Fair Work Act 2009

s.394 - Unfair dismissal

Application for an unfair dismissal remedy- jurisdictional objection - whether small business employer - whether minimum employment period met - employer found to be a small business employer - minimum employment period of twelve months not met - jurisdictional objection upheld - application dismissed.

• [1] On 28 January 2025, Ms Karina Joy (the Applicant) lodged an application pursuant to s 394 of the Fair Work Act 2009 (the FW Act) in which she asserts that the termination of her employment with The Trustee for Nethercote Balson Unit Trust (the Respondent) on 21 January 2025 was unfair. The Applicant seeks an order for compensation. The Respondent failed to file a Form F3 response to the application. An initial review of the application by Commission staff identified that the Applicant's employment may not have met the required six months minimum employment period.

• [2] Following allocation of the matter to my Chambers on 14 February 2025, directions were issued to the parties on 17 February 2025 requiring filing of material in relation to determination of the jurisdictional matter, that of whether the Applicant had met the six months minimum employment period. Both parties filed material in advance of the proceeding listed for 13 March 2025 which was conducted as a determinative conference. At the conference, the Applicant appeared and gave evidence while Mr Sam Balson, who is the Managing Director, appeared on behalf of and gave evidence for the Respondent.

• [3] The Respondent, which trades under the name of Modern Medicine operates two clinics in the Ballarat region. Mr Balson is the Managing Director and joint owner of the Respondent with one other partner. The Applicant commenced employment with the Respondent in the position of Psychologist on 22 July 2024 at the Respondent's clinic. The Applicant was covered by the Health Professionals and Support Services Award 2020, was employed on a part-time basis, and received a pro-rata salary based on the full-time equivalent salary of $130,000 per annum.[1] At 6.48pm on 21 January 2025, the Applicant was notified by Mr Balson of the termination of her employment. The termination of the Applicant's employment was stated to be 'effective immediately.'[2]

• [4] The Respondent provided Payroll Employee Summaries for the following periods, 1 January - 31 January 2025 (the January Summary), 1 December - 31 December 2024 (the December Summary) and 1 November - 30 November 2024 (the November Summary).[3] The January Summary shows that in the period during which the Applicant's employment was terminated there were fourteen employees including the Applicant. The November Summary identified twelve employees, and the December Summary identified thirteen employees.

• [5] When questioned on employee numbers and whether there are any associated entities, Mr Balson confirmed that the fourteen employees identified in the January Summary were employed across the two Modern Medicine clinics. He went on to explain that he also has a 100% interest in another business, Ballarat Myotherapy, which employs at least one employee. In fact, the Practice Manager for Ballarat Myotherapy also provides services to the Respondent's business as does a podiatrist employed by Ballarat Myotherapy. Mr Balson also conceded that he had a 100% ownership interest in a Tasmanian clinic that also employs staff.

• [6] A threshold issue to determine is whether the Applicant has been dismissed from her employment. Section 386(1) of the FW 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.

• [7] Section 386(2) of the FW 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.

• [8] Before considering the merits of the Applicant's unfair dismissal application, the Commission is also required by s 396 of the FW Act to decide certain matters. Section 396 provides as follows:

"396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 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;

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

• [9] I am satisfied that the application was filed within the 21-day statutory timeframe specified in s 394(2) of the FW Act. Therefore, the next issue that must be determined is whether the Applicant is a person protected from unfair dismissal (s 396(b)). The question to be answered in respect of s 396(b) is, for the purpose of the present mater, that found at s 382(a) of the FW Act which relevantly states as follows:

"382 When a person is protected from unfair dismissal

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

• [10] The minimum employment period is one year for a small business employer and six months for other employers, as provided by s.383 of the FW Act which states 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."

• [11] Section 23 of the FW Act relevantly defines a small business as follows:

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, the employee is a regular casual employee of the employer.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee's employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and

(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated."

• [12] Turning firstly to the number of employees of the Respondent, Mr Balson states that the number of employees employed by the Respondent at the time of the Applicant's dismissal on 21 January 2025 was fourteen, as set out in the January Summary. Mr Balson's evidence also establishes that he has a 100% ownership interest in at least two other business and that those business employ staff. I found Mr Balson's claim that the Respondent did not have 'practical influence' over those other business unconvincing.

• [13] I am satisfied that there were associated entities of the Respondent within the meaning of ss 50AA and 50AAA of the Corporations Act 2001 (Cth) at the date of the Applicant's dismissal. Therefore, it is necessary to add the number of employees engaged by those associated entities to the number of employees engaged by the Respondent as of 21 January 2025 for the purpose of calculating the total number of employees. While the number of employees of the associated entities was unclear, it was conceded by Mr Balson that there was at least one person employed by Ballarat Myotherapy.

• [14] At the time of the Applicant's dismissal, the Respondent employed fourteen staff including the Applicant. Taking into account the associated entities, I am satisfied that there were at least fifteen employees at the time of the Applicant's dismissal. This means that the Respondent was not a small business employer at the time of the Applicant's termination of employment. As I have found the Respondent was not a small business employer, the minimum employment period that applied to the Applicant was six months. I now turn to consider whether the Applicant has met the six-month minimum employment period.

• [15] The Applicant contends that the minimum employment period of six months was completed by her on 21 January 2025 when she was terminated with immediate effect at 6.48pm that day. She argues that by reason of the timing of her dismissal at around 7.00pm on 21 January 2025, she was employed for a period of 184 days, being a period of six months. While agreeing she was dismissed with immediate effect when she received the email from Mr Balson, she argued that the Respondent had the full benefit of her work on that day meaning she had effectively worked for the Respondent for six months. That she said distinguished her circumstances from those dealt with in Prigge v Manheim Fowles Pty Ltd[4] (Prigge) where the date of commencement of employment was 26 February 2009, and the time and date the dismissal took effect was 9.00am on 25 August 2006. The Applicant urged me to depart from established full bench and single member authorities of the Commission which are discussed below.

• [16] The calculation of the qualifying period under the Workplace Relations Act 1996 (the WR Act) was considered by a Full Bench in Wilkinson v Skippers Aviation Pty Ltd[5] (Wilkinson). In that case a similar argument arose in respect of when an employee had completed the qualifying period, which under the WR Act was then three months. The Full Bench relevantly stated as follows:

"[30] Regulation 30B(1)(c)(i) says "3 months or less". This is to be interpreted by reference to the relevant provisions of the Acts Interpretation Act 1901.

[31] Section 22(1) of the Acts Interpretation Act includes:

"In any Act, unless the contrary intention appears:

(g) `Calendar month' means a period commencing at the beginning of a day of one of the 12 months of the year and ending immediately before the beginning of the corresponding day of the next month or, if there is no such corresponding day, ending at the expiration of the next month".

[32] Section 46(1) of the Acts Interpretation Act includes:

"Where an Act confers upon any authority power to make, grant or issue any instrument (including rules, regulations or by-laws), then:

(a) unless the contrary intention appears, expressions used in any instrument so made, granted or issued shall have the same meanings as in the Act conferring the power, and this Act shall apply to any instrument so made, granted or issued as if it were an Act and as if each such rule, regulation or by-law were a section of an Act".

[33] Accordingly, no contrary intention in our view appearing, "3 months" in reg.30B(1)(c)(i) means 3 calendar months; that is, a period commencing at the beginning of a day of one of the 12 months of the year and ending immediately before the beginning of the corresponding day of the third month following.

[34] If, therefore, a period of probation which commenced on 7 January 2000 was to be of 3 months or less it had, in our view, to end no later than immediately before the beginning of 7 April 2000. If it ended later than this, it was a period of more than 3 months and, pursuant to reg.30B(1)(c)(ii), a determination would have to be made whether the period was reasonable, having regard to the nature and circumstances of the employment."

• [17] The Full Bench authority of Wilkinson which was decided under the WR Act was considered by Senior Deputy President Richards in Prigge in the context of the FW Act's operation. The Senior Deputy President saw no reason why the reasoning of the Full Bench in Wilkinson should not apply to a minimum period of employment as stipulated at s 383 of the FW Act. He went on to state that "Section 22(1)(b) and (g) of the Acts Interpretation Act 1901 applies to the calculation of the minimum period of employment as it applies to any other similar such statutory time period, where no contrary intention is evidence".[6] While I have some sympathy for the Applicant's perspective, I am not persuaded to depart from the reasoning of the Full Bench in Wilkinson or that of SDP Richards in Prigge, both of which decisions still stand as good authority in my view.

• [18] In circumstances where the Applicant commenced employment on 22 July 2024, she must have been employed immediately before the beginning of 22 January 2025 in order to meet the minimum employment period of six months. As the Applicant's employment was terminated with immediate effect at 6.48pm on 21 January 2025, the Applicant failed to complete the minimum employment period of six months. That is because until midnight on 21 January 2025, she was yet to complete the minimum employment period of six months, where midnight on 21 January 2025 is taken to be the point in time immediately before the beginning of 22 January 2025.

• [19] I have found that as the Respondent was not small business employer at the time of the Applicant's dismissal, the Applicant was required to have served a minimum employment period of six months. As the Applicant failed to meet the minimum employment period, her unfair dismissal application must be dismissed. An Order[7] to that effect will be issued with this decision.

[1] Exhibit A3, Applicant's Part Time Employment Contract, executed 11 July 2024

[2] Exhibit A2, Notice of termination of employment, dated 21 January 2025

[3] Exhibit R1, Payroll Employee Summaries

[4] [2010] FWA 28

[5] PR903635

[7] PR785195

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