Employer insists it was a 'small business' but worker said it had more people
The Fair Work Commission (FWC) recently dealt with a worker’s unfair dismissal application, but the employer rejected his claim and argued he did not qualify for the minimum employment period for a “small business employer.” The worker then said that the employer had undeclared staff in its roster.
Xiaoqi Yuan filed an unfair dismissal claim against Winston Group Australia Pty Ltd, which operates two accommodation establishments in Melbourne, operating under “Winston Apartments.”
Yuan held the position of a housekeeper at the Docklands location, managed by the employer. The employer rejected his claim, asserting that they qualified as a “small business employer” and that he did not fulfill the minimum employment requirement of 12 months.
The ‘minimum employment period’ of a ‘small business employer’
Under the Fair Work Act, a worker cannot seek redress for an unjust termination unless they are “protected” from unfair dismissal at the time of their termination.
The said protection is dependent on whether an employee, at the time of their termination, satisfies the “minimum employment period” requirement.
For a “small business employer,” this minimum period is 12 months. A “small business employer” is defined as an employer who, at the date of dismissal, has a workforce comprising fewer than 15 employees.
Dispute as to employer’s staff count
In the employer's witness statement, it said that at the time of Yuan's termination, the employer had a workforce of only 13 individuals. In a spreadsheet attached to this statement, the names of 15 individuals employed by the employer at the two properties were listed.
The employer clarified that one of the individuals on the list started their employment on 19 July 2023, and one individual was mistakenly counted twice.
According to the employer, these 13 employees were distributed between the employer's Docklands and another area, with nine employees stationed at Docklands and four employees at the other location.
Worker challenges employer’s staff count
Yuan’s evidence challenged the employer’s conclusion that there were only 13 employees. She argued:
- There were an additional three “Indian employees” working at the Docklands site;
- There was a Chinese housekeeper who also worked at the Docklands site;
- There was a company accountant with whom Yuan had some dealings with, and this person was an employee who was not listed in the employer’s spreadsheet;
- There must have been more housekeeper employees at the other location because the Docklands location has 35-45 rooms, and the second area has 25-35 rooms (which Yuan said is “almost fully booked” every day)
The employer agreed with Yuan that there were three additional “Indian employees” however, it said they worked for them “only” in May 2023.
It also produced a tax invoice from Yang that was consistent with her being an independent contractor, arguing that she supplied some of her own equipment (a vacuum, mop and some other cleaning equipment), wore her own uniform, was responsible for her own income tax, is not restricted in providing cleaning services elsewhere, and was entitled to delegate her work. No written contract was produced, and it does not appear that one exists, the employer said.
The Commission’s decision
In its decision, the FWC said that Yang was an independent contractor, not an employee. “There is nothing especially unusual about small businesses and sole operators operating as contract cleaners,” it said.
It also commented on the worker’s argument that the employer must have had more workers since their accommodations were always busy.
“While Yuan asserted that it was heavily booked, this was just speculation. Yuan gave no evidence she had been to or worked at the location when asked, she was unable to identify any single individual – by broad description or otherwise – from her own observation or even based on what she had been told that would indicate there were any other people working at that location,” the decision said.
“While Yuan hinted that there were employees paid ‘cash’ ([which can be inferred] undeclared or ‘off the books’), there was simply no evidence at all to support that serious allegation,” it said.
“The number of employees, including regular casual employees, engaged by the [employer] on the date that Yuan was dismissed on 27 June 2023 was no more than 13 employees, including Yuan. There were no potential associated entities drawn to my attention whose employees might otherwise be counted in addition to the 13 employees identified by [the employer,]” the Commission said.
“As it was not in dispute that Yuan had not been employed for the ‘minimum employment period’ of 12 months at the time of her dismissal, Yuan was not a person ‘protected from unfair dismissal’ at the time she was dismissed,” it added. Thus, the FWC rejected the worker’s application.
