Niraj Akhil v Guardian Pty Ltd
[2024] FWC 1013
•1 JULY 2024
| [2024] FWC 1013 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Niraj Akhil
v
Guardian Pty Ltd
(U2024/1788)
| DEPUTY PRESIDENT BELL | MELBOURNE, 1 JULY 2024 |
Application for an unfair dismissal remedy - jurisdiction objection - minimum employment period - respondent a small business employer – application dismissed.
Mr Niraj Akhil has made an application for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Cth) (Fair Work Act). Mr Akhil started employment with the respondent on 12 April 2023 in the role of Business Development Manager. He was dismissed with effect on 2 February 2024.
In the respondent’s Form F3, it raised jurisdictional objections on the grounds of ‘minimum employment period’, ‘genuine redundancy’ and that the dismissal was consistent with the Small Business Fair Dismissal Code. This decision deals with the first of those objections.
The issue – the minimum employment period
The respondent is a technology company, whose business includes providing an application called ‘Lifestream’.
A person cannot obtain a remedy for unfair dismissal unless they were ‘protected from unfair dismissal’ at the time they were dismissed: s 390(1). An employee is not ‘protected from unfair dismissal’ unless, at the time they were dismissed, they had completed a period of employment with his or her employer of at least the ‘minimum employment period’: s 382(a). For a ‘small business employer’, the minimum period is 12 months. A ‘small business employer’ is an employer that has, at a particular time (in this case, the date of dismissal), fewer than 15 employees: s 23 of the Fair Work Act.
When counting employees, all employees of ‘associated entities’ of the employer are to be included.
It was not in dispute that Mr Akhil was employed for more than six months but less than 12 months. The issue in dispute was whether the employer, was a small business employer, i.e., whether it and any associated entities had fewer than 15 employees at the time Mr Akhil was dismissed.
Procedural matters
On 15 March 2024, I issued directions for the filing of evidence and submissions. I also listed the matter for a mention hearing, scheduled for 21 March 2024.
The directions issued included an extract of s 50AAA of the Corporations Act, which defines what is an “associated entity” for the purposes of that term in ss 12 and 23(3) of the Fair Work Act. The parties had their attention drawn to that definition.
At the mention hearing, Mr Akhil was represented by Mr Kevin Reddy, a paid agent with Australian Dismissal Services, with permission to appear having been granted. As the parties remained in disagreement on whether there were 15 or more employees of the respondent or its associated entities, Mr Akhil’s representative agreed to provide the respondent with a list of the names of people Mr Akhil asserted were employed by the respondent or an associated entity. That step was completed the following day and allowed the employer to more efficiently provide evidence on the key issue in dispute. The parties otherwise complied with the directions by filing the evidence they wished to rely upon.
At the determinative conference itself, Mr Akhil appeared on his own behalf. The directors of the respondent, Messrs Andrew Leigh (Director and Chief Executive Officer) and Cameron Fletcher (Chief Operating Officer) appeared for the respondent. Each of those three prepared short statements. The respondent’s witnesses were not required to answer questions in cross-examination and Mr Akhil was only required to clarify one non-contentious matter.
Findings
Mr Akhil provided a statement listing all the employees he says “have an integral role in the operation of Guardian Pty Ltd”. Mr Akhil listed a number of employees. Ten people were listed in the ‘Melbourne Office’. A further six people were listed as the ‘Tech Team (ExpertStack Pty Ltd) - India’ and another in ‘Tech Team – Vietnam’. For the seven ‘Tech Team’ individuals, Mr Akhil confirmed his understanding that those people were employees of ExpertStack Pty Ltd (ExpertStack).
Each of Messrs Fletcher and Leigh gave evidence about the corporate structure of what I describe as the Guardian group, which includes the respondent and two wholly-owned subsidiaries. They state that there are only eight employees for the total group, plus two contractors. For the eight employees, a payroll extract was produced containing a list of their names.
Two of those employees are directors of ExpertStack. I will return to this matter.
Mr Leigh also gave evidence of the following further matters, in response to questions I asked:
· Mr Leigh is a shareholder of the respondent. There are a number of other shareholders.
· Two of the respondent’s employees are directors of ExpertStack and both of whom have a small shareholding in the respondent, but only as part of an ‘ESS’ shareholding.
· Most staff have a small number of shares, on an employee share scheme incentive arrangement. These amounts were described as ‘minimal’ compared to the overall shareholding.
· ExpertStack is a third-party contract provider of labour services. The relationship between the respondent group and ExpertStack is only contractual. There are no common directorships, and no common shareholding other than the ESS arrangements described above.
· The respondent has no financial investment or other interest in ExpertStack.
· Mr Leigh does not have any insight as to how ExpertStack’s financial or operating policies were made.
Mr Leigh was not otherwise challenged on any of the above matters and, having no reason for me to doubt their accuracy, I accept them.
At the determinative conference, Mr Akhil stated that, having had the benefit of hearing the evidence of the two directors, he now has a better understanding of the legal structure. In an oral submission, he accepted that ExpertStack has nothing to do with Guardian Pty Ltd (at least, I assume, in a sense that would establish it as an ‘associated entity’ of the respondent group companies.)
I am satisfied that ExpertStack is not an associated entity of any entity of the respondent group companies and, therefore, the employees of ExpertStack are not to be included in the headcount calculations for the respondent group companies. I make this finding on the evidence before me, although I take comfort from the fact that Mr Akhil had all but conceded that conclusion by the end of the determinative conference.
When the list of ‘ExpertStack’ employees are excluded from the calculations, the parties had a common list of eight individuals as employees of the respondent. Mr Akhil had two further names on his list, both of whom were described by the respondent as contractors (not employees).
Consideration
Whether or not the final number is eight or ten employees, it makes no difference to the end result: the respondent is a small business employer with fewer than fifteen employees at the time Mr Akhil was dismissed, including employees of associated entities.
Having found that there were fewer than fifteen employees within the meaning of s 23(4) of the Fair Work Act, it follows that the respondent was a “small business employer” for the purpose of s 23(1) of the Fair Work Act.
As it was not in dispute that Mr Akhil had not been employed for the “minimum employment period” of 12 months at the time of his dismissal, Mr Akhil was not a person “protected from unfair dismissal” at the time he was dismissed: 390(1).
The respondent’s jurisdictional objection regarding the minimum employment period is upheld and Mr Akhil’s application for an unfair dismissal remedy must be dismissed.
An Order[1] to this effect will be issued in conjunction with this decision.
DEPUTY PRESIDENT
Appearances:
N Akhil on his own behalf
A Leigh and C Fletcher from the Respondent
Determinative Conference details:
2024.
Melbourne (by video link via Microsoft Teams):
April 18.
[1] PR776598
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