Fair Work Act 2009

s.394 - Unfair dismissal

Application for an unfair dismissal remedy - jurisdictional objection - whether minimum employment period met - whether a transfer of business within the meaning of s 311 of the Fair Work Act 2009 had occurred - jurisdictional objection upheld - minimum employment period not met - application dismissed.

[1] On 2 December 2022, Mr Anei Arol (the Applicant) lodged an application pursuant to s 394 of the Fair Work Act 2009 (the Act) in which he asserts that the termination of his employment with Brimbank City Council (the Respondent) on 16 November 2022 was unfair. The Applicant seeks an order for reinstatement or compensation in the alternative.

[2] On 13 December 2022, the Respondent filed its Form F3 response to the unfair dismissal application in which it raised a jurisdictional objection to the application, that being the Applicant's employment does not meet the minimum employment period of six months. Consequently, the Respondent contends that the Applicant is not a person protected from unfair dismissal and is therefore not entitled to pursue relief for his claimed unfair dismissal under the Act.

[3] Conciliation of the matter before the Commission failed to achieve a resolution and consequently the matter was listed for determinative conference/hearing before me on 19 April 2023 to determine the Respondent's jurisdictional objection in respect of the minimum employment period and the merits of the application. Materials were filed by the Applicant and Respondent in accordance with directions issued by the Commission. The Applicant appeared on his own behalf and gave evidence at the hearing/conference while the Respondent was represented by Ms A Cuchilla-Castillo who called Ms J Willis, the Employee Services Co-ordinator for the Respondent, to give evidence.

• [4] On 9 December 2021, the Applicant was offered casual employment by Hays in the position of "Multiskilled Parks and Garden"[1]. In that role he was deployed on a casual assignment to the Respondent which was a client of Hays. The email from Hays setting out the conditions of his assignment relevantly stated that;

• the Applicant was to commence the casual assignment with the Respondent on 13 December 2021;

• he was to be engaged and paid as a casual employee of Hays;

• the work performed under the assignment was covered by the Local Government Industry Award 2010; and

• • the ordinary hourly rate to be paid to the Applicant by Hays was $30.42.[2]

• [5] The Applicant's employment by Hays was on a regular and systematic basis and his assignment with the Respondent continued up until the point he applied for and was successful in securing direct employment with the Respondent. Jason McDonald was the Team Leader for the Horticulture team at the time the Applicant was on assignment to the Respondent from Hays. Mr McDonald spoke positively of the Applicant's performance in the period prior to his being employed directly by the Respondent[3]. Ms Willis confirmed in her evidence that Mr McDonald ceased employment with the Respondent on 16 June 2022 which was prior to the Applicant's commencement of employment with the Respondent[4].

• [6] On 6 May 2022, the Applicant was interviewed for the position of Multi Skilled Worker with the Respondent and was subsequently offered employment in that role[5] (Letter of Employment) with a start date of 20 June 2022[6]. The salary on commencement was that of $70,701.68 based on the Parks Level 1 classification in the Brimbank City Council Enterprise Agreement 9, EA9 2021[7] (the Agreement) which covered him in his employment with the Respondent. The Applicant accepted the role and commenced employment with the Respondent on 20 June 2022.

[7] Ms Willis stated during cross examination that the Respondent employs approximately 85 employees in the Park Services department in which the Applicant was employed prior to his dismissal. She further stated that the Respondent sources supplementary labour from a range of service providers, including Hays, through a portal used by the Respondent called Comensura. Ms Willis explained the process followed by the Respondent in engaging supplementary labour. Once the proposed use of supplementary labour is approved by the Respondent, the relevant manager would then use the Comensura portal to identify whether any service providers have staff 'on their books' capable of meeting the skills and experience requirements of the required supplementary labour position. On identifying a suitable candidate, the supplementary labour is then engaged through the successful service provider. Hays is not exclusively contracted to provide that service but is one of several providers that may be used by the Respondent.

[8] Ms Willis went on to explain that supplementary labour is sourced for a range of reasons including covering long term illness and injury, short term peaks in activity and short-term gaps created by staff resignations. The Respondent continues to use various service providers including Hays, to cover such staffing needs. She emphasised that the respondent used Hays, and other companies to provide supplementary labour prior to the Applicant's employment and continues to use those companies for the same purpose. She rejected that the Respondent had in-sourced work when it offered employment to the Applicant in June 2022 as the work performed by the Park Services department was and is overwhelmingly performed by direct employees of the Respondent.

[9] Ms Willis confirmed that at the time of the Applicant's recruitment by the Respondent, there were several vacancies in the Parks Services department that were being filled and that while the Applicant was successful in securing employment, other supplementary labour engaged at the time were not successful in securing employment.

• [10] The Applicant was subject to a progressive Probationary Performance Report[8] (the Probationary Report) which involved an assessment on 2 August 2022 and 15 November 2022. The completed and uploaded Probationary Report records that the Applicant "has not displayed Brimbank values and at this point will not be offered an ongoing position_"_. The Applicant claimed in his evidence that the August 2022 review referred to in the Probationary Report was not discussed with him at the time in August and that he was asked to sign off on both the 2 August 2022 and 15 November 2022 reviews when he met with his Co-ordinator David Tripepi on 15 November 2022. He further claimed that at no time during his employment with the Respondent was he counselled or warned regarding his performance prior to the meeting with Mr Tripepi on 15 November 2022.

• [11] A further meeting was held with the Applicant on 16 November 2022 at which Mr Tripepi and Alex Koroneos attended for the Respondent. It was at this meeting that the Applicant was advised that his employment would cease immediately. The Applicant stated that he was not given an opportunity to respond or explain why his dismissal should not proceed. He was asked to return his uniform and keys immediately which he did, following which he left the site. A letter confirming the Applicant's immediate termination of employment signed by the Respondent's Director Infrastructure & City Services Neil Whiteside, was also provided to the Applicant on 16 November 2022[9] (Letter of Termination). The Letter of Termination which advised that the Applicant would receive one week's pay in lieu of notice set out the reasons for the termination of employment as follows;

In accordance with your contract of employment dated 9 June 2022, all new employees at Council are subject to a satisfactory completion of a six-month probationary period following which employment is confirmed.

Brimbank City Council has determined that it will not be confirming your employment within the probationary period due to failing to follow instructions provided by your team leader and poor work performance.

[12] The Applicant rejected that his dismissal was due to poor performance. Rather, he claims that on 10 November 2022 he reported to management of the Respondent that one of his colleagues may have been under the influence of alcohol. He states that the particular employee had a close personal relationship with a number of senior staff of the Respondent which relationships he claims influenced or led to the Respondent's decision to dismiss him. Ms Willis rejected that the decision to terminate the Applicant's employment had anything to do with the Applicant raising an OH&S issue and reiterated that the dismissal decision was based solely on the Applicant's performance during his probationary period.

• [13] In support of his argument that he was employed by the Respondent for a period of eleven months, the Applicant produced several photos which showed him undertaking work for the Respondent prior to June 2022[10]. Ms Willis gave evidence that four of the six photographs provided by the Applicant were from the period March-June 2022 and these photos were published in the Park Services internal newsletter to recognise a milestone or celebrate the team's achievement. She notes that the Respondent provides uniforms to labour hire staff as well as inducting them on OH&S requirements. She accepts that the photos reveal the Applicant was performing work for the Respondent but not that he was employed by it. She further states that people do not need to be 'employed' by the Respondent to appear in the internal newsletter[11].

[14] The Applicant confirmed that the work he performed while employed by Hays and deployed to work for the Respondent was the same work that he undertook once employed directly by the Respondent, with which evidence Ms Willis agreed.

[15] A threshold issue to determine is whether the Applicant has been dismissed from his employment. Section 386(1) of the Act provides that the Applicant has been dismissed if:

(a) the Applicant's employment with the Respondent has been terminated on the Respondent's initiative; or

(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent;

[16] Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant. There was no dispute and I find that the Applicant's employment with the Respondent terminated at the initiative of the Respondent.

[17] Under section 396 of the Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code; and

(d) whether the dismissal was a case of genuine redundancy.

[18] Relevant to the determination of the preliminary matters I am satisfied that;

• the Applicant was dismissed on 16 November 2022 and filed his unfair dismissal application on 2 December 2022, that latter date being within 21 days of the date of his dismissal;

• • the Applicant was covered in his employment by the Brimbank City Council Enterprise Agreement 9, EA9 2021[12] and was in receipt of an annual base salary of $73,341.68 plus superannuation at the time of his dismissal;

• at the time of the Applicant's dismissal the Respondent employed approximately 1,340 employees and is therefore not a small business employer within the meaning of s 23 of the Act; and

• the Applicant was not dismissed due to the Respondent no longer requiring the Applicant's job to be performed by anyone because of changes in the operational requirements of the Respondent's enterprise.

[19] I am satisfied that the application was made within the required period in subsection 394(2), the small business fair dismissal code does not apply, and the dismissal was not a genuine redundancy. I now turn to the remaining preliminary matter to be dealt with, that of the jurisdictional objection raised by the Respondent, that being the Applicant is not a person protected from unfair dismissal be reason of not having met the minimum employment period of six months.

[20] The minimum employment period is one year for a small business employer and six months for other employers as set out in s 383 of the Act as follows:

(a) if the employer is not a small business employer - 6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(b) if the employer is a small business employer - one year ending at that time."

[21] It is uncontroversial that the Respondent is not small business employer therefore the minimum employment period that must have been served by the Applicant is six months.

[22] Section 384 of the Act defines the period of employment in the following terms;

• (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."

[23] Section 384(2)(b) goes on to define the circumstances in which an employee's service with a previous employer may count towards their service with a new employer where it states as follows;

(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."

[24] The meaning of continuous service is set out at s 22 of the Act. In the circumstances of the present case, it appears that sub-sections (5) and (7) may be relevant as they deal with continuous service where there is a transfer of employment of the employee from one employer to another. Section 22 relevantly states as follows;

(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 22 (which deals with annual leave) or Subdivision B of Division 11 of Part 22 (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)).

(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:

(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

(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."

[25] It is uncontested that Hays and the Respondent are not associated entities for the purpose of s 22(7)(a). Section 22(7)(b) does however deal with transfer of business arrangements in respect of organisations that are not associated entities. Relevantly, s 311 of the Act sets out the circumstances in which a transfer of business is deemed to have occurred. Returning to the present case, the Applicant did not contend that a transfer of business had occurred however it appears to me that resolution of the jurisdictional objection in the present matter requires me to consider whether there has been a transfer of business within the meaning of s 311 of the Act. Sections 311(1) & (5) of the Act relevantly provide as follows;

"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).

New employer ceases to outsource work to old employer

(5) There is a connection between the old employer and the new employer if:

(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and

(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer."

• [26] The case law in respect of s 311(5) of the Act reveals that while there is no full bench authority, it has been considered at length in several single member decisions of the Commission. Those single member decisions were helpfully traversed in detail by Asbury VP in Abbott v Acciona Infrastructure Australia Pty Ltd[13] (Acciona). In distinguishing the circumstances in which outsourcing and/or insourcing of work might engage s 311(5) and establish the requisite connection between two entities so as to lead to a transfer of business, the Vice President as she now is relevantly stated as follows;

"[44] I do not accept that the term "outsource" applies to any circumstance where an employer engages labour from an external supplier to undertake any work within the employer's business. The provisions focusing on the work of a particular employee are found in s. 311(1)(a)-(c). Where those are met, there is an additional requirement in s. 311(d) that there be a connection between the old employer and the new employer as described in any of subsections 311(3)-(6). In establishing such a connection for the purposes of those subsections, the term "outsource" must have some work to do. That term in my view, directs attention to the outsourcing arrangement which is the arrangement between the entity outsourcing the work and the entity which will perform the work. It is only where such an arrangement is in place that a connection between two employers as provided in s. 311(4) and (5) will be established. In short, something more than an employee ceasing to perform particular work for one employer and commencing to perform the same or substantially the same work at the same location for another employer is required.

[47] In my view there is a distinction between an employer engaging supplementary labour through a labour hire company and outsourcing work. There will be occasions where the distinction is difficult to establish and the side of the line that a particular case falls on will be determined by the facts and circumstances of that case including:

• The nature of the arrangement between the provider of the labour and the company engaging the labour.
• Whether that arrangement continues after the putative outsourcing has taken place;
• Whether all or some of the labour hire employees in the particular workplace are offered employment at the time of the putative cessation of the outsourcing; and
• Whether the company engaging the labour has some employees "in house" who are carrying out the work and will continue to do so.

[27] I respectfully agree with and adopt the reasoning applied by the Vice President in Acciona for the purposes of the present matter before me.

[28] I am satisfied that the Applicant commenced employment with the Respondent on 20 June 2022 in the classification of Parks Level 1 under the Agreement. He was dismissed with effect on 16 November 2022 meaning that he was employed by the Respondent for a period of approximately five months. That period falls short of the six months required to meet the minimum employment period. That does not necessarily resolve the question of whether he has met the minimum employment period. That is because service with his previous employer Hays may also count towards his overall period of service with the Respondent for the purpose of determining whether the Applicant has met the minimum employment period.

[29] Immediately prior to commencing employment with the Respondent, the Applicant was engaged as a casual employee by Hays and was deployed to the Respondent on a labour hire basis for a period of approximately 6 months. He was employed by Hays in the position of 'Multiskilled Parks and Garden' and was engaged on a regular and systematic basis for that six-month period while deployed to the Respondent. It follows that if the Applicant's period of service with Hays was included in the calculation of his overall period of service with the Respondent, he would comfortably meet the minimum employment period. It is to that issue I now turn.

[30] I have set out above the relevant statutory provisions from which I discern that the Applicant's period of service with Hays will count towards his overall period of service with the Respondent if there was a transfer of business within the meaning of s 311 of the Act, specifically that;

• (1) the Applicant's employment with Hays had terminated;

• (2) the Applicant commenced employment with the Respondent within three months of termination of employment with Hays;

• (3) the work performed by the Applicant for the Respondent was the same or substantially the same as the work formerly performed by him while employed by Hays;

• (4) there was a connection between Hays and the Respondent within the meaning of s 311(5) of the Act; and

• (5) the Applicant was not notified in writing before he commenced employment with the Respondent that his period of service with Hays would not be recognised by the Respondent.

[31] It is uncontested that the Applicant's employment with Hays terminated, that his employment commenced with the Respondent within three months of that termination of employment with Hays and that the work performed by the Applicant once employed by the Respondent was the same or substantially the same as the work he performed when employed by Hays. It was also clear that the Applicant was not notified before commencing his employment with the Respondent that his period of service with Hays would not be recognised by the Respondent.

[32] It follows from the above that if I am satisfied that there is a connection between Hays and the Respondent within the meaning of s 311(5) of the Act, then there will be deemed to be a transfer of business, that the Applicant will be a transferring employee and his period of service with Hays will count for the purpose of calculating his overall period of service with the Respondent. Therefore, the remaining issue for determination in deciding the Respondent's jurisdictional objection is whether the Respondent had outsourced work to Hays and then insourced that work when the Applicant was employed directly by the Respondent.

[33] The evidence of Ms Willis discloses that the Respondent engages supplementary labour from a range of service providers, including through Hays, for a range of reasons including to cover peaks in workload, long term absences and short-term vacancies created by resignations. It is also apparent that the Respondent undertakes its parks maintenance services through its Parks Services department overwhelmingly by using its directly employed workforce, of which there are approximately 85 staff in that department. It is also clear that the Respondent used a range of service providers (including Hays) to provide supplementary labour prior to the Applicant's direct employment and continues to do so.

[34] I am satisfied on the unchallenged evidence that the Respondent has not outsourced the work of parks maintenance services to an external service provider as that work is overwhelmingly performed by the Respondent's employees. Nor has it entered into an exclusive contract with Hays to provide such services. It engages supplementary labour on as needs basis from a range of service providers including Hays. Those arrangements for sourcing supplementary labour by the Respondent were in place prior to the Applicant's employment by Hays and continue to be utilised by the Respondent for the various purposes set out in Ms Willis' evidence. I do not accept that the arrangements for sourcing supplementary labour by the Respondent constitutes 'outsourcing' of work within the meaning of s 311(5)(a) of the Act. Having reached this conclusion I am also satisfied that the decision of the Respondent to directly employ the Applicant does not constitute 'insourcing' of work within the meaning of s 311(5)(b) of the Act.

[35] I find that the requisite connection between the Respondent and Hays within the meaning of s 311(1)(d) of the Act is not present. Consequently, there was no transfer of business between Hays and the Respondent within the meaning of s 311 of the Act when it employed the Applicant. It follows that the Applicant was not a transferring employee and that his period of service with Hays does not count as service with the Respondent.

[36] The Applicant commenced employment with the Respondent on 20 June 2022 and his employment terminated on 16 November 2022. At that later date he had been employed by the Respondent for a period of 21 weeks and had not met the minimum employment period of six months. Accordingly, the Applicant is not a person protected from unfair dismissal and his application for an unfair dismissal remedy must be dismissed. An Order to that effect will be issued with this Decision.

[1] Exhibit A1, Casual employment offer to Applicant from Hays, dated 9 December 2021

[3] Exhibit A2, Statutory Declaration of Jason McDonald, dated 8 February 2023

[4] Exhibit R1, Witness Statement of Justine Willis, at [8]

[5] Exhibit R2, Letter of Employment, dated 9 June 2023

[8] Exhibit R3, Probationary Performance Report

[9] Exhibit R4, Termination of Employment Letter, dated 16 November 2023

[10] Exhibit A3, Photos of Applicant working at Darebin City Council

[13] [2018] FWC 5609

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