Mr Matthew Dally-Watkins v VFG Services Pty Ltd
[2021] FWC 3225
•3 JUNE 2021
| [2021] FWC 3225 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Matthew Dally-Watkins
v
VFG Services Pty Ltd
(U2020/11742)
DEPUTY PRESIDENT LAKE | BRISBANE, 3 JUNE 2021 |
Application for an unfair dismissal remedy – jurisdictional objection – minimum employment period – Small Business Fair Dismissal Code – application dismissed.
[1] This decision concerns an application by Mr Matthew Dally-Watkins (the Applicant) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). The Applicant seeks a remedy, claiming that his dismissal from his employment with VFG Services Pty Ltd (the Respondent) was harsh, unjust and unreasonable. The Applicant’s employment with the Respondent commenced on 22 January 2020 and was terminated on 10 August 2020. The Applicant was employed for a period of 6 months and 3 weeks.
[2] In its Form F3 – Employer Response, the Respondent raised a number of jurisdictional objections on the grounds that:
• the Applicant’s dismissal was a case of genuine redundancy;
• the Applicant’s employment did not meet the minimum employment period;
• the Respondent is a small business employer and it complied with the Small Business Fair Dismissal Code; and
• the Applicant had made fraudulent misrepresentations about his role and employment with the Respondent.
[3] This matter was initially allocated to Commissioner Bissett for determination of a preliminary matter around whether the Applicant had discontinued his application by communication to the Commission. 1 The Commissioner found that the application had not been discontinued and the matter was referred for conciliation. The matter was unable to be resolved at conciliation and now proceeds for determination of the jurisdictional matters.
[4] The matter was allocated to my Chambers and I issued directions for filing of materials addressing the jurisdictional objections on the grounds that the Applicant has not met the minimum employment period and the employer’s contention that they are a small business employer and complied with the Small Business Fair Dismissal Code. This decision deals with those matters only.
LEGISLATION
[5] Section 382 of the Act 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; 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.”
[6] The meaning of “minimum employment period” is relevantly provided at 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.”
[7] Small business employer is defined at s.23 of the Act:
“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, the employee is a regular casual employee of the employer 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.”
[8] As provided in s.23(3) for the purposes of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity. Associated entities are defined in s.12 as having the meaning given by s.50AAA of the Corporations Act 2001, which provides as follows:
“50AAA 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.”
HEARING
[9] The Jurisdictional Hearing was conducted by telephone on 5 February 2021.
[10] The Applicant acted for himself and Mr Michael Baldwin appeared for the Respondent in his role as Director.
SUMMARY OF THE EVIDENCE AND SUBMISSIONS
Respondent’s submissions and evidence
[11] The Respondent submitted that it is a small business employer and complied with the Small Business Fair Dismissal Code, and further stated that the Applicant had not completed the required minimum employment period which for a small business is a period of 12 months.
[12] As to whether it was a small business at the time the Applicant’s employment was terminated, the Respondent provided Xero timesheet details, which it said provides for the week ending:
• 9 August 2020, it had 11 employees;
• 16 August 2020, it had 10 employees (the Applicant no longer on the timesheet “due to severance”); and
• 23 August 2020, it had 10 employees.
[13] The Respondent submitted that it is a “non-trading” Company (Principal) and does not trade as Vogue Advisory Group. It submitted that Vogue Advisory Group Pty Ltd is a separate company and an associate entity in accordance with s.50AAA of the Corporations Act 2001.
[14] As to the Applicant’s period of employment, the Respondent annexed a copy of the Applicant’s employment contract which commenced on 22 January 2020.
[15] The Respondent relied on witness evidence provided by Mr Baldwin, Director, and Mr John Reid, Management Accountant, as follows.
Statement of Mr Baldwin
[16] Mr Baldwin, Director of VFG Services Pty Ltd, stated that because of the coronavirus pandemic, following March 2020 the Respondent was losing substantial business, specifically in the area of insurance. Mr Baldwin stated the Applicant was employed to do insurance quotes and paraplanning administrative work for insurance only. He stated that with a reduction in insurance business by 37%, the Respondent was required to restructure to remain viable. He stated it was for this reason that on 10 August 2020, the Respondent informed the Applicant that his employment had come to an end effective immediately, with two weeks’ notice paid in lieu along with any other accrued entitlements.
[17] Mr Baldwin gave evidence that the Respondent business employs less than 15 employees. He stated that as to names of individuals provided by the Applicant, the Applicant has “assumed that everybody in Suite 1, Level 2 [of the workplace building] is employed by VFG Services Pty Ltd”. Mr Baldwin’s evidence in reply was that the office is leased and has a diverse number of companies working from that Suite every day. He noted this included two “totally separate” Financial Planning businesses with no association with the Respondent business. Mr Baldwin stated that Applicant has also named an individual who works as an independent contractor, and is not an employee of the Respondent, and has named an individual who “runs his own business and helps [the Respondent’s] CPA intern on Fridays”.
Statement of Mr Reid
[18] Mr Reid, Management Accountant for VFG Services Pty Ltd, stated that he has responsibilities as Payroll Officer for the Respondent.
[19] Mr Reid’s evidence supports Mr Baldwin’s statement that the Applicant was dismissed on 10 August 2020, as a direct result of the coronavirus pandemic and a downturn in insurance business. He confirmed that the Applicant was paid all statutory entitlements on termination, including two weeks in lieu of notice. Mr Reid stated the Respondent is a small business employer with fewer than 15 employees and relied on the payroll evidence as provided to the Commission.
Applicant’s submissions and evidence
[20] The Applicant submitted that at the date of his dismissal, the Respondent also employed a further four employees, not provided in their materials. While names are omitted from this decision, the Applicant referred to three employees employed in client services, accounting and servicing “FP”. As to the fourth employee, the Applicant stated that a new employee had started with the Respondent on 10 August 2020.
[21] The Applicant stated that the Respondent employed “17 employees plus several others in Sales and Marketing and Mortgage”.
[22] In reply to the Respondent’s materials, the Applicant stated that he had “not made an assumption/s about the team” and had “not included staff from another business located in the building”. The Applicant stated that Mr Baldwin’s evidence had omitted the accountant, a mortgage broker, a senior adviser, Mr Baldwin himself as the client manager, and “the new paraplanning staff” who started on 10 August 2020. The Applicant also referred to two-part time employees, who were also studying “business/CPA”. He said he believed they were permanent staff members. The Applicant added that “Three additional paraplanning staff were employed leading up to the 10th of August 2020”, and also noted “The sales and marketing staff are paid on referral and work at a different location/s”.
[23] The Applicant stated that Mr Baldwin’s evidence is “inconsistent” with what was communicated to him during his employment and at the time of his dismissal. The Applicant did not otherwise clearly outline what evidence or submissions he was disputing.
CONSIDERATION
[24] The Respondent in evidence listed a total of 13 employees and their duties, two of these were part time employees but all were permanent employees and so confirmed that that was his established headcount. The Respondent went further to address the Applicant’s assertions that the accountant/bookkeeper was an employee, the facts he said were that the Accountant ran his own practice that was separate from the Respondent. The business of the Respondent had a contract with the accountancy business to receive bookkeeping services and thus the accountant identified by the Applicant was not an employee. As to the Accountant’s wife named by the Applicant as an employee, the Respondent confirmed that she had not ever supplied services or worked for the Respondent in any capacity. The Applicant had named another individual as an employee and the Respondent stated in testimony that the person identified was an advisor who did occasional work for the business on a contract basis. Any further names that the Applicant asserted were not employees but rather were other business’ staff located on the same floor as the Respondent’s business.
[25] In response to the material and testimony of the Respondent, the Applicant did not identify any other employees in the business that would increase the number beyond 13.
[26] The Respondent has established that the business has less than 15 employees and therefore is defined under the Act as a small business. In this case then the minimum employment period is 12 months and the Applicant had been employed for a total period of six months and three weeks.
[27] I order that the application be dismissed as it has not met the minimum employment period.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR730461>
1 [2020] FWC 5687.
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