1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Melanie Millington
v
Traders International Pty Ltd
(U2013/8345)
DEPUTY PRESIDENT ASBURY BRISBANE, 10 DECEMBER 2013
Application for unfair dismissal remedy - Jurisdiction - The respondent was not the employer
of the applicant - Transmission of business.
BACKGROUND
[1] Ms Melanie Millington applies for an unfair dismissal remedy under s.394 of the Fair
Work Act 2009 (the Act) in relation to her dismissal by Traders International Pty Ltd. The
application is met with an objection outlined in a series of correspondence from the Director
of Traders International, Mr Lachlan Elsworth, on the ground that Ms Millington was not
employed by Traders International at the point of her dismissal. Essentially Mr Elsworth
contends that prior to her dismissal, Ms Millington was transferred to another company,
Teach Me To Trade Pty Ltd, and that a Director of that company, Mr Anthony Eales
dismissed Ms Millington.
[2] Mr Elsworth made frequent references in his correspondence to advice he has received
from his legal team and barristers in formulating his objection. Given the complexity of the
matters in issue, and that no issue of fairness between the parties arises, Ms Millington was
given permission to be represented by a lawyer pursuant to s.596(2)(a) and (c) of the Act.
[3] Mr Elsworth did not comply with Directions which were issued in connection with the
determination of his jurisdictional objection. In particular he did not provide a witness
statement setting out his own evidence or any documentary evidence in support of his
argument. Mr Elsworth did provide two witness statements but these were filed and served
well outside the time required in the Directions. Notwithstanding his non-compliance with
Directions Mr Elsworth was allowed to give oral evidence, and to tender correspondence he
had previously forwarded to the Commission outlining the basis of his objection, as his
witness statement.
[4] Ms Millington gave evidence on her own behalf. Mr George Trojanowski, a former
employee of Traders International, provided two statements, one at the request of Mr
Elsworth and a second statement at the request of Ms Millington’s legal representative. Mr
Trojanowski also gave oral evidence by telephone. The other person who provided a witness
statement at the request of Mr Elsworth was not available to give evidence or to be cross-
[2013] FWC 9679
DECISION
E AUSTRALIA FairWork Commission
[2013] FWC 9679
2
examined, and after attempts to contact him were made, I decided that I would not take the
statement into account. In the circumstances of this case, the evidence of that person would
not have assisted Mr Elsworth in any event.
[5] The issue for determination is whether Ms Millington was transferred to Teach Me To
Trade prior to her dismissal, so that Traders International was not the employer of Ms
Millington when she was dismissed.
EVIDENCE
[6] It is not in dispute that Ms Millington commenced employment with Traders
International in 2011 and was employed as Mr Elsworth’s Executive Assistant. It is also not
in dispute that Ms Millington was dismissed on 19 March 2013, and was informed that she
was to be dismissed, by Mr Anthony Eales.
[7] The case sought to be argued by Mr Elsworth and his evidence to the Commission
involves a tangled web of events and allegations. I have considered only those relevant to the
issues in dispute. Mr Elsworth is the sole Director of Traders International. Exactly what
business is undertaken by Traders International is not clear from the evidence, but it appears
that at or around the time that Ms Millington was dismissed, the company traded in
commodities markets and currencies and/or sold finance education products to clients.
Traders International operates under an arrangement with a company in the United States,
Traders International Limited (the US company).
[8] In order to undertake this work, Traders International was required to hold an
Australian Financial Services License (AFSL), issued by the Australian Securities and
Investment Commission (ASIC). There was some evidence that this license was administered
by Mr David Orth, from a company known as “Got Money FX” said to be the “AFSL
provider for Traders International”.
[9] At or around October 2012, Mr Elsworth established a company known as Teach Me
To Trade Pty Ltd, and was the sole Director of that Company. Mr Elsworth maintains that he
established Teach Me to Trade as a “back up plan” to provide continuity in case something
went wrong with the Traders International brand, as he was concerned about the possible
impact of bad press on the internet about the brand in the United States. Mr Elsworth further
maintains that all staff were made aware that they may be required to transfer to Teach me To
Trade at short notice.
[10] Mr Elsworth commenced a period of leave on 1 March 2013 at which point he reached
an agreement with Mr Anthony Eales that Mr Eales would “baby sit” the business while he
was on leave. In preparation for this, on 26 February 2013, Mr Elsworth appointed Mr Eales
as a Director of Teach Me To Trade, and it was agreed that Mr Eales would hold 100% of the
share holding of that Company.
[11] Mr Elsworth alleges that at some point, Mr Eales caused Mr Elsworth to be removed
as a Director of Teach Me To Trade, and stole computers and office equipment from the
business. The allegations made by Mr Elsworth about this matter are unsubstantiated and are
not relevant to the issues in dispute. I do not intend to traverse them further.
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[12] Mr Elsworth also said that on 4 March 2013 Mr Eales told Mr Elsworth that he was
seeking legal advice about sacking Ms Millington. Mr Elsworth states that after seeking
clarification about the reasons for this from Mr Eales, he heard nothing further.
[13] In March 2013, Mr Elsworth was advised by Mr Orth that Traders International had
failed its annual audit, and must cease selling any new product under that brand. Mr Elsworth
initially said that this advice was received on 14 March 2013. Mr Elsworth later said that he
had retained control of “stolen” computers and had ascertained that this occurred on 6 March
2013.
[14] Notwithstanding that at the point this matter was heard he had regained control of the
“stolen” computers, Mr Elsworth did not produce the email from Mr Orth. Other than his
assertion that there was an email from Mr Orth, no documentary evidence was produced by
Mr Elsworth in relation to the loss of the AFSL.
[15] Mr Elsworth also said that he had cause to question the date on which he became
aware that the AFSL had been lost, when Ms Millington provided a medical certificate to the
Commission as evidence in these proceedings, indicating that she was not at work on 14
March 2013.
[16] Regardless of the date, Mr Elsworth maintained that on the day he became aware that
Traders International had lost the use of its AFSL, he chaired a meeting of all staff and
without exception, all staff were present. At that meeting, Mr Elsworth told staff that Traders
International had lost its AFSL and was required by law to cease selling any further finance
education products and the business needed to cease immediately.
[17] Upon being informed of this, Mr Elsworth said that all staff voluntarily agreed to
transfer to Teach Me To Trade “on mass” [sic]. Mr Elsworth also stated that all staff were
already aware that if Traders International lost its licence, the Teach Me To Trade “back up
plan” would be immediately triggered. Further, Mr Elsworth said that staff were given the
opportunity to discuss the transfer with him or to seek a redundancy from Traders
International if they were not happy to transfer.
[18] According to Mr Elsworth, no staff member questioned the transfer or disagreed that it
needed to take effect immediately because of the loss of the AFSL. All staff took identical
roles with the new company with no loss of pay, entitlements or conditions, and new contracts
of employment were drawn up within six weeks of the transfer. In support of the proposition
that Ms Millington transferred to Teach Me To Trade, and knew that this transfer would
occur, Mr Elsworth tendered emails showing that Ms Millington had an email address using
the name Traders International, and a “Teach Me To Trade Gmail address”, which she used
prior to the transfer.
[19] Under cross-examination, Mr Elsworth said that Mr Eales was never employed by
Traders International but may have been a sub-contractor. Mr Elsworth also maintained that
if Mr Eales purported to act in the capacity of Managing Director or General Manager of
Traders International when he dismissed Ms Millington, or at any other time, that he did so
without authority.
[2013] FWC 9679
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[20] Mr Elsworth contends that the evidence he has placed before the Commission
establishes that there was a transfer of business between Traders International and Teach Me
To Trade on 6 March 2013 and that Ms Millington was a transferred employee in accordance
with the Act.
[21] Mr Trojanowski provided a statement at the request of Mr Elsworth, dated 10
September 2013, wherein he said that there was a meeting on 14 March 2013 at which all
staff transitioned voluntarily to Teach Me To Trade and agreed that new contracts would be
drawn up in the preceding weeks.
[22] Mr Trojanowski later sent an email to Ms Millington’s Lawyer Mr Yates, who had
also sought a statement from him on behalf of Ms Millington, and advised that he could not
confirm whether Ms Millington was at the meeting at which the transfer was discussed, and
that the comment that it had occurred immediately was “anecdotal”. Mr Trojanowski also
said that even though staff agreed to the transfer on that date, the official transition and
commencement date of their employment with Teach Me To Trade was not until 25 March
2013, as indicated by a payslip tendered by Mr Trojanowski.
[23] In response to the proposition that the meeting took place on 6 December, Mr
Trojanowski said that he no longer had access to his diary and was unsure when the meeting
took place, or who attended.
[24] Mr Trojanowski also said that Mr Eales stated that he had taken over control of
Traders International by the time the meeting was held, and that Mr Eales and his accounts
person met with Ms Millington on 19 March 2013. Further, Mr Trojanowski said that Mr
Eales held a meeting of all staff on the morning of 21 March 2013 and advised that he had
dismissed Ms Millington.
[25] In his witness statement made at the request of Ms Millington, Mr Trojanowski said
that he was employed by Traders International as a telephone support person from February
2011 until his transfer to Teach Me To Trade effective on 24 March 2013. Mr Trojanowski
tendered the following documents:
Payslip from Traders International for the period 25 February 2013 until 10 March
2013;
Payslip from Traders International for the period 11 March 2013 until 24 March 2013.
[26] Mr Trojanowski also tendered a letter from Traders International dated 17 April 2013
stating that Teach Me To Trade was taking over the business and offering Mr Trojanowski
employment from 25 March 2013. That letter dated 17 April 2013 is on Traders International
letterhead, and signed by Mr Eales in the capacity of General Manager. The letter states that
employment with Traders International effectively ceases on 24 March 2013 and that Mr
Eales understands that Teach Me To Trade would make Mr Trojanowski an offer to become
an employee of that company on terms that would be set out in a separate letter, and take on
all of his outstanding entitlements.
[27] The letter of 17 April 2013 further states that if the offer is accepted, Mr
Trojanowski’s employment with Teach Me To Trade would commence on 25 March 2013 or
the next ordinary working day following that date. The letter of 17 April 2013 concludes by
stating that if Mr Trojanowski accepts the offer of employment from Teach Me To Trade, he
[2013] FWC 9679
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will be required to resign his employment with Traders International with effect from the day
before he commences with Teach Me To Trade.
[28] In his oral evidence to the Commission, Mr Trojanowski said that in around February
2013, there were two new people in the office of Traders International, one being Mr Eales.
Mr Eales appeared to be in charge of the Company and two weeks later told employees that
he had taken over. According to Mr Trojanowski, Teach Me To Trade was a backup or
alternative venue for trading ideas, and was used by Mr Elsworth as a venue to interest parties
outside of the Traders International Group. Teach Me To Trade also had a presence on
Facebook and was a venue for communication.
[29] Mr Trojanowski said that the letter from Traders International dated 17 April 2013
was the first time employees had any official documentation to confirm what had been said in
meetings. Any offers from Teach Me To Trade in those meeting had been verbal and “in
principle”. Mr Trojanowski also said that the first staff knew that they were being paid by
Teach Me To Trade, was when their payslips for the period commencing 25 March 2013
indicated that their employer was Teach Me To Trade. Further, Mr Trojanowski said that
when he commenced employment with Teach Me To Trade, the terms and conditions were
different and he received annual leave and other entitlements instead of the casual conditions
he had received while working for Traders International.
[30] Ms Millington maintains that she was dismissed by Mr Eales in his capacity as
Managing Director of Traders International. Ms Millington said that she was aware that
Teach Me To Trade was set up in around October 2012, and was a similar business to Traders
International. Ms Millington was required to produce documents for people to purchase
products under that brand, using different merchant facility details. Ms Millington also said
that Mr Elsworth told her that he had set up Teach Me To Trade so that it would be available
when Traders International no longer had an AFSL.
[31] According to Ms Millington, Mr Elsworth expressed concern on a number of
occasions that Traders International was not complying with ASIC rules. Ms Millington also
said that Mr Elsworth was using the loss of the AFSL to block Traders International Limited
(the US company), so that he would not have to comply with a contract between the US
company and Traders International Pty Ltd.
[32] Ms Millington said that she never worked for Teach Me To Trade, but did work for
Mr Elsworth using the Teach Me To Trade banners and logo. Ms Millington agreed that she
was employed by Traders International but that from time to time, her work was “outsourced”
to Teach Me To Trade. Ms Millington also said that she set up the Teach Me To Trade Gmail
address upon the instructions of Mr Eales to prevent the US company from having visibility
of emails on the server. Further, Ms Millington maintained that Teach Me To Trade and
Traders International had separate merchant facilities, and disputed Mr Elsworth’s assertion
that the two entities shared a facility.
[33] Ms Millington maintained that she did not recall a meeting on 6 March 2013 or any
other date, during which the transfer of employees between Traders International and Teach
Me To Trade had been discussed. Ms Millington also said that she could not recall ever being
told that Traders International had lost its AFSL, but remembered a conversation between Mr
Elsworth and another person during which Mr Elsworth stated that the licence would be lost
as tactic to shut down litigation between Mr Elsworth and the US company.
[2013] FWC 9679
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[34] On the day she was dismissed, Ms Millington was handed a document setting out a
salary sacrifice arrangement she had entered into with respect to her employment with Traders
International. Mr Eales told her that the arrangement was fraudulent. Ms Millington said that
this scheme was set up by the former Chief Financial Officer of Traders International, and
initiated by the company.
CONCLUSIONS
[35] I am unable to accept that Ms Millington transferred to Teach Me To Trade prior to
her dismissal. Mr Elsworth’s evidence about the events was far from compelling. It does not
establish to the required degree - on the balance of probabilities - all of the matters he asserts.
There is insufficient evidence upon which I could be satisfied that Traders International lost
its AFSL. Other than assertions about an email informing him that Traders International had
failed an audit, which Mr Elsworth has not tendered, there is no evidence about that matter.
[36] Mr Elsworth has also made a series of allegations about theft of computers in an
attempt to justify the lack of documentary evidence. Despite making repeated references to a
police report about the matter, there is no evidence upon which I could be satisfied that, if
there was theft, it prevented Mr Elsworth from putting appropriate documents before the
Commission to substantiate his allegations. In this regard, I note that Mr Elsworth informed
the Commission that he had regained the computers, and could ascertain dates from them, but
was still unable to tender any documentary evidence to support his assertions, despite being
granted numerous opportunities to do so.
[37] Even if I accept that Traders International lost its AFSL on 6 March 2013 as asserted
by Mr Elsworth, and all of the other evidence he has provided, it is not sufficient to establish
that Ms Millington was employed by Teach Me To Trade at the time she was dismissed. I
have reached this conclusion for the following reasons.
[38] Regardless of the nature of the relationship between Mr Eales and Traders
International, Mr Elsworth as the sole Director of that company, put Mr Eales in charge of it
from 1 March 2013. On Mr Elsworth’s own evidence, Mr Eales was “babysitting” Traders
International and there is no evidence that Mr Elsworth had taken back control of Traders
International when Ms Millington was dismissed on 19 March 2013.
[39] If there was a meeting on 6 March 2013 at which the transfer of employees to Teach
Me To Trade was discussed, I am unable to be satisfied that there were any such transfers
effected on that date.
[40] It is a fundamental principle of law that contracts of employment are contracts for
personal services, and the benefits and obligations of such contracts cannot be unilaterally
assigned.1 There is no evidence of any agreement on the part of Ms Millington to such a
transfer. Absent evidence of such agreement, I am unable to accept that the alleged transfer
occurred.
[41] Even if I was to accept the evidence that other employees of Traders International
were transferred to Teach Me To Trade, the evidence is that the transfers were not effected
until April 2013, at least a month after Ms Millington’s dismissal. The evidence of Mr
Trojanowski and the documents tendered through him, show at best, an attempt to
[2013] FWC 9679
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retrospectively transfer Mr Trojanowski from Traders International to Teach Me To Trade,
with effect from 25 March 2013, a date after Ms Millington was dismissed.
[42] It is also the case that Mr Trojanowski continued to be paid by Traders International
after the date of the alleged transfer to Teach Me To Trade, and I do not accept that this is
because the two companies had the same merchant facility. This is another matter about
which Mr Elsworth provided no evidence, other than an assertion contradicted by Ms
Millington.
[43] At its highest, if all of the evidence placed before the Commission by Mr Elsworth is
accepted, that evidence establishes that at a meeting on 6 March 2013, some employees of
Traders International agreed in principle to transfer to Teach Me To Trade subject to being
provided with formal documentation at some point in the future.
[44] Such an agreement is insufficient to effect a transfer of employment, as evidenced by
the subsequent correspondence about the matter with Mr Trojanowski. A transfer of
employment cannot occur en masse in circumstances where each individual employee has not
been made an offer of employment by the employer to whom he or she is transferring, and has
not accepted such an offer. Even if what transpired at the meeting of 6 March 2013 was
sufficient, there is no evidence that Ms Millington was at that meeting.
[45] The submission that Mr Eales had no authority to act on behalf of Traders
International is also entirely at odds with the evidence. As previously stated, Mr Elsworth put
Mr Eales in charge of Traders International with effect from 1 March 2013. On Mr
Elsworth’s own evidence, Mr Eales told him on 4 March 2013 that he was taking legal advice
about dismissing Ms Millington. Mr Elsworth’s evidence - that he asked Mr Eales why he
was considering dismissing Ms Millington, and that he heard nothing more from Mr Eales in
relation to this matter - is at odds with his assertion that Mr Eales was not in charge of Traders
International and had no authority to manage that company. If Mr Eales had no authority to
make such decisions, Mr Elsworth would surely have prevented Mr Eales from taking any
further steps to dismiss Ms Millington. This is particularly so given Mr Elsworth’s repeated
statements that Ms Millington was an outstanding employee.
[46] Mr Eales dismissed Ms Millington for alleged fraud in relation to a salary sacrifice
arrangement between Ms Millington and Traders International. Mr Eales’ authority is also
apparent from the letter he signed on 17 April 2013 on Traders International letterhead, in the
capacity of General Manager. There is no evidence that Mr Elsworth sought to inform
employees that Mr Eales was not the General Manager of Traders International. In short, Mr
Elsworth’s assertions about Mr Eales’ role at Traders International are improbable and
contrary to the weight of the evidence.
[47] The legislative provisions relied on by Mr Elsworth do not assist him to establish that
Ms Millington’s employment transferred from Traders International to Teach Me To Trade
prior to her dismissal. The provisions of the Act dealing with transfer of business are found in
Division 2 of Part 2-8 which deals generally with transfer of instruments. It is not necessary
to set out those provisions.
[48] It is sufficient to note that the legislation simply provides a scheme whereby
instruments such as agreements may transfer, or employees have continuity of service
between two employers, in circumstances where there is a transfer of business between those
[2013] FWC 9679
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employers and the employee ceases employment with the first employer and commences with
the second employer in accordance with the provisions. The provisions do not operate to
effect a transfer of employment without the agreement of the employee concerned.
[49] I am satisfied that on 19 March 2013, Ms Millington was dismissed from her
employment with Traders International Pty Ltd. The jurisdictional objection advanced by Mr
Elsworth on behalf of Traders International is dismissed.
[50] A further outstanding issue in relation to whether Ms Millington can pursue an unfair
dismissal application because she is an undischarged bankrupt, has been referred to a Full
Bench of the Commission for determination.
DEPUTY PRESIDENT
Appearances:
Mr M. Yates on behalf of the Applicant.
Mr L. Elsworth on behalf of the Respondent.
Hearing details:
2013.
Brisbane:
September 24.
Final written submissions:
8 October 2013.
Printed by authority of the Commonwealth Government Printer
Price code C, PR545517
1 See ACE Insurance Limited v Trifunovski [2013] FCAFC 3 (25 January 2013) per Buchanan J with whom Lander J agreed
citing: Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014 at 1018-9, 1024, 1026, 1029, 1048; Mersey
Docks and Harbour Board v Coggins and Griffith Liverpool (Limited) [1946] UKHL 1; [1947] AC1 at 14,15; Denham v
Midland Employers Mutual Association Limited [1955] 2 QB 437 at 443.
