Siggers v Tasty Trucks Australia Pty Ltd Tasty Trucks
[2020] FWC 5956
•13 NOVEMBER 2020
| [2020] FWC 5956 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394
Siggers
v
Tasty Trucks Australia Pty Ltd Tasty Trucks
(U2020/7612)
DEPUTY PRESIDENT LAKE | BRISBANE, 13 NOVEMBER 2020 |
Application for relief from unfair dismissal - whether applicant a person protected from unfair dismissal - minimum period of employment - transferring employee - old employer and new employer not related entities - applicant given written notice that period of service with old employer would not be recognised - minimum period of employment not completed - applicant not a person protected from unfair dismissal - application dismissed.
Background
[1] An application was made by Mr Siggers (the Applicant) for a remedy for unfair dismissal pursuant to s 394 of the Fair Work Act 2009 (the Act). The applicant was dismissed from his employment by Tasty Trucks Australia Pty Ltd (the Respondent). The Respondent objected to the application on the basis that the applicant had not completed the minimum employment period within the meaning of s 383 of the Act.
[2] This decision deals with that objection.
Relevant Legislation
[3] Section 390(1) of the Act sets out the circumstances in which the Commission may grant a remedy by way of reinstatement or compensation for unfair dismissal. It is set out as follows:
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
[4] Section 396 of the Act sets out a number of matters which the Commission must consider before turning to the merits of an unfair dismissal application, including whether the Applicant is a person protected from unfair dismissal. Section 396 is expressed as follows:
396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
[5] The application was lodged within the 21-day statutory time limit imposed by s 394(2) of the Act. The Respondent is not a small business as defined and therefore sub-section (c) is not relevant. The applicant’s dismissal was not a case of genuine redundancy, rendering sub-section (d) irrelevant.
[6] Accordingly, the sole matter to be considered, prior to turning to the merits of the application, is whether the Applicant is a person protected from unfair dismissal.
[7] Section 382 of the Act sets out when a person is protected from unfair dismissal:
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.
[8] Section 382(b) is not contentious and is satisfied, given the Applicant’s annual rate of earnings is below the high income threshold. Therefore, the only question is whether the Applicant completed the minimum employment period. Sections 383 and 384 set out the meaning of ‘minimum employment period’ and the method by which a period of employment is calculated.
[9] The sections are expressed as follows: (my emphasis)
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.
[10] Where there has been a transfer of business and the employee is a transferring employee and the relevant entities are not associated entities, then a transfer of employment will have occurred, pursuant to s 22(7)(b) of the Act.
[11] Where there is a transfer of employment, s 22(5) creates a prima facie obligation on the new employer to include the period of service with the old employer. Only when the criteria of s 384(2)(b) are satisfied is that obligation extinguished.
[12] A proper construction of s 384(2)(b) requires consideration of whether:
• the employee is a transferring employee;
• there has been a transfer of business from an old employer to a new employer;
• the old and new employer were not associated entities at the time the employee became employer by the new employer; and
• the employee was notified in writing that the previous period of service would not be recognised.
[13] If all the above criteria required by s 384(2)(b) are satisfied then the period of service with the old employer does not contribute towards the employee’s period of employment with the new employer.
[14] In constructing s384(2)(b) the phrases “transferring employee” and “transfer of business” must be considered. They are contained in The Dictionary (s 12 of the Act) and require reference to ss 311(2) and s 311(1), respectively:
transferring employee, in relation to a transfer of business: see subsection 311(2).
transfer of business: see subsection 311(1).
[15] Section 311 of the Act states:
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
(3) 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.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
Respondent’s Submissions
[16] The Respondent filed written submissions that outlined the Applicant was a casual employee of a company Queensland Commercial Catering Pty Ltd (QCC) where he worked in a commercial kitchen preparing food.
[17] On 21 March 2020, the Respondent purchased the assets of Foodline Pty Ltd, as well as the QCC business – they were both owned by the same directors.
[18] The Respondent and QCC were not related entities, within the meaning of s 50AAA of the Corporations Act 2001. Therefore, the period of service with the old employer would not be recognised in accordance with s 384(2)(b)(ii) of the Act.
[19] Employees of QCC were provided termination letters. The relevant letter of termination was dated 20 February 2020 and indicated that the termination was effective immediately. As the Applicant was a casual, there was no further payment.
[20] The Respondent had previously undertaken interviews with the employees and contractors of QCC and determined to hire a number of the previous employees. Those that were offered employment were provided letters of offer and new contracts of employment.
[21] The offer letters explicitly stated:
1. Position
1.1 Your start date will be 21/03/2020. With the exception of long service leave, this commencement date will be recognised for all purposes regarding your employment service. Your original hire date of 06/12/2018 with Queensland Catering Pty Ltd will be recognised for long service leave purposes only. Any past liability will remain with Queensland Commercial Catering Pty Ltd.
1.2 Your employment will be casual.
2. Probation
2.1 A probation period will apply for the first 6 months of your employment. During this time we will assess your progress and performance in the position.
[22] The Respondent relied upon this as a notification pursuant to s 384(2)(b)(iii) of the Act; the subsequent assertion being that the minimum employment period was effectively reset at the commencement of the employment under the Respondent.
[23] The Respondent’s position is that:
• the Applicant was a ‘transferring employee’ in relation to a ‘transfer of business’ (s 384(2)(b)(i));
• the Respondent and QCC were not associated entities (ss 12, 384(2)(b)(ii)); and
• that the Applicant had been notified in writing that his previous service with QCC would only count for the purposes of long service leave and did not count for the purposes of determining his period of employment (s 384(2)(b)(iii)).
[24] It followed that the Applicant’s period of employment with QCC fell under the exception set out in s 384(2)(b) of the Act. This would mean that any service with QCC could not be considered as part of the applicant’s period of employment with the respondent.
[25] Accordingly, the Applicant was not a person protected from unfair dismissal as he did not satisfy the minimum employment period stipulated by s 383(a) of the Act (s 382(a)).
[26] The Applicant provided no substantive views as to the jurisdictional objection, but did not dispute the information put forward by the Respondent.
Consideration
[27] In determining this application, I must ascertain the Applicant’s period of employment with the Respondent. If the Applicant’s service with the old employer is included, then he will satisfy the minimum employment period and will be protected from unfair dismissal. Section 384(2)(b) sets out numerous criteria, which I will consider in turn.
Section 384(2)(b)(i) - was the Applicant a transferring employee?
[28] It is not contentious that the criteria set out in section 311(1)(a), (b) and (c) have been satisfied in this case. The Applicant was terminated in his employment with the old employer and then commenced work with the Respondent upon their acquisition of the business to continue the work he had previously performed. This occurred within a period of three months.
[29] I am satisfied the Applicant is a transferring employee as defined by s 311(2).
Section 384(2)(b)(i) - was there a transfer of business?
[30] A primary issue for determination is whether s 311(1)(d) has been satisfied, and subsequently, whether there was a transfer of business pursuant to s 311(1). In order to decide this, it is necessary to consider the provisions of ss 311(3) to (6) to ascertain if any of them have been met. In this case, s 311(3) is the only potentially relevant subsection to consider.
[31] In the current circumstances, where the new employer has purchased the business from the old employer, there is clearly a transfer of assets. Therefore, s 311(1)(d) is satisfied and I find there has been a transfer of business as defined by s 311(1).
[32] I am satisfied that both ss 384(2)(b)(i) and 22(7) are satisfied. There has been a transfer of business and a transfer of employment under the Act.
Section 384(2)(b)(ii) – were the old employer and new employer associated entities?
[33] There is no evidence before me that suggests that the purchase of QCC was not an arm’s length transaction. There is no indication of control or significant influence between the entities. Therefore, I am satisfied that that the old employer and the new employer were not associated entities under s 50AAA of the Corporations Act 2001.
Section 384(2)(b)(iii) – did the new employer inform the employee in writing before employment commenced that the period of service with the old employer would not be recognised?
[34] The Applicant did not contest the facts set out above or deny that he had received the relevant information. Section 384(2)(b)(iii) only requires the new employer to inform the employee, in writing, before the new employment, that his previous service was not recognised and this was done. The Act does not prescribe a criteria that the employee acknowledge this fact, that it must be specifically brought to their attention, or that they agree.
[35] In Gregory v Shaver Shop Pty Ltd [2016] FWC 1323, Gooley DP found that where there is a transfer of business the employer is obliged to make it clear to the transferring employee whether service with the old employer will be recognised. This is important for two reasons. First, the employee will know that they will not be protected from unfair dismissal for the qualifying period and second, it will assist the employee to determine if he or she refuses the job offer whether he or she is entitled to redundancy pay. For these reasons the written advice to employees should be clear. 1
[36] Clause 1.1 of the Letter of Engagement informs the Applicant that his previous period of employment will not be recognised, except for the purposes of long service leave accrual. It is clear and I am satisfied that the Respondent has complied with the obligation under s 384(2)(b)(iii).
Sections 382(a) and 383(a) - was the Applicant a person protected from unfair dismissal; did they satisfy the minimum employment period?
[37] By virtue of the operation of subsection 384(2)(b) of the Act, the Applicant’s period of employment with the old employer is excluded. It cannot be recognised as a period of employment relevant to the minimum employment period for an employee to be protected from unfair dismissal.
[38] At the time of their dismissal, the Applicant’s period of employment was not at least the minimum period as prescribed by section 383 of the Act. The Applicant was not a person protected from unfair dismissal and the application must be dismissed.
[39] Following this the applicant is not a person protected from unfair dismissal. The application must be dismissed. I Order accordingly.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR724337>
1 Gregory v Shaver Shop Pty Ltd [2016] FWC 1323, [18].
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