DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Holly Gregory
v
Shaver Shop Pty Ltd
(U2016/4098)

Application for relief from unfair dismissal.

[1] Ms Holly Gregory alleged the termination of her employment by Shaver Shop Pty Ltd was unfair.

[2] Shaver Shop objected to Ms Gregory’s application on the grounds that she had not served the minimum employment period.

[3] It was not disputed that Ms Gregory had been employed by Shaver Shop Pty Ltd from 23 September 2015 and that she was dismissed on 19 January 2016.

[4] It was not disputed that Ms Gregory worked for a franchisee who had operated Shaver Shop Rockingham from December 2014.

[5] I granted permission to Shaver Shop to be represented by a lawyer as I accepted that the issue of whether Shaver Shop Pty Ltd and its franchisee were associated entities and if not whether Ms Gregory’s contract of employment meant that Shaver Shop had met the requirements of section 384(2)(b) raised issues of some complexity and that permitting representation would enable the matter to be dealt with more efficiently. Permission was not opposed by Ms Gregory.

[6] Section 384(2)(b) of the Fair Work Act 2009 provides as follows:

(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.

[7] It was not disputed that Ms Gregory was a transferring employee and that there was a transfer of business.

[8] The only question to be resolved was did Shaver Shop inform Ms Gregory in writing before the new employment started that a period of service with the old employer would not be recognised.

[9] If this were resolved in the positive, then it would be necessary to determine if Shaver Shop and its franchisee were associated entities.¹

[10] Shaver Shop relied upon the letter of offer and the contract of employment which were provided to Ms Gregory prior to 29 September 2015.

[11] The letter of offer relevantly said:

“Your employment is on the basis of a 6 month probation period commencing Tuesday 29^th September 2015 during which time we can both mutually evaluate your performance in the role of Assistant Store Manager.”

[12] The contract of employment also referred to a six month probation period.

[13] Shaver Shop relied upon the evidence of Mr Shane Catania who interviewed Ms Gregory for her position. It was his evidence that he told Ms Gregory that her previous employment with the franchisee would not be recognised, that she would be treated as a new employee, that her employment would be subject to new six month probation and she would have to complete the induction process.

[14] Ms Gregory gave evidence that Mr Catania did not explain that her service would not count.

[15] Shaver Shop relied on an obiter comment of Commissioner Cambridge in Kefer v Tattersall’s Holdings Pty Ltd.² Commissioner Cambridge was considering this issue in light of a letter of offer which said:

“Probationary Period

You will undertake a probationary period of 3 months in this role. Mutual suitability will be determined during the probationary period and permanent appointment may be offered upon its successful completion. During the probationary period, either you or the Company may terminate your employment and this [sic] agreement by providing one weeks [sic] notice in writing. The Company may at its option make payment in lieu of all or part of the notice period.

This probation period does not impact on the minimum employment period under the Fair Work Act 2009.”³

[16] Having found that that this did not meet the requirements of section 384(2)(b)(iii) Commissioner Cambridge went on to say:

“In passing I note that an unambiguous statement in a letter of offer might have great significance in circumstances involving a transfer of business, not involving associated entities, and so that the provisions of subsection 384 (2) (b) (iii) were invoked and the period of service with the old employer, as distinct from the first employer, would not be recognised.”⁴

[17] I do not disagree with Commissioner Cambridge. However it is necessary for the letter of offer to contain an unambiguous statement. That statement must specifically address the requirements of s.384(2)(b)(iii) namely that service with the old employer will not be recognised.

[18] I do not accept that including a period of probation in the letter of offer or the contract of employment satisfies this requirement. Unfair dismissal legislation is beneficial legislation. The Parliament has made it clear that certain persons will not be protected from unfair dismissal. Where there is a transfer of business the employer is obliged to make it clear to the transferring employee whether service with the old employer will be recognised. This is important for two reasons. One, the employee will know that he or she will not be protected from unfair dismissal for the qualifying period and secondly, it will assist the employee to determine if he or she refuses the job offer whether he or she is entitled to redundancy pay.⁵ For these reasons the written advice to employees should be clear.

[19] I am not satisfied that Mr Catania’s explanation to Ms Gregory would have made it clear that she would not be able to make an unfair dismissal application in the first six months of her employment. Even if he had, the requirement of the Act is that the advice must be in writing. I do not consider any oral explanation can make up for any defect in the written notice.

[20] Accordingly Shaver Shop’s objection to Ms Gregory’s application is dismissed as she has met the minimum employment period. An order to that effect will be issued with this decision. The application will be referred to conciliation.

DEPUTY PRESIDENT

Appearances:

A Gregory on behalf of the Applicant.

N Tindley for the Respondent.

Hearing details:

2016.

Melbourne and Perth, by telephone link:

29 February.

1 S.22(7)

2 [2012] FWA 2375

3 Ibid at [38]

4 Ibid at [39]

5 See s.122(3)

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