1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Joel Gilchrist and another
v
Habiku Pty Ltd T/A The Daily Dose
(U2017/1110) (U2017/1184)
COMMISSIONER WILSON MELBOURNE, 10 MAY 2017
Application for Unfair Dismissal Remedy - whether person protected from unfair dismissal
since minimum employment period completed - “Continuous service", “transfer of business”
and “transferring employee” considered.
[1] This decision concerns a jurisdictional objection to unfair dismissal applications made
by Maria Vowles and Joel Gilchrist relating to their dismissal from employment by Habiku
Pty Ltd. Habiku trades as The Daily Dose, which is a café in Box Hill North in suburban
Melbourne. Ms Vowles and Mr Gilchrist are married to each other and were both employed
by Habiku and its predecessor in operating The Daily Dose and were dismissed from
employment by Habiku on the same day, for what are stated to be the same reasons.
Accordingly the jurisdictional objections relating to their applications have been jointly heard
and determined by me.
[2] Section 396 of the Fair Work Act 2009 (the Act) requires the determination of four
initial matters before consideration of the merits of the application, one of which is whether
an applicant is a person protected from unfair dismissal, including for reason of whether they
have completed the minimum employment period.
[3] The other matters requiring determination under s.396 are whether an application was
lodged with the Fair Work Commission within the 21 day period for making such
applications; whether the dismissal was consistent with the Small Business Fair Dismissal
Code or whether it was a case of genuine redundancy. Although there is no contention that the
applications are out of time, the Respondent contends both that they are a small business,
requiring consideration of whether the dismissals were consistent with the Code, and that the
dismissals were genuine redundancies. Those two matters have not been considered in this
decision.
[4] The jurisdictional objection under consideration in these matters is therefore whether
or not either applicant has completed the minimum employment period provided for within
s.383 of the Act. While the service of each Applicant with the Respondent in this matter,
Habiku, only dates from September 2016, and each was dismissed in January 2017, in the
event that the Commission finds that either or both employees is a “transferring employee”
[2017] FWC 2416
DECISION
E AUSTRALIA FairWork Commission
[2017] FWC 2416
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within the meaning of the Act, the circumstances of the matter mean that they will be found to
have completed the minimum employment period and are thus protected from unfair
dismissal and eligible to make an unfair dismissal application in relation to their dismissal.
[5] For the reasons set out below, I am satisfied that each Applicant was a transferring
employee; that each has completed the minimum employment period; and that their unfair
dismissal applications may continue.
LEGISLATION
[6] The legislative provisions which are relevant to this matter are set out in several places
within the Act. In particular;
s.382 provides that a person is protected from unfair dismissal if they have
completed a period of employment of at least the minimum employment period and
their employment is covered, as is the case in this matter, by a modern award;
s.383 provides that the minimum employment period is six months if the employer is
not a small business employer or one year in the event that the employer is a small
business employer;
s.384 provides that the “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”. While s.384(2) provides for exclusion of certain service,
the section deals only with service as a casual employee. Neither Applicant in these
matters was a casual employee; rather each was employed on a full-time basis;
s.311 provides the following in relation to who is a “transferring employee”;
“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
[2017] FWC 2416
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(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, 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:
[2017] FWC 2416
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(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
[7] The matter proceeded before me in the form of a determinative conference. The
Applicants were represented pro bono by Angus Mackenzie, solicitor, from Bartlett
Workplace Lawyers, having been given permission by me to appear for reason of the
efficiency that he would bring as a legal representative to the proceedings taking into account
its complexity (s.596(2)(a)). The Respondent was represented by Nabil Kurban, who is a
director of the company, and Hala Kurban.
[8] Submissions made by the Applicants on representation included that since the
Commission was required to determine the question of whether the minimum employment
period had been served and that a legal representative would be able to more effectively cross-
examine on the relevant matters, a grant of permission for legal representation would bring
efficiency to the proceedings. They also pointed to the jurisdictional matter requiring
determination by the Commission involved substantial complexity.
[9] On Friday, 7 April 2017, having considered the material provided by each regarding
the application for permission for legal representation, I advised the parties that I would grant
the application pursuant to s.596(2)(a) and that reasons for doing so would be provided in the
course of the Commission’s decision on jurisdiction.
[10] Section 596 of the Act, which regulates when a party may be represented by a lawyer
or paid agent in proceedings before the Commission, provides as follows:
596 Representation by lawyers and paid agents
(1) Except as provided by subsection (3) or the procedural rules, a person may be
represented in a matter before the FWC (including by making an application or
submission to the FWC on behalf of the person) by a lawyer or paid agent only with
the permission of the FWC.
(2) The FWC may grant permission for a person to be represented by a lawyer or paid
agent in a matter before the FWC only if:
(a) it would enable the matter to be dealt with more efficiently, taking into
account the complexity of the matter; or
(b) it would be unfair not to allow the person to be represented because the
person is unable to represent himself, herself or itself effectively; or
[2017] FWC 2416
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(c) it would be unfair not to allow the person to be represented taking into
account fairness between the person and other persons in the same matter.
(3) The FWC’s permission is not required for a person to be represented by a lawyer
or paid agent in making a written submission under Part 2-3 or 2-6 (which deal with
modern awards and minimum wages).
(4) For the purposes of this section, a person is taken not to be represented by a lawyer
or paid agent if the lawyer or paid agent:
(a) is an employee or officer of the person; or
(b) is an employee or officer of:
(i) an organisation; or
(ii) an association of employers that is not registered under the
Registered Organisations Act; or
(iii) a peak council; or
(iv) a bargaining representative;
that is representing the person; or
(c) is a bargaining representative.
[11] In granting the Applicants’ application for permission for representation by lawyer, I
had regard to the proper interpretation of s.596, which was considered by Flick J of the
Federal Court in Warrell v Walton1:
“[24] A decision to grant or refuse “permission” for a party to be represented by “a
lawyer” pursuant to s 596 cannot be properly characterised as a mere procedural
decision. It is a decision which may fundamentally change the dynamics and manner in
which a hearing is conducted. It is apparent from the very terms of s 596 that a party
“in a matter before FWA” must normally appear on his own behalf. That normal
position may only be departed from where an application for permission has been
made and resolved in accordance with law, namely where only one or other of the
requirements imposed by s 596(2) have been taken into account and considered. The
constraints imposed by s 596(2) upon the discretionary power to grant permission
reinforce the legislative intent that the granting of permission is far from a mere
“formal” act to be acceded to upon the mere making of a request. Even if a request for
representation is made, permission may be granted “only if” one or other of the
requirements in s 596(2) is satisfied. Even if one or other of those requirements is
satisfied, the satisfaction of any requirement is but the condition precedent to the
subsequence exercise of the discretion conferred by s 596(2): i.e., “FWA may grant
permission...”. The satisfaction of any of the requirements set forth in s 596(2)(a) to (c)
thus need not of itself dictate that the discretion is automatically to be exercised in
favour of granting “permission”.”2
[2017] FWC 2416
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[12] It is well established that in order for permission for representation to be granted under
this section, the Commission must first determine if there exists a jurisdictional prerequisite to
the exercise of discretion by virtue of at least one of the three conditions in s.596(2) of the Act
being met. The Commission must then decide whether or not to exercise the discretion to
grant permission.3 The task of determining whether any of the criteria in s.596(2) is satisfied
involves the making of an evaluative judgment akin to the exercise of a discretion.4
[13] In respect of s.596(2)(a), even if legal representation would enable a matter to be dealt
with more efficiently, a lack of complexity may still mean that permission is refused.5 Sheer
volume of documents or the existence of extraneous issues does not equate to complexity.6
While the consideration of complexity must be treated as a matter of significance in
consideration of this criterion, ultimately the issue is whether the grant of permission would
enable the matter to be dealt with more efficiently.7 There may be many grounds for a
consideration of “efficiency” and familiarity with the subject matter, the conceptualisation
and organisation of argument in the statutory context and marshalling of relevant materials
may be matters that assist in the efficient conduct of the hearing of a matter, as may the
increased alacrity with which cross-examination may be carried out, as well as familiarity
with the Act and authorities in the context of a jurisdictional question.8 The expertise and
familiarity with the issues before the Commission of human resource practitioners or in-house
counsel may also be relevant.9
[14] The relevant complexity in this particular matter is whether, in all the circumstances
the service of the Applicants may properly be regarded as continuous service for the purposes
of the Act for reason of the questions set out below of transfer of business and transfer of
employment. Within the context of a short jurisdictional hearing ostensibly to be focused
upon the facts of the matter it was considered by me that legal representation by the
Applicants would assist the matter to be dealt with more efficiently.
[15] Each of the Applicants gave brief oral evidence in the determinative conference held
by me in relation to these matters, as did Mr Kurban and Ms Kurban. In addition to their oral
evidence, each party filed submissions, documents and witness statements in relation to their
respective contentions. I have had regard to all this material.
[16] The operators of The Daily Dose changed in September 2016. Prior to that change the
cafe had been operated by LS Management. That company withdrew from operation of the
business on 18 September 2016 with the operation of the business being taken over from 19
September 2016 by Habiku.
[17] Ms Vowles had worked at The Daily Dose since 1 October 2014, working in the
capacity of the Café Manager. Mr Gilchrist had worked at The Daily Dose since 25 May
2015, working as the café’ Chef.
[18] The evidence and other material leads to the following findings;
Ms Vowles was employed by LS Management, then the operator of the business
known as The Daily Dose, on 1 October 2014 and worked from that date on a full
time basis as the Café Manager. Mr Gilchrist was employed by LS Management on
25 May 2015 and worked from that date on a full-time basis as The Daily Dose’s
Chef.
[2017] FWC 2416
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LS Management was the Applicants’ employer until 18 September 2016. Each
Applicant’s employment with LS Management until that date was a period of
continuous service, within the meaning of the Act.
LS Management operated the business of The Daily Dose until 18 September 2016.
While the Applicants’ submissions contend that “the business trading as The Daily
Dose may be leased to Habiku Pty Ltd by the old employer”,10 there is no direct
evidence of that before me. In particular, there is no evidence before me as to
whether LS Management, owned by a person named as Luke, also owned, or
continues to own, the business name and the equipment, or the premises from which
the business operates.
Some time prior to August 2016, LS Management decided to cease operation of the
business of The Daily Dose, and Habiku agreed to take over its operation. There was
an arrangement between LS Management and Habiku to do so, which included
Habiku owning or having the beneficial use of some or all of the assets of LS
Management (whether tangible or intangible) in connection with the operation of the
business of The Daily Dose. Those assets included the business name and location;
its fixtures, fittings and menus; and, to the extent they are an asset, the knowledge
and goodwill contributed to the business by the Applicants.
In August 2016 there was a meeting between representatives of LS Management,
Habiku and the two Applicants, in which the change in business operator was
discussed and explained to the Applicants. There is imprecise evidence before me as
to what was discussed in the meeting, however the evidence there is leads to the
findings that;
o Luke, the representative from LS Management, advised the Applicants
that he would cease employing them from the date Habiku would take
over operation of The Daily Dose; that their future employment would be
with Habiku; and that his company would pay out the Applicants their
accrued entitlements; and
o Neither of the Kurbans spoke much of their expectations for the
Applicants’ future employment, leaving the conversation instead up to
Luke, the Director of the outgoing employer.
Neither of the Kurbans, or anyone else acting on behalf of Habiku, informed the
Applicants in writing before their employment with Habiku started that their period
of service with LS Management would not be recognised when they were employed
by Habiku.
On 25 September 2016, LS Management paid Ms Vowles an amount equivalent to
92.25 hours of unused annual leave and annual leave loading.11 On the same date Mr
Gilchrist received from LS Management payment for 133.28 hours’ accrued annual
leave.
The Applicants started employment with Habiku on 19 September 201612 and were
continuously employed by that company until they were notified of their dismissal
on 13 January 2017, which took effect on 20 January 2017. The reason given to the
Applicants for their dismissal was that the business was not covering its costs. They
were advised that as a consequence the business would restructure as it no longer
needed a full-time Chef or Café Manager and that their positions would be made
redundant.
CONSIDERATION
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[19] The question that requires determination in these matters is whether, for reason of the
provisions of the Act in relation to transfer of business, Ms Vowles and Mr Gilchrist are
persons protected from unfair dismissal. This may come about if they are deemed to have
completed the applicable minimum employment period for the reason that they can be found
to be a “transferring employee” from the former operator to the new. In this regard, it is to be
further noted that the minimum employment period is either six or twelve months of
continuous employment, depending on whether The Daily Dose is a small business employer.
That question in itself is a subject of dispute between the parties, however it does not need to
be addressed in this decision since the Applicants’ period of continuous employment with LS
Management was greater than 12 months.
[20] A determination in favour of the Applicants requires a finding that each is a
transferring employee in the manner set out in s.311 and that their service is continuous
service within the meaning of s.22.
[21] 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;
the Applicants’ employment with their old employer, LS Management, terminated
on 18 September 2016 (which satisfies s.311(1)(a));
each Applicant was then employed by Habiku the next day, 19 September 2016
(which satisfies s.311(1)(b)); and
the work each Applicant performed for Habiku was the same, or substantially the
same, as the work each performed for LS Management (which satisfies s.311(1)(c)).
[23] As a result, I find that each of the Applicants was a transferring employee within the
meaning of s.311(2).
[24] 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
Applicants 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).
[25] In this regard, I find that there is a connection between the old employer, LS
Management, and the new employer, Habiku, 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, LS
Management sold the assets of the business to the Respondent, so that Habiku owned or had
beneficial use of them, and which relate to the transferring work.
[26] Accordingly, the elements of s.311 have been satisfied. There was a transfer of
business and the Applicants are transferring employees.
[27] The question of whether the Applicants’ 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;
[2017] FWC 2416
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“(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.”
[28] 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.
[29] The evidence before the Commission is that the Applicants worked continuously for
LS Management, and there is no evidence of either 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 either worked other than continuously for Habiku.
[30] As a result of this analysis, I find that each Applicant, Maria Vowles and Joel
Gilchrist, is a person protected from unfair dismissal, since each has completed the minimum
employment period. The continuous service of each is the period of their entire employment
with LS Management and Habiku, since each was a transferring employee within a business
arrangement that was a transfer of business.
[31] These matters will now be reassigned to the Commission’s Unfair Dismissal Case
Management Team to be dealt with in the usual manner.
COMMISSIONER
OF THE FAIR WORK C AUSTRALIA MMISSION THE SEAL
[2017] FWC 2416
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Appearances:
Mr A Mackenzie, solicitor, on behalf of the Applicants.
Mr N Kurban and Mrs H Kurban for the Respondent.
Hearing details:
2017.
Melbourne:
10 April.
Final written submissions:
24 April 2017.
Printed by authority of the Commonwealth Government Printer
Price code C, PR592588
1 [2013] FCA 291.
2 Accepted by the Full Bench of the Commission as the correct approach to s.596 of the Act in New South Wales Bar
Association v McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663.
3 Appellant v Respondents [2014] FWCFB 4297; Emily Oratis v Melbourne Business School [2014] FWCFB 3869 [5].
4 Asciano Services Pty Ltd v Hadfield [2015] FWCFB 2618 [19].
5 King v Patrick Projects Pty Ltd [2015] FWCFB 2679 [15].
6 Ibid [17].
7 Singh v Metro Trains Melbourne [2015] FWCFB 3502 [16].
8 Smith v James Cook University [2016] FWC 6010, [6]–[7].
9 Ibid [18].
10 Applicant’s Outline of argument: objections (Vowles) 8; Applicant’s Outline of argument: objections (Gilchrist) 8.
11 Exhibit A3, Applicant’s Document List (Vowles).
12 Applicants’ solicitor’s correspondence, 24 April 2017.
