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Employer’s unfair dismissal objection fails after incorrect count of staff numbers

May 04, 2018

By Alex Millman and Lindsay Carroll, NRA Legal

It is no secret that the retail, fast food and restaurant industries include the highest proportion of casual employees in Australia. This means that, when it comes to matters like unfair dismissals, it can sometimes be hard to determine how casual employees are to be treated.

A casual employee can bring an unfair dismissal claim if they are a “regular and systematic casual employee”.

When working out if you are a small business – that is, whether you have 14 or fewer employees – you also need to include in this count any “regular and systematic casual employees”.

What is ‘systematic’ has been generally understood since the birth of the Fair Work Act to mean ‘according to a system’, usually a roster. However, what is ‘regular’ has been a long-contentious issue. In a decision on 1 May 2018, the Fair Work Commission gave some guidance on how to approach the issue.

Werner v Clarendon Arms Pty Ltd t/a Clarendon Arms Hotel

The case

This case was an unfair dismissal claim brought by Ms Werner against her former employer, the Clarendon Arms Hotel (the Hotel). Ms Werner had worked at the Hotel for just under ten months when she was dismissed.

The Hotel argued that Ms Werner was not able to have her application heard by the Commission because, since the Hotel was a small business of 14 or fewer employees, she had not completed the minimum employment period of 12 months.

This caused the Commission to consider whether the Hotel was in fact a small business under the Fair Work Act, and involved an analysis of the working patterns of the Hotel’s casual employees.

The contention

Ms Werner and the Hotel agreed that at the time of Ms Werner’s dismissal, the Hotel had 13 employees, including Ms Werner.

Whilst the Hotel argued that these 13 employees were the only employees to be counted, Ms Werner argued that five additional casual employees needed to be included in the total number of employees, thereby excluding the Hotel from the meaning of the expression ‘small business’ in the Fair Work Act.

The five additional employees identified by Ms Werner typically only worked on weekends – some only on Saturdays, some only on Sundays, and only occasionally on both Saturday and Sunday. Some worked weekdays from time to time as well.

The common characteristic of these employees was that they all worked no more than one or two shifts a week, and the length of these shifts varied.

The Commission’s conclusion

The Commission agreed with Ms Werner’s argument that the five additional employees needed to be included in the count of employees. As such, the Hotel was not a small business, and Ms Werner had served the minimum employment period of six months prior to her dismissal.

The Commission referred to the decision of the Full Court of the Federal Court in Yaraka Holdings Pty Limited v Giljevic, in which the court determined that:

The term ‘regular’ should be construed liberally. It may be accepted … that it is intended to imply some form of repetitive pattern rather than being a synonym for ‘frequent’ or often’. However, equally, it is not used … as a synonym for words such as ‘uniform’ or ‘constant’.”

As such, it was enough for the five employees in dispute to have been engaged in some form of repetitive pattern or have some indication of ongoing employment into the future beyond each engagement. That they had fewer hours of work than other employees was irrelevant.

What this means for you

Mistakenly thinking that you are a small business under the Fair Work Act can have dramatic consequences. Not only does it shift the goal posts when it comes to unfair dismissals, but it also affects your liability when making roles redundant in your business.

The only circumstance in which a casual employee would not be included in the count of employees if they were so irregular that there was no identifiable pattern of work or reasonable expectation of ongoing employment. This can be a difficult thing to determine. For an objective assessment, call NRA Legal on 1800 RETAIL (738 245).

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