Marianne Cope v The Trustee for D & R Furnell Family Trust T/A Furnell Plumbing
[2020] FWC 3693
•24 JULY 2020
| [2020] FWC 3693 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy
Marianne Cope
v
The Trustee for D & R Furnell Family Trust T/A Furnell Plumbing
(U2020/6823)
| Deputy President Anderson | ADELAIDE, 24 JULY 2020 |
Application for an unfair dismissal remedy – whether minimum employment period served – whether employer a small business – not a small business as defined - employee protected from unfair dismissal
On 17 May 2020 Marianne Cope (Ms Cope or the Applicant) applied to the Commission under section 394 of the Fair Work Act 2009 (FW Act) for an unfair dismissal remedy concerning a dismissal on 29 April 2020 by her then employer, Furnell Plumbing (Furnell or the Respondent).
The application is opposed by Furnell which raises two jurisdictional objections: that Ms Cope did not serve the minimum employment period to be eligible to make a claim; and that the employer complied with the Small Business Fair Dismissal Code.
In this matter, the minimum employment issue requires the Commission to determine whether Furnell Plumbing was, at the relevant time, a small business (as defined by the FW Act) and the date of dismissal for that purpose.
Ms Cope’s application was not conciliated as the employer sought determination of Ms Cope’s eligibility to make the claim before further proceedings were conducted.
I issued directions on 19 June 2020. I heard the minimum employment issue by telephone on 10 July 2020.
Both parties were self-represented: Ms Cope (with her husband as a support person) and Ms Rashel Furnell (with her co-owner husband, Mr Damian Furnell). I heard evidence from Ms Cope, Ms Furnell and the employer’s accountant Mr Justin Braakuis of GPK Accountants (Port Lincoln).
At the conclusion of proceedings I directed that further information be provided by the employer; being payroll data and hours worked by certain casual employees for the 2019/20 financial year (via Mr Braakhuis) and documents relating to the impact of COVID-19 on Furnell’s operations in the indigenous lands of northern South Australia.
That information has been provided. Each party lodged final written submissions on the additional material.
Facts
The facts are not largely in dispute though both parties disagree on the application of the facts to the law. The documentary evidence provided is broadly consistent with the oral evidence. All witnesses were truthful and endeavoured to assist the Commission to the best of their recall. Where there are issues of factual difference, I rely primarily on contemporaneous documentary material.
Furnell is owned by husband and wife Damian and Raschel Furnell. It operates a business which contracts (via competitive tender) with the South Australian Government (SA Housing Authority) to provide maintenance services on facilities in the indigenous lands (APY Lands) of northern South Australia.
Furnell employs persons including indigenous persons (from the Anangu people) in this work. It has had considerable success in doing so, including employing two full time Anangu apprentices and other Anangu casual employees as and when they are available and as the need arises. It is proud of its achievements in that regard.
Ms Cope, who lives in Adelaide (where Mr and Ms Furnell are based), commenced employment as Office Manager on 8 May 2019 under the terms of a written employment contract.[1]
As Office Manager, Ms Cope was responsible (amongst other tasks) for payroll administration and employee records.
Ms Cope was a full time employee.
COVID-19 impacted Furnell’s business from March 2020 when public health authorities declared the APY Lands to be a designated area for biosecurity purposes on the basis that indigenous persons had particular vulnerabilities to virus transmission. Furnell were advised that entry to the APY Lands was restricted to essential (emergency or compassionate) authorised work only:[2]
“On midnight 26 March 2020, APY was determined a “designated area” under the Biosecurity Determination Consequently, there cannot be any movement onto the APY lands unless…SAPOL Emergency Manager in conjunction with APY determines the person to be providing an essential service…”
As a result, Furnell ceased rostering all indigenous persons (including casuals). Some concluded on 27 February 2020 whilst others concluded on 13 March and 26 March respectively. No Anangu casuals were employed after 26 March 2020. This directive was confirmed in a letter from the SA Housing Authority to Furnell some weeks later:[3]
“In March 2020, the Anangu Pitjantjatjara Yankunytjatjara (APY) Landholding Body directed that Anangu people were not to be engaged in employment by Furnell Plumbing Pty Ltd (Furnell) during the COVID-19 situation in attempt to limit the risk of transmission.”
In April 2020, with COVID-19 impacts continuing, Ms Cope (and another staff member in the Adelaide office) were advised (on 15 April 2020[4]) they would be stood down from full time work (five days) to four days a week. In a further move that had been foreshadowed in the 15 April 2020 email,[5] the following week Ms Cope was then stood down to three days a week.
Ms Cope took exception to these reductions and the manner in which they were notified.
On 29 April 2020 Ms Cope was advised by Ms Furnell that the situation “was not working out”[6] and that her employment would end. A letter was sent that evening to Ms Cope. The letter read:[7]
“As per discussion on 4pm Wednesday 29th April 2020
We hereby terminate your employment effective immediately.
In addition to your annual leave entitlements you will receive; in accordance with your employment contract payment in lieu of two weeks' notice. Although your working hours changed from full time to part time (3 days a week) this week we will be paying your two weeks' notice at your full-time rate.”
The last day Ms Cope physically worked in the business was that day, 29 April 2020.
Ms Cope received two weeks’ pay in lieu. Payment was made in the normal pay cycle on 11 May 2020, together with accrued leave.[8]
Ms Cope took immediate steps to ascertain her rights. She contacted the Fair Work Ombudsman and lodged a written enquiry, indicating: “I need to clarify my final date of employment to see if I am eligible to make a claim”. The Ombudsman replied[9]:
“An employee’s termination date is their final date of employment. In the instance where an employer pays an employee termination pay in lieu of notice, the date to which the employee is paid up is their termination date.”
Ms Cope filed these proceedings on 17 May 2020 believing she was eligible to make an unfair dismissal claim.
Consideration
Description of employer
Ms Cope’s application is made against the Trustee for D & R Furnell Family Trust trading as Furnell Plumbing. The evidence before me is that Furnell Plumbing Pty Ltd, which was in fact Ms Cope’s employer, is the corporate trustee of that trust.
Whilst, having expressed the incorrect name of her employer, should this matter proceed further Ms Cope would be entitled to seek leave to amend the description of the employing entity.
The minimum employment period obligation
Section 382 of the FW Act provides that a person is only protected from unfair dismissal if they have completed at least the minimum employment period.
If the employer is a small business, that period is twelve months. If the employer is not a small business, that period is six months. The rule is set out in section 383:
“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.”
Timing of dismissal
If Furnell Plumbing is a small business, Ms Cope is eligible to make an unfair dismissal claim only if she had had worked for the employer for at least one year.
Ms Cope says she did. She says that she started employment on 8 May 2019 and that her dismissal took effect on 13 May 2020 being the conclusion of the two weeks (fourteen days) notice she was advised on 29 April 2020.
She says she worked one year and five days. She relies on the advice received by the Fair Work Ombudsman to advance this submission.
Furnell submit that the dismissal occurred on 29 April 2020 and that Ms Cope was, for the purposes of the minimum employment period, employed for eleven months and twenty one days only.
This question is to be determined by reference to the language used in section 383 of the FW Act. In contrast to the calculation of the 21 day statutory period for filing a claim (section 394(2)), the minimum employment rule (section 383) does not use the phrase “after a dismissal took effect”. For minimum employment period purposes, the FW Act refers to the earlier of either “the time when the person is given notice of the dismissal” or the time “immediately before the dismissal”.
In this matter, it is not disputed that Ms Cope was given notice of dismissal by Ms Furnell on 29 April 2020 (both orally and in writing).
I conclude that, by virtue of section 383(a)(i) of the FW Act, the end date for minimum employment period purposes ended on 29 April 2020. On that date, Ms Cope had served 11 months and 21 days.
Ms Cope has understandably relied on information provided by the Office of the Fair Work Ombudsman.[10] Regrettably that information (expressed as “general in nature”) has not drawn a distinction between an end date for the purposes of the minimum employment period (section 383) and a termination date for the purpose of the time limit for filing applications (section 394). In that respect the Ombudsman’s office may have unwittingly misinformed Ms Cope. Further, to the extent that the information provided concerns itself with the latter (when a dismissal takes effect for time limit purposes) it seems to misapply or at least oversimplify established authority.[11] The Ombudsman should review its information resource on these questions and provide greater clarity than what was provided to Ms Cope.
Is Furnell Plumbing a small business employer?
Given the above, Ms Cope is only eligible to make this application if Furnell is not a small business employer.
The obligation to establish that a business is a small business employer rests on the employer seeking to rely on that fact and on the Small Business Fair Dismissal Code.
Section 23 of the FW Act provides:
“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.”
The relevant time for making the calculation is the time “immediately before the time of the dismissal or at the time the person was given notice” (section 388(2)). In this matter, that is the 29 April 2020.
How many persons were employed by Furnell on 29 April 2020?
In this matter there is no evidence of associated entities.
It is uncontested that at 29 April 2020 thirteen full time employees were employed (including the two full time Anangu apprentices, who had by then been stood down). This is readily apparent from both the evidence of Ms Cope[12] and Furnell[13]. I include in that number Ms Cope. During a period of stand down, an employment relationship between an employer and a full time (or part time) employee continues in the absence of its termination at the initiative of the employer or the employee.
It is also uncontested that there were two working directors. Persons to be included are required by section 23 to be “employees”. This requires a contract of employment. Whether a working director is an employee is a mixed question of fact and law. Each matter is determined according to its particular circumstances. In some businesses a working director has been found to hold a contract of employment;[14] in other circumstances, not so.[15]
The evidence before me is that whilst both Mr and Ms Furnell worked in the business as owners neither had a contract of employment and neither drew a salary or wage as an employee. The evidence of Mr Braakhuis was clear on this point. His evidence is supported by the documentary record; persons listed in the payroll records provided by Mr Braakhuis do not include Mr or Ms Furnell. Nor did either hold themselves out as other than owners; for example, the SA Housing Authority corresponded with Mr Furnell as “Director” and Ms Furnell corresponded (for example, in the termination letter) as “Secretary Director”.
As neither Mr nor Ms Furnell were employees of Furnell or an associated entity neither are included in the count.
It is uncontested that about eleven irregular casuals from the Anangu people were on the books, many of whom worked from time to time during periods of the year as and when each became available from within the APY Lands. There is no evidence of regularity of work amongst this group, and Ms Cope did not assert they were regularly and systematically employed. Section 23(2)(b) requires that this group of eleven not be included.
There is also evidence of a group of about thirteen subcontractors engaged by Furnell. Mrs Cope, in her final submission, contends that some of these were, as a matter of law, employees not subcontractors. I have no probative material before me on which to make such a finding. Whilst the mere description of a person as a subcontractor does not make them so, the limited evidence does not support a finding that the label applied to these workers was a sham. Mrs Cope, in her submission, acknowledges some indices would point in one direction but others in the direction of independent engagement (own insurance, own superannuation, own tax, own ABN, invoicing for work and no leave entitlements). There being assertion but no evidence before me to conclude otherwise, this group is not included in the count of employees.
This matter turns on the remaining group – a group of six other casuals, all Anangu persons. Ms Cope submits that each were regular casuals. Furnell submit that none were employed on a regular and systematic basis and (in the alternative) even if some were, none remained employed on 29 April 2020 because all Anangu casuals had not worked since at least one month prior to that date.
The principles governing what is “regular and systematic” employment are well established. The consideration is not merely quantitative. It is also qualitative. What is required is a pattern or system of rostering of work that objectively could be said to be regular and systematic. The approach to applying these terms has been set out by a full bench of the Commission as follows:[16]
“The word “regular” should be construed liberally. It implies some form of repetitive pattern and does not mean frequent, often, uniform or constant. Employment on a “regular” basis may be constituted by frequent though unpredictable engagements. The word “systematic” requires that the engagement be “something that could fairly be called a system, method or plan”. The concept of engagement on a “systematic” basis does not require the employee to be able to foresee or predict when his or her services may be required. It is sufficient that the pattern of engagement occurs as a consequence of an ongoing reliance on the employee’s services as an incident of the business by which he or she is engaged.” (endnotes omitted)
The evidence before me, as produced by Furnell via Mr Braakhuis, is that each of these six persons worked a large numbers of hours but in certain months only.[17] Despite the volume of hours worked, there are some gaps between periods of engagement. In the case of some more than others, the gaps are less frequent. Mr Cullinan for example, worked in each of the five months to March 2020 and Mr Lynch in each of the four months to March 2020.
I am not satisfied that Furnell has met the onus of establishing that these six casuals were not engaged on a regular and systematic basis. I find that Mr Cullinan and Mr Lynch were clearly so employed and, taking into account that “frequent though unpredictable engagements” are capable of meeting the statutory requirement, the gaps evident in the months worked by the other four do not preclude such a finding.
I find on the material before me that five of the six casuals (Mr Cullinan, Mr Lynch, Mr Yai Yai, Mr Brumby and Mr Morris) were engaged (at least at March 2020) on a regular and systematic basis within the meaning of the FW Act.
I make no finding concerning Mr Kunoth as it appears he was employed in part by a subcontractor and at other times by Furnell. The evidence before me concerning his engagement(s) is not sufficiently clear as to conclude that he was employed by Furnell on a regular and systematic basis. Given my finding concerning the other five, I need not make a finding concerning Mr Kunoth.
In light of this finding, Furnell employed eighteen persons within the meaning of the small business employer definition of the FW Act at March 2020.
I now deal with Furnell’s alternate submission that the (five) regularly employed casuals should not be counted as none (it is said) were employed at the relevant time (29 April 2020) because once the APY Lands were closed from March 2020 each was no longer rostered and none performed work.[18]
Whilst there is some superficial force in this submission given the language of section 23 of the FW Act (and in particular the phases “a particular time” and “at that time”) the context in which each casual ceased to be so rostered is relevant. As with full time employees from amongst the Anangu people, the five regular casuals ceased to be rostered because work ceased in light of the public health determination. In that sense, as with Furnell’s full time employees, they were stood down from being rostered due to COVID-19, not on account of a termination of the employment relationship. During the month 30 March 2020 to 29 April 2020 they continued to be on the books and capable of being re-rostered in a manner that continued their regular and systematic employment.
Their failure of any of the five to be rostered in April 2020 was for the same reason that full time employees were being progressively stood down and not rostered: COVID-19 impacts. As a stand down does not end an employment relationship between an employer and a full time employee, the non rostering of these regularly employed casuals for the same reason did not break the regular and systematic basis of their employment.
In these circumstances, I conclude that the five regularly employed casuals remained employed on a regular and systematic basis at the relevant time (29 April 2020).
For these reasons, I conclude that Furnell employed eighteen (18) persons at the relevant time for the purposes of section 23(2) of the FW Act.
Did Ms Cope serve the minimum employment period?
As Furnell was not a small business, the minimum employment period applicable to Ms Cope was service of six months prior to the notice of her dismissal on 29 April 2020.
As Ms Cope had served 11 months and 21 days, she met the required minimum employment period to be a person protected from unfair dismissal within the meaning of the FW Act.
Conclusion
As Ms Cope was a person protected from unfair dismissal, she was eligible to make this claim. Ms Cope is entitled to proceed with her application.
In light of this decision, I will direct that the application be the subject of Member Assisted Conciliation within one month of today’s date. Arrangements for that conciliation will be advised by the chambers of the relevant Member.
Should the matter not be resolved by conciliation, it will be re-listed and I will then issue directions for the filing of materials by both Ms Cope and Furnell in advance of a hearing. The hearing, if needed, will concern merits and remedy including Furnell’s contention that the employer complied with the Small Business Fair Dismissal Code.
DEPUTY PRESIDENT
Appearances:
M Cope, the Applicant on her own behalf, with F Cope
R Furnell and D Furnell, on behalf of The Trustee for D & R Furnell Family Trust T/A Furnell Plumbing
Hearing details:
2020
Adelaide (by Telephone)
10 July.
Final written submissions:
The Trustee for D & R Furnell Family Trust T/A Furnell Plumbing – 15 and 21 July 2020
Ms Cope – 17 July 2020
[1] A1 Attachment E
[2] A1 Attachment C 30 March 2020
[3] Letter SA Housing Authority to Mr Damian Furnell 16 April 2020
[4] A1 Attachment H
[5] “so like I said next week will be a four day week but prepare yourself as it may well reduce to three days the following week.”
[6] A3
[7] A2
[8] A1 Attachment F
[9] A1 Attachment G
[10] A1 Attachment G
[11] Siagian v Sanel Pty Ltd (1994) 122 ALR 333 at 334; Metropolitan Fire and Emergency Services Board v Duggan[2017] FWCFB 4878
[12] A1 Attachment A
[13] Submission 15 July 2020 Attachment C ‘Payroll Totals April 2020’
[14] For example, Finch v Tiles Strata Management Pty Ltd[2020] FWC 3675
[15] Taylor v Auto Loans Group Pty Ltd t/a Autocarloans.com.au [2018] FWC 1950
[16] Bell v Aboriginal Legal Service (NSW/ACT) Ltd[2018] FWCFB 6102 at [11]
[17] Mr Kunoth worked in August 2019, February 2020 and March 2020; Mr Morris in July 2019, September 2019 and February 2020; Mr Cullinan worked in November 2019, December 2019, January 2020, February 2020 and March 2020; Mr Lynch worked in December 2019, January 2020, February 2020 and March 2020; Mr Yai Yai worked in July 2019, August 2019, September 2019, October 2019 and March 2020; and Mr Brumby worked in February 2020 and March 2020
[18] Final working days were: Mr Kunoth 26 March 2020; Mr Morris 27 February 2020; Mr Cullinan 26 March 2020; Mr Lynch 13 March 2020; Mr Yai Yai 13 March 2020 and Mr Brumby 26 March 2020
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