Mi Youn Sim v Sunridge Investments Pty Ltd T/A Choi's Patisserie

[2018] FWC 6992

[2018] FWC 6992

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mi Youn Sim
v
Sunridge Investments Pty Ltd T/A Choi’s Patisserie
(U2018/812)

COMMISSIONER CRIBB MELBOURNE, 15 NOVEMBER 2018

Application for an unfair dismissal remedy - jurisdiction - national system employer - application dismissed.

[1] Ms Mi Youn (Natasha) Sim (the Applicant) has made an application for an unfair dismissal remedy in relation to her dismissal by Sunridge Investments Pty Ltd T/A Choi’s Patisserie (the Respondent) on 8 January 2018. The application was made under section 394 of the Fair Work Act 2009 (the Act).

[2] Ms Sze Man (Mandy) Lai, as Owner of Choi Patisserie, 81A Angelo Street, South Perth, filed an Employer Response to Unfair Dismissal Application (Form F3) on 9 February 2018. The legal name of the business was stated to be Sze Man Lai T/A Choi Patisserie. Ms Angela Lai was the contact person. On the same day, Ms Sze Man Lai filed an objection (Form F4) to Ms Sim’s application. The contact person was Sze Man (Angela) Lai. The grounds of the objection were that the Applicant was not dismissed and that the Applicant did not meet the minimum employment period.

[3] A conciliation teleconference was held on 1 March 2018 but the matter was not settled. Consequently, the jurisdictional objection in relation to minimum employment period was listed for conference/hearing on 20 April 2018.

[4] Ms Sze Man (Mandy) Lai filed a Respondent’s Outline of argument: objections on 11 April 2018. In the Outline of argument, Ms Lai made three jurisdictional objections to the application. These were that the Applicant did not serve the minimum employment period; that the Applicant was not dismissed and that Ms Sim was employed by someone else.

[5] With respect to these objections, Ms Lai also stated by email that she was the operator of the business at 81a Angelo Street, South Perth and that, as she was a sole trader, the application should be dismissed. Ms Lai also advised that the Applicant had stated the correct contact details in the application for her but had used the incorrect ABN. 1

[6] Prior to the scheduled hearing, the Termination of Employment Panel Head wrote to the parties on 11 April 2018 and, based on information provided by Ms Lai, raised the issue that, if Ms Lai is an individual/sole trader, the Respondent is not a National System Employer. The Panel Head stated that this question was a threshold issue which must be dealt with prior to any other issue and directed the Respondent to provide a response to the Not a National System Employer issue by 16 April 2018. The Applicant was directed to provide a response to this issue as well as the Minimum Employment Period objection by 23 April 2018. The parties were also advised that the matter would not be proceeding on 20 April and would be relisted for 27 April 2018.

[7] The Applicant filed an Outline of argument: objections on 20 April 2018, together with a Statement of evidence together with other witness statements and a Document List, which responded to the two jurisdictional objections set out in Ms Lai’s Form F4.

[8] On 24 April 2018, the Commission as presently constituted wrote to Ms Lai and Ms Sim requesting that Ms Lai provide documentary proof of the ABN of the business which employed Ms Sim. This was because the employer’s ABN cited in the Applicant’s application did not match the ABN provided by Ms Lai. The ABN provided by the Applicant was said to have been given to her by Ms Lai in response to the Applicant’s request regarding her personal tax.

[9] Ms Lai replied on 26 April 2018 by email attaching a response. In her response, Ms Lai reiterated her objection on the basis that she is a sole trader but acknowledged that she was the employer/business owner at the relevant time. Further, Ms Lai stated that, prior to 24 December 2017, the Applicant had been employed by Mr He and Mrs Ou as Euro Pastry Pty Ltd trading as Choi’s Patisserie.

[10] In an email on 26 April 2018, Ms Sim stated that she had been employed by Ms Ou and Mr He and that Ms Lai was a manager and that they were all one family. It was also stated by Ms Sim that she had not been notified of the apparent change in ownership. Ms Lai responded the same day disputing that Mr He was family related and stated that she had helped out in the business whilst she was at university. Ms Lai explained that she had stopped working in the business in September 2017 when she went overseas for three months.

[11] In an email dated 26 April 2018, the Commission requested that Ms Lai provide a sworn affidavit (statutory declaration), together with documentary proof, that:

1. The business where Ms Sim worked (81A Angelo Street, South Perth) was transferred from Euro Pastry (owned by Mr He and Ms Ou) to Ms Lai and the date the transfer occurred.
2. Ms Sim was notified of the transfer of ownership and of her new employer.

The parties were also advised that, to allow time for Ms Lai to provide the affidavit, the telephone hearing scheduled for 27 April 2018 would be postponed.

[12] On 27 April 2018, Ms Lai responded by email again arguing that she was a sole trader and that the information that had been provided clearly showed that she was a sole trader. Therefore, Ms Sim’s application should be dismissed. Ms Lai further stated, by email on 30 April 2018, that she had been advised a statutory declaration was not a compulsory document to provide and so Ms Lai did not do so.

[13] On 1 May 2018, the Commission wrote to Ms Lai requesting a statutory declaration attaching proof that the business was transferred to Ms Lai on 24 December 2017 and that Ms Lai was an individual/sole trader.

[14] On 17 May 2018, a statutory declaration together with other material was received from Ms Lai. In the statutory declaration, Ms Lai declared that she was the employer of Ms Sim at the time she wished to change her roster. Ms Lai also provided material from the Australian Government Australian Business Register which showed that Ms Lai was an individual/Sole Trader, that the ABN had been active from 6 January 2015 and that there was a registered business name of Choi’s Café from 11 April 2018. In addition, an Activity statement from the Australian Taxation Office showed activity between January 2018 and March 2018 and that the business address was 81A Angelo Street, South Perth. Finally, a document was provided in relation to the assignment of a lease for premises in Applecross affective 18 December 2014.

[15] Ms Sim responded by email on 21 May 2018 challenging the documentation from Ms Lai and arguing that the Australian Business Register showed that Ms Lai only took over the business officially from 11 April 2018. Therefore, it was contended that the Notice of Change of Ownership, that had previously been provided by Ms Lai was false.

[16] The Commission wrote to Ms Lai, on 30 July 2017 in relation to the documentation that had been provided and again requested that Ms Lai provide legal documentation which showed that Ms Lai became the owner of Choi’s Café (the business at Angelo Street, South Perth) on the date that Ms Lai alleged – 24 December 2017. It was indicated that, if documentation to this effect was not provided by 3 August 2018, there would be a formal hearing of the Respondent’s jurisdictional objection.

[17] A determinative conference was held, by videoconference, on 8 August 2018, in relation to the Respondent’s Not a Nation System Employer jurisdictional objection. Ms Lai gave evidence that the business name was not registered until 11 April 2018 because she did not know that she would need an actual business name to be trading in South Perth. Ms Lai explained that she only became aware of the need to do this when she was applying for an EFTPOS machine and that it was the bank who told her about this. 2 It was agreed by Ms Lai that she would provide the written transfer of business between Mr He and Ms Ou to herself but stated that it would need to be translated by a translation company.3

[18] Ms Lai verbally translated the transfer of business document, which was dated 23 November 2017, during the determinative conference. The transfer of business document was translated to the effect that the transfer would occur on 24 December 2017 and that, from that date, Ms Lai would begin to be liable for all matters to do with the business. 4

[19] It was common ground during the determinative conference that Ms Lai was a sole trader but, from Ms Sim’s perspective, the question was as to when Ms Lai took over the business. 5

[20] Ms Lai was to provide the independently translated business transfer document by Friday, 10 August 2018 with Ms Sim’s submissions in response by Friday, 17 August 2018 with a right of reply by Ms Lai to be provided by Friday, 24 August 2018.

[21] On 10 August 2018, Ms Lai provided the translated Business Sales Contract and, on 15 August 2018, at the request of the Commission, the original Business Sales Contract that had been translated. In essence, the translated Business Sales Contract, dated 23 November 2017, provided for the sale by Mr He and Ms Ou to Ms Lai of the shop located at 81a Angelo Street, South Perth (Choi Patisserie). The terms of the contract stated that Ms Lai would take over the operation of the shop on 24 December 2017 and that any financial issues, debts and credits, tax amount and borrowings will be Ms Lai’s responsibility on and after 23 December 2017.

[22] In her response, Ms Sim stated that, after months of waiting and asking, she had been presented with some kind of official document about Ms Lai taking over the business from her parents from 24 December 2017. Ms Sim stated that she was in no position to doubt or trust the legitimacy of the documents provided. 6 In addition, it was submitted by Ms Sim that she was never notified of the change in ownership and that Ms Lai had admitted that during the preliminary conference call but that Ms Lai was now saying something different.7

Considerations and conclusions

Legislative framework

[23] In order for an employee to be protected from unfair dismissal, the employee is required to be a national system employee i.e. an employee of a national system employer. This is provided for in sections 13, 14, 380 and 382, of the Act. Section 382 of the Act states:

“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.”

[24] Section 380 of the Act provides that:

“In this Part, employee means a national system employee, and employer means a national system employer.”

[25] Section 13 of the Act defines a national system employee as follows:

“A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.”

[26] Relevantly, section 14 of the Act defines a national system employer as follows:

“(1) A national system employer is:

(a) a constitutional corporation, so far as it employs, or usually employs, an individual; or …”

[27] In Western Australia specifically, which is different to the other States, the effect of section 14, together with sections 30D and 30N, is that only employers (and their employees) who are constitutional corporations are national system employers. A constitutional corporation is incorporated and engages in trading or financial activities. Accordingly, in Western Australia, non-constitutional corporations are not national system employers. Non-constitutional corporations include businesses (and their employees) that are sole traders, unincorporated partnerships, unincorporated trusts and incorporated associations and other not-for-profit organisations that are not trading or financial corporations.

[28] The evidence before the Commission shows that, effective from 24 December 2017, Ms Lai became the owner of Choi Patisserie, Angelo Street, South Perth. In doing so, Ms Lai became the employer of Ms Sim from that date. The evidence also shows that, since 6 January 2015, Ms Lai has been, and continues to be, registered on the Australian Business Register as an individual/sole trader. Therefore, on the basis of the documentation provided, I find that Ms Lai was Ms Sim’s employer commencing on 24 December 2017 and remained so on 8 January 2018. I also find that Ms Lai was a sole trader at the time she took over the business and continued to be a sole trader on 8 January 2018. Therefore, at the relevant date, Ms Lai was not a national system employer.

[29] Accordingly, I find that Ms Sim, on 8 January 2018, was not an employee of a national system employer and therefore was not an employee protected from unfair dismissal. As a result, the Fair Work Commission does not have jurisdiction to deal with Ms Sim’s application for an unfair dismissal remedy. Ms Sim’s application is therefore dismissed. An order 8 to this effect will be issued separately.

Appearances:

M Sim on her own behalf

S Lai from the Respondent

Hearing details:

2018.

Melbourne and Perth (determinative conference via video):

August 8.

Printed by authority of the Commonwealth Government Printer

<PR702309>

 1   Email from Ms Lai dated 16 April 2018

 2   Transcript PN 70 and 196

 3   Ibid PN 80 – 84

 4   Ibid PN 106 – 122

 5   Ibid PN 199 – 202

 6   Email from the Applicant to the Commission dated 17 August 2018

 7   Ibid

 8   PR702170