Wilson Chong v Ouson Group T/A Ouson Pty Ltd

[2019] FWC 5724

[2019] FWC 5724

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Wilson Chong
v
Ouson Group T/A Ouson Pty Ltd
(U2019/3171)

COMMISSIONER GREGORY MELBOURNE, 16 AUGUST 2019

Application for relief from unfair dismissal – jurisdictional objection – minimum employment period (small business).

Introduction

[1] Mr Wilson Chong began working as an Operations Manager for Ouson Group T/A Ouson Pty Ltd (“the Ouson Group”) in May last year. However, after working for the business for a period of just over nine months he was dismissed from his employment in March of this year. He then proceeded to lodge an unfair dismissal application.

[2] However, the Ouson Group has raised a jurisdictional objection in response to the application. It submits that it is a “small business employer,” as defined by s.23 of the Fair Work Act2009 (Cth) (“the Act”), as it employs less than 15 employees and, therefore, Mr Chong has not completed the requisite 12 month minimum employment period that is required in the case of a small business employer, prior to making his application. This decision accordingly deals with the jurisdictional objection concerning whether the Ouson Group is a “small business employer.”

[3] Mr Chong appeared on his own behalf. Ms Danielle Stone, who is currently engaged by the Ouson Group as a contracted HR Manager, appeared on its behalf.

The Issue to be Determined

[4] Section 382 of the Act provides that a person is protected from unfair dismissal at the time of their termination if they are “an employee who has completed a period of employment with his or her employer of at least the minimum employment period.” 1

[5] Section 383 continues to provide that:

“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.” 2

[6] Section 23 sets out the meaning of “small business employer.” It states:

“(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.” 3

[7] The parties do not take issue with the fact that Mr Chong was employed for a period of less than 12 months. However, he claims the Ouson Group was not a small business employer, as defined by the Act, at the time of his termination because it employed 15 or more employees. The Commission is accordingly now required to determine whether it was a small business employer or not. If it finds that it was a small business employer then it follows that Mr Chong has not completed the minimum employment period, as required by s.383 of the Act, and his application must be dismissed. However, if the Commission finds the Ouson Group was not a small business employer then Mr Chong has completed the relevant minimum employment period as he was employed for more than 6 months. In that case his application will be relisted to deal with his substantive unfair dismissal claim. This decision accordingly deals only with the evidence that is considered relevant to the jurisdictional objection raised by the Respondent.

The Evidence and Submissions

Ouson Group

Ms Danielle Stone

[8] Ms Danielle Stone is employed by HR staff n’ stuff and is currently contracted to provide HR services to the Ouson Group. She said Mr Chong’s position was made redundant in March of this year as the position of Operations Manager was no longer required by the business. In addition, the position has not been filled since that time. Her witness statement provided details of the payments made to Mr Chong at the time of his termination, and this involved a gross amount totalling $22,608.03.

[9] Ms Stone also provided a Payroll Register [Summary] dated March 2019 and indicated in her evidence that this detailed all of the individuals employed by the Ouson Group at the time Mr Chong was dismissed. There are eleven names on the summary list. They are as follows:

•  Chong, Wilson;

•  Dong, Xinxin (Devin);

•  Kun, Beatrix Ilona;

•  Lu, James Dao Xian;

•  Ma, Ping (Maggie);

•  Qi, Rong (Betty);

•  Ryan, Christopher John;

•  Wang, Elaine (Zhongyi);

•  Xiang, Wenzhuo (Claire);

•  Yang, Xiaoling (Sally); and

•  Zammit, Steven Paul.

[10] Ms Stone also provided two additional invoices and stated that two of the persons named by Mr Chong as employees were in fact independent contractors providing services to the business, with her evidence indicating that those invoices detailed payments for services rendered. The first invoice was from Haibin CanFixIT and, according to the evidence of Ms Stone, concerned a person by the name of Lei Wang. The second invoice was received from the Daro Property Group Pty Ltd, and Ms Stone indicated that these services were rendered by a person named Mr David Thesis.

[11] She also indicated in her evidence that two other persons named by Mr Chong as employees were also contractors to the business, being Mr Jason Northwood and Mr Leo Bordin. She also stated that Mr Ryan Ouyang was a Director of the business and not an employee, and this was why the names of these individuals did not appear on the Payroll Register Summary.

[12] She also indicated in her evidence that two of the other persons named on the list provided by Mr Chong were not employed by the business at the time he was terminated, and were last employed by the business in January of this year. She referred in this context to Mr Rio Guo, who last worked at the business on 23 January 2019, and Ms Edvina Salkanovic, who last worked on 29 January 2019.

Ouson Group’s Submissions

[13] As indicated, the Ouson Group submits that it had only eleven employees at the time Mr Chong was dismissed from his employment. This included Mr Chong. It also submits that only nine of the fifteen names on the list provided by Mr Chong were in fact employees at the time he was dismissed, and the others were either a Director, independent contractor, or persons who were no longer employed by the business at the time Mr Chong was dismissed. The individuals on Mr Chong’s list that it conceded were employees of the business at the time he was dismissed were Mr Zammit, Mr Chong, Ms Wang, Mr Lu, Mr Ryan, Ms Ma, Mr Dong (named by Mr Chong as “Devin”), Ms Xiang (named by Mr Chong as “Claire”) and Ms Kun.

[14] It also referred to three additional names contained in a further email provided by Mr Chong on 17 June 2019. The first was identified as “Claire” and is already contained on its list being Ms Xiang. The second name, Mr David Thesis, has already been identified as an independent contractor, rather than an employee. The third name, identified only as “Irene,” was a person who was not known to the business.

[15] The Ouson Group continues to submit that it is a small business employer as defined by the Act, and as Mr Chong’s period of service was less than 12 months he has accordingly not completed the required minimum employment period, and is therefore not a person who was protected from unfair dismissal at the time he was dismissed. It accordingly submits that his application should therefore be dismissed.

The Applicant’s Submissions and Evidence

Mr Wilson Chong

[16] Mr Chong indicated in his witness statement that he was called into a meeting by Mr Zammit on 6 March 2018 and told that his employment was to be terminated. He told him that the reason for his termination was not poor work performance, but was due instead to the need to “maintain a healthy profitability.” Mr Chong subsequently received a termination payment, but had ongoing concerns about whether he had been paid the full entitlements due to him on termination, including the superannuation contributions he was entitled to receive.

[17] Mr Chong provided a list of fifteen names of persons that he claimed were employed at the time of his termination. The following names appear on that list:

•  Mr Ryan Ouyang;

•  Mr Steven Zammit;

•  Mr Wilson Chong;

•  Ms Elaine Wang;

•  Mr James Lu;

•  Mr Christopher Ryan;

•  Mr Jason Northwood;

•  Ms Lei Wang;

•  Mr Rio Guo;

•  Mr Leo Bordin;

•  Ms Edvina Salkanovic;

•  Ms Maggie Ma;

•  Devin;

•  Claire; and

•  Beatrix Kun.

[18] Mr Chong also provided three additional names in an email dated 17 June 2019. Two of those individuals were simply identified as “Claire” and “Irene,” with the other name provided being Mr David Thesis. Mr Chong was not able to provide any further evidence in response to the submissions by the Ouson Group that Mr Thesis was actually an independent contractor, and that the person named only as “Irene” could not be identified by the business.

[19] Mr Chong did not provide any further evidence or submissions, when it was suggested that some of the names on the list that he provided were in fact independent contractors providing services to the business, rather than employees. He was also not able to provide any further submissions or evidence, when it was suggested that Mr Guo and Ms Salkanovic had last worked for the business in January of this year, and were not employed at the time his employment was terminated.

Consideration

[20] Mr Chong is clearly unhappy about the circumstances that led to his employment being terminated. He states that he did a lot of good work for the business during the time that he was employed, and had previously left a long-standing position to take on this new role. He also has concerns about whether all entitlements due to him on termination were in fact paid. The business claims, in response, that Mr Chong was made redundant in circumstances where it no longer required his position to be filled. It also claims that he has been paid additional redundancy payments in circumstances where it was not legally required to make these payments. However, as indicated at the outset the Commission is not at this point, dealing with Mr Chong’s substantive unfair dismissal application. It is instead dealing with the threshold issue of whether he was a person protected from unfair dismissal at the time his employment was terminated. This depends on the relevant minimum employment period, which is, in turn, determined by the size of the business.

[21] The Commission has only been provided with a very limited amount of evidence in regard to this matter. It is also acknowledged that it is often difficult for an individual employee to know or understand the nature of the relationships that exist between a business and other individuals, who appear to be associated with the business on a regular and ongoing basis. For example, are those persons Directors of the business, rather than employees, or are they engaged as independent contractors to provide services to the business, rather than being in an employment relationship. It is equally often difficult for an individual employee to provide or obtain evidence about these matters.

[22] However, the Commission has had regard to the evidence that is before it at this point in time. The evidence that is the most informative is the payroll summary provided on behalf of the Respondent, and this evidence was not challenged in any significant way by Mr Chong in terms of it representing a list of the employees of the Ouson Group who were employed at the time he was terminated in March of this year. It indicates that the business had only eleven employees at that time, and Mr Chong was not able to provide any further evidence in regard to the suggestion by the business that a number of the other persons named on his list were either independent contractors, or were no longer employed by the business at the time he was terminated.

[23] Therefore, based on the limited evidence that is now before the Commission I am satisfied, on balance, that the only conclusion the Commission is able to come to at this time is that there were only eleven employees employed by the Ouson Group at the time Mr Chong was terminated. Therefore, it was at the time a “small business employer,” as defined by s.23 of the Act, and Mr Chong was therefore required to have completed a minimum employment period of one year to be entitled to be a person protected from unfair dismissal in those circumstances. Given his acknowledgement that he was only employed for a period of nine months it follows that at the time he was dismissed he had not served the relevant minimum employment period required to be a person protected from unfair dismissal. It follows as a consequence that his unfair dismissal application must be dismissed.

COMMISSIONER

Appearances:

W Chong, Applicant.

D Stone for the Respondent.

Hearing details:

2019.

Melbourne:

June 21.

Printed by authority of the Commonwealth Government Printer

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 1   Fair Work Act 2009 (Cth) at s.382(a).

 2   Fair Work Act 2009 (Cth) at s.383.

 3   Fair Work Act 2009 (Cth) at s.23.