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[2002] AIRC 1440
plaintiff. Jurisdictional objection dismissed; file returned to the registry and allocated for conciliation (see [12]).
Commissioner Simmonds dismissed MCG Civil's jurisdictional objection to Mr Hyde's unfair dismissal application. The issue was whether Mr Hyde had completed the three month qualifying period. The Commissioner found that the PAYG Payment Summary prepared by MCG Civil made it more likely Mr Hyde commenced on 15 April 2002, that his prior employment with J.J. McDonald & Sons was not to be aggregated because there was no sham, and that a tax file declaration is not determinative of start date. Accordingly Mr Hyde had served the qualifying period and the application proceeded to conciliation (see [7]-[12]).
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1,833 words · generated 05/07/2026
This is a jurisdictional decision by Commissioner Simmonds of the Australian Industrial Relations Commission in an unfair dismissal context. Mr Matthew John Hyde filed an application for relief in respect of termination of employment on 6 August 2002. MCG Civil Pty Ltd objected to the Commission's jurisdiction on the ground that Mr Hyde had not completed the statutory qualifying period of employment required by s.170CE(5A) and (5B) of the Workplace Relations Act 1996 (the Act) at the relevant time (notice or termination) [1]-[3].
1 cited instrument linked from this judgment.
The primary factual dispute concerned two issues: (a) whether Mr Hyde's employment with MCG Civil should be treated as continuous with his prior employment with J.J. McDonald & Sons Engineering Pty Ltd (McDonalds), and thus include his prior service for qualifying-period purposes; and (b) if not, the precise commencement date of his employment with MCG Civil. The employer contended Mr Hyde started on or about 10 May 2002 and was terminated on 17 July 2002, meaning he had not served the three month qualifying period. Mr Hyde contended either the employers were the same in substance, or alternatively that he commenced with MCG Civil on 15 April 2002, as reflected in a PAYG Payment Summary tendered in evidence [3]-[5], [9].
Commissioner Simmonds heard oral evidence and examined documents including: witness evidence from Mr William McDonald (associated with both companies), Mr Hyde's tax file declaration dated 10 May 2002, a PAYG Payment Summary indicating payments for the period 15 April 2002 to 30 June 2002, statements from McDonalds' pay-mistress, and a cheque-activity report purporting to show McDonalds payments to Mr Hyde [4], [9].
On analysis the Commissioner concluded that (i) Mr Hyde had entered a new contract of employment with MCG Civil (factual indicators included payout of annual leave by McDonalds, signing of a new tax declaration, and different work tasks away from the mine) [7]; (ii) there was no evidence the change of employer was a sham designed to preserve continuity, so prior service with McDonalds would not be counted [8]; and (iii) weighing the documentary and oral evidence, the PAYG Payment Summary was more likely to be accurate, such that Mr Hyde commenced with MCG Civil on 15 April 2002 and therefore had served the three month qualifying period by termination on 17 July 2002 [9]-[12]. The jurisdictional objection was dismissed and the file returned to registry for conciliation [12].
The decision turns on statutory interpretation of s.170CE(5A) and (5B) and an evidentiary assessment.
Statute: s.170CE(5A) makes completion of the qualifying period a threshold jurisdictional requirement; s.170CE(5B) defines the qualifying period as three months unless varied by prior written agreement. The jurisdictional question therefore required a factual determination of whether Mr Hyde had, by the relevant date, completed that three month period [2].
Evidentiary assessment: Commissioner Simmonds examined the competing evidence and made credibility and weight findings. The Commissioner set out objective indicia of a new employment contract with MCG Civil: the payout of annual leave by McDonalds, signing of a new tax file declaration, and performance of different tasks away from the mine [7]. Those facts supported treating the employing entity as different unless there was evidence the arrangement was a sham. The Commissioner expressly noted the general principle that a mere change of formal employer need not necessarily sever continuity if the change is a sham; however, there was no evidence of sham here, and no party pleaded such a case [8].
On commencement date, the Commissioner evaluated the relative weight of the tax file declaration, the PAYG Payment Summary, and oral testimony. The Commissioner observed that a tax file declaration is not determinative of a start date because it can be completed after commencement and its primary function is to determine tax withholding obligations (the employer's withholding liability) [11]. By contrast, the PAYG Payment Summary is the formal statement to taxation authorities about payments and the period in which they were made; absent evidence that the employer had corrected any error with the taxation authorities, the Commissioner was prepared to give the PAYG document significant weight. Some payroll records and the pay-mistress statement were of uncertain provenance and were not safely relied upon [9]-[11]. On balance the Commissioner accepted the PAYG Payment Summary and fixed the commencement date as 15 April 2002, which satisfied the three month threshold by the termination on 17 July 2002 [12].
Thus the decision is grounded in three linked findings: the employment contracts were distinct, there was no sham, and the PAYG record fixed the start date. Those findings disposed of the jurisdictional objection.
Before this decision, the statutory test in s.170CE(5A)/(5B) was already settled: jurisdiction depends on the employee having completed the qualifying period at the earlier of notice or termination. What this decision adds is a practical demonstration of how an industrial tribunal may resolve disputed commencement dates and employer identity questions on the balance of probabilities.
Key legal propositions affirmed or applied:
A change in the formal employing entity does not automatically aggregate prior service for qualifying-period purposes. Continuity will only be aggregated where the new arrangement is a sham or other circumstances justify treating the entities as the same employer; absent evidence of sham, separate legal entities will not have service aggregated (see [8]).
Documentary employer-generated tax records such as a PAYG Payment Summary can be cogent evidence of the period of employment and may be decisive where oral evidence is inconsistent and other records are of uncertain provenance (see [11]-[12]).
Tax file declarations are of limited probative value about commencement dates; their primary significance relates to tax withholding obligations (see [11]).
After the decision, practitioners should expect that tribunals will carefully assess the provenance and reliability of payroll and tax documents, will not automatically treat formal changes of employing entity as continuity unless there is evidence to that effect, and may rely on PAYG summaries as authoritative absent correction to taxation authorities.
Passage: "He was paid out his annual leave entitlement with McDonalds. He signed a new tax file declaration. He carried out work away from the mine site, something he had not done before with McDonalds." [7]
Passage: "The simple fact of entering a new contract of employment with a different company does not necessarily establish that there is a different employer ... possible that ... a sham designed to camouflage the real relationship." [8]
Passage: "The tax file declaration is not determinative of a starting date ... failure to complete it requires the employer to deduct taxation at a rate that takes no account of the tax free threshold ..." [11]
Passage: "On balance therefore ... I consider it more likely than not that Mr Hyde commenced employment with the company on 15 April 2002, as stated in the PAYG Payment Summary ..." [12]
This decision is directly relevant where:
There is a contest about whether an employee has completed the statutory qualifying period for unfair dismissal jurisdiction because of disputed start dates;
An employee moves from one company to another with overlapping management or personnel and there is a question whether the two entities are to be treated as the same employer for continuity of service;
Documentary employer-generated tax records (PAYG Payment Summaries) are available but are inconsistent with oral testimony or other payroll records of uncertain provenance;
Parties have not entered a prior written agreement shortening or varying the qualifying period.
In such fact patterns, tribunals will examine objective indicia of a new contract (payment of accrued entitlements, new tax forms, different work duties), look for evidence of sham arrangements, and may give decisive weight to formal PAYG summaries absent evidence the document is erroneous or corrected.
This decision is an interlocutory jurisdictional ruling of the Australian Industrial Relations Commission and does not itself report later treatments within the judgment. The judgment does not cite later authorities and contains no subsequent judicial history in the text. Any authoritative statements about its treatment in later decisions would require searching subsequent tribunal and court decisions. Practitioners should treat the decision as persuasive guidance on evidentiary assessment in qualifying-period disputes, noting that each case depends on its particular facts.
Several issues remain open or context-dependent despite the Commissioner's findings:
Degree of proof for sham arrangements: Commissioner Simmonds noted sham arrangements can defeat formal changes in employer identity, but the decision does not delineate the quantum or particular kinds of evidence necessary to establish a sham. Future decisions may clarify what constitutes sufficient proof of sham at different fact intensities.
Relative weight of differing employer-produced documents: The Commissioner preferred the PAYG Payment Summary here because no correction had been made to taxation authorities and other records were of uncertain provenance. However, when an employer can explain an apparent discrepancy and demonstrate correction or administrative error with supporting documentation submitted to taxation authorities, tribunals may reach a different result. The line between a reliable employer tax summary and a clerical error remains fact-sensitive.
Interaction with written agreements varying qualifying period: This matter did not involve a prior written agreement shortening or extending the qualifying period. How tribunals scrutinise such written agreements, including their fairness and whether they truly reflect informed agreement, is not addressed here and remains to be developed.
How payroll practices across multi-entity enterprises are treated: Where a true corporate group undertakes reorganisations, the extent to which payroll entries, staff movements, and payments can be aggregated across entities for qualifying-period purposes will depend on evidence of continuity, shared control, and the nature of the arrangements. This decision provides guidance but not a definitive checklist for complex group restructurings.
In practice, parties facing similar disputes should collate contemporaneous payroll records, communications about employer changes, evidence of entitlements paid out, and any notifications to taxation authorities to ensure that tribunals can make reliable findings on commencement and continuity.
s.170CE application for relief in respect of termination of employment
Termination of employment - jurisdiction (qualifying period).
[1] This matter concerns an objection to jurisdiction made by the employer, MCG Civil Pty Ltd (the company), to the application for relief in respect of termination of employment made by Mr Matthew John Hyde on 6 August 2002. The objection taken to the application was that Mr Hyde had not completed the qualifying period of employment with the employer required by s.170CE(5A) of the Workplace Relations Act 1996 (the Act) and prescribed by s.170CE(5B)(a) of the Act.
"(5A) An application under subsection (1) must not be made on the ground referred to in paragraph (1)(a), or on grounds that include that ground, unless the employee concerned had completed the qualifying period of employment with the employer at the earlier of the following times:
(a) the time when the employer gave the employee the notice of termination;
(b) the time when the employer terminated the employee's employment.
"(5B) For the purposes of subsection (5A), the qualifying period of employment is:
(b) a shorter period, or no period, determined by written agreement between the employee and employer before the commencement of the employment; or
(c)a longer period determined by written agreement between the employee and employer before the commencement of the employment, being a reasonable period having regard to the nature and circumstances of the employment."
[3] The company contended that Mr Hyde commenced work with it on or about 10 May 2002 and was terminated on 17 July 2002. It agreed that he had previously worked with another company, with which it had no association, from 28 July 2001 until 8 May 2002. If this contention is correct, Mr Hyde worked for the company for less than the three month qualifying period. There was no evidence that a shorter period or no period had been determined by prior written agreement. Mr Hyde contended either, that the company was the same employer as the previous company, or, in the alternative, that he commenced employment with the company on 15 April 2002, as evidenced by the PAYG Payment Summary provided to him by the company.
[4] Mr William McDonald testified that he was associated with Mr Hyde's previous employer, J.J. McDonald and Sons Engineering Pty Ltd (McDonalds), both as a director and shareholder. He resigned the former position in November 2001 and sold his shareholding on 24 April 2002. It was also not challenged that, when Mr Hyde worked for McDonalds, Mr W McDonald supervised him. McDonalds was engaged on work at the Wemen Mine, where Mr Hyde was employed. At some stage in May 2002, McDonalds ceased work at the mine, removing its plant and equipment from McDonalds. Mr McDonald, by that time, had established the company and purchased one piece of equipment. With that equipment the company carried out works not associated with the Wemen Mine at Patchewollock. Mr Hyde was engaged on those works, having previously been engaged by the company. At the time of engagement, he signed a new tax declaration, dated by him on 10 May 2002. At some stage in February 2002, McDonalds "ran out of work" and Mr Hyde worked with Grigg and Co for two to three weeks. It is not clear from the evidence whether this was done as an employee of Griggs or as some kind of contracting arrangement between McDonalds and Grigg and Co. Shown a copy of Mr Hyde's PAYG Payment Summary and the reference to him working for the company between 15 April 2002 and 30 June 2002, he claimed it represented an accounting error.
[5] Mr Hyde testified that, during his employment with McDonalds, his immediate supervisor was Mr William McDonald; he was given no notice of the change of employer and that, to the best of his knowledge, he commenced working for the company in April 2002. In cross-examination, he was provided with a copy of McDonalds' payment summary that indicated that the last payment to him was made on 5 May 2002. He also confirmed that he had signed a tax declaration with the company on 10 May 2002 and that, when he finished employment with McDonalds, he received a payout of his annual leave entitlements, commencing almost immediately with the company. He also confirmed that his first job for the company was at Patchewollock, away from the Wemen Mine, and that, when employed by McDonalds, he had not worked away from the mine.
[6] It seems clear that, apart from his role as a supervisor for McDonalds, Mr William McDonald ceased involvement with that company when he ceased being a director of that company in November 2001. So much is borne out by the company extract tendered as Exhibit O1. However, that extract also establishes that Mr William James McDonald is a shareholder in the company at the date of the document, namely 23 September 2002. The extract also provides that, in respect of the heading, "Current Shares/Interest Holders" a note "Check documents listed under ASIC Documents Received for recent changes."[1] There was no evidence that such a check had been carried out. In view of Mr McDonald's direct evidence that he ceased to be a shareholder in April 2002, I consider it more likely than not that he has also ceased any shareholding in McDonalds. I so find.
[7] On the basis of Mr Hyde's confirmation of Mr McDonald's evidence, I am satisfied that Mr Hyde entered a new contract of employment with the company when he commenced employment with it. I conclude this because of the following matters:
· He was paid out his annual leave entitlement with McDonalds.
· He carried out work away from the mine site, something he had not done before with McDonalds.
[8] The simple fact of entering a new contract of employment with a different company does not necessarily establish that there is a different employer for the purposes of the qualifying period. Although the formal identity of the employer may alter, it is possible that the arrangement of entering a new contract of employment with a different company is no more than a sham designed to camouflage the real relationship. However, in this case, there is no evidence, nor is there any submission, that such has occurred. I, therefore, do not take into account Mr Hyde's employment with McDonalds for the purpose of determining whether or not he has served the qualifying period.
[9] The position with respect to his commencing date with the company is not as clear. The evidence is far from conclusive and is as follows:
· Mr McDonald's statement that Mr Hyde commenced as a plant machinery operator "on or about 10 May 2002".
· Mr McDonald's statement that the company purchased McDonalds "interest in operation of plant and equipment at the Wemen Mine in or around May 2002".
· Mr McDonald's statement that with the plant and equipment purchased "we took that plant down to Patchewollock and dug a lake there - did an environmental job". This occurred around 10 May 2002.[2]
· The tax file declaration signed by Mr Hyde is dated by him as 10 May 2002, and by the company on 14 May 2002.[3]
· Mr Hyde testified that he signed it after commencing employment with the company, and not on the day he commenced.[4]
· Mr Hyde's PAYG Payment Summary, provided by the company, states that payments were made in the period 15 April 2002 to 30 June 2002. It is common ground that his employment with the company ceased on 17 July 2002. Mr McDonald claimed that it was "possibly a clerical error or an accounting error".[5]
· Mr Hyde's evidence that he believed he started working for the company, to the best of his knowledge, "about April".[6]
· The statement by McDonalds' pay-mistress that Mr Hyde "worked with JJ McDonald & Sons at various intervals between 29 July 2001 and 5 May 2002" and "(u)pon cessation of his employment...on 5 May 2002, he was paid out all his entitlements including two weeks pay in lieu of annual leave". The pay-mistress was not available for cross-examination as she is based in Townsville, Queensland. Her statement was admitted without objection.
· A copy of the "JJ McDonald & Sons Group Cheque Activity Report" purporting to show that cheques were made out to Mr Hyde for periods ending 7 April 2002, 21 April 2002 and 5 May 2002. This exhibit was objected to on the basis that there was no evidence about its provenance. The company relied on it as a business record. The difficulty with this approach is that there is no evidence of that claim.
[10] The statement of the pay-mistress and the "Cheque Activity Report" are somewhat in conflict, for the latter establishes payment for a period "ending" on 5 May 2002, whereas she claims that he was paid out all entitlements, including two weeks pay in lieu of annual leave, on that date. The payment made for the period ending 5 May 2002 appears to be equivalent to two weeks pay. Given that he would have been entitled to a period of notice, in addition to his accrued entitlements, I cannot safely rely on either the statement or the report.
[11] I am unable to find any basis for preferring the direct evidence of Mr McDonald over that of Mr Hyde. That essentially leaves me with the evidence contained in two documents, the tax file declaration and the payment summary. The tax file declaration is not determinative of a starting date, for, as I understand it, failure to complete it requires the employer to deduct taxation at a rate that takes no account of the tax free threshold and to make no adjustment for other circumstances specified in the declaration. The PAYG Payment Summary is the formal advice from the employer to the taxation authority regarding amounts paid to the employee, taxation withheld and other relevant matters, including the period during which payments were made. Mr McDonald was of the belief that a mistake was made in respect of that period, but there was no suggestion that the error had been drawn to the attention of the taxation authorities.
[12] On balance therefore, on the evidence before me, I consider it more likely than not that Mr Hyde commenced employment with the company on 15 April 2002, as stated in the PAYG Payment Summary, prepared by or on behalf of MCG Civil Pty Ltd. On that basis, I dismiss the jurisdictional objection made by the company and referred to in paragraph 1 of these reasons for decision. The file will be returned to the registry and allocated for conciliation.
Printed by authority of the Commonwealth Government Printer
Matthew John Hyde
MCG Civil Pty Ltd - PR925085 [2002] AIRC 1440;
Jurisdictional objection dismissed; file returned to the registry and allocated for conciliation (see [12]).