Ms Emma Semlitzky v JP Family Trust T/A Palmers International

[2012] FWA 8185

[2012] FWA 8185

FAIR WORK AUSTRALIA

DECISION

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

Ms Emma Semlitzky
v
JP Family Trust T/A Palmers International
(U2012/970)

COMMISSIONER CARGILL SYDNEY, 24 SEPTEMBER 2012

Termination of employment - Jurisdiction (genuine redundancy).

[1] This decision relates to an application for an unfair dismissal remedy by Ms E. Semlitzky (the applicant) arising from the termination of her employment. The application is made under section 394 of the Fair Work Act 2009 (the Act) and was lodged on 1 May 2012.

[2] In her application the applicant named her former employer as being JP Family Trust trading as Palmers International. In the employer’s response the employer is named as JP Relocations Pty Ltd ATF JP Family Trust trading as Palmers International Relocations (the respondent).

[3] The matter was the subject of conciliation by a Fair Work Australia (FWA) Conciliator however it did not resolve. It was heard by me in Sydney on 3 September 2012. The applicant represented herself at that time and the respondent was represented by Mr Meehan of counsel who appeared by permission.

[4] The applicant gave sworn evidence and her witness statement was marked Exhibit Applicant 1. Her oral testimony is at PN 143-410 of Transcript. There were two other witnesses in the applicant’s case:

Ms J Rowe A former work colleague. Her witness statement was marked Exhibit Applicant 6 and her oral testimony is at PN 441-461 of Transcript;

Ms J Potter A former client of Palmers International Relocations. Her witness statement was marked Exhibit Applicant 7 and her oral testimony is at PN 467-520 of Transcript.

[5] Evidence was given in the respondent’s case by Mr G Palmer the Manager of Palmers International. His witness statement was marked Exhibit Respondent 1 and his oral testimony is at PN 557-861 of Transcript.

FACTS AND EVIDENCE

[6] One of the issues in this case is the identity of the applicant’s employer. There was considerable evidence about this which is set out below. There was also a deal of evidence about a number of other matters including arrangements concerning the purchase of a vehicle, the hours worked by the applicant, whether she was entitled to the payment of commission and a question about the payment of superannuation entitlements. I have not included that evidence in this decision as these are not issues which I can determine.

[7] The applicant’s evidence is that she is unsure who her employer was. She testified that all she knew was that Mr G Palmer and his brother, Mr W Palmer, employed her. During the period of her employment, which the applicant says began in July 2010, she was paid by a number of different businesses she believes are owned by Mr G Palmer.

[8] The applicant provided a number of her bank statements which show that, during the period between July 2010 and 19 April 2012, the date of the applicant’s dismissal, she received wages from the following entities:

• Australian Vanlines 7 and 14 July 2010;



• Aims Relocations 15 and 22 July 2010;



• Palmers 22 September 2011, however with a note indicating this was in respect of wages for the week ending 9 February 2011;



• Palmers International 29 September 2011 and 29 March 2012;



• Reliable Relocations 5 and 12 April 2012;



• Palmers NSW P/L 19 April 2012.

[9] These statements were marked as Exhibit Applicant 2. It should be noted that these are not the totality of the bank statements for the period but the selection which was tendered by the applicant.

[10] The applicant also provided two PAYG payment summaries for the financial year ending 30 June 2011, Exhibit Applicant 3. One of these shows the payer details as JP Family T/As Palmers International, ABN 48 906 638 699 with the amount of gross payments as $24,548. The other shows the payer as GP Removals Pty Ltd, ABN 63 032 702 362 with a gross payment of $3,807. The applicant testified that she had also received a PAYG summary for the same financial year from Palmer Move Management.

[11] The PAYG payment summary for the applicant in respect of the financial year ending 30 June 2012 was tendered by Mr Meehan and marked Exhibit Respondent 4. That shows the payer as Palmers International Relocations with the ABN of 48 906 638 699 with a gross payment of $47,084.

[12] The applicant provided a pay slip for the period 9 July to 15 July 2010 under the heading Aims Relocations which displays the same ABN as GP Removals Pty Ltd set out in paragraph 10. This was marked as Exhibit Applicant 4. The applicant agreed that she had not received any payment from Aims Relocations after the end of 2010.

[13] The applicant also provided documents showing either current or historical details for four ABNs from the Australian Business Register, Exhibit Applicant 5. Those ABNs and relevant details are as follows:

ABN: 63 032 702 362

Entity name: The Trustee for GP Family Trust

Trading name: FM Olde Piano Removals. It should be noted that this is the same ABN as identified as being that of GP Palmer Removals Pty Ltd in paragraph 10 above, and also of Aims Relocations in paragraph 12 above.

ABN: 38 003 837 705

Entity name: Palmers Removals & Storage Pty Limited (since 13 November 2001)

Trading name: Palmer Bros Transport Pty Ltd

ABN: 23 110 300 706

Entity name: Palmers NSW Pty Ltd

Trading name: Palmers Removals & Storage

ABN: 48 906 638 699

Entity name: The Trustee for JP Family Trust

Trading name: Palmers International Relocations (since 1 May 2011)

Reliable Relocations (20 February 2008 to 1 May 2011)

[14] The applicant’s evidence is that she was employed as the National Logistics Coordinator. She was the only person in the business with the relevant knowledge and experience to organise all of the relevant licences and permits which were required for an international removals business.

[15] It is the applicant’s evidence that a few weeks after commencing employment with what she describes as “Palmers/AIMS” in July 2010, she was advised that the business was to merge with another company, Move Management. For a period of about five months she worked from the office of Move Management which was in a different suburb. The applicant’s evidence is that, when the merger with Move Management fell through, she was sent back to the Palmers/AIMS depot at Chullora.

[16] The applicant’s evidence is that several of the businesses relating to Mr Palmer operated from this same address in Chullora. Her evidence is that there were approximately six other office staff at that location all of whom worked across the different businesses, answering phones and taking down job details. The applicant’s evidence is that the computer system was linked between the various businesses. The applicant says that there were also a number of drivers and storemen working from the Chullora depot who were paid by Palmers International to do moving jobs. The applicant’s evidence is that there were more than 15 employees.

[17] Mr Palmer’s evidence is that, in around March 2010, GP Removals took over Aims Relocations with a view to entering the international removals business. The owner of Aims, Mr A Dick, continued to work in the business. Mr Palmer’s evidence is that, until this time, none of the businesses he was associated with had any involvement in the international arena.

[18] Mr Palmer’s evidence is that the applicant began working “under” Aims Relocations for about a month during which time Move Management, a totally independent entity, proposed that there should be a partnership between the businesses. His evidence is that the applicant then went to work for Move Management.

[19] It is Mr Palmer’s evidence that the arrangement with Move Management did not work out so Palmers International was set up as a new enterprise in the international relocations market. Mr Palmer’s evidence is that it is that entity, JP Relocations trading as Palmers International, which employed the applicant in early January 2011. His evidence is that she was engaged as an Administrative Assistant.

[20] Mr Palmer’s evidence is that Palmers NSW Pty Ltd is a family business which has been operating for about 30 years carrying out domestic work, mainly private removals. It is located at the Chullora address and employs drivers, offsiders and trained removalists. Also operating from that address is GP Removals trading as FM Olde Piano Removals. Mr Palmer’s evidence is that this business specialises in piano removals and has its own employees. His evidence is that Reliable Relocations which operated under the JP Family Trust structure is also located at Chullora. It still has a website but no trucks. Mr Palmer’s evidence is that none of these entities was involved in international removals work.

[21] It is Mr Palmer’s evidence that Palmers International employed the applicant, Mr Dick, a storeman and a couple of casual employees who helped in the warehouse and office. Employees from Palmers NSW Pty Ltd would assist with packing and unpacking containers and delivering goods. Mr Palmer’s evidence is that the maximum number of employees of Palmers International at any one time in 2012 was six. The applicant was the final employee in the business.

[22] Mr Meehan tendered extracts from the ASIC database for Palmers NSW Pty Ltd, Exhibit Respondent 2 and for JP Relocations Pty Ltd, Exhibit Respondent 3. The first of these shows that the director of the company is Mr W Palmer with shares held in equal numbers by Mr W Palmer, Mr G Palmer and Ms D Palmer. The second extract shows that the director and sole shareholder of JP Relocations is Mr J Palmer.

[23] Mr Palmer’s evidence is that he had managerial responsibilities in relation to JP Relocations. His evidence is that in 2012 the business experienced financial difficulties. The business slowly got worse and was propped up by Palmers NSW Pty Ltd transferring money to it on a weekly or daily basis. Some of this money was used to pay wages for employees including the applicant.

[24] Mr Palmer’s evidence is that he shared information about the financial difficulties with the staff including the applicant. His evidence is that, although he had some concerns about the applicant’s work performance, he was more concerned about the viability of the business. Mr Palmer’s evidence is that, around March 2012, he had a discussion with the applicant, the storeman and Mr Dick in which he informed them that, if things did not improve, the business would be closing its doors. His evidence is that there was also a telephone conversation with the applicant about the issue.

[25] By letter dated 19 April 2012 the applicant was informed that her employment was terminated with immediate effect. In the letter, Attachment 2 to Exhibit Respondent 1, Mr Palmer states “It is of unfortunate circumstances that your employment with this company is no longer viable”. Two weeks’ pay in lieu of notice was provided.

[26] It is Mr Palmer’s evidence that JP Relocations Pty Ltd ceased trading on 1 July 2012. It is still registered as a corporate entity.

[27] The applicant agrees that in early 2012 she knew that there were some financial problems in the business. She was aware that funds were being shuffled between the various companies. Her evidence is that the whole industry was in a downturn. The applicant knew that Ms Rowe and the storeman had been dismissed before her.

[28] It is Ms Rowe’s evidence that “Palmers in general” had financial problems. She was aware that the accounts clerk had been borrowing money from other areas to ensure that the international business didn’t go under. Ms Rowe also testified that a few of the financial problems were due to the ineptitude of the accounts clerk.

[29] It is the applicant’s evidence that Mr Dick still works for the company from overseas. It is also the applicant’s evidence that her job is still being done by a Ms K Faifua. The applicant bases this evidence upon emails from overseas agents, Exhibit Applicant 8, and the fact that Ms Faifua answered the phone for the business.

[30] Mr Palmer’s evidence is that Ms Faifua is employed by Palmers NSW Pty Ltd to do import work. She works from her home in Melbourne. Mr Palmer’s evidence is that Palmers NSW Pty Ltd has been doing this work since July and it comprises 10% of the business.

SUBMISSIONS OF THE APPLICANT

[31] The applicant submits that she left a good job with Australian Vanlines to further her career. As far as she is concerned she was engaged by Mr G Palmer. He didn’t inform her who he was representing but offered her a job with a salary of $55,000, a mobile phone and fuel. They negotiated her hours of work. The applicant submits that it is not correct to suggest that she was employed by Palmers International as it was not even trading at the time her employment began. She also submits that, if her employment changed hands between the different businesses, she had not been informed of the changes.

[32] The applicant submits that the work arrangement involved one set of premises from which five companies with five different ABNs operated. The employees were required to undertake work for all of the businesses.

[33] The applicant also submits that the international business is still operating from the Chullora premises and her job is now being done by Ms Faifua. She submits that she was never provided with the option of doing that work nor was the possibility of reducing her hours or working from home for a lower salary discussed with her.

[34] The applicant submits that her dismissal was completely unjust and unfair. She seeks compensation. The applicant understands that FWA has no jurisdiction over the other issues raised in her written submissions.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

[35] Mr Meehan addressed the issue of the identity of the applicant’s employer. He noted that it is the respondent’s case that it, JP Relocations Pty Ltd as Trustee for the JP Family Trust (trading as Palmers International Relocations) is the employer. Mr Meehan noted the evidence as to the co-location of other businesses, in particular Palmers NSW Pty Ltd, at the same site. He submitted that there is no particular significance in this and it should not lead to an inference that Palmers NSW Pty Ltd was carrying on the same international business as JP Relocations Pty Ltd.

[36] Mr Meehan submitted that the applicant’s PAYG summaries in Exhibits Applicant 3 and Respondent 4 support the proposition that the employer was JP Relocations Pty Ltd. He submitted that Mr Palmer’s evidence provided the explanation for the payments from GP Removals Pty Ltd in Exhibit Applicant 3.

[37] Mr Meehan submitted that the applicant’s dismissal was a genuine redundancy within the definition set out in section 389. He noted Mr Palmer’s largely unchallenged evidence as to the financial state of the business from early 2012, the termination of the employment of the other employees and then of the applicant on 19 April 2012. Mr Meehan referred to the evidence that JP Relocations ceased trading from 1 July 2012.

[38] Mr Meehan submitted that the evidence does not demonstrate that Palmers NSW Pty Ltd has taken over the business previously carried out by JP Relocations. He noted that there was no evidence that Ms Faifua is a full time employee undertaking the same duties as those previously carried out by the applicant.

[39] Mr Meehan referred to section 389 of the Act and submitted that subsection (1)(a) had been made out. He submitted that, although he was not aware of the application of any enterprise agreement or award to the applicant’s employment, there was evidence that there had been consultation with employees including the applicant.

[40] Mr Meehan submitted that the exclusion in section 389(2) was not engaged. It would not have been reasonable to have redeployed the applicant in JP Relocations Pty Ltd. It has ceased trading. Further, there was nothing in the evidence to suggest that Palmers NSW Pty Ltd was an associated entity of JP Relocations Pty Ltd.

CONCLUSIONS

[41] As indicated earlier, there is a preliminary issue to be determined in this matter: who is the real employer?

[42] Although the applicant’s employment arrangements are somewhat complicated, I have concluded that, from at least January 2011 through to the date of her dismissal, the applicant was employed by JP Relocations Pty Ltd as Trustee for the JP Family Trust (trading as Palmers International Relocations). This conclusion is based upon the evidence of Mr Palmer as well as the PAYG summaries.

[43] I note that the descriptions of the payer on each of the PAYG summaries are not entirely consistent and do not precisely reflect the corporate identity. Nevertheless I am confident that they do support the conclusion that JP Relocations was the applicant’s employer. The summaries in Exhibit Applicant 3 show that, for the financial year ending 30 June 2011, an entity with almost the same name and with the same ABN as JP Relocations, paid the applicant an amount which represents just under half of her annual salary of $55,000. Mr Palmer has provided an explanation for the payment of $3,807 from GP Removals Pty Ltd.

[44] The PAYG summary for the financial year ending 30 June 2012, Exhibit Respondent 4, describes the payer as being Palmers International Relocations, the trading name of JP Removals, with the same ABN. The amount which was paid to the applicant appears to represent the whole of her earnings for that financial year to the date of her dismissal.

[45] I now turn to consider the substantive matter.

[46] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. The fourth of such matters is whether the dismissal was a case of genuine redundancy. The terms of section 385 are also relevant in that, in order to make a finding that a person has been unfairly dismissed, FWA must be satisfied, among other things, that the dismissal was not a genuine redundancy.

[47] Section 389 sets out the meaning of genuine redundancy. It provides as follows:

“(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[48] I am satisfied on the basis of the evidence in this case that the respondent no longer required the applicant’s job to be performed by anyone because of changes in the operational requirements of the enterprise.

[49] The evidence is that the respondent’s business had been suffering financial difficulties from the beginning of 2012. Mr Palmer’s evidence is that it had been trading at a loss for some months and was no longer commercially viable. Indeed the business ceased trading on 1 July 2012. This situation is a most fundamental change in the operational requirements of the enterprise. Section 389(1)(a) has been made out.

[50] There was nothing before me to suggest that there was an enterprise agreement or modern award which applied to the applicant’s employment. Consequently the respondent had no obligation to consult about the redundancy and hence paragraph (b) of subsection (1) is not relevant.

[51] The next question concerns whether it would have been reasonable in all of the circumstances for the applicant to have been redeployed in either the respondent’s enterprise or that of an associated entity. Clearly the applicant could not have been redeployed within the employer’s enterprise as there were no other positions within that entity. She was the last remaining employee.

[52] It is clear that there were close connections between the respondent and other corporate entities including in particular, Palmers NSW Pty Ltd. Those connections are reflected in the use of employees across the businesses as well as the physical co-location and common computer systems. However there is no evidence that any of the other businesses are associated entities of JP Relocations within the meaning attached to that phrase in section 12 of the Act and section 50AAA of the Corporations Act 2001. As a result there was no other position to which the applicant could have been redeployed within an associated entity of the respondent.

[53] I am satisfied that in the circumstances it would not have been reasonable to have redeployed the applicant.

[54] As a consequence of my findings on each of the relevant factors in section 389 it follows that the applicant’s dismissal was a case of genuine redundancy. As a result I am not able to consider whether or not her dismissal was unfair.

[55] The application is dismissed. An order to that effect is issued with this decision.

COMMISSIONER

Appearances:

E. Semlitzky, the applicant.

S. Meehan of counsel, with K. Hayward of Haywood Solicitors for the respondent.

Hearing details:

2012.

Sydney.

September 3.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR529444>