Ms Tahanee Kakoschke v BG & BJ Pty Ltd T/A Wantirna South Studfield Newsagency

[2016] FWC 1074

[2016] FWC 1074

FAIR WORK COMMISSION

REASONS FOR DECISION

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

Ms Tahanee Kakoschke
v
BG & BJ Pty Ltd T/A Wantirna South Studfield Newsagency
(U2015/15269)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 26 FEBRUARY 2016

Application for relief from unfair dismissal; whether applicant served minimum employment period; jurisdictional objection dismissed.

[1] This is an edited version of the decision delivered ex tempore and recorded in transcript on 11 February 2016. Ms Kakoschke (Applicant) has made an application under s.394 of the Fair Work Act 2009 (Act) for an unfair dismissal remedy.  The Applicant commenced her employment with BG & BJ Pty Ltd t/a Wantirna South Studfield Newsagency (Respondent) a few days after the Respondent acquired the business formerly conducted by Hi-Rail Pty Ltd t/a Wantirna South Studfield Newsagency (old employer) on or about 25 May 2015.

[2] The Applicant's employment with the Respondent ended on or about 5 November 2015.  There is a live question as to whether there was a dismissal within the meaning of s.386 of the Act with the Respondent maintaining that it did not dismiss the Applicant but that the Applicant had left her employment with the Respondent.

[3] The question whether a person has been dismissed is, in my view, inextricably linked to the question of whether the person has been unfairly dismissed as defined in s.385 of the Act, and unlike questions about whether or not a dismissal is consistent with the Small Business Fair Dismissal Code or questions about genuine redundancy, s.396 of the Act does not require the question of whether or not a person was dismissed to be determined as a preliminary matter before the merits of the application are determined.

[4] It therefore seems to me that the question, of, whether or not the Applicant was dismissed should be considered in the context of the merits of the claim if the other jurisdictional objection raised by the Respondent fails.

[5] The Respondent maintains that the application should be dismissed because the Applicant had not at the time of the dismissal served the minimum employment period.

[6] Section 382 of the Act sets out the circumstances in which a person is protected from unfair dismissal.  Relevantly, a person is protected from unfair dismissal if the person, has completed at least the minimum employment period at the time of the dismissal.

[7] It is uncontroversial that the Respondent is a small business employer within the meaning of s.23 of the Act as the Respondent employed some seven employees, including the Applicant, at the time when the Applicant's employment ended.

[8] Section 383 of the Act relevantly contains the minimum employment period in relation to an employer that is a small business employer and that period is a period of one year ending at the time of the dismissal.

[9] It is clear that so far as the period of employment that the Applicant served with the Respondent is concerned that period on its own is less than 12 months.  However, period of employment for the purposes of s.383 is defined in s.384 of the Act.  Relevantly, a period of employment is a period of continuous service that the employee has completed with the employer at the time of dismissal.

[10] Continuous service is defined in s.22 of the Act and that section relevantly provides that if there is a transfer of employment, any period of service of the employee with the first employer counts as service with the second employer and the period between the termination of employment with the first employer and the start of the employment with the second employer does not break continuity. It does not, however, count towards the employee's period of continuous service.

[11] Section 22(7) sets out the circumstances in which there will be a transfer of employment.  There is no suggestion that the old employer and the Respondent are associated entities, and that subsection provides that there will be a transfer of employment if an employee is a transferring employee in relation to a transfer of business from the first employer to the second employer.

[12] The meaning of transferring employee and transfer of business are to be found in s.311 of the Act.  In relation to a transfer of business, a transferring employee is an employee whose employment with the old employer has been terminated, who within three months of termination becomes employed by the new employer and who performs work for the new employer that is the same or substantially the same as the work performed by that employee for the old employer.

[13] As to the meaning of transfer of business, there will be a transfer of business if the matters to which I have just referred relating to a transferring employee exist and there is a relevant connection between the old employer and the new employer as described in any of subsections (3) to (6) of s.311.

[14] Relevantly, there is a transfer of business from the old employer to the new employer is the circumstance set out in subsection (3).  That subsection deals squarely with the circumstances in which there is an acquisition of a business by one employer from another. The acquisition or the details of the acquisition of business is set out in the contract of sale of business executed by the Respondent and the old employer, Hi-Rail Pty Ltd, which is marked as Exhibit 2 in these proceedings. 1

[15] Work will be transferring work if the work performed by the employee for the new employer is the same or substantially the same as the work performed by the old employer.  On the basis of the material before me, the following matters seem to me to be clear.

[16] First, the Applicant maintains that she commenced employment with the old employer in or about February of 2012.  Secondly, it is not in dispute that the employment with the old employer ended immediately before the acquisition of the business by the new employer. The date of termination with the old employer was 24 May 2015.

[17] I accept that the Applicant was employed by the old employer since at least February 2012.  But, in any event, as is set out in the PAYG payment summary individual non-business documentation which was filed with the Australian Tax Office on behalf of the Applicant in Exhibit 1, it seems clear that at least for the period 1 July 2013 to 24 May 2015, the Applicant was employed by the old employer and was earning income from that employment. 2

[18] It is also clear that the sale of business contract in these proceedings contains provisions which deal with the transfer of assets of the business from the old employer to the Respondent. 3 Thirdly, it is not in dispute that the Applicant commenced employment with the Respondent within a period of three months of the termination of her employment with the old employer, and it is apparent that the work the Applicant performed for the old employer, that is performing the work of a sales assistant, is the same or substantially the same as the work that she performs or performed for the Respondent.

[19] In those circumstances, I am satisfied that there was a transfer of business and I am also satisfied that, the Applicant, was a transferring employee within the meaning of the Act in relation to the transfer of business.

[20] It follows from the above that there has been a transfer of employment within the meaning of s.22(7) of the Act and consequently prima facie the Applicant's service with the old employer is counted as service with the Respondent as set out in s.22(5).  This is the case unless another exception applies.

[21] Section 384 of the Act contains a definition of period of employment, as I indicated earlier. It provides that the period of employment with the employer at a particular time is the period of continuous service the employee has completed with the employer at the time that the employee was dismissed.

[22] For reasons already given, that period of continuous service includes the service that the employee worked for the old employer.  However, in the case of a transferring employee in relation to a transfer of business where the old employer and the new employer are not associated entities, prior service with the old employer may not be recognised if the new employer informed the employee in writing before the new employment started that the period of service with the old employer would not be recognised.

[23] Consequently, if such notice had been given by the Respondent to the Applicant, the Applicant’s period of service with the old employer would not count towards the employee's period of employment with the Respondent.  The Respondent maintains that the Applicant was employed on the basis that prior service with the old employer would not be counted.

[24] The Respondent concedes that she did not provide the Applicant anything in writing which would advise the Applicant of that fact, but says that it was communicated to the Applicant by the Respondent orally.

[25] I do not need to make a finding about whether that occurred.  It is sufficient to note that even if it did occur, it is not a sufficient basis to conclude that the prior service with the old employer would not be recognised for the purposes of the minimum period of employment because the exception set out in s.394 of the Act is clear that the notice to the employee must be in writing.  There being no notice in writing, the exception does not apply.

[26] It follows from the above that the period of employment or service rendered by the Applicant with the old employer counts as part of the continuous period of service with the Respondent.  The combined effect of those periods of service is that the continuous period of service is greater than 12 months.  Therefore, I am satisfied that the Applicant has served the minimum employment period as required by the Act and on that basis at least, the Applicant is protected from unfair dismissal.

[27] The jurisdictional objection raised by the Respondent is therefore dismissed. 

[28] As a post script, immediately after delivering my ex tempore decision I conducted a conference between the parties the result of which was a settlement and discontinuance of the application.

 DEPUTY PRESIDENT

Appearances:

Ms T Kakoschke appeared in person.

Ms A Thomson on behalf of the Respondent.

Hearing details:

Melbourne.

2016.

February 11.

 1   Contract of a sale of business between the vendor, Hi-Rail Pty Ltd, which operated the Wantirna South Studfield Newsagency, and the purchaser BG & BJ Pty Ltd.

 2   Summary payments lodged with the ATO for period 01/07/2013 to 30/06/2014 and for the period 01/07/2014 to 24/05/2015.

 3   above n 1.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR577172>