Ming Zhou v Fast Cabinets Pty Ltd

[2019] FWC 1185

[2019] FWC 1185

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ming Zhou
v
Fast Cabinets Pty Ltd
(U2018/8784)

COMMISSIONER GREGORY MELBOURNE, 22 FEBRUARY 2019

Application for relief from unfair dismissal – jurisdictional objection – minimum employment period (small business).

Introduction

[1] Mr Ming Zhou began working for Fast Cabinets Pty Ltd (“Fast Cabinets”) on 17 January 2018 as a Project Manager. However, after working with the business for a period of just over seven months he was dismissed from his employment on 27 August 2018. He then proceeded to lodge an unfair dismissal application.

[2] However, Fast Cabinets has raised two jurisdictional objections in response to the application. It submits, firstly, that it is a “small business employer” as defined by section 23 of the Fair Work Act 2009 (Cth) (“the Act”) as it employs less than 15 employees. Therefore, Mr Zhou has not completed the requisite twelve month minimum employment period that is required in the case of a small business employer prior to making application. It also submits that as a small business employer Mr Zhou’s dismissal was carried out in accordance with the Small Business Fair Dismissal Code. However, this obviously depends upon whether Fast Cabinets is considered to be a “small business employer.” This decision accordingly deals with the jurisdictional objection concerning whether Fast Cabinets is a “small business employer.”

[3] Mr Zhou appeared on his own behalf. Mr B. Baumgarten of Employsure Law was given permission to appear on behalf of Fast Cabinets under s.596(2)(a) of the Act as the jurisdictional objection involved a degree of complexity and his involvement might enable it to be dealt with more efficiently. Permission to appear was only granted at this point in regard to determination of the jurisdictional objection.

The Issue to be Determined

[4] Section 382 of the Act provides that a person is protected from unfair dismissal at the time of their termination if they are “an employee who has completed a period of employment with his or her employer of at least the minimum employment period.” 1

[5] Section 383 continues to provide that:

“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.” 2

[6] Section 23 sets out the meaning of “small business employer.” It states:

“(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.” 3

[7] The parties do not take issue with the fact that Mr Zhou was employed by Fast Cabinets from 17 January 2018 until 27 August 2018, being a period of seven months and ten days. However, Mr Zhou claims that Fast Cabinets was not a “small business employer,” as defined by the Act, at the time of his termination because at that time it employed 15 or more employees. The Commission is accordingly now required to determine whether Fast Cabinets was a small business employer or not. If the Commission finds that it was a small business employer then it follows that Mr Zhou has not completed the minimum employment period as required by s.383 of the Act, and his application must be dismissed. However, if the Commission finds that Fast Cabinets was not a small business employer then he has completed the relevant minimum employment period, and his application will be relisted to deal with his substantive unfair dismissal claim.

The Evidence and Submissions

Fast Cabinets

Ms Qi Zhou

[8] Ms Qi Zhou is a Human Resources Consultant who provides services to Fast Cabinets. She confirmed that Mr Zhou commenced with the business on 17 January 2018 and was terminated on 27 August 2018, with immediate effect, being a period of service of seven months and ten days. His notice was paid out at the time.

[9] Ms Zhou continued to state that as at 27 August 2018 Fast Cabinets employed only seven employees being:

•  Ms Guan Wei Si, a full-time Office Administrator;

•  Ms Wang Leiping, a full-time Office Administrator;

•  Liu Jun, a full-time Shop Drawer and Programmer;

•  Mr Wang Kun, a full-time Production Worker;

•  Liu Qianling, a full-time Production Worker;

•  Mr Ngo Tri, a full-time Production Worker; and

•  the Applicant, Mr Ming Zhou, who was also employed on a full-time basis.

[10] Her witness statement attached a document on a Fast Cabinets Pty Ltd letterhead and was headed “Payroll Activity [Summary].” It indicated that it was created on 22 November 2018 in respect of the period from 22 August 2018 to 31 August 2018 and listed the names of the seven employees named above, including Mr Zhou.

[11] Ms Zhou also indicated that Fast Cabinets has two Directors, but they are not employees of the business and they are not paid any wages by the business. She is also an external consultant to the business and is not an employee. Fast Cabinets also has no associated entities.

[12] She also indicated in her oral evidence that she believed Mr Zhou had named the same individuals on more than one occasion in the list he provided. He had also included the names of individuals who are not employees, and were instead either subcontractors or labour hire employees who worked with the business on some occasions. For example:

•  the individual named “Joan” was Guan Wei Si;

•  the individual named “Sharon” was Liu Qianling;

•  the Vietnamese worker identified was Ngo Tri;

•  Mr Chen is a Director of the business and is not engaged as an employee and accordingly is not paid a wage or salary by the business;

•  Lao Chen, Lao Zhao and Lao Pan were all employed by another business, AHP Pty Ltd, that was not associated with Fast Cabinets and worked in the business on occasions as labour hire employees;

•  Fu Li was a subcontractor, and the identity of Lao Xu was unknown; and

•  it was also unclear who was being referred to by the references to various other spray shop workers.

Fast Cabinet’s Submissions

[13] Fast Cabinets submits that at the time Mr Zhou was dismissed on 27 August 2018 it employed less than 15 employees, and was therefore a “small business employer” within the meaning of s.23 of the Act. In addition, the business had no associated entities, and none of its Directors were employees. Mr Zhao has accordingly not satisfied the relevant minimum employment period and is therefore not a person who is protected from unfair dismissal. His application should accordingly be dismissed.

The Applicant’s Submissions and Evidence

[14] Mr Ming Zhou provided a submission which indicated that a total of 22 employees were employed by Fast Cabinets at the time of his dismissal. He submits that 7 of those employees were employed on a regular casual basis. He also provided a statement in which he indicated that there were around 15 people or more working in the business on a regular basis, and in the meeting when he was dismissed on 27 August 2018 there were about 8 people present, including the Company Director, Mr Chen, and his wife Ms Qi Zhou.

[15] Mr Zhou also took issue with the claims that a number of the individuals were contractors to the business, or were labour hire employees placed in the business, and indicated that it would be unusual for a business like Fast Cabinets to only have seven employees.

Consideration

[16] Mr Zhou is clearly unhappy about the circumstances that led to his employment being terminated. He states that he did a lot of good work for the business in circumstances where he was not provided with a specific job description, and was regularly faced with changing work requirements. However, as indicated at the outset the Commission is not at this point dealing with the substantive unfair dismissal application. It is instead dealing with the threshold issue of whether Mr Zhou was a person protected from unfair dismissal at the time his employment was terminated. This depends on what was the relevant minimum employment period which is, in turn, determined by the size of the business.

[17] The Commission has only been provided with a very limited amount of evidence in regard to this matter. However, the witness statement provided by Ms Qi Zhou states that the business had only seven employees at the time Mr Zhou was dismissed, and that various other individuals that he identified as being present in the business from time to time were either subcontractors or labour hire employees employed by another business that was not an associated entity. Her witness statement also attached a payment statement for the relevant period, which again confirmed that there were at that time seven employees employed by the business. Mr Zhou provided further submissions in response about various other additional individuals but did not provide any further specific evidence.

[18] Based on the limited evidence that is now before the Commission I am satisfied, on balance, that the only conclusion that the Commission is able to come to at this time is that there were only seven employees employed by Fast Cabinets at the time Mr Zhou was terminated. Therefore, Fast Cabinets was at the time a small business employer, as defined by s.23 of the Act, and Mr Zhou was required to have completed a minimum employment period of one year to be entitled to be a person who is protected from unfair dismissal. Given his acknowledgement that he was only employed for a period of seven months and ten days it follows that he was not a person protected from unfair dismissal as he has not served the relevant minimum employment period. It follows as a consequence that his unfair dismissal application must be dismissed.

COMMISSIONER

Appearances:

M Zhou, Applicant.

B Baumgarten of Employsure Law for the Respondent.

Hearing details:

2018.

Melbourne:

December 10.

Printed by authority of the Commonwealth Government Printer

<PR705227>

 1   Fair Work Act 2009 (Cth) at s.382(a).

 2   Fair Work Act 2009 (Cth) at s.383.

 3   Fair Work Act 2009 (Cth) at s.23.