s.394 - Unfair dismissal

Application for an unfair dismissal remedy - minimum employment period not completed - jurisdictional objection upheld - application dismissed.

• [1] Mr Ben Howard was employed by Arkhill Industries Pty Ltd from 4 November 2024 to 11 August 2025. Mr Howard contends that he was unfairly dismissed within the meaning of the Fair Work Act 2009. Arkhill contends that Mr Howard was not protected from unfair dismissal at the time he was dismissed because he had not completed a period of employment with Arkhill of at least the minimum employment period.

• [2] On 30 October 2025, I conducted a hearing in relation to the question of whether Mr Howard was employed by Arkhill for at least the minimum employment period.

• [3] In order to be protected from unfair dismissal in accordance with s 382 of the Act_,_ an employee must have completed a period of employment with their employer of at least the minimum employment period.

• [4] The minimum employment period is 12 months for a small business and 6 months if the employer is not a small business. Section 23 of the Act defines a small business employer as an employer who employs fewer than 15 employees at a particular time. Casual employees are not included unless they are a regular casual employee of the employer.

• [5] For the purpose of calculating the number of employees employed by an employer at a particular time, s 23(3) of the Act states that "associated entities are taken to be one entity".

• [6] Section 12 of the Act defines "associated entity" as having the meaning given by section 50AAA of the Corporations Act 2001.

• [7] Section 50AAA of the Corporations Act provides:

(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.

(b) the operations, resources or affairs of the principal are material to the associate.

(a) the associate has a qualifying investment (see subsection (8)) in the principal; and

(b) the associate has significant influence over the principal; and

(a) the principal has a qualifying investment (see subsection (8)) in the associate; and

(b) the principal has significant influence over the associate; and

(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."

• [8] Section 50AA of the Corporations Act defines "control" as follows:

"(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(a) has the capacity to influence decisions about the second entity's financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members the first entity is taken not to control the second entity."

• [9] Except in chapter 2E of the Corporations Act, a reference to an "entity" in the Corporations Act is a reference to "a natural person, a body corporate (other than an exempt public authority), a partnership or a trust" (s 64A of the Corporations Act).

• [10] Arkhill employed seven full-time or part-time employees at the time of Mr Howard's dismissal, including Mr Ronald Klok, who is a director of both Arkhill and an associated entity (Klok Industries Pty Ltd) and Mr Steven Moylan, who is a director of both Arkkill and another associated entity (Moylan Enterprises Pty Ltd).

• [11] Klok Industries and Moylan Enterprises are the only two entities that own shares in Arkhill.

• [12] Klok Industries does not operate a business, nor did it employ any employees at the time of Mr Howard's dismissal. Its only function is to be a shareholder in Arkhill.

• [13] Moylan Enterprises is the trustee of the Steve Moylan Family Trust. Moylan Enterprises does not operate a business, nor did it employ any employees at the time of Mr Howard's dismissal. It is just a shareholder in Arkhill and the corporate trustee of the Steve Moylan Family Trust.

• [14] Arkhill employed one casual employee at the time of Mr Howard's dismissal. At that time, she worked irregular hours ranging from a few hours per week to 6 or 8 hours per week depending on when she was required. She was not employed on a regular basis at the time of Mr Howard's dismissal.

• [15] Mr Howard contends that AccountCom Pty Ltd was an associated entity of Arkhill at the time of his dismissal. AccountCom is a bookkeeping and human resources company. Ms Kellie Klok is the Managing Director of AccountCom. Ms Klok is the wife of Mr Ronald Klok. Ms Klok is the sole director and shareholder of AccountCom. AccountCom operates its business out of the same premises as Arkhill. Arkill leases those premises from the landlord and subleases part of the premises to AccountCom.

• [16] AccountCom provides administration, bookkeeping, payroll and human resources services to Arkhill, including providing employees such as Mr Howard with documents on the commencement of their employment with Arkhill, such as a checklist and employee information sheet.[1] Arkhill pays for such services on an hourly basis as required.

• [17] I accept Mr Klok's evidence that he does not have any control over AccountCom.

• [18] Although AccountCom provides services to Arkhill and operates from the same premises, pursuant to a sublease, I am satisfied that Arkhill and AccountCom were not associated entities at the time of Mr Howard's dismissal. Arkhill and AccountCom are not related bodies corporate. Arkhill does not control AccountCom, nor does AccountCom control Arkhill. There is no person or entity who controls both Arkhill and AccountCom. Arkhill does not have a qualifying investment in AccountCom and AccountCom does not have a qualifying investment in Arkhill.

• [19] On the evidence before the Commission, the only associated entities of Arkhill at the time of Mr Howard's dismissal were Klok Industries and Moylan Enterprises.

• [20] The total number of employees of Arkhill and its associated entities (Klok Industries and Moylan Enterprises) at the time of Mr Howard's dismissal was seven. There was one casual employee, but she is not included in the count because she did not work on a regular basis.

• [21] It follows that Arkhill was a small business employer at the time of Mr Howard's dismissal and his minimum employment period was 12 months. Mr Howard was only employed by Arkhill for about 9 months (4 November 2024 to 11 August 2025).

• [22] Mr Howard did not complete his minimum employment period with Arkhill. As a result, he was not protected from unfair dismissal at the time he was dismissed. It follows that I must dismiss Mr Howard's unfair dismissal application.

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