Fair Work Commission|2022-03-18|Before: Commissioner P

Nada Zahab v Al-Hikma College Ltd [2022] FWC 616 (18 March 2022)

The attached document replaces the document previously issued with the above code on 18 March 2022.

Minor typographical, grammatical, and referencing amendments have been made to the following paragraphs: [11], [25], [26], [27], [28], [44], [48], [50], [52], [63] and [68].

s.394 - Unfair dismissal

Application for an unfair dismissal remedy - jurisdictional objection that minimum employment period not met - jurisdictional objection dismissed.

[1] This decision concerns an application by Ms Nada Zahab (Zahab/the Applicant) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) lodged on 7 September 2021 (Application).

[2] In the Application, Ms Zahab alleges her employment with Al-Hikma College Ltd (Al-Hikma/the Respondent), an independent primary school located in Lakemba, commenced on 5 January 2021 and that she was dismissed on 19 August 2021.

[3] In the employer response to the Application, Al-Hikma states Ms Zahab commenced employment on 26 February 2021 and that she was dismissed on 19 August 2021. Al-Hikma objected to the Application on the basis that Ms Zahab's period of employment did not meet the minimum employment period.

[4] To be protected from unfair dismissal, a person must have completed a period of employment with their employer of at least the minimum employment period.[1] Further, whether a person is protected from unfair dismissal is a matter that must be determined prior to any consideration of the merits of an application for an unfair dismissal remedy.[2]

[5] Accordingly, this matter was listed for hearing of the Respondent's jurisdictional objection on 25 November 2021 and 16 December 2021. The Applicant represented herself. The Respondent was represented by Mr Omar Merheb, the Principal of the Respondent.

[6] In accordance with directions issued, both parties were given the opportunity to file any witness statements, documentary material and written submissions. The materials filed by the parties were consolidated into a "Digital Hearing Book" (DHB) for reference throughout hearing.

[7] Witness statements were tendered from the following persons, who also gave evidence at the hearing:

Mr Omar Merheb, the principal of the Respondent (Exhibits R1 and R2): and
Mr Mahdy Dennaoui, the Respondent's external accountant (Exhibit R3); and
The Applicant (Exhibits A1 and A2).

[8] For the reasons that follow, I have determined that Ms Zahab has completed a period of employment of at least the minimum employment period.

[9] Mr Merheb is the principal of Al-Hikma and has the authority to make final decision on the hiring of staff.[3]

[10] Mr Merheb gave evidence that the Applicant was employed on a full-time basis from 26 February 2021 until 19 August 2021.[4]

[11] Mr Merheb stated the Applicant attended a meeting in December 2020 with Ms Sadia Anwar (a director of the Respondent) and Mr Mohuddein Said (the landlord of the Respondent), during which the Respondent offered the Applicant an opportunity as a volunteer to show her skills in the hope that Al-Hikma can find a position for her to support her financially.[5] Mr Merheb stated this was in response to the Applicant applying to the school for financial consideration in relation to her children's school fees and offering to volunteer as part of that application.[6] Mr Merheb stated at the time the Respondent "had no vacancy and was in no need of admin staff."[7]

[12] Mr Merheb agreed the Applicant was provided with a personal email address, position title, and access privileges to various systems used by the Respondent, but explained it was the Respondent's practice to provide volunteers with such access to files and systems as needed for the volunteer to perform their tasks.[8]

[13] Mr Merheb states that a full-time employment position in the role of "admin officer" became available effective from 26 February 2021, following discussions between members of the Respondent's board of directors on or about 19 February 2021.[9] This position was offered to the Applicant on 26 February 2021, and she commenced in that position on the same day.[10]

[14] In response to a question from the Commission, Mr Merheb agreed that the role the Applicant performed prior to 26 February was the same role she was employed in from the 26 February 2021.[11]

[15] Mr Merheb denied the Respondent entered into any arrangement to offset the Applicant's school fees against tasks she performed as a volunteer, stating Mr Said holds no official position of authority within Al-Hikma.[12]

[16] In response to the Applicant's evidence regarding a record of hours worked between 5 January and 25 February[13], Mr Merheb stated that document was not an official record of the Respondent, and he was not aware of the existence of that document until it was served on him as part of the Applicant's materials.[14]

[17] On 19 August 2021, and despite Mr Merheb giving evidence that it was a very busy period for the school[15], the Applicant's employment was terminated due to COVID-19 related restructuring.[16]

[18] Mr Merheb also gave evidence of unpaid absences taken by the Applicant totalling 29 days during the period between 26 February and 19 August 2021.

[19] Mr Dennaoui is an accountant engaged by the Respondent to assist the Respondent with its payroll administration.[17]

[20] Mr Dennaoui gave evidence that the Applicant commenced paid employment on 26 February 2021 and was terminated on the 18 August 2021, her last working day.

[21] Mr Dennaoui stated that generally only paid employees are included on the "Admin Biweekly Worksheet" and "Daily Attendance Sheets" which are provided to him for the purpose of processing the Respondent's payroll.[18]

[22] In response to a question from the Commission, Mr Dennaoui stated that he did not have any knowledge as to whether any other arrangements were made between the Applicant and the Respondent prior to 26 February 2021.[19]

[23] The Applicant gave evidence that on Sunday, 20 December 2020 she forwarded her resume to the Respondent seeking an employment opportunity. [20] Al-Hikma was one of several schools that the Applicant contacted seeking an employment opportunity over the period of 18-20 December 2020.[21]

[24] In response to sending that email, she was invited to attend an interview with the Respondent on either 21 or 22 December with Ms Anwar and Mr Said, during which she was advised that she would be "hired" in the role as administration manager and would commence employment on 5 January 2021.[22]

[25] Furthermore, the Applicant stated that during the interview there was discussion about her four school aged children attending Al-Hikma. The Applicant states she was advised their enrolment at Al-Hikma would be accepted and that her "pay for the first part of [her] employment was to be offset by [her] children's enrolment fees, including application, tuition, building levy, uniform, textbooks and stationary fees."[23] In this respect, the Applicant was advised "to keep track of [her] employment hours and inform Mr Said once [her] work hours covered [her] children's school fees."[24]

[26] The Applicant gave the following evidence regarding the period of 5 January 2021 to 26 February 2021:

• That Mr Said confirmed the offsetting arrangement with her when she attended Al-Hikma for work on 5 January 2021;[25]

• That she was provided with login/password credentials for a range of the Respondent's administrative systems including the Respondent's Office 365 Account, Sentral Account[26], the Office 365 Admin-Drive Group, the Office 365 AHC Staff 2021 Group, the AHC Staff 2021 Microsoft Teams Group and the Respondent's School Transactions Portal;[27]

• That she was provided with the email address: n.zahab@alhikma.nsw.edu.au and her email signature identified her role as "Administration Officer";[28]

• That she generally worked up to 5 hours per day during the non-term period of 5 January - 25 January and approximately 8 hours per day during the school term;[29]

• That on 25 February 2021 she approached Mr Said and provided him with a copy of her record of hours[30] and that she was advised by Mr Said that payments to her account would commence from the next fortnightly pay cycle, which commenced on 26 February 2021;[31] and

• That there was no change to the role and duties she performed in the period of 5 February to 25 February compared to the period from 26 February onwards.[32]

[27] The Applicant stated her employment was terminated on 19 August 2021 by Mr Merheb and that she was advised she would receive 2 weeks payment in lieu of notice.[33] The Applicant stated that the payment in lieu of notice has been withheld by the Respondent.[34]

[28] In response to the Respondent's evidence that she sought out a volunteer role with the Respondent as part of her application for financial exemption from school fees, the Applicant stated that she "was not in a position to volunteer for almost 2 months full-time to show her skills in hope that the college can find a position"[35]; that if the application for financial exemption was approved, she expected she would get paid for hours from the outset with no need for the offsetting arrangement[36]; and the offer to volunteer at the college was in respect to after school or weekend hours.[37]

[29] The Applicant further stated that she did not receive a response to her application for financial exemption, other than to inform her that her working hours were being offset against her school fees.[38]

[30] In summary, the Respondent submits that:

the Applicant has concocted the offsetting arrangement and created false time sheet records to overcome the minimum employment period;

Ms Anwar and Mr Said did not have authority to employ the Applicant and her application for financial exemption is inconsistent with the purported offsetting arrangement;

it did not have a vacancy for an administration officer in January 2021 and that position only became available on 26 February 2021;

it agreed to the Applicant volunteering because she expressed an interest in doing so as part of her application for financial exemption; and

• the Applicant's continuous service should be reduced by 29 days on account of unpaid absences which are excluded periods for the purposes of s.22 of the Act.[39]

[31] In summary, the Applicant submits that:

she was employed from 5 January 2021 until 2 September 2021 and therefore, has completed a period of employment of at least the minimum employment period;

the Respondent did not lead any direct evidence from Ms Anwar or Mr Said in relation to the meeting in December 2020 and her employment commencing from 5 January 2021;

there was an intent to create a legally binding employment relationship from the beginning;

that upon commencement of her employment on 5 January 2021 she was provided with access to the Respondent's systems, an unshared workstation and the title of administration coordinator and that there was no change to the role and duties she performed in the period of 5 February to 25 February compared to the period from 26 February onwards; and

• upon commencement of her employment on 5 January 2021 she was provided with access to the Respondent's systems, an unshared workstation and the title of administration coordinator and that there was no change to the role and duties she performed in the period of 5 February to 25 February compared to the period from 26 February onwards.[40]

[32] Section 394(1) of the Act provides as follows:

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy."

[33] Section 396 of the Act provides as follows:

"396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

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

[34] Section 382 of the provides as follows:

**"**382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold."

[35] The meaning of "period of employment" is set out at s.384(1) of the Act as follows:

(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."

[36] The meaning of "minimum employment period" is set out at s.383 of the Act as follows:

(a) if the employer is not a small business employer - 6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(b) if the employer is a small business employer - one year ending at that time."

[37] I have taken into account all of the evidence and submissions of the parties. The fact that an issue is not mentioned in this decision does not mean that it has not been taken into account.

[38] It is not in dispute that the Respondent employed 25 employees at the time the Applicant was dismissed. Therefore, the Applicant's period of employment must be at least six months (or 184 days) at the time immediately prior to her dismissal for the Application to proceed.[41]

[39] As set out above, the period of employment is the period of continuous service the Applicant has completed with the Respondent.

[40] In this case, both the commencement date and the effective date of dismissal are in dispute. Furthermore, the Respondent submits a number of absences do not count as service and have the effect of reducing the Applicant's period of continuous service.

[41] I now turn to each of these matters.

[42] The resolution of the date the Applicant commenced employment with the Respondent will come down to a consideration of which party's evidence is preferred. The difficulty for the Respondent is that it has not sought to adduce any direct evidence from Ms Anwar or Mr Said in relation to the meeting in December 2020.

[43] This is remarkable considering that prior to the allocation of this matter to my chambers, the Applicant filed a preliminary submission and supporting materials to the chambers of Vice President Catanzariti in support of her contention that she had completed the minimum employment period, and in which the Applicant set out in detail the persons she met with in December 2020, the commencement date of her employment, the role, and the offsetting arrangement in relation to school fees and her remuneration.[42]

[44] Despite the Applicant setting out those particulars at such an early stage in the proceedings, the Respondent did not adduce any direct evidence to the contrary in chief, or in reply, following the issuing of directions, in circumstances where it bears an evidentiary onus to adduce evidence in support of its jurisdictional objection.[43]

[45] In those circumstances, I accept the unchallenged evidence of the Applicant, who I observe gave her evidence with honesty and candour, that she was offered and accepted employment in December 2020, which commenced on 5 January 2021. Furthermore, and for the reasons set out above, I draw an inference that the failure by the Respondent to call Ms Anwar, a director of the Respondent with direct knowledge of the matters in dispute, would not have assisted the Respondent's case.[44]

[46] I am also satisfied, and so find, that there was an intention by the parties to create legal relations.

[47] In Susan Bergman v Broken Hill Musicians Club Ltd T/A Broken Hill Musicians Club[45], Steel C summarised the requirement for an intention to create legal relations as follows:

[40] An agreement to do something is only regarded as a contract if the parties intended the agreement to be legally binding and carry legal consequences. That is, if something goes wrong, if one party failed to act in accordance with the agreement, the other party would be entitled to take legal action to seek performance. In employment situations where work is intended to be performed for payment, the necessary legal relations are generally present.

[41] There are exceptions such as Teen Ranch Pty Ltd v Brown and Redeemer Baptist School v Glossop & Ors and counter-exceptions of Ermogenous v Greek Orthodox Community of SA Inc.

[42] Volunteer work by its definition does not, in general, involve this element as the usual motivation for the arrangement is altruism rather than private gain or material advantage. That is, the commitments between parties in such arrangements are moral rather than a legal and formal one. In this matter the applicant provided work in a capacity which is argued to be employment and have a contract of employment. The respondent asserts that she was a volunteer or other than an employee. In determining further whether a contract existed the question must be asked, can it reasonably be inferred that the parties intended to create legal relations?[46]

[48] In Ermogenous v Greek Orthodox Community of SA Inc[47], the High Court of Australia held:

...the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.

[49] In undertaking the objective assessment of state of affairs between the parties, it is well established that the existence of an agreement may be inferred from the subsequent conduct of the parties and evidence of the performance of the transaction by the parties.[48]

[50] Although I have accepted the Applicant's unchallenged evidence that she was offered and accepted a contract of employment that commenced on 5 January 2021, the following examples of conduct by the parties following the commencement of that employment buttress my view that there was intention to create legal relations through the arrangements made in the meeting in December 2020:

• The Applicant's name was added to the administration employees daily attendance sheet from the week commencing 15 January 2021, some 4-5 weeks before Respondent contends it contemplated employing the Applicant. Furthermore, on 18 January 2021 the Applicant entered her "time in" and "signature", before being advised by Ms Anwar not to complete those sheets until the offsetting arrangement was completed as it would confuse payroll;[49]

• On 1 February 2021, Mr Merheb sent email correspondence to the Applicant requesting a meeting to discuss the Respondent's "general admin procedure". In that correspondence, Mr Merheb requests the Applicant to advise him if "admin is busy" and "you are short on staff" at the proposed time;[50]

• On 9 February 2021, Ms Anwar sent email correspondence to the Applicant thanking the Applicant for her prompt action in resolving a matter with a supplier which arose through another of the Respondent's administration employees placing an incorrect order;[51] and

• Various examples amongst the Applicant's materials of emails identifying her involvement in finalising class lists[52], being instructed to issue bulk SMS alerts to parents[53], liaising with suppliers to order uniforms[54] and coordinating repairs to computers.[55]

[51] The above matters illustrate the incongruity between the Respondent's contention that the Applicant was a volunteer, free to come and go as she pleased, and what was actually happening in practice.

[52] I also do not accept the Respondent's submission that Ms Anwar did not have the authority to offer employment to the Applicant. The Respondent did not adduce any evidence such as the Respondent's constitution or resolutions of the Board setting out levels of authority. However, the email correspondence filed by the Applicant shows Ms Anwar actively involved in setting up the Applicant's employment arrangements and providing instructions and feedback to the Applicant in respect to various tasks. Most telling is the email exchange dated 8-9 February 2021[56] where Ms Anwar instructs the Applicant on behalf of the Board to resolve an incorrect textbook order with a supplier which was placed by another of the Respondent's administration employees and provide a report as to why the incorrect order occurred, and how to prevent such things occurring in the future.

[53] In relation to the Applicant's offer to volunteer set out in the application for financial exemption, I accept her evidence set out at paragraph [28] above, that the offer to volunteer at Al-Hikma was in respect to after school or weekend hours. This is consistent with her attempts to seek an employment opportunity with the Respondent or another school in December 2020.[57]

[54] Accordingly, I find the Applicant was an employee of the Respondent from 5 January 2021.

[55] It is not in dispute that the Applicant's employment was terminated on 19 August 2021. Furthermore, it is not in dispute that the Respondent has withheld payment of 2 weeks in lieu of notice.[58]

[56] The issue for determination is whether the withholding of payment in lieu of notice by the Respondent extends the period of employment by a corresponding period of 2 weeks.

[57] In Metropolitan Fire and Emergency Services Board v Garth Duggan[59], a Full Bench of the Commission considered the interrelationship between s.117 and s.383(a)(i) of the Act in the context of whether 'notice of the dismissal' in s.383(i)(a) must comply with the requirements of s.117. After referring to relevant authorities, the Full Bench summarised the position as follows:

...it is clear in our view that if an employer terminates the employment of an employee without giving notice, or payment in lieu thereof, in accordance with an obligation owed by the employer under a contract, award, enterprise agreement or s.117 of the Act, the result is that the employer has acted unlawfully and/or wrongfully and the employee will have one or more causes of action available to him or her under the contract, award, enterprise agreement and/or the Act to remedy the deficiency in notice. However, an unlawful or wrongful dismissal does not invalidate or render void the termination of the employment relationship. Whether the employment relationship has been terminated is a question of fact.

[33] Accordingly, a notice of termination which does not comply with s.117 of the Act may be effective to bring about the termination of the employment relationship and may constitute "notice of the dismissal" within the meaning of s.383(a)(i) of the Act.[60]

[58] The Full Bench then went on to consider the requirements of notice for the purposes of s.383(a)(i) of the Act and stated:

[40] In the context of s.383(a)(i) of the Act, we accept that "notice" should be given its ordinary meaning of "information". But it is important to construe "notice" as part of the composite expression "notice of the dismissal" in s.383(a)(i) of the Act. The MFB's construction of the expression "notice of the dismissal" amounts to "information, intelligence, warning" of the employer's decision to dismiss the employee. However, the dismissal is an event, not merely a decision; it occurs when the employment relationship comes to an end. Accordingly, we consider that "notice of the dismissal" in accordance with s.383(a)(i) of the Act must inform the employee of the time when the employment relationship will come to an end, or at least make that time ascertainable. Such a construction is consistent with the purpose earlier identified.

[41] Furthermore, for the reasons given by the Full Bench in Ayub, we agree it is appropriate to draw on the common law principles identified in that decision to determine whether an employee has been given notice of their dismissal under the Act. To be effective at common law, a notice of termination of a contract of employment must specify a time when termination is to take effect, or that time must be ascertainable.

[42] Accordingly, we agree with the Commissioner's conclusion that a "notice of the dismissal" in accordance with s.383(a)(i) of the Act must either specify a time when the termination is to take effect, or that time must be ascertainable.[61]

[59] The letter of termination of employment[62] issued by the Respondent is abundantly clear as to when the termination of the Applicant's employment took effect. It states:

The date of termination of employment is 19 August 2021. Your termination is effective immediately and you will be paid two (2) weeks in lieu of notice.

[60] While the Respondent has withheld (or not made) payment in lieu of notice, that does not extend the period of employment. A failure to provide the minimum period of notice or payment in lieu thereof as required by s.117 of the Act constitutes a breach of the National Employment Standards and exposes the employer to the imposition of a civil penalty.[63]

[61] Accordingly, I find that the Applicant's period of employment ended on 19 August 2021.

[62] Based on my findings that the Applicant's employment commenced on 5 January 2021 and was terminated on 19 August 2021, the Applicant's period of continuous service is 226 days.

[63] However, the Respondent submitted the Applicant's period of continuous service must be reduced by 29 days due to absences that do not count as service pursuant to s.22(2) of the Act.[64] This would have the effect of reducing the Applicant's period of continuous service from 226 days to 197 days.

[64] The Applicant disputes this and contends that a number of those days are public holidays or non-term periods and therefore count towards her period of continuous service with the Respondent.

[65] Even if it is accepted that the totality of the absences are excluded periods, as a consequence of my findings in relation to the Applicant's commencement date and date of dismissal, the Applicant's period of continuous of service remains in excess of 6 months, or 184 days.[65]

[66] Accordingly, and despite the Applicant's objection to the Respondent's characterisation of some of the absences, it is not necessary to determine whether each period of absence is an excluded period for the purposes of s.22(2) of the Act.

[67] The Applicant's period of continuous service with the Respondent immediately prior to the termination of her employment was at least 197 days, and therefore in excess of 6 months (184 days).

[68] Therefore, the Applicant has completed a period of employment with the Respondent that is at least the applicable minimum employment period, as required by s.382(a) of the Act.

[69] The Respondent's jurisdictional objection is dismissed. The Application will now be programmed for further hearing.

[5] Exhibit R1 at [2]; Transcript 25 November 2021 at PN159-PN160.

[6] Exhibit R1 at [2]; DHB at page 67.

[8] Exhibit R1 at [3]; Exhibit R2 at [5].

[11] Transcript 25 November 2021 at PN235.

[12] Exhibit R1 at [2]; Exhibit R2 at [4].

[15] Transcript 25 November 2021 at PN247-PN251.

[16] Exhibit R1 at [8]; Exhibit R2 at [VI]; Employer Response (Form F3) at q3.1.

[17] Exhibit R3; Transcript 25 November 2021 at PN286, PN293.

[18] Transcript 25 November 2021 at PN328-PN329; DHB pages 77-79, 87-147.

[19] Transcript 25 November 2021 at PN296.

[22] Exhibit A1 at [6], Transcript 25 November 2021 at PN443.

[25] Transcript 25 November 2021 at PN447-PN453; PN571-PN575;

[26] Sentral is described as a student attendance and profile system: see DHB at page 16.

[27] Exhibit A1 at [6], DHB at pages 16-28.

[28] Exhibit A1 at [6], DHB at page 31 and Exhibit A2 at [3e].

[29] Exhibit A1 at [10] and DHB at page 30.

[32] Transcript 25 November 2021 at PN570.

[33] Exhibit A1 at [2]; Exhibit A2 at [8b]-[8c].

[36] Transcript 25 November 2021 at PN447.

[39] Respondent's Closing Submissions filed 2 December 2021.

[40] Applicant's Closing Submissions filed 9 December 2021; Exhibit A2 at [5].

[41] s.383(a) of the Act; Wales v 3 Point Motors Pty Ltd T/A 3 Point Motors [2012] FWA 3817 at [30].

[43] Advanced Health Invest Pty Ltd T/A Mastery Dental Clinic v Mei Chan [2019] FWCFB 5104 at [43].

[44] Jones v Dunkel [1959] HCA 8.

[48] Raward v Vine Nominees P/L & Ors [2001] QSC 494 at [76].

[49] Transcript 25 November 2021 at PN348-PN384, PN472, PN565-PN569; DHB pages 92-93.

[63] Melbourne Stadiums Ltd v Sautner [2015] FCFCA 20 at [213]-[214] per White J.

[65] Wales v 3 Point Motors Pty Ltd T/A 3 Point Motors [2012] FWA 3817 at [30].

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Nada Zahab v Al-Hikma College Ltd [2022] FWC 616

At a glance

Court

Decision date

Before

Source

Judgment (156 paragraphs)

Nada Zahab v Al-Hikma College Ltd [2022] FWC 616 (18 March 2022)

Parties

Legislation Cited (1)