Mr Keith Ireland v Hanson Construction Materials Pty Ltd

[2013] FWC 5292

[2013] FWC 5292

FAIR WORK COMMISSION

DECISION

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

Mr Keith Ireland
v
Hanson Construction Materials Pty Ltd
(U2013/1807)

COMMISSIONER SPENCER BRISBANE, 5 SEPTEMBER 2013

Application for relief from unfair dismissal - jurisdictional objection - s.383 - meaning of minimum employment period.

Introduction

[1] This decision relates to an application made by Mr Keith Ireland (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy alleging that the termination of his employment from Hanson Construction Materials Pty Ltd (the Respondent/the Employer) was harsh, unjust and or unreasonable. The Respondent in this matter has raised a jurisdictional objection to the application; alleging that the Applicant was not an employee who has completed a period of employment with the Respondent of at least the minimum employment period (the jurisdictional objection) and was therefore not a person protected from unfair dismissal. It was not argued, that the Respondent was a small business employer for the purposes of the Act. Therefore the Applicant’s required minimum employment period prior to dismissal is six months, for the Applicant to be protected for unfair dismissal. This decision relates to the jurisdictional objection only, in relation to the minimum employment period.

[2] The Respondent requested that the jurisdictional objection in relation to the minimum employment period be determined prior to any conciliation of the substantive matter.

[3] Directions were set for the filing of submissions and evidence in relation to the jurisdictional objection. Material was filed by both parties. The Respondent argued that the Applicant’s employment fell in to two distinct periods. That is, a period of time brought about by the ‘resignation’ of the Applicant provided in response to two options being given to the Applicant by the Respondent, as a result of disciplinary action, broke the Applicant’s continuity of service. The Respondent argued that the two period are not counted together.

[4] The parties consented to the matter being determined on the papers without the need for a formal Hearing. Taking into account the issues before the Commission, the material filed and the views of the parties, it was determined that it was appropriate to decide the matter on the basis of the material filed by the parties.

[5] While this decision does not refer to all of the evidence and submissions in this matter all of such have been considered.

Relevant legislation

[6] Section 382 of the Act relevantly provides:

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;

[7] Minimum employment period is defined in s.383 of the Act as follows:

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.

[8] The period of employment is defined by s.384 of the Act 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.

[9] The terms of service and continuous service are defined by s.22 of the Act as follows:

22 Meanings of service and continuous service

General meaning

(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

(2) The following periods do not count as service:

(a) any period of unauthorised absence;

(b) any period of unpaid leave or unpaid authorised absence, other than:

(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii) a period of stand down underPart 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or

(iii) a period of leave or absence of a kind prescribed by the regulations;

(c) any other period of a kind prescribed by the regulations.

(3) An excluded period does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service.

(3A) Regulations made for the purposes of paragraph (2)(c) may prescribe different kinds of periods for the purposes of different provisions of this Act (other than provisions to which subsection (4) applies). If they do so, subsection (3) applies accordingly.

Meaning for Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2

(4) For the purposes of Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2:

(a) a period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include:

(i) any period of unauthorised absence; or

(ii) any other period of a kind prescribed by the regulations; and

(b) a period referred to in subparagraph (a)(i) or (ii) does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service; and

(c) subsections (1), (2) and (3) do not apply.

Note: Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2 deal, respectively, with requests for flexible working arrangements, parental leave and related entitlements, and notice of termination or payment in lieu of notice.

(4A) Regulations made for the purposes of subparagraph (4)(a)(ii) may prescribe different kinds of periods for the purposes of different provisions to which subsection (4) applies. If they do so, paragraph (4)(b) applies accordingly.

When service with one employer counts as service with another employer

(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:

(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and

(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.

Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).

(6) If the national system employee has already had the benefit of an entitlement the amount of which was calculated by reference to a period of service with the first employer, subsection (5) does not result in that period of service with the first employer being counted again when calculating the employee’s entitlements of that kind as an employee of the second employer.

Note: For example:

(a) the accrued paid annual leave to which the employee is entitled as an employee of the second employer does not include any period of paid annual leave that the employee has already taken as an employee of the first employer; and

(b) if an employee receives notice of termination or payment in lieu of notice in relation to a period of service with the first employer, that period of service is not counted again in calculating the amount of notice of termination, or payment in lieu, to which the employee is entitled as an employee of the second employer.

Meaning of transfer of employment etc.

(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:

(a) the following conditions are satisfied:

(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;

(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or

(b) the following conditions are satisfied:

(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;

(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.

Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.

(8) A transfer of employment:

(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and

(b) is a transfer of employment between non-associated entities if paragraph (7)(b) applies.

Respondent submissions and evidence

[10] The Respondent provided brief submissions in relation to the jurisdictional objection. The Respondent submitted that the Applicant had been employed with the Respondent as a Batcher from 29 August 2007 to 7 January 2013 (the first period). The Respondent submitted that this employment came to an end, as a result of the Applicant’s resignation from his employment.

[11] The Respondent submitted that the Applicant had a second period of employment, as a Tipper Driver, commencing on 22 January 2013 to 14 May 2013 (the second period). This period of employment, ended due to the Applicant incurring alleged “driving infringements”.

[12] The Respondent submitted that the first period of employment cannot be attributed to the overall period of continuous service for the purposes of s.384 of the Act given the break in service.

[13] The Respondent submitted that there was a period of two weeks between the first period and the second period of employment. Further, the Respondent submitted that, prior to the Applicant’s resignation, ending the first period, the Applicant was advised, by letter dated 4 January 2013, that any further period of proposed employment would be subject to a “6 month probationary period”. This probationary period is identified in clause 4 of the offer of employment for the second period, dated 16 January 2013.

[14] In support of the jurisdictional objection, the Respondent filed a statement of Mr Hayden Post, Transport Manager of the Respondent.

[15] It is Mr Post’s evidence, that the Applicant reported to Mr David Chow, Operations Manager of the Respondent, during the first period when he was employed as a Batcher. Mr Post stated that the Applicant was performing poorly during the first period. As a result of this poor performance, Mr Chow wrote to the Applicant on 4 January 2013, to give the Applicant two “options” regarding his on-going employment.

[16] Annexed to the affidavit of Mr Post is the correspondence of 4 January 2013 from the Respondent to the Applicant. Mr Post stated that he was copied into the correspondence as he is the person, to whom the Applicant, would report if the Applicant, chose to accept either offer.

[17] The relevant extract of the 4 January correspondence is as follows:

“I refer to my letter to you dated 21 December 2012 inviting you to show cause why your employment should not be terminated. In your response delivered on 2 January 2013 you admit to the conduct complained of and of making mistakes in the past.

Your continued mistakes after 5 years of batching have led to a determination by Hanson that you lack the level of forward planning necessary to remain in a Batcher role.

Given the remorse shown in your response of 2 January 2013 Hanson is prepared to offer you new employment in the position of Tipper Driver, with a 6 month probation period, as follows:

1. If you hold a current HC license and wish to accept this offer, you must resign from your employment, effective Friday 11 January 2013, and commence employment in your new position on Monday 14 January 2013; or

2. If you wish to accept this offer but do not hold a current HC license, you must resign from your employment, Monday 7 January 2013, and you will be paid an ex-gratia payment of 5 weeks pay. Hanson will hold open a guaranteed position of Tipper Driver until 31 March 2013 to provide you with an opportunity to obtain your HC licence.

Under either of these 2 options, Hanson will recognise your current employment as continuous with your subsequent employment for the purpose of calculating long service leave and redundancy.

If you do not wish to accept new employment in the position of Tipper Driver under either of the above 2 conditions, Hanson has decided to terminate your employment, effective immediately, for the conduct complained of in my letter to you dated 21 December 2012. You will be paid 5 weeks pay in lieu of notice of termination.”

[18] On 7 January 2013 the Applicant responded to Mr Chow in the following terms:

“In response to this email I would like to take option 2, there for (sic) I am resigning from my position as a batcher and taking up the position of tipper driver as soon as I achieve the required license.”

[19] Mr Post stated that Mr Chow provided the Applicant’s response to the accounts section of the Respondent with instructions that the Applicant was to be “paid out” in relation to his annual leave accrual.

[20] In this email Mr Chow also advised Mr Post that once the Applicant had obtained his HC license Mr Post would need to “sign him up” with a new contract including a 6 month probationary period. This email also noted that the Applicant would have zero leave/sick entitlements. A copy of this email was annexed to the affidavit of Mr Post.

[21] Mr Post stated that he was contacted by the Applicant on 15 January 2013, who advised that he had obtained the relevant licence and that they agreed to a start date of the second period of 22 January 2013.

[22] Prior to the start of the second period Mr Post met with the Applicant to discuss the expectations of the new position. He also issued the Applicant with a “new starter pack” which included the new contract of employment and a tax file number declaration.

[23] Mr Post stated that upon termination from his second period of employment, the Applicant was paid one week in lieu of notice.

[24] In reply the Respondent submitted that the case authority of Tebble v Rizmas Pty Ltd 1(Tebble) was relevant to the matter at hand and stood as authority for the proposition that a resignation did break the period of continuous service, regardless of whether the employee recommenced with their employer within three months.

[25] The Respondent also relied on the reference in ss.22(5) and (7) of the Act to the “first employer” and “second employer”. The Respondent submitted that the same employer cannot fit the definition of “first” and “second” employer.

[26] Further the Respondent submitted that the language of s.22(7) that transfer of employment is from one national system employer to “another” national system employer, on its ordinary and plain meaning, was from one employer to another, not being the same employer.

Applicant submissions and evidence

[27] The Applicant agreed with most of the factual evidence of the Respondent, any differences between the two are immaterial to this jurisdictional decision. For example the Respondent’s evidence is that the Applicant communicated his acceptance of offer two and his resignation on 7 January 2013 whereas the Applicant’s evidence is that this occurred on 6 January 2013. The distinction is irrelevant for the purposes of consideration in this decision but it is noted that a copy of the email is annexed to the affidavit of the Applicant and reflects that the correspondence was sent on 6 January 2013.

[28] The Applicant submitted that s.22 of the Act (extracted above) defines continuous service and provides for excluded periods, when calculating continuous service. The Applicant submitted that no excluded period operated in the circumstances.

[29] The Applicant relied upon the case authority of Kefer v Tattersall’s Holdings Pty Ltd 2in which the Commission referred to the matter of Tebble. In Kefer Commissioner Cambridge held:

“[41] I should also recognise what appears to be something of an anomaly that seems to have emerged from the interpretation and application of s. 22 of the Act. If the approach adopted by Commissioner Roe in Tebble is correct, then the break of service occasioned by an employee who resigns and is re-employed by the same employer within 3 months, would not occur in a case where an employee resigns and is employed by an associated entity within 3 months.

[42] The anomaly that I have identified is unlikely to have been an intended consequence of the meaning given to service and continuous service by s. 22 of the Act. In my view, the logical corollary of the operation of subsections 22 (5) and (7) of the Act, is that if the same employer re-employs an employee within 3 months of the termination of employment, the period of service prior to termination counts as service. The period between termination and re-employment would not count towards the length of the employee’s continuous service but, importantly it would not break the service such that the employee would recommence the minimum employment period.

[43] The extension of the transfer of employment protections established by subsections 22 (5) and (7) of the Act to embrace re-employment with the same employer is also consistent with the terms of subsection 22 (3) of the Act. Further, the notion that continuous service would not be broken if re-employment occurs within 3 months, is congruous with the provisions of s.47 (2) of the Industrial Relations Act 1999 [Qld], which deals with continuous service for the purpose of long service leave.”

[30] The Applicant submitted that following this case authority and the definitions in the Act, the first and second periods of employment are counted together and that therefore the Applicant has completed the minimum period of employment. It is irrelevant, in the Applicant’s submissions to the jurisdictional objection, that the contract for the second period was expressed to include a probationary period.

Consideration

[31] The issue for determination in this matter is what was the Applicant’s period of employment for the purposes of s.383 of the Act at the time of dismissal? This issue requires a consideration of the effect of both the first and second periods of employment and the circumstances at the juncture between the two.

[32] The reference to the case of Kefer is a reference to obiter comments made by Commissioner Cambridge in reference to the decision of Tebble. The relevant portion of Tebble is as follows:

“I am satisfied that if this is the case then the Applicant does not have the required minimum employment period as specified in Section 383 of the Act. I am satisfied that a resignation does break the period of continuous service as defined by Section 22 of the Act. The period between a resignation and reemployment cannot be characterised as a period during which the employee is “employed by the employer” unless the employer specifically agrees to regard it as such and that is not the situation in this case.” 3

[33] I share the concerns of Commissioner Cambridge regarding the consideration of cases of, particularly as relevant to this matter, where the re-employment occurred within three weeks. The concerns raised by Kefer are applicable to the current matter.

[34] The Act refers to a transfer of business as:

transfer of business:

(a) for a transfer of business between a national system employer and another national system employer—see subsection 311(1);

[35] Section 311(1) of the Act provides:

311 When does a transfer of business occur

Meanings of transfer of business, old employer, new employer and transferring work

(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

Meaning of transferring employee

(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a) the old employer or an associated entity of the old employer; and

(b) the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d) that relate to, or are used in connection with, the transferring work.

Old employer outsources work to new employer

(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.

New employer ceases to outsource work to old employer

(5) There is a connection between the old employer and the new employer if:

(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and

(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.

New employer is associated entity of old employer

(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.

[36] The references in this section are to the “transfer” of the employment, the work or the business. The language of the section is read, such that the first employer ceases to have or do something and the second employer begins to have or do something; that there is a “connection” with each other. In this case there is no “connection” of the requisite kind that is no transfer of business. There is a re-engagement by the same Employer.

[37] There is an absence of a clear legislative provision, covering the re-engagement of an employee within 3 months by the same Employer, as the Act in its current form does not allow for these two periods of employment to be joined. In this case the Respondent argued the Applicant’s termination was justified. He did not have the requisite licence for an alternative position, accordingly he took the option to resign, get the licence and take up the new employment. Whilst the Employer’s approach may raise concerns of fairness in bringing the contract to an end, the Applicant did not raise this submission. The Commission can only deal with the jurisdictional facts of the employment period as presented by the Applicant. Therefore the Applicant’s resignation from the first period of employment severed the period of continuous service.

[38] Accordingly only the Applicant’s second period of employment can be taken into consideration and therefore has not completed the minimum employment period.

[39] Given that the Applicant’s second period of employment, does not meet the minimum employment period of six months, the Applicant was not a person protected from unfair dismissal within the meaning of s.386(2)(a) at the time of his dismissal.

[40] On the basis of the jurisdictional objection, regarding the minimum period of employment, the jurisdictional objection is upheld and the application is therefore dismissed.

[41] I Order accordingly.

COMMISSIONER

 1   [2011] FWA 6853 per Roe C.

 2   [2012] FWA 2375 per Cambridge C.

 3 Ibid at [6].

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