Termination two hours before 12-month minimum period sufficient for exemption

Termination two hours before 12-month minimum period sufficient for exemption

The Fair Work Commission has ruled that an employee who was terminated two hours before the expiration of the minimum 12 month period for employees of small businesses cannot pursue an unfair dismissal claim. The decision was made notwithstanding that the employee received a week’s pay in lieu of notice.

The Small Business Fair Dismissal Code, which came into operation on 1 July 2009, applies to small business operations with fewer than 15 employees, including casual employees engaged on a regular and systematic business. Employees of small businesses cannot claim unfair dismissal in the first twelve (12) months of their employment.

The case involved a worker who was employed, with a commencement date of 2 March 2020. He was dismissed on 1 March 2021 at 1.45 pm, with immediate effect. At the hearing, the employer claimed that the worker was home at 2:29 pm and that his payslip reflected he did not work a full 7.6-hour workday, but rather only 6 hours of work on 1 March 2021.

Consequently, the employer contended that the Applicant could not make a claim for unfair dismissal as he had fallen short of the 12-month employment period.

In determining eligibility to pursue a claim, Deputy President Nicholas Lake commented that

the minimum period of employment must be completed “immediately before the beginning of” 2 March 2021, which is immediately before the beginning of the corresponding day of the twelfth month following the date on which the Applicant’s employment commenced”.

Pursuant to s 390 of the Fair Work Act 2009, the Commission can only order an unfair dismissal remedy if the worker is a person “protected from unfair dismissal”. This requires the person to have completed a period of employment that is at least the minimum period of employment. If the employer is a “small business employer”, that period is one year ending at the time when the person is given notice of dismissal, or immediately before the dismissal, whichever is earlier.

All parties agreed that the employer was a small business employer, as defined. The worker accepted that he went home at least half an hour early but maintained that was irrelevant because he had been sent home (as opposed to having elected to leave), so his employment was covered.

Further, he claimed that as he was paid one week in lieu of notice, his employment period was extended until 8 March 2021. On that basis, he submitted that he met the minimum period of employment and therefore is entitled to make his unfair dismissal application.

While expressing some sympathy for the worker’s situation, Commissioner Lake determined he could not pursue his claim.  As he commented,

I am satisfied that the difference between the date the Applicant commenced employment with the Respondent (2 March 2020) and the date he was notified of his dismissal (1 March 2021) is 364 days and approximately 6 hours. Nothing turns on whether the Applicant was paid one week’s salary in lieu of notice, because it was just that, payment in lieu of notice. Had the Applicant worked out the notice period, he would have met the minimum statutory requirement”.

Consequently, Commissioner Lake concluded that the Applicant had not completed the minimum period of employment because, as he noted,

“The Applicant, until midnight on 1 March 2021, was still within, or was still to complete the minimum period of employment, which must be taken to be the point in time which is “immediately before the beginning of” 2 March 2021”.

Accordingly, the Commissioner upheld the jurisdictional objection and ordered that the Application be dismissed.

Mr S v F Services [2021] FWC 4148 (14 July 2021)

Small Business Fair Dismissal Code | FWC Main Site

For questions about the Small Business Fair Dismissal Code, terminating employees, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178, 1300 WAL LAW or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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