Mayo v W & K Holdings

Industrial Relations Commission (NSW)|2009-05-01|Before: Boland J, Harrison DP, Commissioner J

CITATION: Mayo v W & K Holdings (NSW) Pty Ltd as Trustee for W & K Family Trust trading as W & K Constructions [2009] NSWIRComm 67

APPLICANT: Laureen Margaret Mayo PARTIES: RESPONDENT: W & K Holdings (NSW) Pty Ltd as Trustee for W & K Family Trust trading as W & K Constructions

CORAM: Boland J President; Harrison DP; Stanton C

Commonwealth Constitution LEGISLATION CITED: Industrial Relations Act 1996 Workplace Relations Act 1996 (Cth)

CASES CITED: Garvey v Institute of General Practice Education Incorporated [2007] NSWIRComm 159; (2007) 165 IR 62 Solo Waste Aust. Pty. Limited v Inspector McDonald [2005] NSWIRComm 106; (2005) 141 IR 332

APPLICANT: Mr R Edwards, Agent LEGAL REPRESENTATIVES: RESPONDENT: Mr R Warren of counsel with Mr A Foate, solicitor Catalyst Legal Pty Ltd

CORAM: BOLAND J, President HARRISON DP STANTON C

LAUREEN MARGARET MAYO AND W & K HOLDINGS (NSW) PTY LTD AS TRUSTEE FOR W & K FAMILY TRUST, T/AS W & K CONSTRUCTIONS

Application by Laureen Margaret Mayo re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION OF THE COMMISSION [2009] NSWIRComm 67

1 On 30 September 2008, Laureen Margaret Mayo filed an application for relief in relation to unfair dismissal. Ms Mayo had initially sought relief in the Australian Industrial Relations Commission, alleging unfair or unlawful termination of employment. In her application to the Australian Commission Ms Mayo named as her employer "W & K Holdings (NSW) Pty Ltd". Subsequently, in her application to this Commission, Ms Mayo named her employer as "W & K Constructions, an unincorporated entity". 2 A disagreement arose between the parties as to which entity was, in fact, the employer of Ms Mayo. In proceedings before Commissioner J Murphy on 9 October 2008 the respondent contended that the employer of Ms Mayo was "W & K Holdings (New South Wales) Pty Ltd as Trustee for the W & K Family Trust trading as W & K Constructions". In those circumstances, it was submitted, the employer was a constitutional corporation and that by virtue of the relevant provisions of the Workplace Relations Act 1996 (Cth), the Industrial Relations Commission of New South Wales had no jurisdiction to hear and determine Ms Mayo's unfair dismissal claim. The applicant by this time had changed her position in relation to the identity of the employer and contended that it was not W & K Constructions but rather the owner of that trading name, that being "W & K Family Trust" and, as that was an unincorporated entity, the New South Wales Commission did possess the necessary jurisdiction. 3 The matter was subsequently referred to the President of the Commission pursuant to s 193 of the Industrial Relations Act 1996 who determined that a Full Bench should deal with the question of whether the application by Ms Mayo in relation to unfair dismissal was within the Commission's jurisdiction. This decision deals with the jurisdictional issue. 4 Both sides called evidence. The evidence of the respondent consisted, firstly, of two affidavits of William Arthur Leonard who was the sole director of W & K Holdings (NSW) Pty Ltd, and Barry Charles Douglas who was a public accountant, with that company as a client. Mr Leonard and Mr Douglas were required for cross-examination. The affidavits were admitted without any relevant objection. However, as he had deposed in his affidavit it quickly became clear that Mr Leonard was severely dyslexic and any cross-examination concerning the content of documents was not going to assist the Commission. Consequently, counsel for the respondent, Mr R Warren, called Mr Anthony Foate, the respondent's solicitor, who had certified on Mr Leonard's affidavit as follows: It being made known to me that the deponent is severely dyslexic and has grave difficulty in reading, I certify that this affidavit was read to him in my presence and he seemed to understand it.

Respondent's submissions 5 The evidence and submissions for the respondent may relevantly be summarised as follows: s W & K Holdings (NSW) Pty Ltd is The Trustee for the W & K Family Trust trading as W & K Constructions, s W & K Holdings (New South Wales) Pty Ltd is a corporation with an ACN number, ACN 104 106 498,

s the annual reports and accounts for 2007 refer to "W & K Holdings (NSW) Pty Ltd as trustee for W & K Family Trust trading as W & K Constructions", s the Trustee has an ABN number, ABN 17 149 754 980, s the business that trades as "W & K Constructions" has been carried on since 2003 by W & K Holdings (NSW) Pty Ltd for the W & K Family Trust, s the business is engaged in earthmoving for the purpose of the installation and maintenance of pipelines and communication cables, s the bank trading account through which the applicant's wages were paid was an account held in the name of "W & K Holdings (NSW) Pty Ltd in trust for W & K Family Trust trading as W & K Constructions", s as the employer of Ms Mayo was a constitutional corporation, namely, W & K Holdings (NSW) Pty Ltd, by virtue of the provisions of s 16(1) of the Workplace Relations Act, the Commission's jurisdiction to deal with Ms Mayo's unfair dismissal claim was ousted. Applicant's submissions 6 An agent, Mr R Edwards, represented the applicant, Ms Mayo. Ms Mayo was required for cross-examination, albeit brief. Much of Ms Mayo's first affidavit went to the merit of her unfair dismissal claim and not the jurisdictional issue. Ms Mayo did, however, file a supplementary affidavit, which sought to respond to the affidavits of Mr Leonard and Mr Douglas, particularly regarding the issue of which entity employed Ms Mayo. 7 The evidence and submissions for the applicant commenced with the proposition that Ms Mayo was an employee who had been dismissed from her employment. The employer, it was asserted was, "W & K Family Trust" and not the corporation W & K Holdings (NSW) Pty Ltd. The chain of reasoning leading to the conclusion that the applicant was employed by W & K Family Trust commenced with the observation that the terms of Ms Mayo's employment were governed by a written contract of employment, which referred to "W & K Constructions" as her employer. The contract also referred to the "W & K Constructions Employee Collective Agreement", which was said to apply to Ms Mayo's employment. 8 The Collective Agreement referred to an ABN number, "ABN 17 149 754 980". Various searches undertaken by the applicant of the Australian Business Register and the Australian Securities & Investments database, revealed that "The Trustee for W & K Family Trust" was a discretionary trading trust with an ABN number, 17 149 754 980 and that it maintained the trading name "W & K Constructions". It was also discovered that "W & K Holdings (NSW) Pty Ltd" was listed on the ASIC database with an ACN number "ACN 104 106 498", but searches did not reveal any relationship between "The Trustee for W & K Family Trust", "W & K Family Trust" and "W & K Holdings (NSW) Pty Ltd". 9 The applicant submitted that if it was W & K Holdings (NSW) Pty Limited that held the ABN number 17 149 754 980, the ABN search would have shown "W & K Holdings (NSW) Pty Limited as Trustee for W & K Family Trust trading as W & K Constructions". The searches of the incorporated entity W & K Holdings (NSW) Pty Limited revealed there were no trading names registered to that entity. 10 Mr Edwards, for the applicant, submitted that the "Tax Act ensures that the only party that can be an employer as a matter of tax law is the party that maintains an ABN number." W & K Holdings (NSW) Pty Limited did not maintain an ABN number. It was further submitted that the ABN number referred to on Ms Mayo's PAYG slip was the ABN number of "W & K Family Trust". Whilst that name appearing on the PAYG slip did refer to W & K Holdings (NSW) Pty Limited trading as W & K Constructions, there was no such entity, it was submitted. The entity W & K Holdings (NSW) Pty Limited did not own or maintain a trading name and did not act as W & K Constructions as that name suggested on the PAYG slip. 11 Mr Edwards contended that: [T]he tax law says the only person who can deduct from their taxes salary expenses related to the applicant, for instance, is the employer. 12 Mr Edwards submitted that the only tax return filed was by "W & K Family Trust". There was no tax return filed by W & K Holdings (NSW) Pty Limited. Deductions for the applicant's superannuation expenses and her salary were made in the Trust's tax return. Therefore, it was submitted, the Trust must be, as a matter of statute law, the employer. 13 Mr Edwards continued by submitting that "under the tax law it is not possible to submit a PAYG tax instalment without an ABN"; the only party under tax law that can lodge a PAYG payment must be the employer. In the present case it was submitted that, "the employer is the ABN which refers to the discretionary trading trust" and that "as a matter of tax law it is the trust that is the employer and that overrides the equitable doctrine that normally a trustee can never be an employer."

14 The other arm of Mr Edwards' submission was that W & K Holdings (NSW) Pty Limited was not a trading corporation. He submitted that the accounts referred to in the evidence of Mr Douglas that purported to be the accounts of W & K Holdings (NSW) Pty Limited as Trustee for W & K Family Trust trading as W & K Constructions, were, in fact, the accounts of W & K Family Trust. Mr Edwards asserted the Trust was the operating entity and the one that traded, not the corporation. Consideration

15 The evidence in this matter shows, first, that "The Trustee for W & K Family Trust" is W & K Holdings (NSW) Pty Ltd and not a separate, distinct entity. The trustee and the company are one and the same. The trust deed appoints W & K Holdings (NSW) Pty Ltd as the trustee. The fact that it is "The Trustee for W & K Family Trust" that holds an ABN number and W & K Holdings (NSW) Pty Ltd does not, is no basis for suggesting that the Trustee and the Company are two separate entities; they are clearly not. There is no obligation upon a trading corporation (for profit) to obtain a separate ABN if it holds an ABN in its capacity as a trustee of a discretionary trust, which is the case here. 16 W & K Family Trust is not a juristic person; it cannot sue or be sued. A trust is an arrangement for the holding and administration of property under which property is vested in a trustee or trustees which is held by them on behalf of another, or others, namely the cestui que trust or cestuis que trust (beneficiary or beneficiaries) for a particular purpose: Solo Waste Aust. Pty. Limited v Inspector McDonald [2005] NSWIRComm 106; (2005) 141 IR 332 at [16]. The property is legally vested in the trustee. There was no evidence the Trust could be regarded as an entity capable of employing persons. However, it was contended by the applicant that because the "Tax Act ensures that the only party that can be an employer as a matter of tax law is the party that maintains an ABN number" and that as it was the Trust and not the corporation that held the ABN number, it followed that the employer was the Trust. It was also submitted that it was the Trust that submitted a tax return showing deductions for salary and superannuation in respect of Ms Mayo and not the corporation and as the "tax law says the only person who can deduct from their taxes salary expenses related to the applicant, for instance, is the employer" it must follow that the Trust is the employer. 17 ABN 17 149 754 980 is held by the "Trustee for the W & K Family Trust". On the evidence, that trustee is W & K Holdings (NSW) Pty Ltd. That corporation's accounts were in evidence. That the corporation as trustee chose to file a trust tax return that mirrored the relevant information in the corporation's accounts is not a basis upon which to conclude that thereby the trust became the employer of the applicant. The applicant was unable to point to any relevant authority to support its contention in this case that, "as a matter of tax law it is the trust that is the employer and that overrides the equitable doctrine that normally a trustee can never be an employer." 18 The corporation's accounts, which were accounts in the name of "W & K Holdings (NSW) Pty Limited as Trustee for W & K Family Trust trading as W & K Constructions" and cheque records indicating wages of Ms Mayo were paid by cheques drawn on bank accounts belonging to the corporation, were significant indicators that Ms Mayo was employed by the corporation and not by some other entity or by the Trust.

19 The corporation, as trustee for the W & K Family Trust trading as W & K Constructions, is engaged in the business of pipe laying and pit installation for telecommunications, gas, water and sewerage service industries. Its accounts and the evidence of Mr Leonard, Mr Foate and Mr Douglas indicate the corporation is engaged in trading activities. The Trust does not engage in trading activities. Under the Trust Deed the Trustee is the body that may trade. 20 The weight of the evidence is that Ms Mayo was employed by W & K Holdings (New South Wales) Pty Ltd as Trustee for the W & K Family Trust trading as W & K Constructions. We are also of the opinion that W & K Holdings (New South Wales) Pty Ltd is a trading corporation and, therefore, a constitutional corporation for the purposes of s 51(xx) of the Commonwealth Constitution and s 4 of the Workplace Relations Act (see the discussion of trading corporation in Garvey v Institute of General Practice Education Incorporated [2007] NSWIRComm 159; (2007) 165 IR 62 and the authorities referred to therein). Accordingly, the Commission does not have power to hear the applicant's application by operation of s 16(1) of the Workplace Relations Act. Orders

21 The Full Bench orders that the application by Laureen Margaret Mayo for relief in relation to unfair dismissal is dismissed. __________________________________

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Workplace Relations Act 1996(Cth)

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