Yu-Ying Huang v Ballarat Hy Motel Pty Ltd T/A Quality Inn & Suite the Menzies
[2018] FWC 5657
•12 SEPTEMBER 2018
| [2018] FWC 5657 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Yu-Ying Huang
v
Ballarat Hy Motel Pty Ltd T/A Quality Inn & Suite The Menzies
(U2018/6327)
| Commissioner Wilson | MELBOURNE, 12 SEPTEMBER 2018 |
Application for an unfair dismissal remedy – jurisdictional objection – minimum employment period – small business dismissal code – transfer of business.
Mr Yu-Ying Huang commenced employment at a Ballarat motel known as the Quality Inn & Suite The Menzies, or variants of that name, on or around about April 2017 and continued until he was dismissed on 10 June 2018. On 19 June 2018 Mr Huang lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) claiming that he had been unfairly dismissed by Ballarat Hy Motel Pty Ltd T/A Quality Inn & Suite The Menzies (Ballarat Hy Motel).
On 13 July 2018 Ballarat Hy Motel raised three jurisdictional objections to Mr Huang’s application. The first being that Mr Huang’s dismissal was a case of genuine redundancy. The second that Mr Huang’s dismissal was in accordance with the Small Business Fair Dismissal Code and the third being that because Ballarat Hy Motel is a small business that Mr Huang is not a person protected from unfair dismissal because he had not served at the time of his dismissal the minimum employment period of 12 months as provided for under s.386 of the Act.
This decision examines the question only of whether Mr Huang has completed the minimum employment period and is thereby entitled to pursue his application to a merits hearing at which time the matters of genuine redundancy and consistency with the dismissal with the Small Business Fair Dismissal Code would be heard and determined. However while this decision is restricted to consideration of the minimum employment period it is axiomatic to the consideration that findings may need to be made by me in relation to the Respondent’s status as a small business employer, as that term is defined within s.23 of the Act, in order for the minimum employment period to be determined.
As set out below, my finding is that Mr Huang has completed the minimum employment period and was thus at the time he was dismissed a person protected from unfair dismissal.
LEGISLATION
A person is protected from unfair dismissal if they meet the following criteria, set out in s.382 of the Act:
“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 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.
The definition ascribed to the minimum employment period is provided in s.383:
“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.
Relevant to this decision, are the terms of s.384 of the Act and the definition of period of employment:
“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.
Section 311 relevantly provides the following in relation to transferring employees:
“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.”
[(4), (5) and (6) omitted]
The meanings of “service” and “continuous service” are defined within s.22 of the Act, with s.22(7) providing the circumstances in which a transfer of employment occurs, and s.22(5) providing that if there is a transfer of employment, service with a first employer counts as service with the second, albeit that the time between the two periods may not be counted as service. Section 22(7) is in the following terms:
“Meaning of transfer of employment etc.
(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:
(a) the following conditions are satisfied:
(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;
(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or (b) the following conditions are satisfied:
(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;
(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.
Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.”
BACKGROUND
The matter was the subject of a jurisdictional hearing before me on Friday, 7 September 2018. The Applicant was assisted by a support person, Luke Tonkins. The Respondent was represented by Haoxiang Zhu who is the owner of Ballarat Hy Motel.
The question that requires determination in these matters is whether, for reason of the provisions of the Act in relation to transfer of business, Mr Huang is a person protected from unfair dismissal. This may come about if he is deemed to have completed the applicable minimum employment period for reason that he can be found to be a “transferring employee” from the former operator to the new. In this regard, it is to be noted that the minimum employment period is either six or twelve months of continuous employment, depending on whether Ballarat Hy Motel is a small business employer.
The evidence before the Commission consists essentially of the things said by Mr Huang and Mr Zhu in the course of the hearing conducted by me, as well as the documents that each have provided to the Commission thus far.
Arising from that material it is evident that Ballarat Hy Motel contracted to take over the running of The Menzies at some stage in mid-2017, and that the product of the contract would be that the existing operator, Blanc Enterprises Pty Ltd (Blanc Enterprises), would cease operation of the business and that operation would be taken over by Ballarat Hy Motel Pty Ltd, the Respondent in these proceedings. It is accepted in the evidence that this change in operation was with effect from 7 August 2017 and that the original operator, Blanc Enterprises, withdrew on the day before.
CONSIDERATION
Whether a small business employer
Determination of the question of whether the Respondent is a small business employer within the meaning of s.23 of the Act is necessary in order to determine which of the two minimum employment period supply to the Respondent; six months or 12 months.
Mr Huang endeavoured to put forward that the Respondent was not a small business employer, but one with more than 15 employees, both by virtue of the number of people working for Ballarat Hy Motel Pty Ltd as well as people working for what he said was an associated entity.
Mr Huang contended that the count of employees should include people working at another Ballarat hotel, The Heritage on Lydiard (The Heritage), for the reason that there is an associated entity relationship between the business operated by Mr Zhu and The Heritage.
Consideration of Mr Huang’s evidence as well as that of Mr Zhu does not reasonably lead to the conclusion that Ballarat Hy Motel Pty Ltd and The Heritage of Lydiard are associated entities. In particular Mr Zhu’s evidence is that while there is a cooperative relationship between the two businesses, including that employees at times refer customers between each property, there is no formal relationship between the two businesses, certainly not one that would give rise to a finding that they were associated entities. While Mr Zhu was, for a time a Director of the company that operates The Heritage, his explanation about that matter, which I accept, is that he was asked to be a Director and otherwise help out with the operation of the business for a short time because he knew the owner socially, for reasons including that they both had young children. As a result I do not take into account employees of The Heritage in assessing whether Ballarat Hy Motel is a small business employer.
Mr Huang’s evidence to the Commission included a list of 15 potential employees to be taken into account of whom four worked at The Heritage. The other 11 employees worked directly for The Menzies or for the Japanese restaurant operating within The Menzies, known as Asahi. There was some possibility that one of the people named in Mr Huang’s evidence whom worked for The Heritage also worked as a cleaner at The Menzies, however the evidence is not conclusive on the matter. The evidence before the Commission, which I take into account, included that the Asahi restaurant is operated by the Ballarat Hy Motel Pty Ltd. While Mr Zhu endeavoured to put forward that the Asahi business is separate to that of The Menzies and that Asahi employees should therefore not be included in the count required for ascertainment of whether the Respondent is a small business employer, I do not find that such an argument has merit.
Mr Zhu moreover contended that at least two of the five people indicated as working for the Asahi restaurant were not employees, but independent contractors and that another one of the people mentioned was not an employee at the time Mr Huang was dismissed, but instead someone who provided assistance to the motel in return for being provided with board and lodging.
The product of this evidence is a finding that Ballarat Hy Motel Pty Ltd employed between 9 and 11 employees at the time Mr Huang was dismissed.
As a result the evidence leads to a finding that at the time Mr Huang was dismissed from employment, Ballarat Hy Motel Pty Ltd was a small business employer within the meaning of s.23 of the Act. Accordingly it was necessary for Mr Huang to have completed at least 12 months employment in order to be a person protected from unfair dismissal.
Whether minimum employment period served
Mr Huang says the following in his witness statement about the change of operator and how he came to be employed, which I accept as accurate:
“Haoxiang “Mark” Zhu (Ballarat Hy Motel P/L) approached me in September 2016, said he is buying Quality Inn The Menzies and offered me a job to manage The Menzies. And I will be trained by Judy White and Anthony White (Blanc Enterprises P/L) for 2 weeks before he took over The Menzies.
I started training with Judy White and Anthony White under Haoxiang “Mark” Zhu’s request for 2 weeks in March and finished in April. The estimated day of settlement was in April.
Unfortunately, for some reason, the settlement date had been delayed several times.
Since then, I helped out Judy and Anthony, so they could do things together like house hunting, watching footy in friends’ house, going to concerts, bike riding and going to Melbourne…etc.
…
I covered front desk duty since their previous receptionist had left for another full-time job in post office, and they gave me some cash for the work I did.
…
In May, I heard from Judy, Anthony and Mark that landlord was reluctant to sign the lease. The settlement day was unclear.
My training was finished, but Judy and Anthony still needed a receptionist. Therefore, they were wondering if I can still come to The Menzies till settlement day. Mark agreed with the employment as I could get more familiar with motel managerial duty while working for Judy and Anthony. Mark didn’t inform in writing before I started employment with him that a period of service with Judy White and Anthony White would not be recognised.
One day around May, Anthony asked for my bank detail and gave me a tax file number declaration form to fill out, that’s where I think I was officially employed. After the day I filled out the form, Anthony started transferring the wages to my bank account instead of giving me cash.”[1]
Mr Huang’s oral evidence to the Commission is consistent with this account. In addition to the matters set out above Mr Huang recollected that his duties under Blanc Enterprises were in the nature of training and working largely as a receptionist. He said that he worked for up to eight hours per shift and that he worked continuously for Blanc Enterprises from at least mid-May until 6 August 2017, other than for about a week when he had an illness that prevented him from working. His evidence about working for Ballarat Hy Motel is that his employment with that company commenced the following day on 7 August 2017 and that upon being employed by Ballarat Hy Motel his duties changed only marginally, with the most notable differences being that he was the full-time Motel Manager as well as that he was able to live on site, an arrangement which commenced on 6 August 2017.
A determination in favour of the Applicant requires a finding that he is a transferring employee in the manner set out in s.311 of the Act and that his service is continuous service within the meaning of s.22 of the Act.
Determination of whether or not an employee is a transferring employee is a matter dealt with in s.311(2), which in turn requires the provisions of s.311(1)(a), (b) and (c) to be satisfied.
An analysis of the circumstances of the matter allow the following findings:
· Mr Huang worked in the business known as The Menzies continuously between mid-May 2017 until 6 August 2017, during which time his employer was Blanc Enterprises Pty Ltd. While that employment was on a casual basis, the work with Blanc Enterprises was regular and systematic employment within the meaning of the Act;
· Mr Huang continued to work in the business known as The Menzies from 7 August 2017, when he commenced employment with Ballarat Hy Motel Pty Ltd, until his termination on 10 June 2018;
· The work performed by Mr Huang for Ballarat Hy Motel Pty Ltd is the same, or substantially the same as the work he performed for Blanc Enterprises Pty Ltd.
As a result, I find that Mr Huang was a transferring employee within the meaning of s.311(2).
It is also germane to consider whether there has been a transfer of business in the manner set out within s.311(1). My findings above, in relation to the question of the Applicant being transferring employees, satisfies the provisions of s.311(1)(a), (b) and (c), which then leaves s.311(d) for consideration, which deals with whether there is a connection between the old and new employer of one of the types described in ss.311(3) - (6).
In this regard, I find that there is a connection between the old employer, Blanc Enterprises, and the new employer, Ballarat Hy Motel Pty Ltd, of the nature set out in s.311(3), which refers to there being a transfer of assets from the old employer to the new employer. Relevantly, and as a result of an arrangement between the two entities, Ballarat Hy Motel Pty Ltd owns or has beneficial use of some or all of the assets owned beneficially used by Blanc Enterprises, and which relate to the transferring work.
Accordingly, the elements of s.311 have been satisfied. There was a transfer of business and the Applicant is a transferring employee.
The question of whether the Applicant’s service is continuous service requires consideration of s.22 of the Act. That section provides a general meaning of the term in s.22(1), and a general proposition within s.22(2) about periods of leave that will be excluded from continuous service:
“(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).
(2) The following periods do not count as service:
(a) any period of unauthorised absence;
(b) any period of unpaid leave or unpaid authorised absence, other than:
(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or
(ii) a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or
(iii) a period of leave or absence of a kind prescribed by the regulations;
(c) any other period of a kind prescribed by the regulations.”
The further subsections of s.22 are not directly relevant to the determination of this matter, other than s.22(7) which defines the meaning of “transfer of employment” and which is set out above.
The evidence before the Commission is that the Applicant worked continuously for The Menzies, as operated by Blanc Enterprises Pty Ltd and Ballarat Hy Motel Pty Ltd, from at least mid-May to the date of his dismissal on 10 June 2018. There is no evidence either of Mr Huang having taken leave of the type contemplated in s.22(2) or otherwise having broken their period of service. Similarly, there is no evidence that Mr Huang worked other than continuously for the two entities operating The Menzies.
Those matters lead to a finding that Mr Huang’s continuous service is a period of not less than 12 months.
As a result of this analysis, I find that the Applicant, Mr Huang, is a person protected from unfair dismissal, since he has completed the minimum employment period. The continuous service of Mr Huang the period of his entire employment with Blanc Enterprises and Ballarat Hy Motel, since he was a transferring employee within a business arrangement that was a transfer of business.
This matter will now be reassigned to the Commission’s Unfair Dismissal Case Management Team to be dealt with in the usual manner.
COMMISSIONER
Appearances:
Mr Yu-Ying Huang and Mr Luke Tonkin on behalf of the Applicant
Mr Zhu Haoxiang for the Respondent
Hearing details:
2018.
7 September;
By Telephone.
<PR700212>
[1] Exhibit A2, Witness Statement of Yu Ying “Richard” Huang.
Printed by authority of the Commonwealth Government Printer
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