[26] The submissions made by the applicant asserted that the jurisdictional objections raised by the employer should be rejected. In respect to the minimum employment objection, the applicant submitted that in the applicant's circumstances, there was a transfer of business in satisfaction of s. 311 of the Act because, in particular, there was a connection between Staff Australia and the employer in satisfaction of the requirements of subsection 311 (5) of the Act.

[27] The consideration of the minimum employment objection raised by the employer in this instance has involved the assertion that the applicant was not a person protected from unfair dismissal because he had not completed a period of employment with the employer of at least the minimum employment period. This objection arises from the provisions of subsection 382 (a) of the Act which relevantly states:

"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 ..."

[28] In this case the employer was not a small business employer and therefore pursuant to s. 383 of the Act, the relevant minimum employment period was 6 months. In any event, the period of employment of the applicant with the employer was a period of less than 3 months.

[29] Section 384 of the Act provides for a more detailed prescription of what does and what does not constitute a period of employment for the purposes of the minimum employment period. Section 384 of the Act is in the following terms:

(1) An employee's period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(a) a period of service as a casual employee does not count towards the employee's period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee's period of employment with the new employer."

[30] The evidence in this matter has established that the applicant was a casual employee engaged on a regular and systematic basis and he had a reasonable expectation of continuing employment. The regular and systematic employment of the applicant commenced in about April 2016 with the labour hire provider, Staff Australia. From at least May 2017, the applicant was engaged on a regular and systematic basis by Staff Australia at the Asahi Prospect site. On or about 3 April 2018, the applicant ceased employment with Staff Australia, and he then commenced employment with the employer. The applicant continued to perform the regular and systematic work at the Asahi Prospect site up until about 29 May 2018.

[31] Consequently, the evidence has established that the nature of the applicant's employment with both Staff Australia and then subsequently with the employer, satisfied the provisions of subsection 384 (2) (a) of the Act.

[32] The circumstances of this case involved the employment of the applicant with two different employers who were not associated entities. The applicant had been employed by the new employer for less than three months. Therefore, unless the previous employment with the old employer counted as a period of continuous service, the applicant would not have completed at least the minimum employment period. Subsection 384 (2) (b) of the Act establishes requirements that must be met if the period of employment with the old employer is to be counted towards the employee's period of employment with the new employer.

[33] Subsection 384 (2) (b) of the Act introduces the notion of a "transferring employee in relation to a transfer of business" as contained in paragraph (i) of that subsection. Section 12, The Dictionary of the Act, provides for definitions of both a transferring employee and a transfer of business as follows:

"transferring employee, in relation to a transfer of business: see subsection 311(2)."

"transfer of business: see subsection 311(1)."

[34] Consequently s. 311 of the Act establishes the meaning of the terminology "transfer of business" and "transferring employee" as relevant in any application of subsection 384 (2) (b) of the Act. Section 311 of the Act is in the following terms:

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).

(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a) the old employer or an associated entity of the old employer; and

(b) the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d) that relate to, or are used in connection with, the transferring work.

(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.

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.

New employer is associated entity of old employer

(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer."

[35] In addressing the requirements of subsection 311 (1) of the Act the matters contained in paragraphs (a) to (d) therein must be satisfied in order to establish that there was a transfer of business. The facts in this case involved, (a) the termination of the applicant's employment with Staff Australia and, (b) the commencement of employment with the employer within three months of the termination, and (c) the work the applicant performed for the employer was the same or substantially the same as that performed for Staff Australia_._

[36] In order to satisfy paragraph (d) of subsection 311 (1) of the Act, the evidence would need to establish that there is a connection between the old employer and the new employer as described in any of subsections (3) to (6). In this instance the contest has been reduced to the question as to whether or not the terms of subsection (5) can be satisfied in respect to the new employer ceasing to outsource work to the old employer.

[37] Subsection 311 (5) of the Act deals with circumstances where a new employer ceases to outsource work to an old employer such that if such circumstances exists, there is established to be a connection between the old employer and the new employer. The operation of the terms of subsection 311 (5) has been examined in two particular Decisions of this Commission that have been previously mentioned, namely Yarra City and ERGT. As mentioned in both the Yarra City and ERGT Decisions, the Act does not provide any definition for the word "outsource" and the Macquarie dictionary definition of; "to contract (work) outside the company rather than employ more in-house staff" would appear to provide for the appropriate meaning to be given to the word "outsource" as it is to be applied in subsection 311 (5) of the Act.

[38] Further, as was recognised in both the Yarra City and ERGT Decisions, the transfer of business provisions in the Act are to be "broadly interpreted" and are not intended to "focus on whether the new employer had taken over the 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." In this regard, it is relevant to reproduce that part of the Explanatory Memorandum that dealt with what has become subsection 311 (5) of the Act wherein it is stated:

"1226. The intention of this subclause is that a transfer of business occurs where a new employer decides to in-source the work previously done by the transferring employee of the old employer."[3] [emphasis added]

[39] Consequently, any application of the provisions of subclause 311 (5) of the Act should focus upon the work done by the transferring employee rather than any broader contemplation of outsourcing any particular business activity or functions. Thus, with due respect to the conclusions that were reached in the Decision in Yarra City, the fact that the new employer may not have in-sourced all of the transferring work and retained a mixture of direct hire and labour hire personnel, should not be interpreted to mean that the employer had not ceased to outsource the work. Rather, the test to be applied is whether the work of the transferring employee had ceased to be outsourced, (aka in-sourced).

[40] Further, it is important to recognise that the protection from unfair dismissal provisions of the Act are beneficial legislation, and the minimum employment period establishes a qualification for access to the beneficial legislation. Subsection 384 (2) of the Act is clearly intended to ensure that casual employees who work on a regular and systematic basis and who are transferred to employment with a new employer are not denied access to the beneficial legislation unless the new employer informs them in writing that their period of service with the old employer would not be recognised.

[41] Employees may often have little knowledge of the details that might surround any transfer of business. The experience for an employee such as the applicant in this case, is that on the next regular day of employment he arrived at work and performed the same work that he had undertaken on a regular and systematic basis since about at least May 2017. When, on 3 April 2018, the applicant transferred from employment with Staff Australia to Toll Personnel, the only change to his employment circumstances that the applicant would have been able to identify would have been the provision of pay advice from Toll Personnel rather than Staff Australia. This change would have also been reflected by the invoicing in respect of the work of the applicant from 3 April 2018 onwards being provided to Toll Transport from Toll Personnel rather than from Staff Australia.

[42] Even in circumstances which unquestionably involve a transferring employee in relation to a transfer of business, subsection 384(2) (b) (iii) provides the new employer with the capacity to ensure that the period of service with the old employer would not be recognised. Consequently, the legislative emphasis is upon the provision of information to the employee who, as a consequence of the change in employment, loses access to the beneficial legislation. In circumstances where the new employer fails to provide information, it would seem that the employee should generally be entitled to believe that they had not lost any service based entitlements such as access to the beneficial legislation providing for remedy for unfair dismissal.

[43] Consequently, in this context, the particular circumstances of the applicant can be translated (and inserted) into the particular provisions of subsection 311 (5) of the Act as follows:

(5) There is a connection between the old employer (Staff Australia) and the new employer (Toll Personnel) if:

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

(b) the transferring work is performed by those transferring employees (the applicant), as employees (an employee) of the new employer (Toll Personnel), because the new employer (Toll Personnel), or the associated entity of the new employer (Toll Transport), has ceased to outsource the work to the old employer (Staff Australia) or the associated entity of the old employer.

[44] The application of the relevant circumstances in this instance to the terms of subsection 311 (5) of the Act, reveals the reliance upon and significance of the connection between the associated entities of Toll Transport and Toll Personnel. The resultant position can be alternatively expressed as follows: On 13 March 2017, when Toll Transport commenced to undertake the Asahi Prospect warehouse operations, it initially outsourced the labour requirements to, inter alia, Staff Australia (the old employer). Subsequently, on 3 April 2018, when the applicant commenced employment with Toll Personnel (the new employer), an associated entity of the new employer (Toll Personnel), namely Toll Transport, ceased to outsource the work to Staff Australia.

[45] Thus, the circumstances of the applicant in this instance satisfy the provisions of subsection 311 (5) of the Act. There is a connection between the old employer (Staff Australia) and the new employer (Toll Personnel) primarily because an associated entity of the new employer (Toll Transport) ceased to outsource the work to the old employer (Staff Australia).

[46] The determination of the minimum employment objection raised in this matter has involved a contest about whether or not the applicant was a person protected from unfair dismissal. The absence of any such protection was asserted to have occurred because the previous employment of the applicant with another employer should not count as service for the purposes of the minimum employment period established under ss. 382, 383 and 384 of the Act.

[47] The determination of the minimum employment objection has required an application of the terms of subsection 311 (5) of the Act so as to establish whether there was a connection between the old employer (Staff Australia) and the new employer (Toll Personnel) involving the new employer or an associated entity of the new employer (Toll Transport), ceasing to outsource work to the old employer.

[48] Upon analysis, the Commission has concluded that there is a connection between the old employer (Staff Australia) and the new employer (Toll Personnel) in satisfaction of the requirements of subsection 311 (5) of the Act. This connection has been established as a result of the transferring work of the applicant having been performed by the old employer (Staff Australia) because it had been outsourced by an associated entity of the new employer (Toll Transport) and subsequently the transferring work of the applicant was performed by him as an employee of the new employer (Toll Personnel) because the associated entity of the new employer (Toll Transport) ceased to outsource the work to the old employer (Staff Australia).

[49] Consequently the applicant had completed the minimum employment period and is a person protected from unfair dismissal. The minimum employment objection of the employer is dismissed.

[50] The matter will be listed for Mention and Directions proceedings at 2:00 pm on 22 October 2018.

1. [1] Steve Cokuzovski v Yarra City Council T/A Yarra City Council [2018] FWC 155.
2. [2] Nicole Burdziejko v ERGT Australia Pty Ltd [2015] FWC 2308.
3. [3] Fair Work Bill 2008 Explanatory Memorandum @ paragraph 1226.

Printed by authority of the Commonwealth Government Printer