[2013] FWC 3302 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Nigel Jones
v
QinetiQ Pty Ltd T/A QinetiQ Australia
(U2012/14201)
DEPUTY PRESIDENT ASBURY |
BRISBANE, 14 JUNE 2013 |
Application for unfair dismissal remedy - Jurisdictional objection - Minimum employment period - Transfer of employment - Requirement that first employer and second employer are national system employers - First Employer is a foreign corporation - First employer has no operations and has not employed any person in Australia - Fair Work Act provisions relating to national system employers can only operate with respect to foreign corporations to the extent that they employ persons in Australia - First employer is not a national system employer - No transfer of employment between first and second employer - Applicant has not served minimum employment period - Jurisdictional objection upheld - Application for unfair dismissal remedy dismissed.
Background
[1] This Decision concerns an application under s.394 of the Fair Work Act 2009 (the Act) by Mr Nigel Graham Jones, seeking an unfair dismissal remedy with respect to his dismissal by QinetiQ Pty Ltd trading as QinetiQ Australia (QinetiQ Australia). The application is met with jurisdictional objections on the grounds that Mr Jones is not a person protected from unfair dismissal because at the time of his dismissal:
● Mr Jones had not served the minimum employment period as required by s.382(a) of the Act; and
● A modern award or enterprise agreement did not apply to Mr Jones; and
● The sum of Mr Jones’ annual rate of earnings exceeded the high income threshold.
[2] Directions were issued requiring the parties to file and serve outlines of submissions and witness statements in relation to the jurisdictional objections. At the hearing into the jurisdictional objections, permission was sought for QinetiQ Australia to be represented by Counsel. Mr Jones did not oppose permission being granted. Permission was granted pursuant to s.596(2)(a) of the Act on the basis that the matter involved issues of constitutional law, and it would enable the matter to be dealt with more efficiently, taking into account its complexity.
[3] Counsel for QinetiQ Australia indicated that the jurisdictional objection in relation to whether Mr Jones had served the minimum employment period would be pressed at the hearing, on the basis that it is a narrower question which would determine the matter. In the event that this objection was not upheld, the Company reserved its position in relation to the objection on the basis that Mr Jones’ rate of remuneration exceeded the high income threshold and a modern award or enterprise agreement did not apply to him.
Issues in dispute
[4] Mr Jones was employed from 1987 by a British Company, QinetiQ Limited and worked for that Company in the United Kingdom. Mr Jones commenced employment with QinetiQ Australia, on 22 May 2012 and was dismissed without notice on 4 October 2012. The period of employment with QinetiQ Australia completed by Mr Jones immediately before the dismissal was 4 months and 12 days.
[5] The issue in dispute is whether Mr Jones’ service with QinetiQ Limited is continuous with his service with QinetiQ Australia so that he has completed the minimum employment period in accordance with s.382(a) of the Act. Mr Jones asserts that his service with QinetiQ Limited is continuous with his service with QinetiQ Australia, and that his period of employment is 25 years.
[6] Mr Jones asserts that there was a transfer of his employment between QinetiQ Limited and QinetiQ Australia. Mr Jones further asserts that QinetiQ Limited is a constitutional corporation by virtue of being a foreign corporation, and is substantially connected to QinetiQ Australia because the two entities are both subsidiaries of another entity, QinetiQ Group PLC.
[7] QinetiQ Australia contends that Mr Jones’ service with the two entities is not continuous, on the basis that QinetiQ Limited is not a national system employer under the Act and there was no transfer of employment between QinetiQ Limited and QinetiQ Australia.
Legislation
[8] Section 51(xx) of the Commonwealth of Australia Constitution Act (the Constitution) authorises the Parliament to make laws providing for the foreign corporations, and provides as follows.
“51 The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:
...
(xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth”
[9] In New South Wales v the Commonwealth 1 (the Incorporations Case) the majority of the High Court held that “to fall within one limb of the power, a corporation must satisfy two conditions: it must be formed within the limits of the Commonwealth and it must be a trading or financial corporation. To fall within the other limb, a corporation must be a foreign corporation, that is, a corporation formed outside the limits of the Commonwealth.”2 Justice Deane agreed that the word “foreign” and the phrase “formed within the limits of the Commonwealth” should be construed as alternatives, so that a foreign corporation is one that is formed outside Australia.3
Commonwealth, for the purposes of the Constitution is defined in s.6:
“The Commonwealth” shall mean the Commonwealth of Australia as established under this Act.
Therefore, the parliament subject to the Constitution has power to make laws for the peace, order and good government of Australia with respect to foreign corporations.
[10] Section 38 of the Act provides that it does not apply so as to exceed Commonwealth power and for invalid applications to be read down so that only a valid application is taken to have been intended, unless an otherwise valid application can only operate with invalid applications. 4
[11] The legislative provisions relating to unfair dismissal applications are found in Chapter 3 Part 3-2 of the Act. By virtue of s.380, for the purposes of Part 3-2 of Chapter 3, the terms “employer” and “employee” mean respectively, a “national system employer” and a “national system employee”. The meanings of those terms are found in sections 13 and 14 of the Act which relevantly provide:
13 Meaning of national system employee
A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.
Note: Sections 30C and 30M extend the meaning of national system employee in relation to a referring State.
14 Meaning of national system employer
(1) A national system employer is:
(a) a constitutional corporation, so far as it employs, or usually employs, an individual; or
(b) the Commonwealth, so far as it employs, or usually employs, an individual; or
(c) a Commonwealth authority, so far as it employs, or usually employs, an individual; or
(d) a person so far as the person, in connection with constitutional trade or commerce, employs, or usually employs, an individual as:
(i) a flight crew officer; or
(ii) a maritime employee; or
(iii) a waterside worker; or
(e) a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or
(f) a person who carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory.
Note 1: In this context, Australia includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands (see paragraph 17(a) of the Acts Interpretation Act 1901).
Note 2: Sections 30D and 30N extend the meaning of national system employer in relation to a referring State.
[12] The term “constitutional corporation” is defined in s.12 of the Act as “a corporation to which paragraph 51(xx) of the Constitution applies.
[13] By virtue of s.382 of the Act, 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.
[14] To be protected from unfair dismissal, a person must satisfy the criteria in s.382(a) and at least one of the criteria in s.382(b). QintetiQ Australia is not a small business employer, and by virtue of s.383(a) the relevant employment period for the purposes of s.382(a) is 6 months. An employee’s period of employment is defined in s.384 as follows:
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.
[15] The meanings of “service” and “continuous service” are dealt with in s.22 of the Act. Sections 22(1), 22(5) and 22(7) are relevant in the present case.
22 Meanings of service and continuous service
General meaning
(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).
....
When service with one employer counts as service with another employer
(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:
(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and
(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.
Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).
....
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.
[16] An “associated entity” as defined in s.12 of the Act, has the meaning given by s.50AAA of the Corporations Act 2001 which provides as follows:
50AAA Associated entities
(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
(2) This subsection is satisfied if the associate and the principal are related bodies corporate.
(3) This subsection is satisfied if the principal controls the associate.
(4) This subsection is satisfied if:
(a) the associate controls the principal; and
(b) the operations, resources or affairs of the principal arematerial to the associate.
(5) This subsection is satisfied if:
(a) the associate has a qualifying investment (see subsection (8))in the principal; and
(b) the associate has significant influence over the principal; and
(c) the interest is material to the associate.
(6) This subsection is satisfied if:
(a) the principal has a qualifying investment (see subsection (8))in the associate; and
(b) the principal has significant influence over the associate; and
(c) the interest is material to the principal.
(7) This subsection is satisfied if:
(a) an entity (the third entity) controls both the principal and the associate; and
(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.
(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:
(a) has an asset that is an investment in the second entity; or
(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.
Evidence
[17] Ms Jessica Julia Ciccozzi, Human Resource Manager of QinetiQ Australia provided two witness statements in support of the jurisdictional objection. In a statement made on 26 November 2011 5, Ms Ciccozzi said that QinetiQ Australia is an Australian Proprietary company wholly owned by QinetiQ Overseas Holdings Ltd, a British company. A certified copy of a certificate of incorporation issued by the Registrar of Companies for England and Wales, was appended to Ms Ciccozzi’s supplementary witness statement indicating that QinetiQ Limited is incorporated under the Companies Act 1985.6
[18] A diagram showing relationships between various entities was appended to Ms Ciccozzi’s witness statement indicating that QinetiQ Group PLC owns QinetiQ Holdings Limited. That company owns QinetiQ Limited and QinetiQ Overseas Holdings Ltd. QinetiQ Overseas Holdings Ltd owns QinetiQ Services Pty Ltd, QinetiQ Limited and QinetiQ Australia. 7
[19] Ms Ciccozzi said that prior to commencing with QinetiQ Australia on 22 May 2012, Mr Jones had worked for QinetiQ Limited, a company that is registered and wholly based within the United Kingdom. Mr Jones resigned from QinetiQ Limited on 19 April 2012 and completed his four week notice period on 18 May 2012. Mr Jones’ employment with QinetiQ Australia was intended to be, and treated as, being completely separate from his prior employment with QinetiQ Limited. There was no transfer from the British Company to the Australian Company. Rather, QinetiQ Australia independently offered a job to Mr Jones which he accepted and then resigned from QinetiQ Limited. None of Mr Jones’ employment entitlements were recognised for the purposes of his employment with QinetiQ Australia.
[20] Ms Ciccozi also said that there is very little interaction between the business run by QinetiQ Australia and the business run by QinetiQ Limited. Both companies have separate policies and procedures, and operate independently of one another. QinetiQ Limited does not have any operations in Australia and does not employ anyone in Australia. QinetiQ Limited does not have a place of business in Australia and has not established a share transfer office or share registration office in Australia. Further, QinetiQ Limited does not administer or otherwise deal with property situated in Australia as an agent, legal personal representative or trustee.
[21] Ms Ciccozzi appended Mr Jones’ employment agreement with QinetiQ Australia to her witness statement 8. That agreement contains a definition of “Affiliate” as a related body corporate of the Company within the meaning of s.50 of the Corporations Act 20019, and requires that Mr Jones must serve any affiliate and accept office in any affiliate as the employer requires, without additional remuneration10. The agreement also requires Mr Jones to sign a deed with an affiliate, at the request of the employer, containing the provisions from the agreement in relation to confidential information and non-competition11. Further, the agreement provides for a three month probationary period, and that employment may be terminated within that period by the giving of one week notice on either side, but that the probationary period does not apply to “existing employees who are signing a new contract for any required purpose”12.
[22] In a further statement made on 15 January 2013 13, Ms Ciccozzi said that Mr Jones did not “move across from the UK element of the Company to the Australian organisation” as he claimed in his application for an unfair dismissal remedy. Rather, Mr Jones was employed by a completely separate company, QinetiQ Limited, incorporated in the United Kingdom. Ms Ciccozzi also said that Mr Jones resigned his employment with QinetiQ Limited before commencing employment with QinetiQ Australia. Appended to Ms Ciccozzi’s statement was an email from Mr Jones to Mr Steven Morley, in the following terms:
“Letter of Resignation - N G Jones - Staff Number 00008483
Dear Steve
As you are aware, as part of the reorganisation within the Weapons Division, and as a result of the formation of Range Capability Services, I have been offered the Position of Senior Consultant within QPL (CW & EO), based in Brisbane, QLD.
In undertaking this new role, I will be responsible for the BD activities relating to this new business group, and I have a proposed start date in my new contract with QPL of Monday 21 May 2012.
Please take this letter as formal confirmation that I will effectively be leaving employment with QinetiQ Ltd on Friday 18 May upon completion of working my 4 weeks notice period.
I would appreciate it if you could commence the processes needing to be undertaken for my termination of employment.” 14
[23] Ms Ciccozzi disputed Mr Jones’ assertion that the termination of his employment with QinetiQ Australia was instigated by QinetiQ Limited, and said that QinetiQ Limited has no power to direct QinetiQ Australia to terminate the employment of one of its employees. Ms Ciccozzi also said that no person holds positions in both QinetiQ Limited and QinetiQ Australia.
[24] Mr Jones stated in his application for an unfair dismissal remedy that he was employed from November 1987 until his dismissal on 4 October 2012. Mr Jones also stated that QinetiQ was formed as a result of a partnership with the United Kingdom Ministry of Defence, with civil service employees being transferred across to employment with QinetiQ retaining all of their rights of service including pensions, employment terms and conditions and duration of service. Mr Jones joined the UK Ministry of Defence Procurement Executive as a graduate engineer in November 1987, and remained a civil servant until his transfer to QinetiQ in 2001.
[25] Mr Jones said that since that time, QinetiQ via a series of acquisitions, has become the QinetiQ Group, which is floated on the UK stockmarket and has a presence in North America and Australia under the umbrella of the UK parent company. In April 2012 a new business group was set up in QinetiQ UK called International Range Capability Services, with Australia being seen as a key market requiring a Subject Matter Expert (SME). Mr Jones took up that role and was “instructed” for taxation reasons, to resign his employment with QinetiQ UK in order to do so. In his supplementary witness statement made on 17 January 2013, Mr Jones said that his resignation was a formality, to enable the exit processes required to be completed, to be instigated. 15
[26] Mr Jones stated in his application that his QinetiQ UK employment ended on 18 May 2012 and his “new employment” with QinetiQ Pty Ltd in Australia started on 21 May 2012. Mr Jones further states that the business area he worked for in QinetiQ UK and in which he also worked for QinetiQ Pty Ltd, both report to the same Managing Director, who is based in the UK. On this basis, Mr Jones asserts that his employment with the QinetiQ group is continuous, so the effective period of his employment dates back to November 1987.
[27] In a witness statement made on 10 December 2012, 16 Mr Jones said that his move to Australia was part of an initiative referred to as “Vision 2015”, put in place by the CEO of QinetiQ PLC to develop and grow Australia as a “home market” for QiniteQ. Mr Jones’ move to Australia was part of a fully approved business plan for a new line of business set up in the UK, called International Range Capability Services. This business plan was approved by the Managing Director of the QinetiQ UK line of business called managed services. The CEO of QinetiQ Australia also reports to the CEO of QinetiQ PLC.
[28] Mr Jones also said that an employee of QinetiQ in either the UK or Australia has the same ability to purchase QinetiQ PLC shares, and the performance of the UK, Australian and North American arms of the business all play their part in underpinning the overall company performance and the share price on the London Stock Exchange. Mr Jones tendered an annual report of QinetiQ Group PLC, which alludes to the integration and performance of QinetiQ Australia. Mr Jones also tendered an interview given by the CEO of QinetiQ Australia, where the importance of that company working closely with QinetiQ UK to increase market share in Australia, the new home market, is stressed.
[29] Mr Jones maintained that weekly telephone reviews are conducted between QinetiQ Australia and QinetiQ UK as part of delivering the International Range Capability Services business model, and that the action that lead to the termination of his employment was instigated by QinetiQ Limited, and that the person leading this action from the UK holds the position of Operational Assurance Director for the QinetiQ Group and Programme Director Materials Management Improvement for QinetiQ Limited.
Submissions
[30] In its response to the application QinetiQ Australia asserts that Mr Jones was employed by a separate legal entity incorporated and operating in the UK - QinetiQ Limited. Mr Jones applied for and was successful in obtaining a position with QinetiQ Pty Ltd in Australia, and applied for and obtained a subclass 457 Visa allowing him to work in Australia for that company.
[31] QinetiQ Australia asserts that Mr Jones resigned from his previous employer to accept the job in Australia and was engaged in Australia on Australian terms and conditions. There was no reference in Mr Jones’ contract of employment allowing transfer of any conditions or entitlements from his previous employer, and the contract states that there is no prior recognition of service. QinetiQ Australia also points to the fact that Mr Jones’ subclass 457 Visa was applied for and approved on the grounds that this was not an inter-company transfer and this is clearly stated in the Visa application documents. Further, QinetiQ submits that Mr Jones was not seconded by QinetiQ Limited, as he did not have a contract with the UK business preserving his entitlements in accordance with usual practice.
[32] QinetiQ Australia submits that QinetiQ Limited has no presence in Australia and does not conduct business in Australia. Mr Jones’ case is based only on the fact that QinetiQ Limited is owned by a company that also owns QinetiQ Australia. Further, Mr Jones’ case is based on the proposition that by reference to s.22 of the Act, he is entitled to the definition of “continuous service” in that section. The period of service that Mr Jones has with QinetiQ Australia is four months and 12 days. There has been no transfer of employment between QinetiQ Australia and QinetiQ Limited, because a necessary condition of such a transfer is that both employers are national system employers.
[33] It is also submitted for QinetiQ Australia that it is not sufficient for Mr Jones to argue that QinetiQ Limited is a foreign corporation. It is only constitutionally competent for the Parliament of Australia to legislate under the head of power in s.51(xx) of the Constitution, if the legislation deals with the business activities of foreign corporations in Australia. What is required for QinetiQ Limited to be treated as a constitutional corporation for the purposes of the Act, is that it employs an individual in Australia, as provided in s.14. The Act is directed towards employment relationships, and to be sensible, those relationships have to be within Australia.
[34] Mr Jones submitted that the ultimate holding company of QinetiQ Australia is QinetiQ Group PLC, and QinetiQ Australia is wholly owned by QinetiQ Group PLC. QinetiQ Limited is also a subsidiary of QinetiQ Group PLC. Mr Jones also submitted that the question is whether his service with QinetiQ Limited counts as service with a national system employer for the purposes of ss. 22(5) and 22(7) of the Act. Mr Jones accepted that for QinetiQ Limited to be treated as a national system employer, it must be a constitutional corporation in accordance with s.14(1)(a) of the Act, relevantly a foreign corporation in accordance with s.51(xx) of the Constitution.
[35] Mr Jones submitted that a foreign corporation is simply a corporation formed outside Australia. Mr Jones cited Creighton and Stewart Labour Law 5th Edition to the effect that the mere fact of incorporation overseas will make a corporation a constitutional corporation and bring it within the definition of “national system employer”. If it is necessary to establish a more substantial connection between QinetiQ Limited and Australia, then this is met by virtue of the fact that QinetiQ Australia and QinetiQ Limited are both subsidiaries of QinetiQ Group PLC.
[36] It is also submitted by Mr Jones that material such as the annual report and accounts demonstrate that QinetiQ Group operates as a global company and that the operations of QinetiQ Australia are not distinguishable from those of the global company and the “corporate veil” should not be artificially allowed to draw such a distinction. Further Mr Jones submits that in order to meet the requirements of s.22(1)(a)(ii) of the Act, it is necessary to show that QinetiQ Australia and QinetiQ Limited are “associated entities” as defined in s.50AAA of the Corporations Act 2010 with such definition including “related bodies corporate” as defined in s.50 of that Act.
[37] Mr Jones submits that QinetiQ Australia is a subsidiary of QinetiQ Group PLC which is in turn the holding company of QinetiQ Limited, and the requirements of the Corporations Act 2010 are met such that QinetiQ Australia and QinetiQ Limited are related entities. Accordingly Mr Jones submits that he has met the minimum employment period.
Further Submissions
[38] After concluding the hearing and reserving my decision, I identified a number of decisions which might be relevant to the issues in this case. Directions were issued on 2 April 2013 to the parties, along with copies of the identified decisions, inviting further submissions from the parties. The Respondent made further submissions. The Applicant advised he did not wish to make further submissions.
[39] In Glenn Gardner v Milka-Ware International 17 Commissioner Gooley (as she then was) found that a company incorporated in New Zealand was a foreign corporation within the meaning in s.51(xx) of the Constitution, and to the extent that it employed persons to perform work within Australia, was a national system employer as defined in s.14 of the Act.18 In that case, it was held that the applicant performed work in Australia in the course of his employment with a foreign corporation, and Fair Work Australia had jurisdiction to deal with his dismissal in Australia by the foreign corporation.
[40] In Baldacchino and Ors v Triangle Cables (Aust) Pty Ltd 19 the question was whether the employer and other entities operating outside Australia were “related entities” for the purposes of the Corporations Act 2001 (Cth) so that they were taken to be one entity under the previous Workplace Relations Act 1996. The relevant legislative provision under consideration in that case, was concerned solely with the question of whether the entities were related and not whether they were constitutional corporations. This is a different question to that arising in the present case, where the relevant entities are required to be national system employer as defined in s.14 of the Act, before a transfer of employment can take effect.
[41] Similarly, the question in West v TWG Services Pty Ltd 20 was whether an arrangement whereby an entity formed outside Australia, employed a non-resident to perform work within Australia, was caught by the Workplace Relations Act 1996. In that case, the Court held that the employer was bound by the terms of the Workplace Relations Act 1996, in circumstances where the employee was performing his or her contract of employment within the territorial limits of Australia.
[42] The matter of Australian Timken Pty Ltd v Stone (No. 2) 21 involved an application for payment of long service leave pursuant to New South Wales legislation. The Applicant in that matter was employed wholly in Australia with some work undertaken overseas however it was not the case that the overseas work was done other than pursuant to the contract of employment formed within Australia. The matter is distinguishable from the present matter for that reason.
[43] In summary, cases where a foreign corporation has been found to be bound by the Act (and its predecessors), or cases where the activities of a foreign corporation have been relevant to the application of the Act to a related corporation formed within the limits of the Commonwealth, have involved foreign corporations in their capacity as employers of persons in Australia.
[44] As Counsel for QinetiQ Australia submits, these cases are consistent with the principles set out in the decision of the High Court of Australia in New South Wales v The Commonwealth 22 (the Work Choices Case) where the majority23 cited with approval the decision of Justice Gaudron in Re Dingjan Ex Parte Wagner24 to the effect that the main purpose of the power to legislate with respect to foreign corporations must be directed to their business activities in Australia.
Conclusions
[45] At the time of his dismissal, Mr Jones was employed by QinetiQ Australia, and had not completed the required minimum employment period with that company, in that his period of continuous service with QinetiQ Australia was less than the 6 month period specified in s.338(1)(a) of the Act. To satisfy the requirements of s.383(1)(a) of the Act, Mr Jones must demonstrate that his service with QinetiQ Limited is continuous with his service with QinetiQ Limited, and must do so within the parameters of the Act necessary to establish that continuity.
[46] In order for employment with two separate entities to be recognised as continuous service for the purposes of the Act, it is necessary that the service is deemed as continuous in accordance with the relevant provision of the Act. The terms “service” and “continuous service” are defined in s.22 of the Act. The general meaning is found in ss. 22(1), (2) and (3) of the Act. The circumstances in which service with one employer counts as service with another employer are set out in s.22(5), which essentially provides that if there is a transfer of employment in relation to a national system employee as provided in s.22(7), service with the first employer counts as service of the employee with the second employer. Section 22(7) categorises transfers of employment as those involving a transfer of employment between associated entities and those that involve a transfer of employment of a national system employee between non-associated entities.
[47] A transfer of employment between associated entities requires a transfer of employment from one national system employer (the first employer) to another national system employer (the second employer), where the employee becomes employed by the second employer within three months after the termination of the employee’s employment with the first employer. A transfer of employment between non-associated entities requires that the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer.
[48] It is axiomatic that transfer of employment as provided in s. 22 of the Act must be a transfer between two national system employers. This is apparent from the terms of s.22. Further s.380 provides that for the purpose of Part 3-2 in which the provisions relating to whether an employee is protected from unfair dismissal are found, the terms “employer” and “employee” are defined as national system employee and national system employer. This can be contrasted with, for example, Part 3-1 General Protections which provides at s.355 that in Part 3-1 employee and employer have their ordinary meaning, and are not limited to national system employers or employees.
[49] A national system employee is an individual, employed, or usually employed, by a national system employer. In order to be a national system employer an incorporated entity other than one in a Territory, must be a constitutional corporation - ie. a corporation to which s.51(xx) of the Constitution applies. While a foreign corporation may be a constitutional corporation by virtue of s.14(1)(a) of the Act, a constitutional corporation is a national system employer so far as it employs, or usually employs an individual.
[50] QinetiQ Limited can only be a national system employer, to the extent that it employs persons within Australia. QinetiQ Limited does not employ any person in Australia. Accordingly, QinetiQ Limited is not a national system employer and there can have been no transfer of employment between QinetiQ Limited and QinetiQ Australia.
[51] I accept that it may be the case that QinetiQ Australia and QinetiQ Limited are associated entities, by virtue of being related bodies corporate as provided in s.50AAA (2) of the Corporations Act 2001. In this regard, s.50(c) of the Corporations Act 2001 provides that where a body corporate is a subsidiary of a holding company of another body corporate, the first mentioned body and the other body are related to each other. Section 46 of the Corporations Act 2001 provides that a body corporate is a subsidiary of another body corporate if and only if the other body controls the first body’s board, or the casting of more than half of the maximum number of votes that might be cast at a general meeting, or holds more than half of the issued share capital.
[52] However the fact that QinetiQ Australia and QinetiQ Limited may be related bodies corporate and would meet the definition of related entities, is not sufficient to establish a transfer of employment. For the reasons set out above, for Mr Jones to establish continuous service in accordance with s.22 of the Act it is also necessary that both entities involved in the transfer of employment are national system employers as defined in s.14 of the Act.
[53] It is also the case that Mr Jones resigned his employment with QinetiQ Limited, and his employment entitlements with QinetiQ Limited were not preserved in the United Kingdom or recognised by QinetiQ Australia. Mr Jones, on the facts set out in his application, accepted new employment with QinetiQ Australia. There is no basis for finding that QinetiQ Limited continued to employ Mr Jones after he came to Australia or that QinetiQ Limited transferred Mr Jones to Australia to perform work for QinetiQ Limited. Mr Jones did not contend that this was the case.
[54] Mr Jones has not served the minimum period of employment as required by s.382(a) and is not a person protected from unfair dismissal. The Commission does not have jurisdiction to deal with Mr Jones’ application for an unfair dismissal remedy and that application must be dismissed. An Order to that effect will issue with this Decision.
DEPUTY PRESIDENT
Appearances:
Mr N. Jones on his own behalf.
Mr A. Herbert of Counsel on behalf of QinetiQ Pty Ltd.
Hearing details:
2013.
Brisbane:
January 18.
1 The State of New South Wales Plaintiff; and The Commonwealth of Australia Defendant. The State of South Australia Plaintiff; and The Commonwealth of Australia Defendant. The State of Western Australia Plaintiff; and The Commonwealth of Australia Defendant (1989 - 1990) 169 CLR at 482
2 Ibid per Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ at 497-498.
3 Ibid per Deane J at 504
4 Explanatory Memorandum to Fair Work Act paragraph 174.
5 Exhibit 1 Witness Statement of Jessica Julia Ciccozzi.
6 Exhibit 2 Attachment “JC4”.
7 Exhibit 1 Attachment “JC1”
8 Exhibit 1 Attachment “JC3”.
9 Exhibit 1 Attachment “JC3” clause 3.1.
10 Ibid clause 10.
11 Ibid clause 36.
12 Ibid clause 37.
13 Exhibit 2 Supplementary Witness Statement of Jessica Julie Ciccozzi.
14 Exhibit 2 Attachment “JC5”.
15 Exhibit 4.
16 Exhibit 3.
18 Ibid at [24].
19 PR 972581.
20 (2009) 189 IR 97.
21 [1971] AR 246.
22 (2006) 229 CLR 1.
23 Ibid at 114.
24 (1995) 183 CLR 323 at 365.
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