Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - Jurisdictional objection - Whether applicant has met minimum employment period - Whether applicant's service with former labour hire company and respondent is continuous - Whether a connection between labour hire employer and respondent under s.311(5) of the Fair Work Act 2009 - Whether work of applicant was outsourced and ceased to be outsourced when new employment began - No connection found between labour hire company and respondent - Jurisdictional objection upheld - Application dismissed.

[1] Mr Jared Abbott applies under s. 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of the termination of his employment by Acciona Infrastructure Australia Pty Ltd (Acciona). Acciona objects to the application and contends that Mr Abbott was not a person protected from unfair dismissal under s.382 of the Act, as he had not met the minimum employment period defined in s.383 of the Act.

[2] Acciona is part of a joint venture known as Nexus Delivery (Nexus) which is undertaking the construction of the Toowoomba Second Range Crossing Project (the Project). In addition to its own employees, Acciona utilises labour hire companies to provide employees to perform work on the Project. DBS Queensland Pty Ltd (Dowells) is a labour hire company which provides labour for the Project.

[3] Mr Abbott is a carpenter. On 18 April 2017, Mr Abbot was employed by DBS Queensland Pty Ltd (Dowells) to perform work on the Project and Mr Abbot worked for Dowells on the Project until 29 September 2017 when Mr Abbot's employment with Dowells ended. Mr Abbott commenced employment with Acciona on 3 October 2017 and remained in that employment until 8 February 2018. In order to make an unfair dismissal application Mr Abbott must establish that his service with Dowells and Acciona is continuous so that he has completed a minimum employment period of six months. Other than the issue of whether he has completed the necessary minimum employment period, Mr Abbott is a person protected from unfair dismissal.

[4] A hearing was held on 27 July 2017. Permission was granted for both parties to represented by lawyers pursuant to s. 596 of the Act on the basis that I was satisfied that it would enable the matter to be dealt with more efficiently taking into account its complexity and that no issue of fairness arose. Mr Abbott was represented by Mr L Tiley, Solicitor, Hall Payne Lawyers and Acciona by Mr M Rawlings of Counsel instructed by DWF. Mr Abbott gave made two statements which were tendered into evidence. Mr Abbott was also cross-examined. Acciona tendered a statement made by Mr Steven Ingham, HR Manager for the Nexus on the Project. Mr Ingham was not required for cross-examination.

[5] By virtue of s. 382(a) of the Act, one of the criteria for a person to be protected from unfair dismissal is that the person is an employee who has completed a minimum period of employment with his or her employer. Acciona is not a small business and s. 383 provides that the minimum period Mr Abbot must have completed is six months ending at the earlier of the time when he was given notice of the dismissal or immediately before the dismissal. Section 384(1) provides that an employee's period of employment at a particular time, is the period of continuous service the employee has completed with the employer at that time as an employee. Section 384(2) deals with when casual employment counts toward a period of employment and provides as follows:

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;

(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."

[6] The meaning of continuous service is set out in s. 22 of the Act. Relevantly in the present case, sub-sections (5) and (7) of s. 22 deal with whether an employee's service is continuous when there is a transfer of employment of the employee from one employer to another and provides 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)).

(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.

Insert s. 22(5) and (7)"

[7] It is common ground that Acciona and Dowells are not associated entities for the purposes of s. 22(7)((a). Section 311of the Act deals with transfer of business and relevantly provides at subsection (1):

Meanings of transfer of business, old employer, new employer and transferring work

(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

[8] Mr Abbott relies on s. 311(5) to establish the requisite connection. Section 311(5) of the Act provides as follows:

"New employer ceases to outsource work to old employer

(5) There is a connection between the old employer and the new employer if:

(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and

(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer."

[9] In written submissions filed prior to the hearing Acciona conceded that in the present case, the requirements of s. 311(1)(a) - (c) have been met and that:

• Mr Abbott's employment with Dowells has terminated;

• Mr Abbott became employed by Acciona within three months of the termination; and

• The transferring work is the same or substantially the same as the work Mr Abbott performed for Dowells.

[10] In oral submissions at the hearing, Mr Rawlings on behalf of Acciona made the further concession that for the purposes of s. 384(2)(a) of the Act, Mr Abbott's service with Dowells as a casual employee was regular and systematic and that he had a reasonable expectation of continuing employment on a regular and systematic basis.[1]

[11] The issue for determination is whether there is a connection between Dowells and Acciona as provided in s. 311(5) of the Act on the basis that the work was outsourced by Acciona to Dowells and that the outsourcing ceased when Mr Abbott was employed by Acciona. Acciona also asserts that Mr Abbott was put on notice by Acciona that his service with Dowells would not be recognised when he received the offer of employment from Acciona, and that this was sufficient to meet the requirements in s. 384(b)(iii) for his service with Dowells not to be recognised by Acciona.

CASE LAW IN RELATION TO s. 311(5)

[12] It has been observed in a number of cases that there is no definition of "outsourcing" in the Act. It is also the case that there is no full bench authority directly on point in relation to the operation of s. 311(5) in the context of an employee of a labour hire company who is employed by the labour hire company at a particular site or on a particular project and ceases employment with the labour hire company to take up employment with an entity on the same site or project, including the entity which owns or controls the site or operates the business in which the labour hire employee was engaged.

[13] The Explanatory Memorandum for the Act deals with s. 311(4) and s. 311(5) by reference to a cumulative example. In relation to s. 311(4) the example is a human resource management company employing four security guards to staff its reception desk and which decides it no longer wishes to employ security guards and enters into a contract with a security firm to provide the services. In the example given, the security firm employs all four guards who perform the same work for the security company. This is said to constitute a transfer of business.

[14] In relation to s. 311(5) the same example is used on the basis that after two years, the human resource management company decides that it no longer wishes to outsource the security work and terminates its contract with the security firm and offers employment to the security guards employed by the security firm. Those guards accept the offers of employment and perform the same work as employees of the human resource management company as they did for the security company. This is also said to be a transfer of business.

[15] Notwithstanding that there is no full bench authority on s. 311(5) there are a number of decisions of single members of the Commission in relation to this issue. In Burdziejko v ERGT Australia Pty Ltd[2] the applicant was employed by a labour hire company to work at ERGT Australia Pty Ltd (ERGT) and was offered ongoing employment by ERGT after three months. ERGT contended that there had been no transfer of business on the basis that the labour hire company had not undertaken any part of ERGT's business and that ERGT had not terminated an arrangement with the labour hire company. It was also submitted that ERGT had simply contracted with the labour hire company to provide labour and had never required the labour hire company to perform work for ERGT.

[16] ERGT in that case sought to distinguish circumstances where a company contracts out wider services - for example maintenance work - and enters into a contract for the provision of that work with another company, from circumstances where a company just seeks to hire workers to perform maintenance work from a labour hire company. ERGT argued that in the first case there is outsourcing and in the second case there is not. Deputy President Gooley held:

"[37] I do not accept the submission of ERGT that it did not outsource the work because prior to employing Ms Burdziejko the work performed by Ms Burdziejko was not required to be performed. ERGT employed customer service officers. Because it had gained a new client it had additional work that it needed to be performed. Instead of engaging an employee to perform that work, it engaged Hays to provide a person to perform that work. It outsourced the work to Hays. Further, after a period of time, it decided that it no longer wanted Hays to perform that work and decided to perform the work in house and employed Ms Burdziejko to do the same work.

[38] Unless the contract with Hays is a sham, upon engaging Hays to provide labour ERGT is no longer performing that work. Instead of ERGT engaging labour to perform the work Hays engaged the labour to perform work.

[39] The transfer of business provisions in the Fair Work Act 2009 were intended to have wider application than that provided for in the predecessor acts where the focus was on whether there was a transfer of the business between the old employer and the new employer. The application of the predecessor provisions focused the character of the business in the hands of the old employer and the new employer. The Explanatory Memorandum makes it clear that the new provisions do not focus on whether the new employer had taken over that business or part thereof but whether there has been a transfer of work between the two employers and the reason for the transfer of that work.

[40] One only needs to take the words of the Act and apply it here.

(a) the transferring work had been performed by one or more transferring employees (Ms Burdziejko), as employees of the old employer (Hays), because the new employer (ERGT), had outsourced the transferring work to the old employer (Hays); and

(b) the transferring work is performed by those transferring employees (Ms Burdziejko), as employees of the new employer (ERGT), because the new employer (ERGT), , has ceased to outsource the work to the old employer (Hays).

[41] I therefore accept that there is a connection between the old employer (Hays) and the new employer (ERGT) such that there was a transfer of business from Hays (the first employer) to ERGT (the second employer)."[3]

[17] In Sapienza v Cash in Transit Pty Ltd T/A Secure Cash,[4] Deputy President Gooley found that there was a connection between two entities as provided in s. 311(5) on the basis that one entity contracted another entity to perform work for it in Western Australia and then made a decision to perform the work itself,[5] and employed the persons who had previously been performing the work.

[18] In Thorne v Jura Australia[6] a company referred to in the decision as "Coffee" entered into an agreement with another company "JEAG", under which a third company, "Global", would provide labour to a fourth Company, "Jura" to sell coffee machines. The agreement also provided for the provision of other items such as vehicles and information technology systems. It was also the case that JEAG and Jura were related entities, as were Coffee and Global. The agreement ended and the employees were offered positions with Jura. Jura submitted that the question of whether s. 311(5) was relevant depended on the meaning of the term "outsource" and that the term did not cover every arrangement in which labour is provided by another entity. Jura contended that the arrangement was a service agreement and that it was a pure joint venture rather than an outsourcing arrangement and the termination of the arrangement did not trigger the application of s. 311(5). Commissioner Cargill held:

"[47] The application or otherwise, of subsection (5), turns on whether the arrangement by which Global had been providing labour could be considered to be "outsourcing" or something else. The evidence of Mr Liakatos is that Global was the company by which labour was provided for the shareholders of Jura. In my view the fact that there was an arrangement by which other things such as vehicles and IT services were provided does not mean it was not an outsourcing arrangement.

[48] I am satisfied that Jura had outsourced the transferring work to Global and, as at the end of 2011, had ceased to outsource that work. It follows that subsection (5) is met and, consequently, so is subsection (1). There has been a transfer of business and the applicant is a transferring employee as contemplated by subsection (2)."

[19] In Gaudsen v Silvan Pty Ltd[7] the applicant was employed on a casual basis by a labour hire company to undertake work as a store person at the premises of another company, Silvan. The applicant's employment with the labour hire company terminated and the next day he commenced employment with Silvan performing the same work. Silvan contended that the applicant's service was not continuous on the basis that it had not outsourced the work of warehousing and logistics but rather had engaged the applicant through the labour hire company, as supplementary labour. Silvan also sought to distinguish the facts in Jura on the basis that Jura involved an outsourcing arrangement which ceased resulting in the work being brought back "in house". Silvan further argued that the third party in Jura was not a labour hire company. In finding that the employee had not served a minimum employment period, Commissioner Spencer held that while the work undertaken by the applicant for the labour hire company and Silvan was similar, there was no connection between the two entities except via the labour hire arrangement and that the required connection was not established for the purposes of s. 311(5).[8]

[20] In Cokuzovski v Yarra City Council an employee who was employed by the Council as a parking attendant from 15 May 2017 until 27 August 2017 had performed work for the Council from March 2013 until 14 May 2017 - the day before the employee was employed by the Council. The Council argued that the employee was not protected from unfair dismissal as he had not served the minimum employment period. The employee argued that he had been offered and had accepted direct employment with the Council in 2013 and alternatively, that he was a transferring employee in relation to a transfer of business from the labour hire company to the Council. The Council maintained that there was no transfer of business from the labour hire company to the Council.

[21] Deputy President Millhouse rejected the employee's primary argument and found that he was not employed by the Council prior to 15 May 2017. The facts as set out by the Deputy President were that the Council had previously employed parking officers directly and had used labour hire employees to supplement its workforce. The Council had continued to directly employ some parking officers. Deputy President Millhouse went on to consider whether there was a connection between the labour hire company and the Council by virtue of s. 311(5) of the Act. The Deputy President held that in order for there to be a ceasing of outsourcing for the purposes of that section, there must first be outsourcing. This required consideration of whether the arrangement by which the labour hire company provided labour to the Council was outsourcing.

[22] In considering this question, Deputy President Millhouse adopted the definition of outsourcing in the Macquarie Dictionary referred to by Deputy President Gooley in Burdziejko as: "to contract (work) outside the company rather than employ more in-house staff." Deputy President Millhouse found that when the Council determined that it no longer wished to perform as much of the parking officer work and engaged a third party to perform that work, it outsourced the parking control officer work. However, the Deputy President went on to conclude that the Council had not ceased to outsource work when it employed the applicant on the basis that the arrangements with the labour hire company for the supply of contingent labour to perform parking officer work remained on foot. Further, the Council continued to directly employ parking officers. The Deputy President held that:

"[91] The mere fact that the Respondent offered the Applicant direct employment in the Position, carrying out work that has continued to be performed in house, does not mean that the Respondent has ceased to outsource the parking control officer work. There continues to be the same scope of outsourcing of the parking control officer work by the Respondent. The outsourcing has continued, unaffected by the direct employment of the Applicant. It is clear on the evidence that it has not ceased.

[92] I accept the Respondent's submission that the matter before me can be distinguished from the decision in Burdziejko given the different factual circumstances.

[93] Accordingly, I am not satisfied that the direct employment of the Applicant means that the Respondent has "ceased to outsource the work" pursuant to s.311(5) of the Act."

[23] Deputy President Millhouse went on to conclude that there was no connection between the labour hire company and the Council as required by s. 311(1)(d) of the Act and accordingly there was no transfer of business from the labour hire company to the Council and the employee was not a transferring employee.

[24] The evidence and submissions relevant to the issues for determination in this case can be summarised as follows. Mr Abbott said that in late June or early July 2017, he became aware that four or five of his colleagues had transferred from Dowells to being direct employees of Nexus Delivery. In early September 2017 a Project engineer approached Mr Abbott and asked whether he wanted to be on the books of Nexus and was interested in coming across. Mr Abbott said that he said yes to this proposal because there was greater job security and better conditions. When Mr Abbott started working for Acciona there was no discussion about his past service with Dowells and whether it would count with Acciona. Mr Abbott also said that he was not told that his service would not count and maintained that he had a total of 42 weeks service when he was dismissed comprising 24 weeks with Dowells and 18 weeks with Acciona.

[25] Mr Abbott tendered the letter of offer provided to him on 29 September 2017. The letter of offer confirms that his employer is Acciona Infrastructure Australia Pty Ltd and that he will be joining the Nexus Delivery team. The letter confirms that Mr Abbott's employment will commence on 3 October 2017 and will continue until he is released by Nexus Delivery when his role is no longer required, unless his employment is terminated earlier. The letter of offer also provides that:

1. Your employment conditions will be governed by the ACCIONA Infrastructure Australia Pty Ltd Enterprise Agreement 2014 (the 'EA'), a copy of which is attached. The EA outlines wage rates and other terms of your employment, including entitlements and information specific to your position.

2. Your primary employment designation is: CW 5 Classification in the EA. In addition to performing any duties within your assigned classification group you will perform additional duties as reasonably and lawfully directed by your Supervisor to meet Project needs, provided that such duties are within your skills, competence, qualifications and training.

3. Under the terms of the EA, you will initially be engaged for a six (6) month probationary period. During this time we will assess your progress and performance, and may end your employment by providing 1 week's notice. Thereafter, your employment may be terminated as provided for in the EA."

[26] Under cross-examination Mr Abbott agreed that Mr Purkis, who worked for Dowells as a Supervisor or HSC [Health and Safety Co-ordinator] and who Mr Abbot had reported to while working for Dowells, remained on site after Mr Abbott took up employment with Acciona, and was supervising other employees of Dowells who were also still working on the Project at that time.

[27] Mr Ingham's evidence is that Mr Abbott was employed as part of a general recruitment exercise that included the placement of advertisements on the "Seek" website. Mr Ingham said that prior to commencing employment with Acciona, Mr Abbott worked on the Project as a day to day casual employed by Dowells. Dowells is contracted to Nexus Delivery to provide labour on the project. Dowells continue to supply labour to the Project and at the time Mr Ingham made his statement, Dowells supplied 10 - 12 employees to undertake concrete line drainage works in an area of the Project. Mr Ingham also said that workers supplied by Dowells continue to be used on the Project on an "as needs" basis. Further, Mr Ingham said that Dowells continued to supply labour to an area of the Project termed Central bridges up to the end of April 2018, when work on some of the bridges was coming to an end. Between January and April 2018 Dowells had up to 20 workers in the Central bridges area with an average of ten present each day.

[28] Mr Tiley on behalf of Mr Abbott contended that Acciona bears the onus of establishing that the Commission does not have jurisdiction to deal with Mr Abbott's application in circumstances where Acciona raised the jurisdictional objection. Mr Abbott maintains that his total period of continuous service, properly counted, will include his service with Dowells immediately prior to his commencing with Acciona. The necessary connection between Dowells and Acciona exists on the basis that Acciona decided to cease outsourcing the work performed by Mr Abbott and bring Mr Abbott and the work performed by him, in house.

[29] There is no requirement that there be any connection in the sense of ownership or transfer of assets between the two entities. Further, the proposition that immediate past service - albeit on a casual basis - with a labour hire firm counts as service with a host employer for the purposes of the minimum employment period, is supported by the case law. In this regard reference was made to the decision of Deputy President Gooley in Burdziejko, where the submission that outsourcing had not occurred because prior to employing the applicant in that case, the work was not required to be performed by persons employed by the company was repeated. Further, in Burdziejko it was sufficient that the company had decided that additional work would be performed by employees of a labour hire company and had later decided that the work would be performed in house and had employed the applicant to do the same work.

[30] Mr Tiley submitted that the reasoning in Burdziejko makes it plain that where work that was previously outsourced is brought in house by an employer, then provided that ss. 311(1)(a) - (d) are satisfied, a transfer of business will be deemed to have occurred for the purposes of s. 384(2)(b) of the Act. In circumstances were Mr Abbott was not advised that his service with Dowells would not be recognised by Acciona, Mr Abbott's total period of continuous service comprises his 24 weeks of continuous service with Dowells in addition to his 18 weeks of continuous service with Acciona. As a result, when Mr Abbott was notified by Acciona of the termination of his employment he had completed in excess of six months continuous service and was a person protected from unfair dismissal.

[31] In oral submissions Mr Tiley contended that the concession by Acciona that the work performed by Mr Abbott for Acciona was the same or substantially the same as the work he performed for Dowells, was a significant one. This is the case because the focus of s. 311(5) is on the transferring work being done by the particular employee rather than the entirety of the commercial arrangements between Acciona and Dowells.

[32] Support for the proposition was said by Mr Tiley to be found in three sources. The first is the use of the singular in the terms of s. 311(5) which provides that "the transferring work had been performed by one or more transferring employees". The second is the relevant part of the Explanatory Memorandum, where the singular "employee" is also used. The third is the decision of Deputy President Gooley in Burdziejko where it was held that s. 311(5) applied in the case of a single employee where work was sent outside the business and brought back. Mr Tiley submitted that s. 311(5) was engaged when the work performed by Mr Abbott was sent outside Nexus to Dowells and was then brought back in. Contrary to the decision in Cokuzovski there was no requirement that the work first existed in house, and the approach in Burdziejko should be preferred to that in Cokuzovski. Further, given that the facts in this matter are closer to those in Burdziejko than to those in Cokuzovski, the former case should be followed.

[33] Mr Tiley submitted that if the drafters of the legislation had intended that there be a third step requiring the work to be in house before it was outsourced, this requirement would be clearly stated, and the Commission should not insert this third requirement. Mr Tiley further submitted that to apply s. 311(5) in the manner contended for by Mr Abbott would not create a stampede of applicants to the Commission as all that employers are required to do to avoid the transfer provisions is to write to a transferring employee advising that previous service will not be recognised.

[34] Mr Abbott was not provided with such notice and the best that Acciona can say is that Mr Abbott's contract of employment had a probationary period which was in effect written notice to Mr Abbott that his previous employment with Dowells would not be recognised. This submission is wrong on the basis that a contractual probationary condition cannot remove the benefit of a statutory provision or defeat the operation of the statutory regime of protection from unfair dismissal.

[35] Acciona contends that Mr Abbott has the onus of establishing that there was a transfer of business between Dowells and Acciona and that his period of service as a casual employee with Dowells should count towards his period of employment. In oral submissions Mr Rawlings for Acciona said that Acciona is required to establish the factual basis for a jurisdictional objection and the onus then shifts to the applicant to establish that there is standing for the application to proceed. In support of this proposition, Mr Rawlings referred to the decision in Abdalla v Viewdaze[9] where a Full Bench of the Australian Industrial Relations Commission held that a Respondent raising a jurisdictional objection bears an "evidentiary onus" which it must discharge in order to put the Commission's jurisdiction in issue by leading evidence or making factual submissions, which if accepted would lead to the conclusion that the Commission had no jurisdiction. The Full Bench went on to hold that:

"Once that 'onus' has been discharged, the 'onus' passes back to the Applicant who bears the ultimate responsibility for establishing that the application is within jurisdiction. Where...the evidence before the Commission is insufficient to enable it to come to a conclusion favourable to the mover of the motion on an issue which has to be determined, the motion should be dismissed."[10]

[36] Acciona concedes that Mr Abbott's employment with Dowells was terminated and that he was employed by Acciona within three months of the termination, and that the transferring work is the same or substantially the same as the work Mr Abbott performed for Dowells. In order to establish the requisite connection between Dowells and Acciona Mr Abbott must successfully prove that Acciona outsourced the work to Dowells and that Mr Abbott performed the work for Acciona because it ceased to outsource the work to Dowells.

[37] Acciona contended that as the present case only involves the provision of supplementary labour, Acciona had not outsourced the transferring work to Dowells. The term "outsource" is not defined in the Act and while Mr Abbott relies heavily on the decision in Burdziejko, Acciona submits that the decision in Gausden should be followed so that the natural and ordinary meaning of the phrase "had outsourced ... work" is found to involve the contracting out of a business function or process and does not encompass the engagement of only supplementary labour. As the present matter only involved the provision of supplementary labour, Acciona did not outsource the transferring work to Dowells.

[38] Acciona further contends that even if the approach in Burdziejko is followed and the Commission finds that the work was outsourced to Dowells, this does not mean that by offering the work to Mr Abbott, Acciona has ceased to outsource that work. This is consistent with the decision in Cokuzovski and the facts in the current case can be similarly distinguished from Burdziejko. In this regard, Acciona pointed to the evidence that from the commencement of Mr Abbott's employment with Acciona, Dowells provided supplementary labour to the Project and continues to do so.

[39] In relation to its assertion that Mr Abbott was put on notice that his employment with Dowells would not be recognised when he received the offer of employment from Acciona on 29 September 2017, Acciona pointed to the statement in the offer of employment that Mr Abbott's employment was subject to a six month probationary period and that his employment could be terminated by one weeks' notice. Acciona submitted that this clause would have no utility if Mr Abbott's service with Dowells was to be recognised and consequently Mr Abbott was on notice from 29 September 2017 that his service would not be recognised.

[40] In relation to the provisions of the Act relevant to the present dispute, Mr Rawlings pointed to other provisions of s. 311 - subsections (4) and (6) - and submitted that these subsections relate to the corporate structure of a company and how its workforce is managed in order to undertake particular tasks. The subsections do not relate to engagement of employees on an individual day to day level. In relation to s. 311(5)(a) Mr Rawlings submitted that the term "transferring work" on a natural reading, seems to refer to all of the work that was outsourced. This is also apparent from s. 311(5)(b) which indicates that the new employer has ceased to outsource the work. The work should be considered as a whole. Support for this construction is also found in the heading of the sub-clause - "New employer ceases to outsource work to old employer" - which suggests that the work for the purposes of the subsection is the work as a whole and that the subsection refers to the ending of the arrangement between the old employer and the new employer.

[41] Acciona submits that the term "work" needs a scope to contain it and that the scope is the outsourcing agreement by which the work is transferred. In the present case, the arrangement between Dowells and Acciona continued and there was simply an offer of employment to Mr Abbott as an individual while labour hire arrangements continued for other employees of Dowells. Therefore an individual moved rather than an outsourcing of work. Accordingly the facts were the same as those in Cokuzovski and could be contrasted with those in Burdziejko where there was only one employee provided by the labour hire company to do a job. Accordingly, the same principle was applied in both cases and the outcome was different because in Burdziejko there was no evidence that a labour hire arrangement was ongoing so that outsourcing continued.

[42] Mr Rawlings also referred to the example in the Explanatory Memorandum as supporting Acciona's argument on the basis that in that example all of the security guards provided by the contractor were employed by the employer so that the scope of the work was the entire outsourcing arrangement.

[43] The term "outsource" is not defined in the Act. I accept that the term should be given its ordinary meaning - to contract work outside a company rather than employ more in-house staff. I also accept that on the plain wording of s. 311(5) there is no apparent requirement that work must have been done in-house before it can be outsourced. In my view, the term "outsource" can apply equally in cases where an employer currently undertakes work in-house or where it plans to undertake new work and decides that rather than directly employing persons to undertake that work, it will outsource the work so that it is undertaken by an external provider.

[44] I do not accept that the term "outsource" applies to any circumstance where an employer engages labour from an external supplier to undertake any work within the employer's business. The provisions focusing on the work of a particular employee are found in s. 311(1)(a) - (c) . Where those are met, there is an additional requirement in s. 311(d) that there be a connection between the old employer and the new employer as described in any of subsections 311(3) - (6). In establishing such a connection for the purposes of those subsections, the term "outsource" must have some work to do. That term in my view, directs attention to the outsourcing arrangement which is the arrangement between the entity outsourcing the work and the entity which will perform the work. It is only where such an arrangement is in place that a connection between two employers as provided in s. 311(4) and (5) will be established. In short, something more than an employee ceasing to perform particular work for one employer and commencing to perform the same or substantially the same work at the same location for another employer is required.

[45] If this was not the case then there would be no requirement to use the term "outsource" and the legislation would simply state that where an employee performs work in a particular workplace for one employer and is offered substantially the same work in the same workplace by another employer, the service of the employee will be deemed continuous. Clearly the additional requirement that there be a connection must operate on the basis of something additional. Each of the subsections 311(3) - (6) provide for additional requirements to establish a connection for the purposes of s. 311(d).

[46] An employer contracting with a labour hire company for the labour hire company to provide an employee of the labour hire company to supplement its workforce or to replace an absent employee will not automatically be found to have outsourced the relevant work. Rather, the employer may simply be engaging additional labour in a flexible manner, to ensure that it can continue to undertake particular work. Conversely, it does not follow that an employer who has engaged an employee of a labour hire company to supplement its own workforce, or to replace an absent employee and then after a period of time offers that employee employment within its business, will be found to have ceased to outsource the work the relevant employee was previously undertaking.

[47] In my view there is a distinction between an employer engaging supplementary labour through a labour hire company and outsourcing work. There will be occasions where the distinction is difficult to establish and the side of the line that a particular case falls on will be determined by the facts and circumstances of that case including:

• The nature of the arrangement between the provider of the labour and the company engaging the labour;

• Whether that arrangement continues after the putative outsourcing has taken place;

• Whether all or some of the labour hire employees in the particular workplace are offered employment at the time of the putative cessation of the outsourcing; and

• Whether the company engaging the labour has some employees "in house" who are carrying out the work and will continue to do so.

[48] The approach to applying s. 311(5) I favour is not inconsistent with the plain words in the legislation. Outsourcing can occur when one employee or a number of employees are involved. This approach is not inconsistent with the example in the Explanatory Memorandum which indicates that all of the relevant employees (security guards) were provided by a contract security company and were all offered employment in the workplace where they had been engaged to perform the same work as direct employees of the employer that operated that workplace. Accordingly, there was outsourcing and a subsequent cessation of outsourcing,

[49] This approach does not necessarily give rise to an inconsistency in the decided cases referred to by the parties. In Burdziejko it does not appear that there was a great deal of evidence about the arrangement between the two relevant entities. The second entity in that case did employ other employees termed customer service officers and contended that the applicant was engaged to supplement its labour force because it obtained a new client. It is not clear whether there were any other employees provided by the labour hire company as supplementary labour at the relevant time. It is also not clear whether the employee in that case only performed work for the new client which had generated the additional workload, or whether the work for that new client was different than the work performed in house for other clients. It is also not apparent that the labour hire arrangement continued after the putative outsourcing or that the labour hire company continued to provide employees to the employer in question after the applicant took up employment with that employer.

[50] In Sapienza it is apparent that all of the work in a particular state was outsourced to another entity in accordance with a contract between the two entities and was then brought in house in circumstances where the employees employed by one party to the contract who had been performing the work subject of the contract were offered employment with the other party to the contract. This was also the case in Jura where there was an agreement between two entities for the provision of labour and a number of the employees engaged by one entity pursuant to that contract were offered and accepted employment with the other entity party to the contract, in circumstances where the former entity had performed all of the relevant work for the latter entity.

[51] In Gausden there was a contract for the provision of labour by a labour hire company to an employer which operated a warehouse and the applicant in that case was engaged in the course of the labour hire company providing supplementary labour.[11] It follows that the employer in that case employed other persons to carry out warehousing duties such that it could not be said that it had outsourced that function. It is also probable that given the nature of the labour hire arrangement, it remained in effect after the employment of the applicant in that case had ceased. This was certainly the case in Cokuzovski and is the basis for distinguishing that case from Burdziejko.

[52] On the facts in the present case, Acciona as a part of the Nexus Delivery Joint Venture, directly employed some of the employees who were performing work on the Project. At the same time, Acciona supplemented its direct labour force with additional employees provided by Dowells, a labour hire company. The arrangement between Acciona and Dowells for the supply of labour was in place before Mr Abbott was employed by either entity and continued after Mr Abbott commenced employment with Acciona. I do not accept that this arrangement is outsourcing. I also do not accept that in the circumstances of this case, by offering employment to Mr Abbott, Acciona ceased to outsource the work Mr Abbott had previously performed as an employee of Dowells. Accordingly I am not satisfied as required by s. 311(5) that the work was outsourced or that outsourcing had ceased.

[53] For completeness, I do not accept the submission that the terms of the written contract of employment between Acciona and Mr Abbott placed Mr Abbott on notice that his service with Dowells would not be recognised. The mere act of establishing a probationary period in a contract of employment does not constitute informing Mr Abbott in writing that his service with Dowells would not be recognised in the manner contemplated in s. 384(b)(iii). That provision clearly requires that the employee be informed of this specific matter, and not that the employee is put on notice that an inference should be drawn from an apparently unrelated contractual term. It is also the case that such a term cannot overcome protections under the Act afforded to employees such as protection from unfair dismissal.

[54] I find that there was no connection between Acciona and Dowells as required by s. 311(d) of the Act. Accordingly, there was no transfer of business between Dowells and Acciona and Mr Abbott was not a transferring employee. As I am not satisfied in relation to these matters, the conditions in s. 22(7) and s. 22(5) are not satisfied and the service of Mr Abbott with Dowells does not count as service with Acciona.

[55] Mr Abbott was employed by Acciona on 3 October 2017 and his employment was terminated on 8 February 2018. At that time he had been employed by Acciona for 18 weeks and accordingly had not completed a minimum period of employment of at least six months. Accordingly, Mr Abbott is not a person protected from unfair dismissal and his application for an unfair dismissal remedy must be dismissed. An Order to that effect will issue with this Decision.

Mr L Tiley of Hall Payne Lawyers on behalf of the Applicant.

Mr M Rawlings instructed by DWF on behalf of the Respondent.

[2] [2015] FWC 2308.

[4] [2017] FWC 5939.

[6] [2012] FWA 4954.

[7] [2014] FWC 5337.

[11] [2014] FWC 5337 at [42].

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