[2019] FWCFB 1099 Note: Refer to the Federal Court decision of 16 October 2019 for the result of this matter.

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604—Appeal of decision

Bronze Hospitality Pty Ltd
v
Janell Hansson
(C2018/5304)

DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT COLMAN
DEPUTY PRESIDENT SAUNDERS

MELBOURNE, 20 FEBRUARY 2019

Appeal against decision [2018] FWC 5665 of Commissioner Wilson at Melbourne on 18 September 2018 in matter number U2018/6613 – casual employment – whether employment regular and systematic – reasonable expectation of ongoing employment – whether employer was a small business employer – appeal upheld.

[1] This decision concerns an appeal lodged by Bronze Hospitality Pty Ltd (Bronze) against a decision of Commissioner Wilson 1 in which he dismissed Bronze’s jurisdictional objections to an unfair dismissal application brought by Ms Janell Hansson.

[2] Ms Hansson’s employment relationship with Bronze commenced on 28 November 2017, when she was first engaged as a casual. Her period of service as a casual employee continued until 21 January 2018. From 22 January 2018 until her dismissal on 7 June 2018, Ms Hansson was employed as a permanent full-time employee.

[3] Bronze raised two objections to the application. First, Bronze contended that it was a small business employer and that the ‘minimum employment period’ was therefore one year, which Ms Hansson had clearly not served. Secondly, Bronze said that in any event, Ms Hansson’s service as a casual did not count towards her period of employment, because she was not engaged on a regular and systematic basis and did not have a reasonable expectation of continuing employment. As a result, Bronze said, Ms Hansson’s period of employment was less than six months.

[4] The Commissioner decided that Bronze was not a small business employer, because it employed 15 employees, 2 and that the minimum employment period was therefore six months. In the course of reaching this conclusion, the Commissioner determined that four particular casual employees had been employed by Bronze on a regular and systematic basis and that they should be included in the total number of persons employed.3 The Commissioner also decided that Ms Hansson had satisfied the six month minimum employment period, because all of her casual service was to be included in her period of employment with Bronze.4 He found that Ms Hansson’s casual employment had been regular and systematic, and that she had a reasonable expectation of ongoing employment.5

[5] An appeal under s.604 of the Fair Work Act 2009 (Act) is an appeal by way of rehearing, and the Commission’s powers on appeal are exercisable only if there is error on the part of the primary decision-maker.⁶ There is no right to appeal and an appellant must seek the permission of the Commission. A differently constituted Full Bench granted permission to appeal on 19 November 2018. The hearing of the appeal took place before us on 22 January 2019.

[6] Bronze’s Notice of Appeal contained three grounds alleging error on the part of the Commissioner, each of which was elaborated upon in written and oral submissions.

Was Bronze a small business employer (s.23)?

[7] The first ground of appeal contended that the Commissioner erred in his conclusion that the four casual employees were each employed on a regular and systematic basis and that they should therefore count in the analysis of whether Bronze was a small business employer. The second and related ground of appeal contended that the Commissioner consequently erred in concluding that the minimum period of employment that Ms Hansson had to serve with Bronze in order to bring an unfair dismissal claim against it was only six months, and not one year.

[8] Section 23 of the Act provides that a person is a small business employer at a particular time if it employs fewer than 15 employees at that time. For the purposes of calculating the number of employees, a casual employee is not to be counted unless, at the time, the person ‘has been employed by the employer on a regular and systematic basis’
(s.23(2)(b)).

[9] Before the Commissioner, Ms Hansson contended that Bronze employed 15 people at the time of her dismissal, and submitted a list of names. Bronze accepted that the first 11 people on her list counted for the purpose of s.23, but contended that the last four were casuals who were not employed on a regular and systematic basis.

[10] The Commissioner set out a summary of the evidence about the working arrangements of these four ‘contested’ casuals:

“[36] The Respondent’s documents show the following about the Four Contested Employees:

• NB

• Started employment at some time between 20 and 26 February 2017 and was still in employment on 10 June 2018;

• “% on time” was 85.71%;

• Worked 31.22 hours between 28 May 2018 and 10 June 2018

• AM

• Started employment on 1 May 2017 and ended employment on 19 July 2018;

• “% on time” was 75%;

• Worked 46.12 hours between 28 May 2018 and 10 June 2018.

• AR

• Started employment on 7 December 2017 and was still in employment on 10 June 2018;

• “% on time” was 66.67%;

• Worked 31.67 hours between 28 May 2018 and 10 June 2018.

• LT

• Started employment on 2 March 2018 and was still in employment on 10 June 2018;

• “% on time” was 81.82%;

• Worked 51.97 hours between 28 May 2018 and 10 June 2018.” 7 [Footnotes omitted]

[11] The Commissioner then analysed this evidence in the following way:

“[37] The foregoing indicates that each of the Four Contested Employees likely had, at 10 June 2018, a continuing employment relationship with Bronze Hospitality sufficient to allow a finding that each had at that date of Ms Hansson’s dismissal on
7 June 2018 a reasonable expectation of continuing employment. The limited evidence on the subject does not allow a finding to the contrary that any one of the people concerned did not have such an expectation. Further, the period 28 May 2018 and
10 June 2018 is relatively short, comprising a reference period of just 13 days. The hours worked by each of the Four Contested Employees in that period ranges between 31 and 52 hours; such is by no means irregular or intermittent employment. On the other hand evidence could have been presented by the Respondent, if it was actually available, about the irregularity or the absence of a systematic nature of the employment of each during that, or a longer period.

[38] LT’s period of employment was the shortest, being from 2 March 2018 however, no cogent evidence was presented by the Respondent to the effect that the hours the person worked over the three months of employment, or the 52 hours worked in the 28 May – 10 June period was merely a casual happenstance with them having no reasonable expectation at that time of ongoing employment. No endeavour was made to provide direct evidence that LT was merely filling in for a temporary uplift in customers which could end at any moment. The most the Commission has before it are the general contentions from Mr Thorpe about the transient nature of the industry.

[39] Mr Thorpe’s submission, both in respect of LT and the other Four Contested Employees, to the effect that the hospitality industry is notoriously transient and featured by high turnover is neither unremarkable or inconsistent with the Commission’s own knowledge, however such contention does not dispense with the matter – instead the question is whether, at the time Ms Hansson was dismissed, the relevant “employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis”.

[40] I also take into account that each employee was measured for their relativity to start shifts on time – ranging in the case of the Four Contested Employees between 66.67% and 85.71%. These precise measurements indicate some expectation of continuity, albeit in tandem with the other circumstances of the employment relationship of each person. Why would it be necessary to consider “% on time” if not to make decisions about future work?

[41] I am satisfied that each of the Four Contested Employees at the time of
Ms Hansson’s dismissal were employed by Bronze Hospitality on a regular and systematic basis and likely had an expectation of continuing employment.” 8
[Footnotes omitted]

[12] In our opinion, this analysis discloses two errors.

[13] First, the Commissioner has proceeded on the assumption that s.23 is concerned with whether a casual employee has a reasonable expectation of continuing employment. The provision makes no reference to such an expectation, and differs in this respect from s.384(2), which counts service as a casual towards the period of employment only if it is regular and systematic and the employee had a reasonable expectation of continuing employment.

[14] We have considered whether the Commissioner’s examination of the four employees’ expectation of ongoing employment simply formed part of his analysis of whether their employment was regular and systematic. However, the Commissioner does not say this, and we do not consider that a fair reading of the passage above indicates that he took this approach. The Commissioner makes a finding at [37] that each of the four employees had a reasonable expectation of continuing employment, which is restated or referred to in paragraphs [38], [40] and [41]. It was evidently an important part of his reasoning in concluding that the four casual employees fell within s.23.

[15] We note that at [39], the Commissioner correctly states the question that he is required to answer in relation to s.23, namely whether, at the time of Ms Hansson’s dismissal, each of the four casuals has been employed on a regular and systematic basis. However, the question he answers is one concerned both with regular and systematic employment and reasonable expectation of ongoing employment. 9 In our view, the Commissioner mistakenly considered that the question of whether the employees had a reasonable expectation of ongoing employment was an element of the test established by s.23(2)(b).

[16] This might not have mattered, had the Commissioner otherwise satisfied himself that the casual employment of the four employees was regular and systematic. However, it is not clear to us that, independent of his consideration of the employees’ expectation of ongoing employment, the Commissioner would have reached the conclusion that they had been employed on a regular and systematic basis.

[17] Secondly, and in any event, we do not think that there is a sufficient basis in the evidence to ground a conclusion that the four casual employees were employed on a regular and systematic basis.

[18] The evidence cited by the Commissioner as to the working arrangements of the four casual employees went to three issues: the commencement of their casual employment and whether they were still employed on 10 June 2018; Bronze’s record of their punctuality, namely how often, in percentage terms, they started work on time; and the number of hours they worked over the 13 days between 28 May 2018 and 10 June 2018.

[19] As to the first matter, the commencement dates of the four employees tells us the period over which they have been on the books as casuals, and available to work, but it does not of itself say anything about how often and in what, if any, pattern they worked, or more generally whether the casual employment was regular or systematic. As to the second matter, the data on the employees’ punctuality was evidently a matter that the Commissioner considered to be relevant to the question of their expectation of ongoing employment, as he considered that it had been collated by the employer to make decisions about future work. 10 But it is not clear to us how it pertains to regularity or system in the employees’ casual employment. Thirdly, the information about the hours worked by the four employees in the 13 day period from 28 May to 10 June 2018, while relevant, tells us little about whether their employment was regular and systematic.

[20] We recognise that each of the four employees worked a reasonable number of hours in this 13 day period, namely 31, 46, 31 and 51 hours respectively. But it is not known on which days they worked. For example, the two employees who worked 31 hours might have worked ten hours on each of three successive days. It is difficult to see how evidence of three days’ work could lead to a conclusion that the casual employment was regular and systematic. Perhaps they worked three hours on each of ten days. This might establish a pattern, relevant to the consideration of whether the employment was systematic, and might potentially support, although not necessarily found, a conclusion of regularity.

[21] In any event, evidence of work done over a 13 day period is a fragile basis to found a conclusion that the employees were employed on a regular basis. We do not say that a period of 13 days could never be sufficient in order to reach such a conclusion. There is no minimum period for which persons must have been employed on a regular and systematic basis in order to ‘count’ for the purposes of s.23. All the circumstances must be taken into account. But in this case, considering all that is known about the four casual employees, we do not consider the evidence of their working arrangements to be an adequate basis to conclude that they were employed on a regular and systematic basis.

[22] We also note that the details of the hours worked by the four employees concerned a period that extends three days beyond the end of Ms Hansson’s employment on 7 June 2018. It is difficult to see how hours worked by the four employees after Ms Hansson’s dismissal could be taken into account. In our view, only 10 of the 13 days are relevant, and it is not known which of the hours referred to were worked in the last three days and should therefore be excluded.

[23] In addition to the evidence cited in the decision, we have reviewed the transcript, and considered the evidence given by Ms Hansson about the working arrangements of ‘N.M.’, whom she said worked every Saturday and Sunday. 11 However, Ms Hansson also said that she had worked with all of the four contested casuals ‘pretty much every day’ and that they had been there since she started.12 But this cannot be the case, as N.M. only started work at Bronze in February 2018, and ‘L.T.’ commenced in March 2018, both well after
Ms Hansson’s commencement as a casual employee in November 2017. Even if it were accepted that ‘N.M.’ worked regularly and systematically on Saturdays and Sundays, this leaves the total number of employees of Bronze at 12.

[24] In Yaraka Holdings Pty Ltd v Giljevic, 13 the Court noted that it is the engagement of a casual employee that must be regular and systematic, not the hours worked pursuant to such engagement.14 It also held that the term ‘regularly’ should be construed liberally, and that ‘systematic’ does not mean predictable.15 We respectfully adopt these observations. However, it is important to note that the Court did not say or suggest that the hours of work are analytically unimportant. Clearly, the days on which a person works and the hours worked on those days are relevant to the consideration of whether casual employment is regular and systematic, and whether the person has a reasonable expectation of ongoing employment.

[25] Finally, the Commissioner also referred to Bronze’s own list of persons employed at the relevant time, which included details of nine other casual employees. Although it appears that Ms Hansson did not contend that these persons were casual employees who were employed on a regular and systematic basis, the Commissioner stated that consideration of the evidence about those nine employees (this evidence being the date they were first employed and the hours worked between 28 May and 10 June 2018) ‘does not lead to the view that the employment of all of those people was not on a regular and systematic basis.’ 16 To the extent that this is a finding that these people were employed on a regular and systematic basis, it is not sustainable, for the same reasons identified in relation to the four contested employees above.

[26] For these reasons, we consider that the Commissioner’s conclusion that the four ‘contested’ casuals and the nine additional casuals were employed on a regular and systematic basis was not open on the evidence. The consequence of this is that there was no basis for the Commissioner to determine that Bronze was not a small business employer.

Was Hansson engaged on a regular and systematic basis etc. (s.384(2))?

[27] Bronze’s third ground of appeal submitted that the Commissioner erred in finding that Ms Hansson’s seven and a half weeks (in fact nearly eight weeks) of casual employment by Bronze was on a regular and systematic basis with a reasonable expectation of ongoing employment, and that it should therefore be taken into account in determining her total period of employment.

[28] It will be recalled that s.384(2)(a) states that 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 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”

[29] We make some observations about the construction of s.384(2)(a)(ii). First, ‘during’ can mean either ‘throughout the course of’ or ‘at a point in the course of’. In our view, the first of these meanings is intended. The sub-provision is an exception to an exception; a period of casual service does not count, unless two requirements are met. Both of these requirements concern states of affairs that can develop over time. This context points to the word ‘during’ connoting a continuous period, rather than a point in time. Further, the alternative construction would mean that a casual employee need only have a reasonable expectation of continuing employment for any fleeting period in the course of the casual employment. There is no apparent rationale that would support this being the intended meaning. Finally, we note that the explanatory memorandum to the Fair Work Bill states simply that ‘service as a casual employee does not count towards the period of employment unless it was on a regular and systematic basis and the employee had a reasonable expectation of continuing engagement on a regular and systematic basis.’ 17 This wording is consistent with the interpretation we favour, and inconsistent with a ‘point in time’ meaning. The effect of this is that a particular period of service as a casual employee only ‘counts’ in respect of periods when the casual employment was regular and systematic and the employee had a reasonable expectation of continuing employment.

[30] Secondly, the continuing employment that is to be the object of the reasonable expectation is employment as a casual employee. So much is clear from the reference to ongoing employment on a ‘regular and systematic basis’. However, if an employee has an expectation of future permanent employment, this might be relevant to whether the employee also had an expectation of continuing casual employment pending the commencement of permanent employment.

[31] Thirdly, Bronze submitted that the definition of ‘long term casual employee’ in
s.12 of the Act affects the meaning of the word ‘casual’ in s.384(2). This is not the case. The expression ‘long term casual employee’ does not appear in s.384. It is relevant instead to requests for flexible working arrangements and parental leave (see ss.65(2)(b)(i) and 67(2)(a)).

[32] Bronze’s principal contention in its third ground of appeal was that it is not possible for a casual employee to work on a regular and systematic basis, or to have or develop a reasonable expectation of continuing employment, after some eight weeks of casual work. We reject this contention. As we have said above in relation to s.23, there is no minimum period of time that is required in order for casual employment to assume a regular and systematic character, nor is any minimum period necessary for an employee to develop a reasonable expectation of continuing employment. This can be simply illustrated by the example of a casual employee who is told on commencement that his or her casual employment will be ongoing, as well as regular and structured in some way, and who is then rostered accordingly.

[33] Where nothing is said about the regularity or system of engagement, or its possible duration, all of the circumstances are to be considered in order to ascertain whether s.384(2) is engaged. Clearly upon a person’s first engagement, without more, one could not speak of regularity or system, and in the very early phase of a casual employment relationship it may be difficult to substantiate that it is either regular or systematic, or that any reasonable expectation exists as to ongoing employment. However, a short period might well be sufficient, depending on the circumstances. The question in the present matter is whether it was reasonably open on the evidence for the Commissioner to conclude that Ms Hansson’s circumstances fell within s.384(2).

[34] The Commissioner set out the evidence submitted by Bronze as to Ms Hansson’s working arrangements from 28 November 2017 to 26 January 2018. At [9] of his decision, in describing the background to the matter, the Commissioner noted the number of hours worked by Ms Hansson each fortnight, and at [12], helpfully, he set out a table identifying each day on which Ms Hansson worked, as well as her start and finish times.

[35] The Commissioner’s consideration of whether Ms Hansson’s period of casual employment fell within s.384(2)(a) commenced, following a review of the relevant authorities, at [24]. He noted that it was clear that Ms Hansson’s hours varied somewhat from week to week, but that this did not necessarily lead to a conclusion that her employment as a casual was not regular or systematic. He then stated:

“[25] The Respondent’s argument that a period of 7 weeks employment is incapable of being regarded as a period of regular and systematic employment is not made out and fails. Further, its contention that the work within that period of 7 weeks was not regular and systematic is also not made out. The evidence of Ms Hansson was that she was engaged to work as a casual with the prospect of being converted to full time employment if the relationship progressed positively. The evidence of the timesheets is that the actual work performed by Ms Hansson in the period in question was part of a continuing relationship between the parties.

[26] I therefore find that Ms Hansson’s employment as a casual was regular and systematic. Her period of employment for the purposes of the minimum employment period was between 28 November 2017 and 7 June 2018, a period of slightly more than 6 months and 1 week.” 18

[36] The Commissioner’s decision does not reveal the precise basis upon which he concluded that Ms Hansson’s employment as a casual was regular and systematic. However, an examination of the details of Ms Hansson’s rostered work confirms that the conclusion was plainly open to the Commissioner. The table set out at [12] of the decision shows that over the period of her casual employment, Ms Hansson was engaged to work on 46 occasions. In six of the nearly eight weeks she worked on Tuesday, Wednesday, Thursday and Friday, and in all but one she worked on a Saturday. She also worked five Sundays. On 30 of the 46 occasions, she started worked around 17.00 to 18.00, and on most of those occasions worked until around 21.00 to 23.00.

[37] In our opinion, there was an ample basis in the evidence for the Commissioner to conclude that Ms Hansson’s period of employment was on a regular and systematic basis over this period. In our view, he reached the correct conclusion. The evidence which is available to support it is to be contrasted with the evidence going to the working arrangements of the four contested casual employees discussed earlier.

[38] Then there is the question of whether Ms Hansson had a reasonable expectation of continuing employment by Bronze on a regular and systematic basis. At [5], the Commissioner states his conclusion that Ms Hansson did have a reasonable expectation of ongoing employment with Bronze Hospitality. At [8], the Commissioner states:

“…However, that which she has put forward indicates that she was engaged initially in the pre-Christmas period when the business was very busy, and with the expectation that if things worked out she would be offered ongoing employment at a later time. That offer came about, likely in the last week of December, with it then taking until late January to formally document the ongoing arrangement and convert her employment from casual to full-time.”

[39] Bronze contended that the Commissioner’s conclusion that Ms Hansson had a reasonable expectation of ongoing employment was not supportable, given her evidence to the effect that she did not expect to be employed for six months. In fact, what Ms Hansson said in her evidence was that, in the industry, employees know that their job might only last six months, and that if they do last that long it is a good effort. 19 We accept that this evidence is relevant to the consideration of whether Ms Hansson had a reasonable expectation of ongoing employment as a casual employee, however it is far from definitive. We reject Bronze’s contention that Ms Hansson’s evidence shows that she did not have a reasonable expectation of continuing employment.

[40] Bronze also contended that the Commissioner was wrong to state, at [8], that Ms Hansson had put forward a position that ‘she was engaged initially in the pre-Christmas period when the business was very busy, and with the expectation that if things worked out she would be offered ongoing employment at a later time.’ Bronze says that there was no basis in the evidence for the conclusion that when she was engaged, there was already an expectation that ‘if things worked out’, she would be given ongoing employment. We agree that the possibility of ongoing permanent employment arose only later, towards the end of December, not at the beginning of Ms Hansson’s employment. The Commissioner asked
Ms Hansson during the proceedings whether it had been held out to her that, if things went well, she would become a permanent employee, but she did not say ‘yes’. 20

[41] Similarly, Bronze contended that the Commissioner was wrong to find, at [25], that there had been evidence from Ms Hansson ‘that she was engaged to work as a casual with the prospect of being converted to full time employment if the relationship progressed positively.’ We agree. There was no such evidence. As we have said, only in late December was she told that she would be offered permanent employment, which ultimately occurred only later in January.

[42] However, Ms Hansson also gave evidence that from the commencement of her casual employment, she was told that it was going to be busy over the Christmas period and school holidays and that she should expect a lot of hours. She gave evidence that she in fact expected that she was going to receive regular work because Bronze had told her that it was their busiest period. 21 In late December, she was offered the prospect of permanent employment22 and on 22 January 2018 she received this offer and accepted it.

[43] In our view, this evidence, which was not contradicted by Bronze, is sufficient to found a conclusion that Ms Hansson had a reasonable expectation of ongoing employment as a casual employee. She was told that she would receive regular work, she expected to receive it, and she did in fact receive it. Although the precise date on which she was told that she should expect a lot of work is not indicated, it was evidently at the commencement of her employment (‘from the moment I was there’). 23 The ‘Christmas period’ might only extend to 25 December but the ‘school holidays’ continue into January. Then in late December,
Ms Hansson was told to expect a permanent contract. As explained above, what is relevant under s.384(2)(a) is an expectation of ongoing work as a casual, however, in this case the discussion about receiving a permanent contract would give rise to a reasonable expectation of continuing casual employment until the permanent employment was finalised. In our view, the Commissioner was correct to conclude that Ms Hansson had a reasonable expectation of ongoing employment for the purposes of s.384(2)(a)(ii).

[44] As we have said, the period of regular and systematic employment must coincide with the reasonable expectation of ongoing employment, in order for the relevant period to count towards the period of employment. In light of what she was told to expect when she joined, and the days and hours she actually worked, we consider that all of Ms Hansson’s casual employment was regular and systematic, and that she had a reasonable expectation of continuing employment throughout this period. Although there were errors in his reasoning, the Commissioner’s conclusion that all of Ms Hansson’s casual service counts towards her period of employment was correct.

[45] Accordingly, we reject Bronze’s third ground of appeal.

Conclusion

[46] It follows from our conclusions in respect of the first and second grounds of appeal that the Commissioner’s decision was affected by appealable error. On this basis, the appeal should be upheld and the decision quashed, insofar as it determined that Bronze was not a small business employer and that the minimum employment period was six months. The decision is otherwise confirmed.

[47] In our view, the appropriate course is for us to remit Bronze’s jurisdictional objection that it was a small business employer to Commissioner Wilson for redetermination. This will afford to the parties an opportunity to call or seek to have produced further evidence of the working arrangements of the four contested employees, and potentially the nine additional employees.

[48] We order as follows:

(1) The first and second grounds of appeal are upheld;

(2) The decision ([2018] FWC 5665) is quashed, insofar as it determined that Bronze was not a small business employer and that the minimum employment period was six months;

(3) The decision is otherwise confirmed; and

(4) Bronze’s jurisdictional objection that it was a small business employer, and that Ms Hansson had not served the minimum employment period of one year, is remitted to Commissioner Wilson for redetermination.