Najib Lahoud v Ox Metal Fabrication Pty Ltd

[2011] FWA 6226

[2011] FWA 6226

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Najib Lahoud
v
OX Metal Fabrication Pty Ltd
(U2011/7709)

COMMISSIONER MCKENNA SYDNEY, 19 SEPTEMBER 2011

Unfair dismissal - minimum employment period - small business.

[1] Najib Lahoud (“the applicant”) has filed an application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (“the Act”), with respect to the termination of his employment on 4 May 2011 by OX Metal Fabrication Pty Ltd (“the respondent”). The spelling of the applicant’s surname was corrected in the proceedings from “Lahood” to “Lahoud”.

[2] The respondent filed an employer’s response outlining various matters, including a jurisdictional objection. In light of the matters raised by the respondent, directions for the filing and service of materials were issued in advance of a Conference/Hearing scheduled for 9 September 2011 concerning “Minimum Employment Period - Small Business”. The respective merits of the application are not presently relevant for consideration in this decision, given the basis of the allocation concerning the preliminary issue.

[3] As to matters related to the minimum employment period concerning a small business, the Act provides as follows:

“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.

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.

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.”

[4] In the proceedings on 9 September 2011, the applicant appeared on his own behalf and the respondent was represented by Terry Tisdale, Director. It may be noted that the applicant had been represented by a solicitor, but the solicitor did not seek to appear for the applicant on 9 September 2011. As to that, the applicant submitted he “would like to come for himself” before Fair Work Australia in noting why his solicitor was not appearing, as well as alluding to costs-related considerations (whereas the applicant’s solicitor advised my Associate by telephone and later confirmed in writing that the firm had acted for the applicant on a pro bono basis, but otherwise confirmed the applicant “did not wish us to appear in this matter today”). A Notice of Representative Ceasing to Act subsequently was filed by that solicitor on 13 September 2011. I note this only so as to give some context to the fact that while materials filed by the applicant pursuant to the directions (and the making of applications such as those concerning an adjournment and orders for production) were made with legal assistance, the applicant appeared on his own behalf on 9 September 2011.

[5] In response to a query from me about how long the proceedings might take, I was given a time estimate of approximately 10 minutes. As it transpired, apart from dealing with some preliminary matters, that estimate was reasonably accurate. The proceedings were informal, with each party relying principally on the materials already filed as supplemented by short oral submissions related to documentation that had been the subject of an order for production - coupled with some diversions into merits-related matters, being matters which were not the subject of the proceedings listed for 9 September 2011.

[6] The respondent’s materials relevantly contended that the respondent was a small business which employed fewer than 15 employees. Given the applicant was employed for less than one year and the respondent employed fewer than 15 employees, the respondent submitted the application should be dismissed. In this regard, Mr Tisdale’s witness statement indicated that certain payroll activity summaries showed the respondent employed 14 people both around the time of the applicant’s recruitment and at the date of dismissal. Two payroll activity summaries were attached to Mr Tisdale’s statement showing the total number of employees as being 14, but with all the names of the individual employees, apart from the applicant’s name, struck-out in pen.

[7] The applicant’s outline of submissions in reply, which, as I have noted, were filed by a solicitor, did not admit to the accuracy of the payroll activity summaries attached to Mr Tisdale’s statement. Prior to the allocation of the file to me, the applicant had in late-September and early-August 2011 lodged similar, but not identical, draft orders for the production of documents relevant to the determination of the number of employees employed by the respondent. It may be noted, in this respect, that another member of Fair Work Australia issued an order requiring the production of certain documents (namely, the payroll activity documents in Annexures A and B to the submissions made by Ox Metal Fabrication Pty Ltd, showing the names of all employees on those documents) on 2 September 2011, returnable on 6 September 2011; and, on 5 September 2011, also declined the applicant’s adjournment application. The respondent filed documentation pursuant to the order for production, comprising the two payroll activity summaries with the names of all the individual employees showing. The applicant first viewed the actual names of the employees on the payroll activity statements in the proceedings on 9 September 2011.

[8] As to the number of employees, the applicant’s witness statement dated 31 August 2011 indicated the respondent employed 22 named persons (who were identified in the applicant’s statement only by their nick-names or given names) and five further, unnamed persons. On reviewing the employees’ names on the payroll activity summaries that had been produced under the order for production, the applicant submitted the respondent employed more employees than those named on the payroll activity summaries. In this respect, the applicant gave examples in his submissions of the names of various individuals with whom he had worked, being persons whose names were not recorded in the documentation that had been produced pursuant to the order.

[9] Mr Tisdale submitted the respondent had produced the exact records that had been required pursuant to the order for production. He further submitted the list of employees named in the payroll activity summaries was accurate and complete as to the employees employed by the respondent. Mr Tisdale submitted that although the applicant had stated there were other named people with whom he had worked who were not listed in the payroll activity summaries, other persons not named on the payroll activity summaries were not actually employees of the respondent even though they worked at the premises. In this respect, Mr Tisdale submitted, for example, that neither he personally nor his wife were employees of the respondent; that contractors worked at the premises; and there were employees of companies other than the respondent who worked at the premises. In acknowledging that he does conduct some other businesses at the premises, Mr Tisdale submitted he did not want to go through all his business structure.

Consideration

[10] The applicant was first employed by the respondent on or about 15 October 2010, initially as a casual employee and then as a permanent employee from 15 December 2010; he was dismissed on 4 May 2011. While the respondent’s submissions noted there had been an initial period of casual employment of about eight weeks and then 20 weeks of permanent employment, the respondent estimated the combined period of casual and permanent employment at approximately 28 weeks. No issue was raised in the respondent’s submissions to suggest the applicant was not employed on a regular and systematic basis during the initial period of casual employment or that the applicant did not, during that period, have a reasonable expectation of continuing employment; and he was, thereafter, given permanent employment.

[11] The respondent produced the materials that had been required under an order for production, being the materials sought on the basis, as outlined in the applicant’s written submissions, that would “enable the tribunal to accurately determine the number of employees employed by the respondent as at 4 May 2011.” Proceeding on the basis of the matters as advanced in the applicant’s submissions, the documents so produced indicated the respondent employed 14 employees. While the applicant nominated some other people with whom he had worked who were not named on the payroll activity summaries, his understanding that those persons were employees of the respondent was contraindicated by: (a) the payroll activity summaries; and (b) Mr Tisdale’s confirmation that while there were persons working at the premises other than those identified on the payroll activity summaries, those persons were not employed by the respondent and, hence, this was the reason why such persons were not shown on the respondent’s payroll activity summaries. There was nothing before Fair Work Australia to contest the submissions of Mr Tisdale in such respects; and the applicant could not be expected to know, without further or better information as to business structure, which corporate entities may have employed the other persons with whom he worked at the respondent’s premises.

[12] Neither party raised or relied on any issues related to whether the other persons who were not recorded in the payroll activity summaries may have been employees of associated entities. Section 23 of the Act provides as follows as to the meaning of a “small business employer”:

“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.”

[13] I do not consider there is presently sufficient material before Fair Work Australia as may be required properly to determine the respondent’s small business-related objection to this application. That is, s.23(3) of the Act, specifically and directly, provides that 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 (as to the meaning of associated entity, see s.12 of the Act). Here, it was common ground there were persons other than those named in the respondent’s payroll activity statements who worked at the respondent’s premises as employees of other companies and, pertinently, Mr Tisdale’s submissions as to his business structure were at least suggestive of a view there may be a relevant association. It was indeterminate on what was put by the parties on 9 September 2011, in relation to the proper determination of a jurisdictional question, whether any such persons employed by companies other than the respondent itself relevantly are to be taken into account. In circumstances where the applicant viewed the actual names of the employees on the payroll activity summaries for the first time only on the day of the proceedings after he was granted access to the documentation displaying the names of the respondent’s employees, I consider it would be appropriate to allow the applicant the opportunity to advance any further written submissions he may wish to make in relation to the associated entity issue should he so choose.

[14] It may be the case that the applicant will not file and serve anything further in relation to the (potential) associated entity point but, given the way the proceedings unfolded on 9 September 2011, I think it would be fair as between the parties in relation to the determination of the preliminary issue to at least allow that opportunity. Thus, the following contingent direction is given, only in the event the applicant proposes to avail himself of the opportunity:

The applicant is directed to file with Fair Work Australia and serve on the respondent an outline of submissions and any witness statements and any other material documentary material the applicant intends to rely upon in relation to the discrete question of whether there were employees of associated entities to be taken into account in relation to the respondent’s jurisdictional objection, by no later than noon on 10 October 2011.

[15] If the applicant does not file and serve anything further by noon on 10 October 2011 pursuant to this contingent direction, I foreshadow that I will then proceed to dismiss the application on the basis of what was before Fair Work Australia as at 9 September 2011, i.e., absent any other considerations, the documentary material comprising the payroll activity summaries supports the respondent’s contention it employed fewer than 15 employees when the applicant was dismissed and the applicant’s period of employment of less than one year otherwise was a matter of common ground.

[16] In the event the applicant files and serves any further materials in relation to the associated entity-related issue by noon on 10 October 2011, the respondent will be given the opportunity to respond. Such directions as may be appropriate as to further programming will then be issued in light of any materials that may be filed by the applicant.

[17] The proceedings are adjourned accordingly.

COMMISSIONER

Appearances:

N. Lahoud on his own behalf.

T. Tisdale, Director, for the respondent.

Hearing details:

2011
Sydney:
9 September.

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<Price code C, PR514474>