[2] This is an application for an unfair dismissal remedy pursuant to Section 394 of the Fair Work Act 2009 (the Act). The Application for unfair dismissal remedy is made by Ms Vyvyanne Martin (the Applicant) in respect of her dismissal by Donut King Chirnside Park T/A Hersing Pty Ltd (the Respondent). The Applicant referred to the employer in her Application as Donut King but the Respondent confirmed the correct identification of the employer.

[3] The Applicant represented herself and Ms Wu, an owner of the company, represented the Respondent.

[4] The Application was made on 30 September 2011. It is not in contention and I am satisfied that the Applicant was dismissed on 28 September 2011 at the initiative of the employer.

[5] I considered the submissions of both parties and also Ms Wu and the Applicant gave evidence and were subject to cross examination.

[6] The Applicant was employed in the business from 14 September 2006 until 28 September 2011.

[7] The Applicant gave uncontested evidence that she was employed as a permanent part time employee during the period from 14 September 2006 until 5 July 2011. There was a transfer of ownership on or about 5 July 2011. From 5 July 2011 until 28 September 2011 the Applicant was employed as a casual employee. In the earlier period she received and was paid annual leave. In the later period she was paid at a higher rate than before because of the 25% casual loading. It is not contested that the Applicant worked the same regular shifts for at least

two years prior to 5 July 2011. The Applicant contends that she worked different but regular shifts from 5 July 2011 until 28 September 2011.

[8] The relevant provisions of the Act are as follows.

When service with one employer counts as service with another employer

(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 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (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)).

(6) If the national system employee has already had the benefit of an entitlement the amount of which was calculated by reference to a period of service with the first employer, subsection (5) does not result in that period of service with the first employer being counted again when calculating the employee's entitlements of that kind as an employee of the second employer.

(a) the accrued paid annual leave to which the employee is entitled as an employee of the second employer does not include any period of paid annual leave that the employee has already taken as an employee of the first employer; and

(b) if an employee receives notice of termination or payment in lieu of notice in relation to a period of service with the first employer, that period of service is not counted again in calculating the amount of notice of termination, or payment in lieu, to which the employee is entitled as an employee of the second employer.

(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.

(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and

(b) is a transfer of employment between non-associated entities if paragraph (7)(b) applies.

91 Transfer of employment situations that affect entitlement to payment for period of untaken paid annual leave

Transfer of employment situation in which employer may decide not to recognise employee's service with first employer

(1) Subsection 22(5) does not apply (for the purpose of this Division) to a transfer of employment between non-associated entities in relation to an employee, if the second employer decides not to recognise the employee's service with the first employer (for the purpose of this Division).

Employee is not entitled to payment for untaken annual leave if service with first employer counts as service with second employer

(2) If subsection 22(5) applies (for the purpose of this Division) to a transfer of employment in relation to an employee, the employee is not entitled to be paid an amount under subsection 90(2) for a period of untaken paid annual leave.

Note: Subsection 22(5) provides that, generally, if there is a transfer of employment, service with the first employer counts as service with the second employer.

(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.

(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

(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."

[9] If there is continuity of employment between the two ownerships then there is no doubt that the Applicant has had at least 12 months continuous service. I am satisfied having regard to the evidence of the Applicant and the material about the shifts worked attached to the statement of Ms Wu, that the casual employment period is regular and systematic with a reasonable expectation of continuing employment. Even if there were a dispute about the regularity of the shifts between 5 July 2011 and 28 September 2011 such that the employment during that period was not regular and systematic, I am satisfied that the Applicant had more than 12 months continuous employment prior to the termination if there is continuity of employment between the two periods of ownership.

[10] I am satisfied that the Applicant was not consulted about and did not agree to any change in employment status with the new owner. The change in the amount of work provided to the Applicant after the change to the new owner was a source of conflict between the Applicant and the Respondent. This was one of the issues which led to the termination.

[11] All of the conditions of the Act for protection from unfair dismissal would be met if there was continuing employment with transfer of ownership.

[12] I am satisfied that the Respondent is a small business. I am satisfied that there are no associated companies. The rosters attached to Ms Wu's statement show no more than 10 people of whom two are the owners of the business. I am not sure if those two persons are employees or not. The Applicant gave evidence and Ms Wu accepted that there may be up to three additional people employed from time to time. Even if I include all of these persons there are not more than 15 persons employed at the time of the termination of the Applicant.

[13] However, whether it is a small business or not the Applicant does not have the required minimum period if, as claimed by Ms Wu, the Applicant and other employees were in fact terminated by the previous owner and rehired by the new owner on or about 5 July 2011 and the conditions set out in Section 384(2)(b) of the Act are met.

[14] This is a transfer of business between non-associated entities in accordance with Section 22(8). There is a transfer of employment in accordance with Section 22(7)(b). The letter of the former owner attached to Ms Wu's statement is evidence that the second employer is not recognising service with the first employer for the purposes of annual leave in accordance with Section 91 of the Act. This is not contested by the Applicant.

[15] Section 384(2)(b) provides that the period of service with the old employer does not count if the new employer informed the employee in writing before the new employment started that the period of service will not be recognised.

[16] There is no evidence at all that this occurred. Ms Wu says that the old employer told employees that they would be terminated and then rehired but there is no direct evidence to support this and it is disputed by the Applicant. I am not satisfied that this occurred. However, even if I am wrong about this such a verbal statement by the old employer does not meet the requirements of 384(2)(b).

[17] Ms Wu says that some time after they commenced as the new owners she changed the rosters and put on the roster a note to the effect "Hi everyone, this is a trial, we are only employing two full timers, your hours will be cut, please understand." There may be some questions as to whether or not this change in employment conditions and the manner in which it was implemented is consistent with the relevant Award and the contract of employment, however, there is no basis for saying that this note constituted written notice to employees prior to the new employment that the period of previous service will not be recognised.

[18] For these reasons I am satisfied that the conditions in Section 384(2)(b) have not been met and as a consequence I am satisfied that the Applicant does in fact have more than 12 months continuous service. The Applicant is protected from unfair dismissal. The jurisdictional objection is dismissed. The matter will be allocated to another member of Fair Work Australia to consider whether or not the dismissal was unfair.

[19] An order to this effect is published separately.

Ms Wu, an owner of the company, represented the Respondent.

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