UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00228

DELIVERED : FRIday, 21 April 2023

FILE NO. : U 81 OF 2022

Applicant

AND

THE PATRICIA GILES CENTRE INC

Respondent

CatchWords : Unfair dismissal – termination of employment – jurisdiction – national system employer – trading corporation – trading activities of organisation – declaration made – jurisdiction found

Legislation : Associations Incorporation Act 1987 (WA)

  Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)

Result : Jurisdiction found

Representation:

Applicant : Ms L M Genovesi

Respondent : Ms D Cameron

Case(s) referred to in reasons:

Aboriginal Legal Service of Western Australia (Inc) v Lawrence (No 2) [2008] WASCA 254; (2008) 89 WAIG 243

Bankstown Handicapped Children’s Centre Association Inc and Another v Hillman and Others [2010] FCAFC 11, (2010) 182 FCR 483

Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134

Springdale Comfort Pty Ltd trading as Dalfield Homes v Building Trades Association of Unions of Western Australia (Association of Workers) (1987) 67 WAIG 325

United Firefighters’ Union of Australia v Country Fire Authority [2015] FCAFC 1; (2015) 228 FCR 497

Reasons for Decision

1         Ms Lynda Genovesi worked as a support worker with the Patricia Giles Centre Inc from 24 January 2022 until mid-May 2022. On 27 May 2022 the Patricia Giles Centre Inc wrote to Ms Genovesi and notified her that her employment was terminated effective on 20 May 2022.  Ms Genovesi claims she was unfairly dismissed and seeks an order for compensation from the Commission.

2         The Patricia Giles Centre Inc oppose Ms Genovesi’s application because it says it is a national system employer for the purposes of the Fair Work Act 2009 (Cth) (FW Act) and therefore the Western Australian Industrial Relations Commission (Commission) lacks jurisdiction to hear and determine Ms Genovesi’s claim. As this matter has been raised, it is necessary for the Commission to determine the issue of jurisdiction prior to enquiring into and dealing with the substance of Ms Genovesi’s claim.

Questions to be Decided

3         The issue I must decide is whether, on an overall assessment, the Patricia Giles Centre Inc is a corporation, and its operations and activities have the character of trading. If I conclude that it is a trading corporation the Commission lacks jurisdiction to hear and determine the claim.

Background and Evidence

4         The Patricia Giles Centre Inc submitted a statutory declaration by its Chief Executive Officer.  The statutory declaration sets out that:

(a) The Patricia Giles Centre for Non-Violence (PGCNV) derives income from various Government Service Agreements and Grants but also generates income from several trading activities including the sale of goods and services, rental income and philanthropic sources.

(b) PGCNV is contracted to deliver services on behalf of the Department of Communities. These are funded through seven Service Agreements which include refuge services, women's and children's counselling services, and some outreach services. The funding for these services, over the last two years, equates to approximately 71% of total income.

(c) PGCNV also delivers programs under Grant Agreements funded by the Department of Communities. Over the last two years there have been eight of these across a range of activities. The funding for these activities, over the last two years, equates to approximately 19% of total income.

(d) PGCNV strategic plan refers to the Agency as being profit for purpose and includes the development of a diversified and sustainable income generation strategy to reduce the reliance on Government funding.

(e) Other income sources over the two years include Government stimulus payments (3.6%), other philanthropic grants (3.6%), operating activities - including sale of goods, etc (0.6%), rent received from refuge and property (1.1 %) and philanthropic donations (1.9%).

(f) In addition to the above, PGCNV also has $1.75m in investments which have broken even over the last two financial years. This break-even figure includes a $158k noncash decrease in portfolio value in the 2022 financial year.

5         The Chief Executive Officer’s statutory declaration attached a copy of the Patricia Giles Centre Inc’s Constitution, an analysis of its income for financial years ending in 2019 through to 2022 and an extract of the summary of its Strategic Plan 2020 to 2023.

6         Ms Genovesi did not submit any evidence or submissions and did not contest the contents of the Patricia Giles Centre Inc Chief Executive Officer’s statutory declaration concerning the operations and activities of the organisation and the arrangements for raising revenue to support its activities.

Principles

7         Section 14(1)(a) of the FW Act defines a national system employer as a constitutional corporation, so far as it employs, or usually, employs an individual and s 13 of the FW Act defines a national system employee as an individual employed by a national system employer.  Section 12 of the FW Act defines constitutional corporations as corporations which are trading, or financial corporations formed within the limits of the Commonwealth. Section 26 of the FW Act states that it applies to the exclusion of all State or Territory industrial laws that would otherwise apply to a national system employee or employer including the Industrial Relations Act 1979 (WA) (IR Act). If an employer is a trading corporation it is a national system employer, then this Commission does not have jurisdiction to consider, hear or determine an unfair dismissal application.

8         In accordance with the Western Australian Industrial Appeal Court’s decision in Springdale Comfort Pty Ltd trading as Dalfield Homes v Building Trades Association of Unions of Western Australia (Association of Workers) (1987) 67 WAIG 325, the Commission is unable to proceed unless satisfied that the Commission has the necessary jurisdiction to do so.

9         In Aboriginal Legal Service of Western Australia (Inc) v Lawrence (No 2) [2008] WASCA 254; (2008) 89 WAIG 243 (Lawrence), the Western Australian Industrial Appeal Court sets out the principles to be applied by the Commission when considering whether an entity is a trading corporation [68].

(1) A corporation may be a trading corporation even though trading is not its predominant activity: Adamson (239); State Superannuation Board (303 – 304); Tasmanian Dam case (156, 240, 293); Quickenden [49] - [51], [101]; Hardeman [18].

(2) However, trading must be a substantial and not merely a peripheral activity: Adamson (208, 234, 239); State Superannuation Board (303 - 304); Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10, 20; Fencott (622); Tasmanian Dam case (156, 240, 293); Mid Density (584); Hardeman [22].

(3) In this context, ‘trading’ is not given a narrow construction. It extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trade in services: Ku-ring-gai (139, 159 - 160); Adamson (235); Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169, 184 - 185, 203; Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325, 330; Quickenden [101].

(4) The making of a profit is not an essential prerequisite to trade, but it is a usual concomitant:  St George County Council (539, 563, 569); Ku-ring-gai (140, 167); Adamson (219); E (343, 345); Pellow [28].

(5) The ends which a corporation seeks to serve by trading are irrelevant to its description: St George County Council (543, 569); Ku-ring-gai (160); State Superannuation Board (304 – 306); E (343).  Consequently, the fact that the trading activities are conducted is the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as ‘trade’:  St George County Council (543) (Barwick CJ); Tasmanian Dam case (156) (Mason J).

(6) Whether the trading activities of an incorporated body are sufficient to justify its categorisations as a ‘trading corporation’ is a question of fact and degree: Adamson (234) (Mason J); State Superannuation Board (304); Fencott (589); Quickenden [52], [l01]; Mid Density (584).

(7) The current activities of the corporation, while an important criterion for determining its characterisation, are not the only criterion. Regard must also be had to the intended purpose of the corporation, although a corporation that carries on trading activities can be found to be a trading corporation even if it was not originally established to trade: State Superannuation Board (294 - 295, 304 - 305); Fencott (588 - 589, 602, 611, 622 - 624); Hughes (20); Quickenden [101]; E (344); Hardeman [18].

(8) The commercial nature of an activity is an element in deciding whether the activity is in trade or trading: Adamson (209, 211); Ku-ring-gai (139, 142, 160, 167); Bevanere (330); Hughes (19 - 20); E (343); Fowler; Hardeman [26].

10      The decision of the Court in Lawrence has been cited with approval in superior appellate court decisions (see for example United Firefighters’ Union of Australia v Country Fire Authority [2015] FCAFC 1; (2015) 228 FCR 497 and in Bankstown Handicapped Children’s Centre Association Inc and Another v Hillman and Others [2010] FCAFC 11, (2010) 182 FCR 483) (Bankstown).

11      In Bankstown in recognising that the activities of the Association in that case were directed at the public good, the Full Court of the Federal Court, nevertheless concluded the operations and activities were trading activities and had a commercial character. The Federal Court noted the description of the relationship between the parties in the relevant contract and its overall activities [54].

Is The Patricia Giles Centre Inc a Corporation?

12      I find that the Patricia Giles Centre Inc’s Constitution describes it as an Association and states that the Associations’ name is ‘The Patricia Giles Centre Inc’. Although the Constitution refers to the Associations Incorporation Act 2015 (WA) there is no evidence submitted that the Patricia Giles Centre Inc is an incorporated body and when it became registered as such.

13      I am unable to conclude that the Patricia Giles Centre is a corporation.

Is The Patricia Giles Centre Inc a Trading Corporation?

14      The second question to be determined is whether the overall activities of the Patricia Giles Centre Inc have the character of trading activities.

15      The Constitution sets out that the principal objects of the Patricia Giles Centre Inc are:

(a) to raise community awareness of the issues surrounding family and domestic violence and to encourage the adoption of preventative strategies within the community;

(b) to provide a range of services to alleviate family and domestic violence;

(c) to promote non-violent conflict resolution at individual, community and political levels;

(d) to enable and encourage women towards self-determination; and

(e) to co-operate with such government authorities, whether federal, state or local and such other organisations whose objects are similar to the objects of this Association.

16      The Patricia Giles Centre Inc also submitted an extract from its Strategic Plan referring to a ‘Strategic Pillar’ of Future Proofing which states ‘[w]e are a profit for purpose agency and will influence change for good through industry innovation’.

17      As in Bankstown, the purpose of the organisation is not necessarily determinative and an assessment of its activities and whether these have the character of trading is required.

18      The Patricia Giles Centre Inc’s evidence is that to support its activities the Centre receives revenue through different sources including:

(a) Funds from the Department of Communities for delivery of services including refuge services, women’s and children’s counselling services and outreach services (71%);

(b) Funds for delivery of programs under Grant Agreements funded by the Department of Communities (19%);

(c) Funds from government stimulus payments (3.6%), other philanthropic grants (3.6%) and operating activities including sale of goods (0.6%), rent received from refuge and property (1.1%) and donations (1.9%).

19      The Patricia Giles Centre Inc expends funds on staffing, accommodation, information and communications technology, vehicles, program and client expenses and marketing.

20      In accordance with the principles in Lawrence it is necessary to establish whether the trading activities are sufficient to justify its categorisation as a ‘trading corporation’ and it is a question of fact and degree.

21      In 2021-2022 the income for the Patricia Giles Centre Inc was $5,027,775 from the following sources:

(a) $4,791,780 from state government grants and $12,984 from brokerage resulting in a total of 4,804,764 from state government representing 96% of total revenue.

(b) $158,680 from other grants described as ‘corporate, Lotterywest etc’ representing 3.2% of total revenue.

(c) $64,331 from other income representing 1.2% of total revenue.

22      I consider that the activities that have the character of trading activities are those described as the sale of goods and rent received from refuge and property. That is, they have the character of commercial trade in services or elements of exchange: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 (139, 159 - 160) cited in Lawrence.

23      There is no evidence that the provision of services for the state government and the benefit of grants involve any activities that have the character of trading activities. The description that the Patricia Giles Centre Inc is contracted to deliver services on behalf of a government department is not sufficient to persuade me that these activities are trading.

24      The two trading activities of sale of goods and rents are limited sources of revenue. In Bankstown [52] the Full Court observed that ‘[t]here is no bright line delineating what is or is not a trading corporation’. However, the trading activities engaged in to support the operations of the organisation are not substantial nor significant. They are incidental activities.

Conclusion

25      For these reasons I conclude that the Patricia Giles Centre Inc is not a trading corporation.  This finding reflects an overall assessment of the nature of the operations and activities on the material provided to me.

26      In concluding that the Patricia Giles Centre Inc is not a trading corporation, I conclude that this Commission has the necessary jurisdiction to conciliate and if necessary, hear and determine this application.