Mr Patrick Murrihy v R Mechanical Services Pty Ltd

[2012] FWA 3754

[2012] FWA 3754

FAIR WORK AUSTRALIA

DECISION

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

Mr Patrick Murrihy
v
R Mechanical Services Pty Ltd
(U2012/214)

COMMISSIONER CRIBB MELBOURNE, 11 MAY 2012

Application for unfair dismissal remedy – jurisdiction - minimum employment period - small business employer.

[1] Mr Patrick Murrihy (the applicant) has made an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. It is alleged that his dismissal by R Mechanical Services Pty Ltd (the respondent) was harsh, unjust or unreasonable.

[2] The application was listed for conciliation by telephone on 27 February 2012 but conciliation did not end up taking place.

[3] On 28 February 2012, the employer lodged a jurisdictional objection on the grounds that the employer was a small business employer and, on that basis, the applicant was employed for less than 12 months and therefore unable to make a valid application.

[4] The jurisdictional objection was heard on Friday 20 April 2012. Both Mr Murrihy and Mr R Roper, Director of the company, gave evidence. The objection was unable to be determined as it was necessary for further material to be provided by the employer. Additional documentation regarding the payroll records for two employees was forwarded to Mr Murrihy and the Tribunal on Thursday 26 April 2012. Further information was then requested by the Tribunal, on 1 May 2012, regarding the payroll records for one of the two employees. This was provided by Mr Roper on 1 May 2012.

[5] This decision concerns only the disputed aspects of the jurisdictional objection by the company - namely, whether or not it is a small business employer.

Statutory context

[6] The relevant provisions of the Act state:

“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.”

Note: High income threshold indexed to $118,100 from 1 July 2011

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] It is therefore necessary that I determine if Mr Murrihy was employed by a small business employer and whether or not he had less than 12 months employment immediately prior to his dismissal.

[8] A small business employer is defined in 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, 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.”

Considerations and conclusions

Number of employees

[9] It was Mr Murrihy’s contention that, at the time of his dismissal, the company had 18 employees. 1

[10] On the other hand, the company submitted that there were 13 employees at the relevant time - 12 full time employees and 1 permanent part time employee. 2

[11] During the hearing, it became common ground that, at the time of Mr Murrihy’s dismissal, the company employed the following full time and part time employees:

• R Wright



• R Bannister



• N Hancock



• Hannah Fimmel



• Jenny



• E Shine



• M Jackson



• A Short



• D Lardner



• T Hancock



• N Cole



• A Symes



• P Murrihy



• R Roper (total of 14 employees) 3

[12] In dispute were:

• K Roper



• D Roper



• R Taylor



• L Shine

[13] At the conclusion of the hearing, it was accepted by Mr Murrihy that Ms Shine was not employed on 24 January 2012 as she had been dismissed on 15 January 2012. 4 Mr Murrihy also accepted that Mr R Taylor was a subcontractor and not an employee.5

[14] That left Ms K Roper and Mr D Roper in dispute.

Ms Roper

[15] It was stated by the company that Ms Roper had been terminated on 23 December 2011. This was challenged by Mr Murrihy who argued that, despite possibly having been terminated on 23 December 2011, Ms Roper had come back after that and done some more work. He was not completely sure as to whether she had been at work the day he was made redundant. 6

[16] With respect to Ms Roper, the additional material provided by the employer included Statutory Declarations from Ms Roper, Mr Lardner, Ms Shine, Ms Carr, Mr Jackson and Ms Fimmel that she (Ms Roper) was terminated on 23 December 2011 and that she had not worked since that date. An Employee Employment Details sheet showed a termination date of 23 December 2011. There were two payslips also for Ms Roper covering the period from 15 January 2012 to 28 January 2012. 7

[17] Additional information was sought from the employer as to what payments were made to Ms Roper between 15 January 2012 and 28 January 2012. The explanation received was that the payments were Ms Roper’s redundancy pay which was finalised on 28 January 2012. 8

Mr D Roper

[18] In terms of Mr D Roper, it was Mr R Roper’s evidence that he was a casual employee who had commenced employment on 27 November 2011. It was said that he was terminated on 23 December 2012 but that he was called back in as a casual and worked for a short period of time in January 2012 and has not worked there since. 9

[19] Mr Murrihy contended that he was 100% sure that Mr D Roper was working the day he was dismissed. 10

[20] The additional material provided by the company included Statutory Declarations from Mr D Roper and Ms Hancock (administration) that Mr Roper was terminated on 23 December 2011 with two weeks’ notice. He worked out the notice from 16 January 2012 to 27 January 2012. An Employee Employment Details sheet classified Mr Roper as casual and his employment category as temporary. His start date was listed as 28 November 2011 and termination date as 23 December 2011. There were also two payslips - for the period 15 January 2012 to 21 January 2012 and 22 January 2012 to 28 January 2012.

Associated entity

[21] The issue of two associated entities to R Mechanical Services Pty Ltd was raised by Mr Murrihy. An ASIC company search found R Industries Pty Ltd with Mr Roper as Company Director. 11

[22] It was Mr Roper’s evidence that R Industries Pty Ltd was a shelf company and separate to R Mechanical Services Pty Ltd. He said that it had no employees and that there had been no financial activity in the last six months. 12

[23] On the basis of the material before me, I find that there are no employees from R Industries Pty Ltd to be added to the calculations.

Conclusions

Number of employees

[24] Taking all of this into account, it would appear that, as at the time of Mr Murrihy’s redundancy, Ms Roper was not an employee of R Mechanical Services Pty Ltd and so therefore is not counted.

[25] With respect to Mr D Roper, it seems that he was working out his notice period on 24 January 2012 as his termination did not come into effect until the end of the notice period, namely 27 January 2012.

[26] When calculating the number of employees, the Act requires, at s.23(2)(b), that a casual employee is not counted unless they have been employed “on a regular and systematic basis.” On the basis of the material before me, I find that Mr D Roper was employed with the company on 24 January 2012. He was employed as a casual employee for the period from 28 November 2011 until 27 January 2012. Accordingly, at the time of Mr Murrihy’s dismissal, Mr D Roper had been employed on a “regular and systematic basis” as set out in section 23(b) of the Act.

[27] Therefore, in accordance with the definition of a “small business employer” (s.23 of the Act), Mr D Roper needs to be counted as an employee.

[28] Accordingly, taking all of this into account, I find that the company employed 15 employees at the time of Mr Murrihy’s dismissal. This number is made up of the agreed 14 employees with the addition of Mr D Roper as the result of my findings in paragraphs 18 - 20 and 25 - 27 above.

Minimum employment period

[29] It was common ground prior to the hearing that Mr Murrihy commenced employment with the company on 7 February 2011. 13 During the hearing, it was agreed that the date of Mr Murrihy’s redundancy was 24 January 2012.14

[30] Therefore, at the time of his dismissal, Mr Murrihy had been employed for a period of 11 ½ months.

Conclusion

[31] I find that R Mechanical Services Pty Ltd did not employ fewer than 15 employees (including Mr Murrihy) at the time Mr Murrihy ceased employment with R Mechanical Services Pty Ltd. Therefore, R Mechanical Services Pty Ltd is not a small business employer as defined in section 23 of the Act.

[32] Mr Murrihy was employed for more than six months at the time he was dismissed. He is therefore protected from unfair dismissal.

[33] The employer’s jurisdictional objection is dismissed. The application will be allocated for arbitration.

COMMISSIONER

 1   Exhibit A1 and A2

 2   Exhibit R1 at paragraph 6

 3   Exhibit A2 and Transcript PN 50 - 94

 4   Transcript PN 249 - 253

 5   Ibid PN 247 - 248

 6   Ibid PN 134 - 135 and PN 215

 7   Respondent’s additional documentation, dated 26 April 2012

 8   Email from Mr R Roper dated 1 May 2012

 9   Transcript PN 74 - 85

 10   Ibid PN 215

 11   Attachments to Exhibit A1

 12   Transcript PN 96 - 100

 13   Exhibit R1 at paragraph 1 and Exhibits A1 and A2

 14   Exhibit A1 and Transcript PN 46

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