Miss Felicity Lewis-Driver v Hayden Davison McLean

[2016] FWC 4850

[2016] FWC 4850

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Miss Felicity Lewis-Driver
v
Hayden Davison McLean
(U2016/3554)

COMMISSIONER CRIBB MELBOURNE, 20 JULY 2016

Application for relief from unfair dismissal - jurisdiction - national system employer - casual employee.

[1] Ms Felicity Lewis-Driver has made an application for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (FW Act). The application is in relation to Ms Lewis-Driver’s alleged dismissal by Mr Hayden Davison McLean (the Respondent, employer, Mr McLean) on 16 December 2015.

[2] There were no jurisdictional objections raised in the Employer Response to Unfair Dismissal Application (Form F3) lodged by the Respondent on 29 February 2016. However, subsequently on 21 April 2016 jurisdictional objections 1 were filed on behalf of the Respondent, on the basis that the employer is not a national system employer and that the Applicant was employed on a casual basis. At the request of the Commission, further submissions were filed on behalf of the Respondent in relation to the Name of the Respondent2 and the Nature of Employment3. An Outline of Submissions in response to the Respondent’s jurisdictional objections4 was filed on behalf of Ms Lewis-Driver on 9 June 2016.

[3] A hearing in relation to the Respondent’s two jurisdictional objections was held on 10 June 2016. The Respondent was represented by Ms N Anderson, solicitor and the Applicant by Ms A Cooper, solicitor.

1.The employer is not a national system employer

[4] The Respondent submitted that the name of the Respondent is Hayden Davison McLean for which there is an ABN and the entity type is individual/sole trader. 5 It was argued that the employment arrangement was private and domestic in nature in that it was an individual person in their own home who was totally reliant on the Applicant for their everyday life.6

[5] It was contended that the FW Act was enacted using the corporations power as a means of regulating trade and commerce like activities as set out in section 14 of the FW Act. The Respondent stated that section 14 defines national system employers and that the Respondent was not any of those described. It was said that there were no submissions from the Applicant to the contrary on this point. 7

[6] The Respondent said that the Applicant was relying on section 30D of the FW Act which states, on the basis of a referring state under section 30B, that a national system employer is extended to include any person that employs or usually employs an individual. It was argued, however, that section 38 of the FW Act limited this expansion to the extent that the State’s referral power provides for this. The Respondent stated that the Victorian State referral law is the Fair Work (Commonwealth) Powers Act 2009 (Referral Act) and that section 4(2) legislates the referral of matters except those which are excluded subject matter. 8

[7] It was submitted that in section 3 of the Referral Act, a State subject matter includes section 3(p) “claims for enforcement of contracts of employment…”. The Respondent argued that, given the disagreement between the parties as to the nature and terms of the contract of employment, the parties were actually talking about a claim for enforcement of a contract of employment. It was stated that the parties have not been able to agree as to who the employer is and what type of employment it was and there was no written contract of employment between the parties. Therefore, the Respondent contended that the referral powers were not invoked and that section 14 of the FW Act applied. 9

[8] It was also argued that the State never legislated about private arrangements in private homes between individuals but that it legislated employment relations laws on the basis of employment agreements. It was the Respondent’s position that the absence of a clear agreement is actually a State matter which is covered under section 3(p) of the Referral Act as it is a claim for enforcement of contracts of employment. The Commission was referred to the decision in Thomas v Jeannette Anne Crawford 10 (Thomas) in support of its contention that an individual cannot be a national system employer.11

[9] Further, the Respondent argued that the protection from unfair dismissal sits in a Part of the FW Act where the object (at section 381) is to establish a framework for dealing with unfair dismissals that balances the needs of business including small business, and the needs of employees. It was stated that there was no scope in that section for considering the needs of the Respondent who is at a distinct disadvantage, given his vulnerability and the nature of the arrangement. It could not be considered that the provisions of the FW Act can be stretched to include a private individual in his home. The Respondent also submitted that a private arrangement between two individuals was a better way of categorising the employment relationship. This was said to not fit under the unfair dismissal part of the FW Act. 12

[10] It was also submitted that, having an ABN, does not actually make the individual a sole trader. The Respondent explained that the ABN was applied for simply on the basis that the individual needed to be able to pay PAYG and superannuation. However, it was argued that that did not make the individual in question a sole trader. Rather, it was a private person, acting in a private capacity and the employment was in a private capacity not in any trading or business capacity. The Respondent contended that the ABN does not signify anything more than that there was compliance with the requirements to pay PAYG and superannuation. Further, it was argued that a private individual becomes a business when they are actually transacting as a business and engaging in business-type activities. 13

[11] The Respondent agreed that there was employment and that there were terms and conditions verbally agreed. It was said that there was no dispute about Mr McLean being an employer in the everyday sense of the word. However, section 30H of the FW Act requires that the employer be a national system employer which has a higher level of responsibility but only to the extent that Victoria referred those powers. 14 The Respondent argued that the referral power does exist but that it does not bring in everything. It was stated that the Commonwealth has legislated in this area and has defined what a national system employer is and it was stated that the Respondent is not that.15

[12] On behalf of the Applicant, it was submitted that it was well-established that individual sole traders in Victoria are national system employers. The State of Victoria was said to have referred powers with respect to certain matters relating to workplace relations to the Commonwealth under the Referral Act. One of those matters was stated to be the rights and responsibilities of employers and employees relating to termination of employment. 16

[13] As a referring state, it was argued that the extended definition of national system employer applies in Victoria which includes individual employers. The decision in Thomas that the Commission was referred to was said to relate to an individual sole trader in Western Australia (WA). It was stated that the State of WA has not referred power to the Commonwealth and therefore the extended meaning of national system employer does not apply. 17

[14] It was stated that the alternate argument put during the hearing by the Respondent, that the provision of disability support under direct employment arrangements/that there is no written contract of employment, was misconceived. This was on the basis that the excluded subject matters, under the Referral Act, are defined. The provision of disability support under direct employment arrangements was said to not be one of these excluded matters. 18

[15] In relation to the Respondent’s argument that this matter falls under section 3(b) of excluded matters (claims for enforcement of contracts) in the Referral Act, it was said to not be relevant as to whether Mr McLean was the employer of the Applicant. That there was no written contract of employment was contended to not change the fact that Mr McLean was an employer. It was stated that Mr McLean was registered as an individual/sole trader with an ABN. 19

[16] In conclusion, the Applicant argued that there was no discretion on this point. It was stated that, in Victoria, an individual/sole trader is a national system employer and that Mr McLean was the employing entity of the Applicant as Mr McLean was paying the applicant. 20

Considerations and conclusions

[17] It was submitted, on behalf of the Respondent, that Mr McLean was an employer in the everyday sense of the word. However, it was argued that the arrangement between the Respondent and the Applicant was a private arrangement between individuals which was not referred by the State of Victoria to the Commonwealth. The Respondent argued that Mr McLean, as an individual, was not a sole trader and that the employment was in a private capacity and not a trading or business capacity. Further, it was contended that Mr McLean was not covered by the extended meaning of national system employer as, under section 3(p) of the Referral Act, claims for enforcement of a contract of employment were not referred. Finally, it was stated that the unfair dismissal Part of the FW Act did not apply to the Respondent because the objects of this Part of the FW Act (section 381) were concerned with balancing the needs of business and of employees and Mr McLean was not operating a business.

[18] On the other hand, on behalf of the Applicant, it was contended that, in Victoria, individual/sole traders are national system employers. This was because the State of Victoria has referred its powers with respect to the rights and responsibilities of employers and employees in relation to termination of employment. Therefore, the extended meaning of national system employer applies in Victoria and a national system employer includes an individual. Further, it was argued that, although section 3(p) of the Referral Act does exclude claims for enforcement of contracts, the point was that Mr McLean was an employer, he paid the Applicant and he was registered as an individual/sole trader with an ABN.

[19] I have carefully considered the parties’ submissions. It was common ground that section 14 of the FW Act did not apply to the Respondent. The State of Victoria is a referring state, under section 30B of the FW Act, that referred powers to the Commonwealth. The referral to the Commonwealth was made under the Fair Work (Commonwealth Powers) Act 2009. The “referred subject matters” set out in section 3(1) include, at (c)(iii), termination of employment. Excluded subject matters include State subject matters such as superannuation, workers compensation, occupational health & safety, long service leave and other traditional State matters. There is no exclusion for private arrangements in the list of excluded State subject matters.

[20] The State subject matters excluded from referral to the Commonwealth include 3(p) - claims for enforcement of contracts. It is my view that this matter is not a claim for the enforcement of a contract. It is an application for an unfair dismissal remedy in a situation where an Applicant believes that they have been unfairly dismissed. Therefore, this falls squarely under the referred subject matter of termination of employment. The enforcement of contracts is a judicial (Court) function and the Commission does not have the power to enforce contracts of employment.

[21] Therefore, I find that the extended meaning of national system employer applies as the State of Victoria has referred the relevant subject matter (termination of employment) to the Commonwealth and the application concerns an alleged unfair dismissal by the employer.

[22] The extended meaning of national system employer is set out in section 30D of the FW Act and is as follows:

“30D Extended meaning of national system employer

(1) A national system employer includes:

(a) any person in a State that is a referring State because of this Division so far as the person employs, or usually employs, an individual; and

(b) a holder of an office to whom subsection 30E(2) applies.

(2) This section does not limit the operation of section 14 (which defines a national system employer).

Note: Section 30H may limit the extent to which this section extends the meaning of national system employer.”

[23] As can be seen from section 30D above, a national system employer includes any person who employs or usually employs an individual. It is a matter of fact that Mr McLean paid the Applicant, provided the Applicant with payslips, deducted PAYG tax and paid superannuation. Therefore, under the definition of the meaning of national system employer, Mr McLean is a national system employer under the FW Act.

[24] It was acknowledged by the Respondent that Mr McLean was an employer in the everyday sense of the word. However, it was argued that the objects of the Unfair Dismissal part of the FW Act (section 381) did not cover Mr McLean as he was an individual and it was a private arrangement.

[25] Section 381 sets out the objects of the Unfair Dismissal Part of the FW Act and it states that the object is to establish a framework for dealing with unfair dismissal that balances the needs of business and employees (section 381(1)(a)). Section 381 goes on to state, at section 381(1)(b), that another object of this part is to establish procedures for dealing with unfair dismissal that addresses the needs of employers and employees (amongst other things). The preceding section (section 380) states that employer means a national system employer.

[26] Therefore, it cannot be said that the object of the Unfair Dismissal Part of the Act is solely to establish a framework that balances the needs of business and employees. Equally, the object of this Part of the FW Act is to establish procedures that address the needs of employers and employees. Mr McLean is an employer under this Part of the FW Act through section 380 which defines an employer as a national system employer, which Mr McLean is (section 30D).

[27] In addition, the Guide to this Act (section 4) states that the FW Act, at section 4(1)(b) sets out the rights and responsibilities of employees, employers and organisations in relation to employment (Chapter 3). Chapter 3 (at section 6 (1)) sets out the rights and responsibilities of national system employers and, in relation to Unfair Dismissals, provides that Part 3–2 deals with unfair dismissals of national system employees and the granting of remedies.

[28] Accordingly, I have formed the view that Mr McLean is a national system employer and is therefore covered by the Unfair Dismissal provisions of the FW Act. The Respondent’s jurisdictional objection, that the Respondent is not a national system employer, is dismissed.

2.The Applicant was a casual employee

[29] Having found that the Respondent is a national system employer, it is necessary for the Commission to deal with the Respondent’s second jurisdictional objection i.e. that the Applicant was a casual employee.

[30] Section 384 of the FW Act deals with the issue of when casual employment counts towards period of employment. It 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;”

(a) Regular and systematic employment

[31] The Respondent’s contention was that, even though it was clear to both parties that the Applicant’s employment was on a casual basis, the nature of that employment was not ongoing systematic employment with a reasonable expectation of continuity. 21

[32] During the hearing, both parties made oral submissions in addition to the written submissions that had been filed. 22 Additional evidence was provided by the Applicant in the form of her rosters from December 2014 to June 2015.23 Following an opportunity to peruse the rosters, it was acknowledged, on behalf of the Respondent, that the rosters indicated a pattern of employment that was consistent.24

[33] However, it was not accepted by the Respondent that, although there was regularity in the shift pattern, it was also systematic employment. This was because of ad hoc changes to the roster which were required due to the Applicant stepping in and taking shifts when there were crises. Ms Lewis-Driver’s availability and willingness to do this was said to not constitute a pattern. 25

[34] It was submitted, on behalf of the Applicant, that the Applicant’s rostered hours established a sequence of engagements through a series of contiguous periods of service. 26 It was stated also that the Applicant worked for the Respondent almost every week over a 14 month period.27

[35] During the hearing, it was indicated by the Commission that it was likely to be found that Ms Lewis-Driver’s employment was on a regular and systematic basis. 28 At the conclusion of the hearing, the Commission advised that it was highly probable that the Commission would find that the employment was regular and systematic but that the Commission, if required, would either confirm or not confirm this provisional finding.29

[36] I have taken the opportunity to review the provisional finding that Ms Lewis-Driver’s employment as a casual employee was on a regular system and systematic basis. Following the review, I confirm my provisional finding in this regard - that the requirements of section 384(2)(a)(i) have been met. In reaching this conclusion, I have taken into account the decision of Commissioner Roe in Ponce v DJT Staff Management Services Pty Ltd T/A Daly’s Traffic 30 (Ponce) where he expressed the view that evidence of regular and systematic employment can be established where:

• “ The employer regularly offers work when suitable work is available at times when the employer knows that the employee has generally made themselves available; and

• Work is offered and accepted sufficiently often that it could no longer be regarded as simply occasional or irregular.” 31

[37] I adopt Commissioner Roe’s approach. In this matter, the rosters provided (December 2014 - December 2015) 32 show a pattern of work that is regular i.e. every week with three or more shifts being worked during the vast majority of the weeks. Therefore, on the basis of the rosters, it can be said that the employment was regular and systematic as work was regularly offered by the employer. It could not be said that the pattern of Ms Lewis-Driver’s shifts could be described as occasional or irregular.

(b) Reasonable expectation of continuing employment on a regular and systematic basis

[38] In relation to the requirements of section 384(2)(a)(ii), it was submitted by the Respondent that the basis of the employment was that it was for the sole purpose of providing support to an individual whose needs changed from time to time. Further, it was stated that the employment was only possible due to the funding from an individual support package which was completely outside of the employer’s control. Therefore, ongoing employment was not possible in these circumstances as, at any point in time, any of the variables could change. 33

[39] As well, it was stated that both parties were in discussion about the employment in December 2015 and that both parties had agreed that the employment was casual. 34

[40] On the other hand, it was submitted, on behalf of the Applicant, that it was not going to change that the Respondent requires 24-hour care by a team of carers. It was acknowledged that care and funding arrangements might change but it was said that there are potential variables in any workplace. However, it was stated that the situation was not akin to that of seasonal work. 35

[41] Rather, it was argued that the Applicant had been one of the Respondent’s carers every week for 14 months and that there was no indication that that was going to change. It was stated that the Respondent had just provided the Applicant with a written contract requesting that she sign it, very shortly before her employment ended. There was a dispute about the contract and it was indicated that Ms Lewis-Driver did not sign it. 36 It was submitted that, in those circumstances, it is quite clear that Ms Lewis-Driver had an expectation that her employment was going to continue into the future and there was said to have been no indication that that was not going to be the case.37

[42] Finally, the Commission was referred to the Full Bench decision in Shortland v The Smiths Snackfood Co. Ltd 38 (Shortland) where it was held that continuous service by casual employee is only broken when the employer or employee make it clear to the other party that there will be no further engagements. The Applicant argued that, looking at the history of the engagement, Ms Lewis-Driver did have a reasonable expectation that the regular and systematic engagement would continue on that basis, as it had for the previous 14 months.39

[43] At the conclusion of the hearing, the Commission reserved its decision in relation to this aspect of section 384(2)(a). Having considered the submissions of the parties, I find that Ms Lewis-Driver had a reasonable expectation of continuing employment on a regular and systematic basis. It was not disputed that, around December 2015, Ms Lewis-Driver was asked to sign a contract of employment as a casual employee. At that point in time, Ms Lewis-Driver had been employed as a casual employee on a regular and systematic basis for at least the previous 14 months. It is acknowledged that things change but that is so for any workplace. However, it is accepted that Ms Lewis-Driver, on being asked to sign a contract of employment, and having worked for the employer for the previous 14 months, had a reasonable expectation of continuing employment with the employer on a regular and systematic basis.

[44] Further, there is no evidence before me that either party made it clear to the other that there would be no further engagements. Rather, the employer asked the Applicant to sign a contract of employment and there is nothing before me that shows that Ms Lewis-Driver did not wish to have any further engagements from the Respondent. The contract appears to have not been signed due to a dispute in relation to one of the clauses in the contract.

[45] Therefore, I am satisfied that the Applicant had a reasonable expectation of continuing employment with the employer on a regular and systematic basis. Having found that the requirements of section 384(2)(a)(i) and (ii) have been met, together with Ms Lewis-Driver’s period of service with the respondent being between about 25 October 2014 and 15 December 2015, I find that the Applicant meets the minimum employment period as required under section 383 of the FW Act.

[46] Accordingly, the Respondent’s second jurisdictional objection is dismissed.

[47] An order 40 dismissing the respondent’s two jurisdictional objections will be issued separately. The application will be referred for conciliation.

Appearances:

A Cooper of Ashurst Australiafor the Applicant

N Anderson of Villamanta Disability Rights Legal Service Inc. for the Respondent

Hearing details:

2016.

Melbourne:

June 10.

 1   Exhibit R1

 2   Exhibit R2

 3   Exhibit R3

 4   Exhibit A1

 5   Exhibit R2 at paragraph 2 and Attachment 1

 6   Exhibit R1 at paragraph 2 and Transcript PN 14

 7   Ibid and ibid PN 14 - 15 and 97

 8   Transcript PN 16 - 17

 9   Ibid PN 19 and Exhibit R1 at paragraph 3

 10   [2014] FWC 8452

 11   Transcript PN 19, 55 and 99

 12   Ibid PN 20 - 21, 43, 47 and 51

 13   Ibid PN 42 and 59

 14   Ibid PN 43, 65 - 69, 71 and 73

 15   Ibid PN 79

 16   Ibid PN 33 and Exhibit A1 at paragraphs 3 - 5

 17   Ibid PN 34 and ibid at paragraphs 5 - 7

 18   Ibid PN 35 and ibid at paragraph 8

 19   Ibid PN 37

 20   Ibid PN 38

 21   Ibid PN 129 - 131

 22   Exhibit R3 and Exhibit A1

 23   Exhibit A2

 24   Transcript PN 130 and 169

 25   Ibid PN 138 and 175 - 182

 26   Exhibit A1 at paragraphs 12 - 14

 27   Ibid at paragraph 15 and Transcript PN 188

 28   Transcript PN 181 and 183 - 184

 29   Ibid PN 209 and 212

 30   [2010] FWA 2078

 31   Ibid at [76]

 32   Exhibit A1 at Attachment 1 and Exhibit A2

 33   Transcript PN 129, 131, 136, 138, 158 and 175 - 176

 34   Ibid PN 131

 35   Ibid PN 193 - 194

 36   Ibid PN 194

 37   Ibid PN 194 - 196

 38   [2010] FWAFB 5709

 39   Exhibit A1 at paragraph 14 and Transcript PN 197 - 201

 40   PR583100

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