Ms Kelly Harland v Paradigm Cleaning & Professional Services Pty Ltd

[2015] FWC 8425

[2015] FWC 8425

FAIR WORK COMMISSION

DECISION

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

Ms Kelly Harland
v
Paradigm Cleaning & Professional Services Pty Ltd
(U2015/6724)

COMMISSIONER ROE MELBOURNE, 4 DECEMBER 2015

Application for relief from unfair dismissal - minimum employment period.

[1] Ms Harland was employed from 1 February 2015 by Paradigm Cleaning & Professional Services Pty Ltd. A letter dated 23 January 2015 from Paradigm advised employees of Australind Cleaning Services Pty Ltd who employed Ms Harland at that time that Paradigm was the new business owner as from 1 February 2015 and that:

“Please be advised since Paradigm Cleaning and Professional Services Pty Ltd will be your new employer, all employment associated wages and entitlements, including any leave will start afresh as of the 1st February 2015. If you have any approved leave prior to change of management please ensure that you complete a leave request and return to the office.”

[2] The PAYG summary provided by the liquidator of Australind Cleaning Services Pty Ltd shows that Ms Harland was employed throughout the period from July 2014 and it does not show any termination payments.

[3] I am satisfied that there was a transfer of business between Austalind Cleaning Services Pty Ltd and Paradigm. The conditions in Section 311(1) and (3) are met and Ms Harland is a transferring employee pursuant to Section 311(2). The connection between the old employer and the new employer is the transfer of at least some assets. The relevant parts of Section 311 provide:

“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

(2) 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.”

[4] Section 384 provides:

“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.”

[5] I am satisfied that the conditions in Section 384(2)(b)(i) and (ii) are met. However, I am not satisfied that Paradigm informed Ms Harland in writing that her period of service with Australind would not be recognised consistent with Section 384(2)(b)(iii). The reference to “if you have any approved leave prior to change of management please ensure that you complete a leave request and return to the office” is ambiguous. It suggests that leave bookings will be honoured but it is ambiguous as to whether it will be paid or unpaid. The statement that entitlements including leave entitlements will start afresh is not the same as a statement that previous service will not be recognised. Personal leave, annual leave, long service leave, redundancy, unfair dismissal protection and other matters may be linked to the recognition of service. Protection from unfair dismissal may not be understood by all employees to be covered by the expression “employment associated wages and entitlements, including any leave”. The legislation is quite specific that an employee must be notified in writing that a period of service with the old employer will not be recognised. This legislation is clearly designed to protect employees in circumstances where there is a transfer of business. I am satisfied that the requirement in the legislation must be strictly followed before an employee’s rights are extinguished. The fact that the words “all employment associated wages and entitlements, including any leave will start afresh” might be read as implying that service will not be recognised is insufficient.

[6] I am satisfied that Ms Harland’s service with Australind counts towards the period of continuous service for the purposes of determining whether or not Ms Harland has the minimum period of employment to be protected from unfair dismissal. Paradigm is not a small business so the minimum period of employment is six months.

[7] A termination letter dated 27 July 2015 was received by Ms Harland on 30 July 2015. That letter also referred to Ms Harland’s alleged failure to attend a meeting on 27 July 2015. The letter said that Ms Harland was to return all company property by 31 July 2015 and that the termination was from 27 July 2015. The company issued a separation certificate which advised that the employment ended on 27 July 2015. The separation certificate advises that entitlements are to be paid on 31 July 2015.

[8] Mrs James for Paradigm gave evidence that she sent Ms Harland a text message on 23 July 2015 advising her to attend a meeting that day. She gave evidence that she sent a further text message requesting Ms Harland attend a meeting on 27 July 2015. Ms Harland does not accept this evidence. When Ms Harland did not attend the meeting Ms James says she sent the letter of termination referred to earlier on that day. Mrs James says that she sent a further text message on 29 July 2015 advising that a letter of termination had been sent on 27 July 2015 and requesting company property be returned.

[9] Ms Harland confirms that she received a text message on 29 July 2015 advising her that her employment had been terminated. Ms Harland says that she received the termination letter on 30 July 2015.

[10] I am satisfied that Ms Harland was employed by Paradigm from 1 February 2015 until 29 July 2015. This is two days short of six months.

[11] Therefore, if Ms Harland’s service with Australind did not count towards the minimum employment period because of the operation of Section 384(2)(b)(iii) then she would not have the minimum employment period. However, I have found that Ms Harland’s service with Australind does count.

[12] It is accepted that Paradigm is not a small business for the purposes of the Act.

[13] For the reasons discussed earlier I am satisfied that Section 384(2)(b)(iii) does not apply to Ms Harland’s service with Australind. Consequently I am satisfied that Ms Harland has the minimum employment period and is protected from unfair dismissal.

COMMISSIONER

Appearances:

Ms K Harland represented herself.

Ms E Smith appeared for the Respondent.

Hearing details:

2015

Perth by telephone

November 20

Printed by authority of the Commonwealth Government Printer

<Price code A, PR574748>