an unfair dismissal claim).

[36] Nor am I persuaded by Expo’s submission that the reference to ‘new employment’ or to contractual probation consistent with the minimum employment period can satisfy the requirement in section 384(2)(b)(iii) to notify the employee in writing before the new employment started that a period of service with the old employer would not be recognised.

[37] By virtue of the transmission of business provisions contained in the FW Act the fact that employment is ‘new employment’ with a new employer following a transfer of business does not automatically mean that prior service with a different employer will not recognised. In fact, but for section 384(2)(b)(iii), it would be. Therefore, the inclusion of a reference to ‘new employment’ cannot of itself discharge the obligation of notification.

[38] Nor in my view can reference to a contractual period of notice discharge the obligation of notification. A contractual period of notice whether consistent or inconsistent with the minimum employment period has work to do independently of the qualifying periods to access a statutory remedy for unfair dismissal. For example, a contract of employment may provide for a shorter or longer probationary period than the minimum employment period. For example, a contract could provide for a probationary period of 12 months yet an employee, not employed by a small business, with 8 months service would be entitled to make an application for a remedy for unfair dismissal not withstanding their contractual probationary period had not expired.

[39] Most critically the express contractual recognition of Mr Young’s accrued leave as entitlements in the Expo Employment Contract could reasonably, and on the evidence appears to have, led Mr Young to conclude that his period of prior service with Bokay would be recognised by Expo.

[40] I am therefore not satisfied that Expo has satisfied the requirement set out in section 384(2(b)(iii) of the FW Act to inform Mr Youngin writing before his employment with Expo started that his period of service with Bokay would not be recognised by Expo.

[41] I am therefore satisfied that, at the time of dismissal, that Mr Young was an employee who had completed a period of employment with Expo of at least the minimum employment period.

[42] The jurisdictional objection is dismissed and the Application will be remitted for the determination of the merits of the Application.

DEPUTY PRESIDENT

Appearances:

MrR Kumar for the Applicant
MrP Mullally for the Respondent

Hearing details:

2020.
Perth and Video Conference:
10 July.

Printed by authority of the Commonwealth Government Printer

<PR720853>

1 Warrell v the Commission [2013] FCA 291

 2   Digital Court Book at page 18 and 19

 3   Digital Court Book at page 18

 4   Digital Court Book at page 18 and 19

 5   Digital Court Book at page 19