Miss Madison Field v Viva! Life Photography

[2019] FWC 7732

[2019] FWC 7732

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Miss Madison Field
v
Viva! Life Photography
(U2019/2345)

COMMISSIONER GREGORY MELBOURNE, 12 NOVEMBER 2019

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

Introduction

[1] Ms Madison Field began working as a photographer for Viva! Life Photography – Frankston T/A Viva Frankston (Viva Photography) in May last year. However, after working with the business for just over seven months, she was dismissed from her employment on 20 February 2019. She proceeded to lodge an unfair dismissal application.

[2] However, Viva Photography has raised a jurisdictional objection in response to the application. It submits it is a “small business employer,” as defined by Section 23 of the Fair Work Act 2009 (Cth) (the Act), because it employs less than 15 employees. Therefore, Ms Field has not completed the requisite twelve month minimum employment period required in the case of a “small business employer” prior to making her application. This decision accordingly deals with whether Viva Photography is a “small business employer.”

[3] Ms Field appeared on her own behalf. Mr Ben Cox, Manager, appeared on behalf of Viva Photography.

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 state:

“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] As indicated, 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

There is no issue about Ms Field being employed by Viva Photography from May 2018 until 20 February 2019, a period of just over seven months. However, she claims it was not a “small business employer,” as defined by the Act, because it employed 15 or more employees at the time that she was dismissed. The Commission is accordingly now required to determine whether Viva Photography was a “small business employer” or not at the time that Ms Field’s employment was terminated.

If the Commission finds that it was a “small business employer” at that point in time then Ms Field has not completed the minimum employment period as required by Section 383 of the Act and her application must be dismissed. However, if the Commission finds that Viva Photography was not a small business employer then Ms Field will have been found to have has completed the required minimum employment period, and her application will be relisted to deal with her substantive unfair dismissal claim.

The Evidence and Submissions

Viva Photography

Mr Ben Cox

[7] Mr Cox is the Manager of Viva Photography Frankston. He indicated in his evidence that Ms Field was employed as a casual employee on a regular and systematic basis from 4 May 2018 until 20 February 2019, being a period of less than twelve months. At the time she was dismissed the business employed eleven people in total, with nine of those being employed on either a full-time basis, or as regular and systematic casual employees. The business is therefore a “small business employer” under the definition in the Act.

[8] Mr Cox also made reference to the decision of Commissioner Wilson in the matter of Pauline Italia v Viva Life Photography Pty Ltd T/A Viva Life Photography – Frankston. 4 It concerned an unfair dismissal application brought by another employee who was dismissed on the same day as Ms Field. Mr Cox continued to state that Commissioner Wilson found that he was not able to conclude that there were any associated entities to be taken into account in assessing the number of employees employed by Viva Life Photography. He concluded, based on the evidence before him at the time, that the business employed 10 employees and was therefore a small business employer.

[9] Mr Cox continued to state:

“The entity that owns Viva Photography Frankston is The Viva Family Trust. The aforementioned trust also owns Viva Photography Joondalup. The employees at both businesses on 20/02/2019 are listed in section 2v of the Respondent’s Outline of argument – objections. The directors of the trust are Joanna Bettegacci (nee Natoli) and Tony Bettegacci. The directors are also the immediate financial beneficiaries of the trust. Neither director has any other financial interest or directorship of any legal business entity.” 5

[10] Mr Cox also attached payroll summaries for 21 February 2019 for the Frankston and Joondalup stores, which list the names of 11 employees.

[11] He also indicated in response to a question from the Commission that the other entities in the group all have different owners, and there is no cross financial beneficial arrangement between them. The Joondalup and Frankston stores are both franchise operations owned by The Viva Family Trust, and the beneficiaries of that trust are Joanna and Tony Bettegacci.

[12] He continued to state that Ms Bettegacci does have an involvement with the Moonee Ponds store as she is employed by Viva Franchising, which is responsible for developing the franchise network. Ms Bettegacci also convenes meetings of employees from the different locations from time to time as part of this role. Mr Cox had also worked previously at the Moonee Ponds store location but it was under different ownership at the time.

[13] He also stated, in conclusion, that Mr Bettegacci is not an employee of any of the entities associated with the Viva franchise, and Ms Bettegacci is not an employee of Viva Photography at Frankston. She is instead the General Manager of the Viva Franchise Development Office. In addition, Mr and Mrs Natoli are the owners of the Moonee Ponds franchise, but are not employees of that business. The other employees at the Moonee Ponds location are also employed by an entirely different entity. While there may be some family connections between the owners of the Moonee Ponds franchise and the Frankston franchise they are separately owned legal entities.

Viva Photography’s Submissions

[14] Viva Photography provided the following list of names of employees employed at the time that Ms Field was dismissed. It also set out details of their employment status.

“1. Pauline Italia	Casual
2. Madison Field	Casual
3. Marian Fithall	Casual
4. Silvana Fenollar	Full-Time
5. Ben Cox	Full-Time
6. Adrian Natoli	Full-Time
7. Sian Roberts	Full-Time
8. Caroline Toughy	Casual
9. Hannah Packwood	Casual” 6

[15] It did not include on this list two casual employees who only worked on an irregular basis in the 6 months prior to 20 February 2019.

The Applicant’s Submissions and Evidence

Ms Madison Field

[16] Ms Field provided the following list of names, and the employment status of each of those individuals, in support of her submission that at the time of her dismissal Viva Photography employed at least 15 employees.

“1. Joanna Bettegacci	Fulltime (body corporate)
2. Tony Bettegacci	? (body corporate)
3. Ben Cox	Fulltime
4. Madison Field	Casual
5. Silvana Fenollar	Fulltime
6. Pauline Italia	Casual
7. Marian Fithall	Casual
8. Adrian Natoli	Fulltime
9. Sian Roberts	Fulltime
10. Caroline Toughy	Casual
11. Hannah Packwood	Casual
12. Vittorio Natoli	? (body corporate)
13. Katie Holliday	Fulltime or Casual
14. Rachel Gedeye	Casual
15. Fernanda Cruz	Fulltime or Casual
16. Maria Natoli	? (body corporate)” 7

[17] She also indicated that the list of employees covered three different franchise locations, however, there were three further locations in Western Australia, and she was not able to provide an accurate list of the employees at each of those locations.

[18] Ms Field also referred to the decision of Commissioner Wilson in Pauline Italia v Viva Life Photography Pty Ltd T/A Viva Life Photography – Frankston. She indicated in her evidence that she believed Commissioner Wilson was not able to make a finding that there were associated entities to be taken into account in assessing the number of employees employed by the business because of the lack of available evidence. He therefore accepted the evidence provided on behalf of the employer that there were at the relevant time only ten employees employed, and the business was accordingly a “small business employer.”

[19] She acknowledged that it is difficult to establish the nature of the corporate structure associated with Viva Photography, however, she understood the Viva Australia Group Pty Ltd is the parent company of each of the four Viva Photography franchise operations.

[20] She also made reference to the eleven employees named on the list provided by Viva Photography, and notes that it also now seeks to claim that two of those individuals should not be included on the list because they were casual employees who were not employed on a regular and systematic basis.

[21] She also submits that Ms Joanna Bettagacci and Mr Tony Bettegacci should be counted in the number of employees as both are owners of the business, and Ms Bettegacci is also the General Manager.

[22] Mr Ben Cox should be included as during the time she was employed at the Frankston store he was involved in managing both the Frankston and Moonee Ponds stores, and she provided details of rosters showing he was variously assigned to work at both locations. She also states that he told her he was responsible for managing both locations.

[23] Ms Field also stated that Ms Bettegacci and Mr Natoli had control over the operations at the Frankston and Moonee Ponds stores, and both businesses were therefore associated entities. Ms Field also indicated in her evidence that Ms Bettegacci is employed as the General Manager at the Fremantle store, and regularly convened conferences involving the staff from the Frankston and Moonee Ponds the stores. This again suggested they are associated entities.

[24] She also provided a copy of the contract of employment given to her at the time she was first employed and notes that it provides that an employee could be employed at any one of the different Viva Photography store locations.

[25] Ms Field also indicated in response to a series of questions from the Commission that she understood Ms Bettegacci was the General Manager of the Frankston store, as well as being part of the “body corporate.” Mr Bettegacci was, however, only involved with the “body corporate.” She also indicated that Ms Holliday, Ms Gedeye and Ms Cruz were located at the Moonee Ponds store, while Mr Natoli and Ms Maria Natoli were the co-owners of that store. Mr Adrian Natoli, Mr Sian Roberts, Ms Caroline Toughy and Ms Hannah Packwood were also located at the Joondalup store in Western Australia, and Ms Fithall worked at the Frankston location.

[26] She also provided additional documentation, including an extract from the ASIC database indicating that the business name “Viva Life Photography – Frankston,” was registered on 20 May 2015 by the trustee for The Viva Family Trust, with the relevant representatives, being Ms Joanna Bettegacci and Mr Tony Bettegacci. She also provided an Australian business register extract for The Viva Family Trust which indicated that it traded under both the names Viva Life Photography – Frankston and Viva Life Photography Joondalup.

[27] A further extract from the ASIC database indicated that the holder of the business name Viva Life Photography Moonee Ponds is Gembay Pty Ltd.

Consideration

[28] Both parties made reference in their evidence and submissions to the decision of Commissioner Wilson in Pauline Italia v Viva Life Photography. It concerned the dismissal of another casual employee, Ms Pauline Italia, who was dismissed on the same day as Ms Field. Commissioner Wilson was also required in that matter to deal with the issue of whether Viva Life Photography was a “small business employer” for the purposes of the Act. Given the similarities involved in both matters it is appropriate to set out his conclusions, which are contained in the following extracts (references omitted):

“[9] Consideration of whether an employer at the relevant time is a small business employer requires application of s.23 of the Act. While an employer is a small business employer if at a particular time it employs fewer than 15 employees, consideration also needs to be given to whether the employing entity has associated entities, with s.23(3) providing that “associated entities are taken to be one entity”.

Whether Associated Entities

[10] The operation of the Respondent’s business from its premises in Frankston is part of a franchising arrangement operating across at least Victoria and Western Australia. In Victoria there are franchisees operating under the name Viva Life Photography both in Frankston and Moonee Ponds. In West Australia there are franchisees operating in several locations. Ordinarily five people would be employed in each of the stores and Mr Cox’s evidence on the subject is that at the relevant time, being that of the date of termination of Ms Italia’s employment, on 20 February 2019, there were 10 employees in total of the entity running the Frankston store, including Ms Italia. Five of those were engaged in the Frankston store and five at the Joondalup store. Mr Cox also conceded that there were four people employed in the Moonee Ponds store at the relevant time, which would be consistent with the standard business operation of other franchises, although gave evidence that it was owned by a separate entity to that operating Frankston and Joondalup named Gembay Pty Ltd.

[11] While Mr den Hollander led evidence that there were also four employees featured in the payroll materials provided by Mr Cox which were not listed in the Respondent’s evidence, Mr Cox’s evidence was that these employees were no longer working at Viva Photography Joondalup at the time of Ms Italia’s dismissal and were therefore not included in the count of employees.

[12] Evidence before the Commission shows that the Frankston store is operated by The Viva Family Trust, ABN 54 537 607 673. The trust operates another store at Joondalup in Western Australia.

[13] The Viva Life franchise at Moonee Ponds was, until on or around 1 December 2018 operated by Gembay Pty Ltd but is now operated by The Viva Australia Group, as trustee for The Natoli Stores Family Trust, ABN 27 906 181 931. The Group also operates three other stores in Western Australia.

[14] While there appear to be some common beneficiaries between the trusts, ultimately the question of whether the two are associated entities requires a finding that the circumstances provided for within s.50AAA of the Corporations Act 2001 (Cth) have been met. Mr Cox’s evidence on the subject of the operating and ownership structure included;

•  that the operating entity of the Frankston and Joondalup stores, the Viva Family Trust “has two trustees which is Joanna Bettegacci and her - although it says Natoli, that's her maiden name - and her husband Tony Bettegacci”; and

•  that, in relation to the operations of the Moonee Ponds and the other WA stores the “owners, or the directors of Viva Australia Group as attested to by the ASIC printout, are referred to, are Vittorio Natoli and Maria Natoli” who are the parents of Joanna Bettegacci.

[15] Section 50AAA of the Corporations Act 2001 (Cth) provides:

“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.”

[16] The Applicant contends there is a relationship of the requisite nature between the two entities and the number of persons employed by each ought to be taken into account in assessment of whether the Respondent is a small business employer. In particular, Ms Italia points to the work undertaken by Mr Cox, the current Viva Life Frankston Studio Manager, for the Viva Life Moonee Ponds franchise after he moved to the Frankston store. Evidence was led that between December 2018 to January 2019 Mr Cox spent 50% of his time at the Frankston store and 50% at the Moonee Ponds Store, assisting the Moonee Ponds store with ‘a tough time’; that Mr Cox continued to use log-in details for Moonee Ponds and be on the phone to the Moonee Ponds store consistently at the time of Ms Italia’s dismissal in February 2019; and that Mr Cox was seeking access to the Moonee Ponds PaySmart account which is used by the store to produce payments for clients who could not pay up front (i.e. a loan system).

[17] Mr Cox had been employed by Viva Life Moonee Ponds for some time and moved to Viva Life Frankston in late October 2018. His evidence on the subject includes that he helped out the Moonee Ponds store with certain work in the months after his move to Frankston and that he also was directly on the roster for the Moonee Ponds store for about three weeks in late January/early February 2019, while also undertaking work in the Frankston store. Mr Cox gave evidence that this came about because Moonee Ponds had one of their employees on holiday and that he presumed the work he performed for Moonee Ponds would be invoiced by the owners of the Frankston store to the Moonee Ponds store, but that he is not aware of whether that actually occurred.

[18] The evidence before the Commission on the subject of whether there are associated entities to be taken into account in assessing whether Viva Life Frankston is a small business employer is not extensive and does not adequately deal with the matters set out within s.50AAA of the Corporations Act 2001. In particular, the Commission is unable to establish either that the two trusts are related bodies corporate; that either controls the other or that the operations, resources or affairs of one entity is material to the other; that there may be a qualifying investment from one to the other, with or without significant influence and material interest between them; or that a third entity controls both. Findings on those matters would require considerably more evidence on the corporate structures and the matters of resourcing and control than presently before me. The evidence available in this matter including the trust deeds of the trusts referred to and the evidence of Mr Cox and Ms Italia and Mr den Hollander shows only that there are the structures referred to, and that there is a business relationship between them, but does not go so far as to establish the greater, more formal arrangements contemplated under s.50AAA. The mere facts of family connections and familial ownership, business or contractual relationships are not sufficient for the findings that would be necessary under that section in order to establish there are associated entities.

[19] As a result, I make no finding that there are associated entities to be taken into account in assessment of the number of employees employed by the Respondent.

Whether small business employer

[20] I accept the evidence of Mr Cox to the effect that there were, at the relevant time, 10 employees of the Respondent. It follows that I find the Respondent was a small business employer at the time Ms Italia’s employment ended which in turn leads to a finding that the relevant minimum employment period was one year (s.383(b)).” 8

[29] Viva Photography obviously relies on this decision in support of its submission that it was at all relevant times, a “small business employer” and, therefore, the relevant minimum employment period was 12 months. Ms Field submits in response that the decision was influenced by a lack of available evidence, and the evidence she relies on now, is sufficient to support a different outcome.

[30] I am not satisfied that the Commission is able to come to this same conclusion. I am not aware of any evidence that suggests any of the franchises, other than those located at Frankston and Joondalup, can be considered to be associated entities. Commissioner Wilson also dealt with similar submissions to those made in this matter about the Moonee Ponds location and concluded that it was not appropriate for it to be considered to be an associated entity.

[31] I am also satisfied that the views expressed by Commissioner Wilson about family connections being insufficient to establish that there are associated entities remained pertinent in the context of this matter.

Conclusion

[32] I am not satisfied, in conclusion, that the available evidence can be said to establish that Viva Photography was anything other than a “small business employer” at the time that Ms Field was dismissed from her employment. She had only been employed for just over seven months at that time, which is less than the minimum employment period for a “small business employer.” Therefore, she has not completed the required minimum employment period and her application must be dismissed.

COMMISSIONER

Appearances:

M Field, Applicant.

B Cox for the Respondent.

Hearing details:

2019.

Melbourne:

July 19.

Printed by authority of the Commonwealth Government Printer

<PR714204>

 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.

 4   [2019] FWC 3613.

 5   Respondent’s Witness statement, filed 24 June 2019.

 6   Respondent’s Outline of argument - objections, filed 24 June 2019 at 2v.

 7   Applicant’s Outline of argument - objections, filed 11 July 2019 at 3b.

 8   [2019] FWC 3613 at [9]-[20].