Nick Nittos v Mitchbiz Nominees T/A Kitchens U Build

[2014] FWC 6325

[2014] FWC 6325

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Nick Nittos
v
Mitchbiz Nominees T/A Kitchens U Build
(U2014/7120)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 12 SEPTEMBER 2014

Application for relief from unfair dismissal.

[1] Mr Nick Nittos claimed that he had been unfairly dismissed by Mitchbiz Nominees trading as Kitchens U Build. 1

[2] It was not disputed that Mr Nittos had not worked for Mitchbiz for 12 months. Mitchbiz objected to Mr Nittos’s application on the basis that Mitchbiz was a small business and therefore Mr Nittos had not served the minimum employment period. 2

Is Mitchbiz a small business?

[3] Mitchbiz submitted a list of its employees. In addition, it submitted payroll activity statements and details of superannuation payments made to employees. Those documents supported Mitchbiz’s contention that at the relevant date it employed less than 15 employees.

[4] Mr Nittos submitted that there were two other persons employed by Mitchbiz. One of the persons was the father of Mitchbiz’s director. Evidence given at the conference established that while he did do some work for the business he was not an employee of the business.

[5] Mr Nittos also submitted that Mr Pierce was an employee. Mr Pierce was not called to give evidence. Mr Mitchell, Mitchbiz’s company director, gave evidence that Mr Pierce was a contractor. Mr Pierce has a business called Triton Cabinet and D&S Plastering.

[6] Mr Mitchell said that, in addition to supplying kitchens for customers to install themselves, Mitchbiz provided an installation service and Mr Pierce was one of the contractors that Mitchbiz used. Mr Pierce was paid by the job and if there was any rectification work required, as a result of Mr Pierce’s errors, he was not paid any additional monies. He said that Mr Pierce was offered jobs and he was free to accept or reject the work. Mr Pierce did not work out of Mitchbiz’s premises and they did not provide him with any equipment. He was not required to apply for leave and he had his own employees. Mr Mitchell said that at one time Mr Pierce was hourly paid when he worked for his brother Adrian who was a contractor to Mitchbiz. After Adrian stopped working for Mitchbiz, Mr Pierce then worked as a contractor for Mitchbiz,

[7] Mr Nittos said that he was told by Mr Pierce that he was paid by the hour and received most of his work from Mitchbiz. He said that Mr Pierce was paid to do rectification work and was not allowed to go on leave without Mr Mitchell’s agreement. Mr Nittos said that Mr Mitchell was able to veto who Mr Pierce employed.

[8] Mr Nittos did not call any other evidence to support his submission that Mr Pierce’s contracting arrangement with Mitchbiz was a sham. I am unable to conclude on the evidence before the Commission that Mr Pierce is an employee of Mitchbiz.

[9] Mr Nittos also submitted that Jo from J&R Floors, who has his own business which operates out of the same building, was also an employee. Mr Mitchell explained that this person had done some work at no cost to Mitchbiz and he was not an employee of Mitchbiz. Again, no evidence was called to support Mr Nittos’s submission that this person was an employee.

[10] I prefer Mr Mitchell’s evidence. He had direct knowledge of Mitchbiz’s arrangement with Mr Pierce and Jo. Mr Nittos relied upon what others had told him.

[11] On the evidence before the Commission, Mitchbiz employed less than 15 employees.

[12] Mr Nittos submitted that Stuart & Rowney Pty Ltd, which operates Kitchens U Build Moorabbin, is an associated entity of Mitchbiz and therefore its employees should be included in the count of employees. One of the directors of Stuart & Rowney is Mr Mitchell’s sister.

[13] Section 50AAA of the Corporations Act 2001 defines an associated entity.

Are Mitchbiz and Stuart & Rowney Pty Ltd related bodies corporate?

[14] Related bodies corporate are defined at s.50 of the Corporations Act 2001.

[15] There is no evidence before the Commission that Mitchbiz and Stuart & Rowney are related bodies corporate.

Does Mitchbiz control Stuart & Rowney or vice versa?

[16] Mr Nittos submitted that the two businesses trade under the same name and that Mitchbiz provides warehousing and other services to Stuart & Rowney. He submits that Mitchbiz controls Stuart & Rowney.

[17] Control is defined at s.50AA of the Corporations Act 2001.

[18] The mere fact that the two companies operate under the same trading name, and share resources does not mean that one company controls the other. There were no formal arrangements between the two companies. Mr Mitchell gave sworn evidence that his company did not control Stuart & Rowney or vice versa.

[19] It was his unchallenged evidence that Mitchbiz did not charge Stuart & Rowney for the use of the business name; Stuart & Rowney is invoiced for any cabinets it orders; there is no franchise agreement and no commitment from Stuart & Rowney to purchase products from Mitchbiz; Stuart & Rowney is responsible for its own income and expenses and is not directed by Mitchbiz in how it performs work.

[20] Mr Nittos submitted that the companies share a website and advertising and Mitchbiz controls Stuart & Rowney and the direction it goes in. He submitted that Stuart & Rowney could not exist without Mitchbiz.

[21] Mr Mitchell accepted that the two companies shared a website and advertising. He provides warehouse services to Stuart & Rowney and it was charged for that service. It was his evidence that Stuart & Rowney operated a kitchen building business before the companies shared advertising, website and warehousing and would continue to do so if Mitchbiz ceased to operate.

[22] Mr Nittos submitted that the companies must have verbal agreement to work in conjunction with one another. He submitted that there has to be a link or common goal. He submitted that Mitchbiz would be able to stop Stuart & Rowney from using the name. He submitted that Stuart & Rowney work to Mitchbiz’s business scheme.

[23] Mr Nittos did not call any evidence to support his submissions or to contradict Mr Mitchell’s evidence.

[24] Mr Mitchell’s evidence satisfies me that Mitchbiz does not control Stuart & Rowney or vice versa.

[25] There was no evidence that either company had a qualifying investment in the other company. There was no submission that there was a third entity which controlled both companies.

[26] For these reasons I find that Mitchbiz and Stuart & Rowney are not associated entities and therefore the employees of Stuart & Rowney are not included in the count of Mitchbiz’s employees.

[27] I find on the evidence that Mitchbiz is a small business and because Mr Nittos had less than 12 months service with Mitchbiz he is not protected from unfair dismissal and his application is dismissed.

DEPUTY PRESIDENT

 1 See s.385 of the Fair Work Act 2009

 2   See s.383 and s.23 of the Fair Work Act 2009

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