Michael Stagbouer v Silverlock Packaging

[2013] FWC 6343

[2013] FWC 6343

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michael Stagbouer
v
Silverlock Packaging
(U2013/10202)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 30 AUGUST 2013

Application for relief from unfair dismissal - jurisdiction - minimum period of employment - small business employer - associated entities.

[1] On 5 June 2013 Mr Stagbouer lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act), with respect to what he alleged was the unfair termination of his employment by Silverlock Pty Ltd trading as Silverlock Packaging (Silverlock).

[2] The application was not able to be the subject of the Fair Work Commission (FWC) telephone conciliation process because Mr Stagbouer did not participate in that conference and could not be contacted. The application was subsequently referred to me for determination.

[3] Silverlock objected to the application proceeding further on the basis that it was a small business and that Mr Stagbouer had been employed for less than one year.

[4] In a telephone directions conference on 12 August 2013, both parties were advised that the matter would be the subject of a Determinative Conference on 29 August 2013, which would specifically address the Silverlock position that it was a small business employer and Mr Stagbouer did not have the requisite one year’s employment service. The conference date was agreed with the parties. In the directions I issued following this conference I stated:

“In the event that either party seek to be legally represented in this matter the appropriate notice (Form F53) should be lodged as a matter of urgency. In this event, the parties should expect the matter will be called on for a brief telephone hearing in advance of 29 August 2013 so as to enable consideration of any request for a grant of permission.

Compliance with these directions is mandatory and a failure to do so, or to attend the hearing on 29 August 2013, may disadvantage the party concerned. Any enquiries with respect to these directions should be addressed to my office on 08 8308 9851. 1

[5] My Directions required Silverlock to file and serve material in support of its position on this issue. Silverlock complied with this request.

[6] On 22 August 2013 Mr Stagbouer forwarded the following e-mail to my office:

“To whom it may concern,

In regards to the matter of: Unfair dismissal reference: (U2013/10202)

As you may be aware I plan to take action in relation to unfair dismissal which took place on the 16th May of this year, from SIlverlock Packaging.

I am writing to inform you that i plan to seek legal advice from West Side Lawyers on the the 28th August 2013.

It is my request that I have our arrangements, which were previously planned for the 29th of August at 10am, to be resceduled for a later date. If it were at all possible, could i please have my appointment with you resceduled for four weeks after the date of the 28th August.

This would allow time for an application for legal aid to be approved, and should it not be approved, for me to seek advice from a private lawyer if need be.

Please feel free to contact me via Telephone on xxxxxxxxxx. (sic)

Yours sincerely

Michael James Stagbouer

22/08/2013”

[7] Having confirmed my position about this request, my Associate responded on that same day, stating:

“Mr Stagbouer

I have referred your email to the Senior Deputy President (SDP).

The SDP has asked that I advise you that, at the Directions conference on 12 August 2013 he set a determinative conference date that was agreed with both parties and confirmed that this date would not readily be changed. Also, in the Directions issued after this conference, the SDP asked that any request for representation be lodged and foreshadowed an earlier listing of the matter for the purpose of considering a request for a grant of permission to appear.

On the information before him, the SDP is not inclined to change the nominated date simply because, some 2 weeks after the Directions conference, you now have arranged to see your lawyers.

The SDP has asked that if you still wish to pursue a changed date please:

1. advise by return email, the date on which you first contacted Westside Lawyers, or any other nominated lawyer about representation, and

2. contact the respondent to establish its views on a possible adjournment.

I await your earliest advice.”

[8] No further advice was received from Mr Stagbouer. My Associate forwarded the following e-mail to him on 28 August 2013:

“Mr Stagbouer, further to our email exchange on 22 August, and in the absence of further advice from you, please confirm your attendance at the Determinative Conference listed for Thursday 29 August.”

[9] When Mr Stagbouer did not respond, my Associate sent an SMS text to Mr Stagbouer reminding him of the conference. Mr Stagbouer acknowledged receipt of that message.

[10] Notwithstanding this, Mr Stagbouer did not attend the Determinative Conference on 29 August 2013. After the commencement of that conference, he sent an e-mail indicating that he expected to participate in the conference by telephone. Mr Stagbouer’s e-mail stated:

“Not Sure what is going on. I have rang conference line at 10 am and no one has came to call. I now have legal representation and will now be taking this matter to court, and make a formal complaint on how this matter has been dealt with by the FWC.” (sic)

[11] Subsequent attempts to telephone Mr Stagbouer were unsuccessful and my Associate advised him of this by e-mail in the following terms:

“Mr Stagbouer, The Determinative Conference today is to be in person. I have just tried to call your mobile which went to message bank, as well as dial into the previous teleconference details provided for the directions hearing. You were not present on the line .....10.15am I have left my mobile details on your voicemail.”

[12] That e-mail was read by Mr Stagbouer but no further advice was received from him.

[13] It is not appropriate that I comment on Mr Stagbouer’s criticisms of the conduct of this matter. If Mr Stagbouer believes he has been treated unfairly, he may elect to take action to pursue that concern.

[14] I determined that the Determinative Conference would proceed in Mr Stagbouer’s absence on the basis that I was satisfied that he had been given more than adequate and fair notice of the matter. I advised that, depending on the conclusions I reached, Mr Stagbouer may be given a further opportunity to explain his non-participation in this conference.

[15] Section 396 requires that the FWC decide specified initial matters before considering the merits of Mr Stagbouer’s application. At the Directions Conference on 12 August 2013 Silverlock confirmed that there was no issue with the lodgement time for the application and that this was not a case of genuine redundancy. The Determinative Conference was directed toward clarifying whether Mr Stagbouer was a person protected from unfair dismissal and, as a related matter, whether Silverlock was a small business.

[16] Section 382 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.

Note: High income threshold indexed to $129,300 from 1 July 2013”

[17] I do not understand that there is any question that the requirements of s.382(b) are met, in these circumstances. The issue here is whether Mr Stagbouer has completed the requisite minimum period of employment.

[18] Section 383 states:

“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.”

[19] A small business is defined in s.23 in the following terms:

“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.”

[20] There is no dispute about Mr Stagbouer’s assertion in his application that he commenced employment with Silverlock on 17 September 2012. There is a difference in the effective date of termination of employment. Mr Stagbouer asserts this was 16 May 2013. Mr Bubner, the General Manager of Silverlock asserts that Mr Stagbouer did not attend work after 13 May 2013 and that a letter advising of the termination of his employment was sent to him on 17 May 2013 and that he expected that Mr Stagbouer would have received this on 20 May 2013.

[21] Absent evidence to the contrary, I have taken it that Mr Stagbouer was notified of his dismissal on 20 May 2013. That is not fundamental to this particular issue as in any event, the duration of Mr Stagbouer’s employment was approximately 8 months.

[22] Consequently, if Silverlock is a small business employer, Mr Stagbouer is not then a person protected from unfair dismissal.

[23] Silverlock has provided a list of its employees, as at 15 May 2013. There are a total of 10 employees, including Mr Stagbouer on that list. I am satisfied that these employee numbers did not change over the following week.

[24] However, the advice provided by Mr Bubner 2 continued, to state:

“As for the three businesses trading in different states and operating under the trading name of Silverlock Packaging, none have the same ownership or business structure, and as such all are separate business entities similar to franchises. Silverlock Packaging in SA is a unit trust, with the beneficiaries different to the shareholders in both Vic and WA, which are both proprietary limited companies. As such, although operating under the same trading name, the different ownership and company structures mean they cannot be classified as associated entities.

E.g. if Joe Bloggs owns a Jim’s Mowing franchise, he cannot be held legally accountable for the actions of another Jim’s Mowing franchise owner in a different state.”

[25] Mr Bubner was uncertain as to the corporate structure of businesses trading in other states. He advised that he reported to a Managing Director in Western Australia. At my request, Mr Bubner arranged for evidence to be given by telephone by Ms Reaves, who is an employee of Silverlock & Co Pty Ltd in Western Australia.

[26] Ms Reaves’ evidence was that Silverlock Packaging was the trading name for Silverlock Unit Trust and that the Trustee for that unit trust was Silverlock Pty Ltd. Further, that Silverlock Pty Ltd was jointly owned by Mr R and Ms L Silverlock.

[27] Further, Ms Reaves advised that Mr R and Ms L Silverlock were Directors and were two of three equal shareholders in Silverlock & Co Pty Ltd, based in Western Australia and employing around 18 employees both now and in May 2013.

[28] Ms Reaves also gave evidence about a Victorian entity, Silverlock Operations Pty Ltd but it is not necessary that I deal with that here.

[29] The concept of an “associated entity” for the purposes of s.23(3) of the FW Act is defined in s.4 in the following terms:

[30] Section 50AAA of the Corporations Act 2001 states:

“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.”

[31] I have considered whether Silverlock & Co Pty Ltd, based in Western Australia, controls Silverlock in the context of this definition. On the information before me, Mr R and Ms L Silverlock have controlling interests in both Silverlock and Silverlock & Co Pty Ltd and have complete, or majority shareholdings in both businesses. Because of the number of employees involved, I have concluded that the operations and resources of these businesses are material to both Mr R and Ms L Silverlock.

[32] Consequently, I consider it necessary that I add the numbers of employees engaged by both businesses together. This number exceeds 15 such that I cannot regard Silverlock to be a small business employer. Consequently, this Silverlock objection to the application must fail. Mr Stagbouer has completed the necessary minimum employment period.

[33] In the course of the Determinative Conference, Mr Bubner indicated that Silverlock may have another position relative to whether Mr Stagbouer had abandoned his employment. I have not considered this issue and propose to do so at a further Determinative Conference which has been listed for 30 September 2013 when the merits of the application will be addressed. Directions relative to that Determinative Conference will be provided to the parties. For the avoidance of any doubt, Mr Stagbouer is advised that I expect him to attend this conference if he seeks to pursue his application, and that a failure to do so could give rise to a costs application pursuant to s.400A.

Appearances:

C Bubner appearing for the respondent.

Hearing details:

2013.

Adelaide:

August 29.

 1   Directions dated 12 August 2013, paras [6] and [7]

 2   Exhibit R1

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