UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2021 WAIRC 00510

DELIVERED : Friday, 17 september 2021

FILE NO. : U 16 OF 2021

Applicant

AND

Fraser Suites Perth

Respondent

CatchWords : Industrial Law (WA) - Termination of employment - Harsh, oppressive or unfair dismissal claim - Whether Commission has jurisdiction - Trading activities of respondent

Legislation : Fair Work Act 2009 (Cth)

   Industrial Relations Act 1979 (WA)

Result : Application dismissed for want of jurisdiction

Representation:

Applicant : Mr C Narayanan

Respondent : Ms M Brown and Ms P Harrison (of counsel)

Case(s) referred to in reasons:

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

R v Brisbane Licensing Court: Ex parte Daniell (1920) 28 CLR 23

Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151

Dickson v The Queen (2010) 241 CLR 491

Reasons for Decision

1         Ms Hsu was employed by Frasers Perth Management Pty Ltd (Frasers Perth) from 9 December 2020 until 28 January 2021.  Ms Hsu claims she was unfairly dismissed and has applied to the Western Australian Industrial Relations Commission (Commission) for compensation. Ms Hsu contends that she was forced to resign because of the behaviour of two colleagues.

2         Frasers Perth objects to the Commission dealing with this matter because it says the Commission does not have the necessary jurisdiction as it is a national system employer. The Commission’s jurisdiction is ousted by the Fair Work Act 2009 (Cth) (FW Act).

3         Ms Hsu contends that the Commission has jurisdiction because the FW Act does not apply in her circumstances.  Ms Hsu contends that she was employed for a period less than the minimum six-month period required under that act to be able to make an application.  Ms Hsu submits that the Industrial Relations Act 1979 (WA) (IR Act) applies because the FW Act operates to prevent her from making an application to the Fair Work Commission.

Questions to Be Decided

4         The questions to be decided are:

(a) Whether the requirement to be employed for a minimum period in the FW Act operates to enable an application to the Commission; and if it does not

(b) Whether Ms Hsu’s employer, Frasers Perth is a trading corporation and a national system employer.

Principles

5         Section 109 of the Constitution resolves conflicts between the concurrent power of both the Commonwealth and the States to legislate on the same topic by giving the laws of the Commonwealth overriding force:

‘When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid’

6         Both the Western Australian parliament and the Commonwealth parliament have legislated on the topic of industrial law: The IR Act and the FW Act respectively. Both contain provisions concerning termination of employment and access to remedies where it is found that an employee has been unfairly dismissed.

7         The High Court has established that where there is an inconsistency in legislations of the Commonwealth and State, the Commonwealth law prevails where:

(a) It is impossible to obey both laws in R v Brisbane Licensing Court: Ex parte Daniell (1920) 28 CLR 23.

(b) One law purports to confer a legal right, privilege or entitlement that the other law purports to take away or diminish in Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151.

(c) The Commonwealth law evinces a legislative intention to ‘cover the field’ and a State law also operates in that same field in Dickson v The Queen (2010) 241 CLR 491, 502.

8         Section 26(1) of the FW Act provides for the FW Act to apply to the exclusion of all State or Territory laws so far as they would otherwise apply in relation to a national system employee or a national system employer:

 (1) This Act is intended to apply to the exclusion of all State or Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer.

 (2) A State or Territory industrial law is:

 (a) a general State industrial law; or

 (b) an Act of a State or Territory that applies to employment generally and has one or more of the following as its main purpose or one or more of its main purposes:

 (i) regulating workplace relations (including industrial matters, industrial activity, collective bargaining, industrial disputes and industrial action);

 (ii) providing for the establishment or enforcement of terms and conditions of employment;

 (iii) providing for the making and enforcement of agreements (including individual agreements and collective agreements), and other industrial instruments or orders, determining terms and conditions of employment;

 (iv) prohibiting conduct relating to a person’s membership or non‑membership of an industrial association;

 (v) providing for rights and remedies connected with the termination of employment;

 (vi) providing for rights and remedies connected with conduct that adversely affects an employee in his or her employment; or

 (c) a law of a State or Territory that applies to employment generally and deals with leave (other than long service leave or leave for victims of crime); or

 (d) a law of a State or Territory providing for a court or tribunal constituted by a law of the State or Territory to make an order in relation to equal remuneration for work of equal or comparable value; or

 (e) a law of a State or Territory providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair; or

 (f) a law of a State or Territory that entitles a representative of a trade union to enter premises; or

 (g) an instrument made under a law described in paragraph (a), (b), (c), (d), (e) or (f), so far as the instrument is of a legislative character; or

 (h) either of the following:

 (i) a law that is a law of a State or Territory;

 (ii) an instrument of a legislative character made under such a law;

 that is prescribed by the regulations.

 (3) Each of the following is a general State industrial law:

 (a) the Industrial Relations Act 1996 of New South Wales;

 (b) the Industrial Relations Act 1999 of Queensland;

 (c) the Industrial Relations Act 1979 of Western Australia;

 (d) the Fair Work Act 1994 of South Australia;

 (e) the Industrial Relations Act 1984 of Tasmania.

 (4) A law or an Act of a State or Territory applies to employment generally if it applies (subject to constitutional limitations) to:

 (a) all employers and employees in the State or Territory; or

 (b) all employers and employees in the State or Territory except those identified (by reference to a class or otherwise) by a law of the State or Territory.

For this purpose, it does not matter whether or not the law also applies to other persons, or whether or not an exercise of a power under the law affects all the persons to whom the law applies.

9         The language of the FW Act falls into the third category established by the High Court and is a Commonwealth law that evinces a legislative intention to ‘cover the field’ and prevails over a State law that also operates in that same field.

10      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 refers to paragraph 51(xx) of the Constitution which defines constitutional corporations as corporations which are trading, or financial corporations formed within the limits of the Commonwealth.

11      The Western Australian Industrial Appeal Court established in Aboriginal Legal Service of Western Australia (Inc) v Lawrence (No 2) [2008] WASCA 254; (2008) 89 WAIG 243 (Lawrence) that in respect of constitutional corporation employers and those they employ, the IR Act is inconsistent and the FW Act prevails.

12      Furthermore in Lawrence, the Industrial Appeal Court set 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].

Is Frasers Perth a Trading Corporation?

13      The applicant made written submissions concerning legal principles and the application of the FW Act and the IR Act.  Ms Hsu’s contention is that there is effectively a gap in the FW Act, because there is a minimum period of employment and employees with less than the minimum period of employment can access relief through State laws.

14      This contention is not accepted. The FW Act expressly requires that an employee has completed a minimum of six months employment. It is a pre-condition to qualify for the protection from unfair dismissal. The IR Act does not prescribe this requirement. The provisions of the Commonwealth law and the provisions of the State law are different and inconsistent.  The Commonwealth law is not absent and there is an inconsistency. The FW Act prevails over the State IR Act for national system employers and employees.

15      Section 26 of the FW Act operates to apply to all national system employees and national system employers and excludes the provisions of the IR Act.

16      The central issue in this matter, then, is whether the employer is a national system employer.

17      If the respondent is a trading corporation the jurisdiction of the Commission to deal with the applicant’s claim is therefore excluded.

18      The issues to be determined in this matter when deciding whether the respondent is a trading corporation is, as set out in Lawrence, whether it is incorporated, the character of the activities carried on by it at the relevant time and whether or not it was engaged in significant and substantial trading activities of a commercial nature such that it can be described as a trading corporation.

19      The respondent’s General Manager of the property operated at East Perth submitted an affidavit attaching an Annual Financial Report for the year end 30 September 2020, summary of the structure of the company and an extract of the company details held by the Australian Securities and Investments Commission.

20      The activities of the respondent are outlined in the affidavit and include offering accommodation, conference food and drink, and event management services. It also operates a restaurant and a bar. The respondent also manages commercial leases for several commercial lessees.

21      I find that the activities of the respondent are commercial in nature, and it is a business operated for the purpose of profit. On the undisputed evidence provided by the respondent I am satisfied that Frasers Perth is an incorporated entity, and its main purpose is to trade with the aim of generating a profit.

Conclusion

22      Frasers Perth is a trading corporation and Ms Hsu was employed by a national system employer and this Commission does not have jurisdiction to deal with Ms Hsu’s application for unfair dismissal.

23      An order will issue dismissing this application for want of jurisdiction.