Mr Desapriya Fernando v South Oakleigh Club Incorporated T/A South Oakleigh Club (SOC)

[2016] FWC 4553

[2016] FWC 4553

FAIR WORK COMMISSION

DECISION

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

Mr Desapriya Fernando
v
South Oakleigh Club Incorporated T/A South Oakleigh Club (SOC)
(U2015/16669)

COMMISSIONER HARPER-GREENWELL MELBOURNE, 8 JULY 2016

Application for relief from unfair dismissal – Threshold jurisdiction issue to be determined – Whether employer is a small business employer – Whether minimum employment period met. Application granted

[1] Mr Desapriya Fernando filed an application under s.394 of the Fair Work Act 2009 (the Act) alleging that the termination of his employment by the South Oakleigh Club Incorporated T/A South Oakleigh Club (SOC) on 29 November 2015 was unfair.

[2] Mr Fernando commenced his employment as a Chef with SOC on 1 January 2015. On 29 November 2015 the General Manager at the time, Mr O’Sullivan, terminated Mr Fernando’s employment with immediate effect. Mr Fernando was paid four weeks’ salary in lieu of notice.

[3] The SOC objected to Mr Fernando’s application on the grounds that it was a small business employer and that Mr Fernando had not completed the minimum period of employment and therefore is not protected from unfair dismissal: s.382(a) of the Act.

Procedural History

[4] In the Form F3- Employer Response to Unfair Dismissal Application, SOC submitted they employed 22 employees at the time of Mr Fernando’s dismissal. SOC, at question 2.1, submitted there were no jurisdictional objections, however at question 2.2, SOC claimed to be a small business, and the dismissal was consistent with the Small Business Fair Dismissal Code.

[5] A directions hearing was held on 15 April 2016. Mr Morris appeared for Mr Fernando and Ms Horsfield, Board Member for the SOC attended for SOC.

[6] Ms Horsfield raised a jurisdictional objection stating SOC was a small business, the dismissal was consistent with the Small Business Fair Dismissal Code and Mr Fernando had not been employed for the minimum employment period.

[7] The Fair Work Commission (the Commission) issued Directions on 15 April 2016 requiring SOC to file an outline of submissions and any evidentiary material they intended to rely on regarding the jurisdictional objection.

[8] On 19 April 2016 the Commission received a Form F4- Objection to unfair dismissal application and submissions from SOC.

[9] On 20 April 2016 the Commission wrote to SOC requesting they provide a payroll summary for “all employees” who were employed by SOC on the date of Mr Fernando’s termination including:

● Full time employees

● Part time employees

● Regular Casuals and non-regular Casuals

[10] The jurisdictional objection was heard by the Commission on 22 April 2016. At the hearing Mr Morris appeared for Mr Fernando and the SOC was represented by Mr O’Connor of Counsel. Mr Frank van der Krann, SOC’s General Manager, appeared and gave evidence for SOC. Mr Peter Russell, President of SOC, also attended the hearing.

[11] For the reasons set out below I have found that SOC is not a small business employer for the purposes of the Act. Mr Fernando had served the minimum employment period required by s.382 of the Act, and as a result, Mr Fernando was protected from unfair dismissal and his application is therefore granted.

Background

[12] Mr Fernando submits he wasn’t provided with any reason for the dismissal at the time he was dismissed, nor was he given any opportunity to respond to any reason that might have been held by SOC. Mr Fernando further submits he was not provided with a termination letter.

[13] SOC submits Mr Fernando had received two oral warnings for his standards and quality relating to the cleanliness of the kitchen and quality of the food he was presenting. SOC further submitted Mr Fernando was provided with reasons for the dismissal by Mr O’Sullivan on 29 November 2016 and a termination letter was provided the day after the dismissal took effect.

[14] It is not in contention that Mr Fernando commenced full-time employment with SOC on 1 January 2015 and his dismissal took effect on 29 November 2015. If SOC was a small business for the purposes of the Act, Mr Fernando would not have completed the requisite minimum employment period required by s.382 of the Act and would consequently not be a person protected from unfair dismissal.

[15] SOC submits they are a small business employer employing a total of 13 employees, made up of five full-time employees and eight regular casual employees. 1

[16] Mr Fernando submits at the time of his dismissal SOC employed a total of 19 employees, being five full-time employees and 14 regular and systematic casuals.

[17] For the purpose of calculating the number of employees employed by SOC at the time Mr Fernando was dismissed, associated entities are taken to be one entity. The Act at s.12 provides that the expression “associated entity” has the meaning given by section 50AAA of the Corporations Act 2001 (Cth). SOC submit there are no associated entities, the submission of SOC was not contested by Mr Fernando.

The Statutory Framework

[18] The Commission exercises its powers in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. The relevant provisions from Part 3-2 of the Act are set out below.

[19] Section 382 of the Act provides that a person is protected from unfair dismissal only if they have completed the required minimum employment period.

“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.”

[20] If a person has not completed the relevant minimum employment period, they are unable to make an unfair dismissal remedy application.

[21] Section 383 of the Act, which is set out below, provides different minimum employment periods dependent upon whether or not the employer is a small business employer.

“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.

[22] Section 384 of the Act deals with an employee’s period of employment and is 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; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and
(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and
(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[23] Section 23 of the Act, which is set out below, says that a small business employer is one that employs fewer than 15 employees at the time of a person's dismissal.

“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.”

Consideration of Regular and Systematic Casuals

[24] In the decision of Commissioner Roe in Ponce v DJT Staff Management Services Pty Ltd 2(Ponce), Roe C undertook an analysis of regular and systematic employment and concluded the following:

“[66] It is the employment which must be on a regular and systematic basis. This does not mean that the hours or days of work must be regular and systematic. Although the previous legislation referred to the period or periods of casual engagement rather than the period of casual employment I do not think that this change is of much practical significance. The previous authorities have also established that employment or engagement can be regular and systematic even if it is seasonal, or where the times and dates of work are quite irregular or are not rostered, or where there are breaks due to school holidays or other needs of the employee. In Summerton v Jabiru Golf, the hours worked varied from 3 to 39 in a week but it did not stop SDP Duncan finding that the employment was regular and systematic. It is clear that to establish ‘regular and systematic’ there must be sufficient evidence to establish that a continuing relationship between the employer and the employee has been established. This is clearly a reason why there is a legislative requirement for a reasonable expectation of continuing employment.

[67] In my view, full-time and part-time work must be regarded as meeting the definition of regular and systematic. This is one reason why regular and systematic casual work meets the jurisdictional hurdle and why it is distinguished from irregular, occasional or non-systematic casual work for the purposes of a range of entitlements under the Act and Awards as discussed above. Legislators have deemed it fair to give regular and systematic casuals the same entitlements as other workers because they are engaged regularly and systematically, like full and part-time employees (in respect to matters such as parental leave and unfair dismissal jurisdiction).” (endnotes not reproduced)

[25] In Grives v Aura Sports Pty Ltd, 3 Jones C (as she then was) said at para [29]-[35]:

“[29] The Macquarie Dictionary meaning of ‘regular’ relevantly includes:

1. Usual; normal; customary

2. Recurring at fixed time; periodic

3. Observing fixed times or habits

The Macquarie Dictionary meaning of ‘systematic’ relevantly includes:

1. Having, showing or involving a system, method or plan

2. Characterised by a system or method; methodical

3. Arranged in or comprising an ordered system

[30] The Court of Appeal, Australian Capital Territory, in Yaraka Holdings Pty Ltd v Giljevic considered a deeming provision applicable to independent contractors which, in part, deemed an individual to have been employed by an employer if the engagement ‘has been on a regular and systematic basis.’ It should be noted that the deeming provision included matters which should be considered in determining whether an engagement has been on a regular and systematic basis. The following extracts from the judgements of the majority are instructive. Crispin P and Gray J noted:

It was common ground that the concept of employment on a ‘regular and systematic’ basis had been drawn from provisions found in regulations under the Workplace Relations Act 1996 (Cth), particularly reg 30B, and this concept has been considered by industrial tribunals in a number of cases.

[31] Their Honours noted that:

...it is the ‘engagement’ that must be regular and systematic; not the hours worked pursuant to such engagement.

[32] Relevantly, their Honours observed in relation to the meaning of ‘regular’ that:

The term ‘regular’ should be construed liberally. It may be accepted, as the Magistrate did, that it is intended to imply some form of repetitive pattern rather than being used as a synonym for ‘frequent’ or ‘often’. However, equally, it is not used in the section as a synonym for words such as ‘uniform’ or ‘constant’.

and formed the view that the pattern of engagement of the individual in question over the years from 1995 to 2002 satisfied this description.

[33] In respect of the meaning of ‘systematic’, their Honours held:

The concept of engagement on a systematic basis does not require the worker to be able to foresee or predict when his or her services may be required. It is sufficient that the pattern of engagement occurs as a consequence of an ongoing reliance upon the worker’s services as an incident of the business by which he or she is engaged. In the present case, the systematic nature of the engagement is evident from the constant pattern that was maintained over the years, the fact that payments were not made at the completion of each job but left until the respondent needed money or it was otherwise convenient, and the appellant’s ongoing reliance upon him as evidenced by such matters as his authorisation to buy goods on the appellant’s behalf and the provision of Christmas bonuses.

[34] Madgwick J concurred with the majority. In a separate judgement, his Honour considered examples provided in the relevant statute of ‘individuals who are workers’ concluding that ‘the meaning to be ascribed to (the deeming provision) is conditioned by the examples.’ Accordingly, his Honour stated:

It is clear from the examples that a ‘regular ... basis’ may be constituted by frequent though unpredictable engagements and that a ‘systematic basis’ need not involve either predictability of engagements or any assurance of work at all.

Engagement under contracts on a ‘systematic basis’ implies something more than regularity in the sense just mentioned, that is, frequency. The basis of engagement must exhibit something that can fairly be called a system, method or plan (cf the definition of ‘systematic’ in the Macquarie Dictionary, revised 3^rd edn, 2001).

[35] The finding as to whether employment is regular and systematic is a discretionary one having regard to the totality of the evidence. Setting out factors which dictate a finding one way or another is to be avoided, particularly so given the Act is silent as to the matters to be considered.” (endnotes not reproduced)

[26] Vice President Lawler in his decision of Burke v Marist Brothers St Joseph’s College, 4 whilst adopting the approach of Roe C in Ponce, provides the following note of caution:

“one must not treat the summary of Roe C as a substitute for the language of the statute: the ultimate question always remains whether the employment was ‘regular and systematic’ within the meaning of section 384(2)(a) and care must be taken not to invert the test to one which asks the question whether the employment was ‘occasional or irregular’.” (emphasis added)

[27] Section 384(2)(a) provides that 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 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.

The evidence

[28] As outlined in paragraph [4], SOC originally submitted that they employed 22 employees at the time of Mr Fernando’s dismissal. SOC later submitted a jurisdictional objection claiming to be a small business, and that the dismissal was consistent with the Small Business Fair Dismissal Code.

[29] In its submission to the Commission, SOC asserts they employ a total of 13 employees comprising of: 5

a) five full time employees; and
b) eight regular casual employees

[30] SOC submitted a document titled ‘Payroll Cross Check’ 6 (hereinafter referred to as payroll summary) listing all employees employed by SOC at the date of Mr Fernando’s dismissal. The payroll summary provided by SOC identified 14 employees in total. The employees were identified by the following employment types:7

a) four full-time employees
b) six casual (irregular) employees
c) four casuals (regular) employees

[31] Mr Fernando submitted a document titled “SOC Employee Count” consisting of five columns. The first column titled ‘Applicant’, details Mr Fernando’s submission as to the total number of employees he says were employed by SOC at the time of his dismissal totalling nineteen. The second column was titled ‘Witness Cleverley’, who was the General Manager of SOC until he resigned in September 2015. Mr Cleverley provided Mr Fernando with an account of the number of employees he says were employed by SOC as at 5 October 2015, being a total of twenty three employees. Mr Cleverley did not provide sworn evidence as to his witness statement or employee count provided in the second column. The third column was a summary of the rosters from 22 to 28 November 2015 as provided by SOC in its submission on 19 April 2016, identifying nineteen employees. The fourth column was a summary of the SOC roster from 4 to 10 October 2015 identifying twenty one employees and the fifth column was a count of employees from the payroll summary provided by SOC being a total of fourteen employees. 8

[32] Column one of the SOC Employee Count identified the employees by employment type. Mr Fernando submits at the time of his dismissal SOC employed a total of nineteen employees in the following employment types: 9

● 5 Full time employees
● 14 Regular Casuals

[33] It is not in contention that SOC employs a total of five full time employees. There is a factual dispute as to how many casuals are employed by SOC and how many of those casuals are regular and systematic casuals as opposed to irregular casuals.

[34] Mr Morris’ evidence was that SOC had excluded a number of employees from its payroll summary, naming Sue and Kath. Mr O’Connor’s submission is that Sue was a full time cashier and was not on the payroll summary as she had not worked on the date of the summary as produced.

[35] I conducted a cross check of each employee from the SOC employee count and the payroll summary, confirming with Mr O’Connor which of the employees had worked on the date of Mr Fernando’s dismissal being the date on the payroll summary. It became evident that the payroll summary was not a list of all employees employed at the time of Mr Fernando’s dismissal but rather a list of all employees who worked on the day of Mr Fernando’s dismissal.

[36] It was put to Mr O’Connor that the payroll summary was not a true reflection of the number of employees employed by SOC at the date of Mr Fernando’s dismissal. Mr O’Connor clarified that the payroll summary was a summary of employees who would had worked on 29 November 2015 and did not include those employees who were not engaged to work on that day.

[37] Mr van der Kraan’s evidence was that Kath was a bookkeeper employed for around 30 hours a week and was not on the payroll summary as she was not likely to have worked on 29 November 2015.

[38] In considering the evidence outlined above, I am satisfied that the payroll summary is not a true reflection of the total number of employees employed by SOC at the time of Mr Fernando’s dismissal. The payroll summary is a list of employees who worked on Sunday 29 November 2015.

[39] During the hearing, the following five employees were identified and agreed by the parties as SOC full time employees at the date of Mr Fernando’s dismissal:

● Sue – Cashier

● Les- Duty Manager
● Andrew- Duty Manager
● Brooke- Receptionist
● Des (Mr Fernando)- Head Chef

[40] The following eight employees were identified and agreed by the parties as regular and systematic casuals who were employed by SOC as at the date of Mr Fernando’s dismissal:

● Mandy- Gaming
● Kath – Bookkeeper
● Louise – Duty Manager
● Emma-(Hoa Nguyen) Game Casual
● Gary- Cashier
● Ayesha- Kitchen Hand
● Christina- Kitchen Hand- work for the dole –
● Henry – Second Chef

[41] The submission put by Mr O’Connor was the employee identified as ‘Manny’, a gaming casual, was not employed by SOC at the time of Mr Fernando’s dismissal. This was not disputed by Mr Fernando.

[42] Mr O’Connor submitted the employee identified as Harrison is an irregular casual employee who was engaged shortly prior to Mr Fernando’s dismissal and was not provided with regular or systematic hours of work. Mr Fernando did not contest the submission put forward by Mr O’Connor.

[43] Louise was identified as a regular casual, both in Mr O’Connor’s submission to the Commission and on the payroll summary.

[44] Emma was identified as an irregular casual on the payroll summary. Mr O’Connor’s submission was that the employees identified as ‘Louise’ and ‘Emma’ (also known as ‘Hoa’) were engaged on a regular basis. Mr O’Connor stated the following when asked the nature of Emma and Louise’s engagement:

“Louise she as with Emma is casual employee but she is regularly engaged as a casual.”

[45] Mr O’Connor had identified the five full time employees and the eight regular casual employees. Although there appeared to be some confusion on behalf of SOC in the evidence being submitted, it was taken from Mr O’Connor’s submission, as referred to in paragraph [44], the eighth employee identified as a regular casual was Emma.

[46] Darren, Michelle, Martin and Stephanie were identified on the SOC Employee count, however were not identified on the payroll summary. Martin ceased to exist on the rosters from the week of 20 September 2015, whilst Stephanie and Michelle ceased to exist on the rosters from 8 November 2015. Darren did not appear on the roster for the week commencing 22 November 2015. Mr Morris was invited to provide evidence of an on-going employment relationship between Darren, Michelle, Martin, Stephanie and SOC and Mr Fernando was invited to provide sworn witness evidence. Mr Morris submitted he was unable to provide evidence to this effect.

[47] On the evidence before me I accept Michelle, Martin and Stephanie no longer have an on-going employment relationship. I also accept Darren does not form part of the SOC employee count.

[48] Mr O’Connor submitted the following employees were irregular casuals and did not fall within the definition of having regular and systematic employment:

● Bradley
● Claudia
● Luke
● Patrick

[49] Mr Morris disputed Mr O’Connor’s submission, based on his analysis of the rosters provided by SOC, and argued the employees identified in paragraph [48] were regular and systematic casual employees as they were regularly and systematically engaged to work.

Are Bradley, Claudia, Luke and Patrick regular and systematic casuals?

[50] SOC provided rosters for all employees from the period of 3 August 2015 to 29 November 2015. Mr O’Connor submitted each of the above employees were engaged on a casual non-regular and non-systematic basis. Mr O’Connor sought to rely on SOC’s written submission to support this assertion.

[51] SOC’s written submission was that there are a few irregular casuals who are provided with shifts as the need arises- for example waiting, bar, functions or when regular staff call in sick. 10

[52] An analysis of the rosters submitted by SOC provided for a different picture. Bradley, Claudia, Luke and Patrick were regularly rostered on to work each week. According to the rosters Bradley, Claudia, Luke and Patrick were rostered to work regular shifts over the three months as detailed in the rosters provided. 11

[53] Bradley mainly performed shifts on a weekly basis in the bar/floor with some shifts as a cashier. Bradley regularly worked Thursday’s in the Bingo area for the entire duration submitted. His shift commenced at 6:15pm and the roster indicated ‘until required’ as his finishing time. Although the other days may have varied, the shift start times rarely varied and he regularly worked between two and five shifts per week. 12

[54] According to the rosters, Claudia was regularly engaged to work on a Sunday in the Poker room from 6pm until required. Claudia was provided with additional shifts where the rosters indicated functions. It appears the only week Claudia was not provided with a shift was on the week she was not available to work. 13

[55] The rosters provide Luke with regularly rostered shifts in the Bingo Room and he was provided with additional shifts on some weeks. Luke worked at a minimum of one shift per week often on the same day and up to five shifts per week between the period commencing 20 September 2015. Luke was rostered to work at least one shift every week even if that shift was not on the same day of each week. 14

[56] Patrick was rostered to work a 10am to 3pm shift in the snooker room on a regular basis. Patrick also obtained additional shifts regularly on a Wednesday, Thursday and Friday unless he indicated on the roster he was not otherwise available. Patrick regularly worked between 3 and 4 shifts per week and at times up to 5 shifts. However he was regularly provided with shifts throughout the whole of the period submitted. 15

Conclusion

[57] As put by Roe C in Ponce, it is the employment which must be on a regular and systematic basis. This does not mean that the hours or days of work must be regular and systematic. It is clear from the rosters that Claudia, Luke, Patrick and Brad were regularly rostered on each week. Their employment was on a regular and systematic basis. Each of the employees could reasonably expect to obtain shifts every week by the sheer fact that each of the employees were rostered to work each week, unless the roster indicated that they were not available to take a particular shift. Although the amount of shifts they were given may have varied very slightly on some weeks, nonetheless, each was provided with shifts regularly each week.

[58] The rosters are indicative of a continuing relationship between SOC and each of the employees and it is difficult to distinguish how these employees could be regarded as different to the other regular and systematic employees identified by SOC.

[59] SOC rely on the submission that Bradley, Claudia, Patrick and Luke are non-regular casuals as they are only provided with shifts when others are not available take these shifts. The evidence of the rosters indicates otherwise. Each of the employees were provided with a particular shift that distinguished them from other employees.

[60] Taking into account all of the evidence, I conclude that once engaged, these employees are put on the roster for work each week until they either indicate they are not available to work, resign or no longer wish to receive shifts. I conclude from the evidence that Bradley, Claudia, Patrick and Luke are engaged as regular and systematic casuals and subsequently form part of the employee head count when establishing how many employees SOC employ.

[61] I conclude SOC employ five full time employees and 13 regular and systematic casuals. I therefore find SOC to have employed a total of 18 employees at the time of Mr Fernando’s dismissal. It follows that SOC is not a small business employer as defined in section 23 of the Act as they employed greater than 15 employees at the time of Mr Fernando’s dismissal.

[62] I have concluded that SOC is not a Small Business as defined in section 23 of the Act. I find that Mr Fernando is an employee who has completed a period of employment with SOC of at least the minimum six month period as required by section 382 of the Act.

[63] The jurisdictional objection of SOC is dismissed. Mr Fernando’s s.394 application will be further dealt with by the Commission.

COMMISSIONER

Appearances:

Mr R Morris for the Applicant

Mr M O’Connor of counsel for the Respondent.

Hearing details:

2016.

Melbourne:

April 22.

 1   Exhibit R2.

 2   [2010] FWA 2078.

 3   [2012] FWA 5552.

 4   [2015] FWC 7324.

 5   Exhibit R2.

 6   Exhibit R1.

 7   Exhibit R1.

 8   Exhibit A1.

 9   Exhibit A1.

 10   Exhibit R2, Para 29.

 11   Exhibit R3.

 12   Exhibit R3.

 13   Exhibit R3.

 14   Exhibit R3.

 15   Exhibit R3.

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