Worker argued companies shared directors, office space and HR functions, making them related for employment purposes
A designer challenged his dismissal, arguing that three companies he worked for consecutively were associated entities, which would give him sufficient service to bring an unfair dismissal claim.
The worker contended the companies shared directors, office space and HR functions, making them related for employment purposes.
The employer maintained that the three companies were separate entities with different ownership structures and business operations, and that the worker had only four months' service with the dismissing company.
Employment across three companies
The parties agreed that from February 2024 to June 2025, the worker worked for three different companies. From 5 February 2024 to 4 August 2024, the worker worked for the first company. From 5 August 2024 to 9 February 2025, he worked for the second company.
And from 13 February 2025 to 13 June 2025, he worked for the third company. A director of the first and third companies submitted two witness statements. In the first, he referred to all three companies as being associated entities. In the second, he sought to correct this.
The director stated that while the first and third companies had the same two directors and shareholders, the second company's sole director and shareholder was the director's wife.
The director's evidence was that while there was cooperation between the three companies and they share office space, the first and third companies do not control the operations of the second company or finance it.
The director said the first company is a computer and IT business, the third company is a data infrastructure business, and the second company is his wife's distribution business.
The director said the second company is one of a number of different distributors used by the first and third companies, and that the second company also distributes the products of other businesses.
Worker's perspective on company relationships
The worker said that he believed the three companies were associated entities. He said the director's wife was the HR director of the first company, and that it was she who had sent him the offer of employment to work at the first company and who had handled his visa sponsorship, and that the director was copied into much of their correspondence.
The director said his wife was not the HR director of the first company and was not employed by the first company, but that she assisted the first company with HR matters.
The Commissioner accepted the director's evidence. It was clear, credible and convincing. The Commissioner found that the second company is not an associated entity of the third company. These entities are not related bodies corporate, nor are they associated within the meaning of any of the other sub-provisions of the Corporations Act 2001.
In particular, there was no evidence of any qualifying investments, nor was there any evidence that the third company controls the second company, or that the second company controls the third company.
That the director and his wife are married does not evidence control, nor does the fact that the wife provides assistance to the first company on HR matters. Similarly, the fact that there is close cooperation between the companies is not indicative of control.
From the worker's working perspective, little changed during his employment with these three companies. The worker said that over his time working for the companies he reported to the same manager, and that the first company's management team covered all companies.
He said that his transfers were administrative adjustments implemented to comply with a six-month employment limitation that applied under his previous 417 working holiday visa, and to prepare a new 482 sponsored visa. But this does not affect the analysis of whether the second and third companies are associated entities.
Minimum employment period not met
The period of the worker's service with the third company was four months. Under the Act, if an employee transfers to an associated entity within three months of the employment with the first employer ending, then the period of service with the first employer counts towards service with the second employer, and the period between the end of the first employment and the start of the second does not break the continuity of employment.
But as the second company is not an associated entity of the third company, these provisions do not apply in respect of his employment with that company.
Further, the worker's service with the first company does not count towards his service with the third company because the period between the end of his service with the first company and the start of his employment with the third company exceeded three months.
In conclusion, the worker had only four months' service with the third company, which is less than the minimum employment period of six months.
The third company contends that it is a small business employer, and that the worker would need a year's service before he could bring an unfair dismissal claim against it.
But even if this is not the case, the worker does not meet the general minimum employment period of six months, and was therefore not protected from unfair dismissal. For this reason, the application must be dismissed.
Genuine redundancy finding
In any event, the Commissioner considered that this was a case of genuine redundancy. The Commissioner found that the third company no longer required the worker's job to be performed by anyone because of changes in the operational requirements of its enterprise.
The Commissioner accepted the evidence of the director that on 28 May 2025, he conducted a review of the business operations of the third company to ascertain whether it still needed an industrial graphic designer to prepare artwork for products, and that he concluded the third company had no new products planned for launch which would require such work.
At the time of his dismissal, the worker was the only designer working for the third company. It no longer needed one.
The worker said that he was also performing work for the benefit of the first company at this time, and that he remained involved in the first company-branded projects.
But the director said that while the first company still employed designers, it too had a reduced demand for design work; when the worker worked for the first company, there had been six designers, and since then, there had been five. The decline in demand had particularly affected the type of projects on which the worker had worked.
The Commissioner accepted this evidence. The Commissioner found that the third company no longer wanted the worker's job to be done by anyone because of its changed operational requirements.
Performance and visa concerns dismissed
The worker said that another reason to doubt that his employment was terminated for reason of redundancy was that during the discussion when his manager and the director had dismissed him, he was told that the reason for the dismissal was his lack of ability.
The director agreed that the question of the worker's performance was raised but said that it was made very clear to the worker that he was being made redundant. The Commissioner accepted the director's evidence about this.
The Commissioner noted that in a message to the director on 19 June 2025, the worker told the director that he expected to receive redundancy payments. It is clear from this that the worker's own understanding was that his position had been made redundant.
The worker said that he believed that the real reason for his dismissal was that some days earlier, he had asked management to ensure that his employment records were 'aligned' with the first company, the company that had sponsored his visa application, and that the third company had taken adverse action against him for raising this matter.
The director denied this and said that he had always supported the worker's visa arrangements. The Commissioner believed him. It is clear that the reason for the dismissal was the redundancy of the worker's position.
The Commissioner found that the element of 'genuine redundancy' was met. The third company no longer required the worker's job to be performed by anyone because of changes in the operational requirements of its enterprise.
No award consultation obligations
The worker did not claim that he was covered by an award or enterprise agreement. No party made any reference to the application of an industrial instrument, and the worker's payslips referred to him as award-free.
The Commissioner considered for himself whether the worker might have been covered by the Graphic Arts, Printing and Publishing Award 2020, but did not consider that this was the case, because the third company is a business that is a distributor of information technology and data infrastructure, not an employer in the industry of the award.
The Commissioner did not consider that the third company had any award obligations to consult with the worker about his redundancy.
As to whether it would have been reasonable to redeploy the worker, the worker said that he could have transitioned into positions such as product manager, production manager, graphic designer, or industrial designer for the first company, and that the company made no effort at all to redeploy him.
But the director said, and the Commissioner accepted, that these positions were occupied by other employees, and that the only available roles were sales-related, for which the worker did not have the required skills.
Based on the evidence, the Commissioner was not satisfied that it would have been reasonable for the person to be redeployed within its enterprise or that of an associated entity.
There is no evidence of any other available position or work that the worker could reasonably have undertaken. Each of the requirements was met. The dismissal was a case of genuine redundancy and was therefore not unfair.
