UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00691

DELIVERED : tuesday, 15 August 2023

FILE NO. : U 12 OF 2023

Applicant

AND

St Vincent de Paul Society (WA) Incorporated

Respondent

CatchWords : Unfair dismissal - Jurisdiction - National system employer - Trading corporation - Trading activities - Whether trading activities substantial - Not for profit

Legislation : Australian Constitution
Associations Incorporation Act 2015 (WA)
Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)  

Result : Dismissed

Representation:

Applicant : Mr S Stackpool (as agent) and Ms B Courtenay-Clack (in person)

Respondent : Ms S Masters (of counsel) and Ms H Rheinberger (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 The Judges of the Federal Court of Australia; Ex parte Western Australia National Football League (Inc) [1979] HCA 6; (1979) 143 CLR 190

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] FCA 50; (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 Brenda Courtenay-Clack was employed as a Retail Manager by St Vincent de Paul Society (WA) Incorporated (St Vincent de Paul Inc), from March 2019 until her dismissal on 1 February 2023 for alleged misconduct. Ms Courtenay-Clack denies that she misconducted herself and claims her dismissal was harsh, oppressive and unfair.

2         St Vincent de Paul Inc oppose Ms Courtenay-Clack’s application because it says her actions leading up to the dismissal constituted a serious and clear breach of her obligations and duties and her conduct was not within the organisation’s policy and values.

3         In addition, St Vincent de Paul Inc maintains that 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 Courtenay-Clack’s claim.

4         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. It is necessary for the Commission to determine the issue of jurisdiction prior to enquiring into and dealing with the substance of Ms Courtenay-Clack’s claim.

Questions to be Decided

5         The issue I must decide is whether, on an overall assessment, St Vincent de Paul Inc is a corporation, and its operations and activities have the character of trading. If I conclude that it is a trading corporation this Commission lacks jurisdiction to hear and determine the claim.

Background and Evidence

6         St Vincent de Paul Inc submitted a statutory declaration signed by the Executive Manager, Business Services and attached an extract of the Western Australian Incorporated Associations Register, a copy of the respondent’s Constitution and a copy of the General Purpose Financial Reports for 2021-2022 and 2020-2021 financial years. The Executive Manager described the operations and activities of the organisation and noted the nature of the arrangements for the raising of revenue to support its activities.

7         Ms Courtenay-Clack submitted an email in response contending that the respondent was a state system employer because:

1. The 57 retail and distribution centres operate within the state of Western Australia and not the whole of Australia and St Vincent de Paul Inc is a state company;
2. St Vincent de Paul Inc state that the revenue received is essential for delivering services to the Western Australian community;
3. The organisation has a state council and not a national council;
4. St Vincent de Paul Inc’s website refers to ‘Here in Western Australia’; and
5. St Vincent de Paul’s Inc is registered as ‘St Vincent de Paul Society (WA) Incorporated’ with the Government of Western Australia and refers the Commission to the ’Not for Profit Law’ website which states ‘Incorporation is the broad term to describe a business registered with a ‘state’ to become a separate legal entity’.

8         Ms Courtenay-Clack submitted that she had initially applied to Fair Work through their online portal, ‘only to be told that they had no jurisdiction over my case and have forwarded it on to the WAIRC for processing’. Ms Courtenay-Clack attached to her statement a screen shot of an online enquiry made to the Fair Work Ombudsman. At the hearing Ms Courtenay-Clack stated that she had received an email from Fair Work informing her that it had referred her application to this Commission. Ms Courtenay-Clack was provided an opportunity to provide a copy of the email. No further evidence was submitted. Ms Courtenay-Clack stated that she had received an automated text message quoting the reference number for the enquiry made with the Fair Work Ombudsman however she was not able to locate the text message because of an upgrade to her phone.

9         In summary Ms Courtenay-Clack contends that the Commission has jurisdiction because St Vincent de Paul Inc only operate within the geographical confines of the state of Western Australia and therefore is not a national system employer.

Principles

10      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):

11      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. A national system employer is, relevantly for the purposes of this application, a ‘constitutional corporation’.

12      A constitutional corporation is defined in s 12 of the FW Act as ‘a corporation to which paragraph 51(xx) of the Constitution applies’. The Australian Constitution defines, at paragraph 51(xx), constitutional corporations as ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’. Simply put, a constitutional corporation is either a ‘foreign corporation’ or a ‘trading’ or ‘financial’ corporation formed within the Commonwealth.

13      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.

14      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 at [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].

15      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)).

16      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 at [54].

Operations Within a Geographic Confine of a State

17      Ms Courtenay-Clack submits that St Vincent de Paul Inc conducts all of its activities within Western Australia. In addition, the sources of income of the organisation are from within Western Australia. Ms Courtenay-Clack did not refer the Commission to any precedents or authorities in support of her contentions.

18      St Vincent de Paul Inc contend that the geographic location of its activities and sources of income are irrelevant for the purposes of determining whether it is a national system employer. The relevant assessment is whether an organisation is a trading corporation and not where any trading takes place. St Vincent de Paul Inc referred the Commission to Lawrence.

19      A national system employer is not defined by reference to the location of its activities, operations nor revenue sources. The FW Act defines a national system employer, relevantly for this application, as a ‘constitutional corporation’. There is nothing in the meaning of national system employer that refers to the location of activities, operations, or sources of income of a constitutional corporation. There is no authority for the proposition that the location of activities, operations and sources of revenue of an employer are relevant to the assessment of whether St Vincent de Paul Inc is a constitutional corporation. Therefore, I do not accept the submissions of Ms Courtenay-Clack as correct.

20      Nevertheless, it is necessary for the Commission to satisfy itself that it has jurisdiction.

Is St Vincent de Paul Inc a Corporation?

21      I find that St Vincent de Paul Inc is an incorporated body and upon its registration as an incorporated Association under the Association Incorporation Act 2015 (WA) on 24 March 1917, it became a corporation in accordance with that Act.

Is St Vincent de Paul Inc a Trading Corporation?

22      The second question to be determined is whether the overall activities of St Vincent de Paul Inc have the character of trading activities.

23      The ‘Constitution of the St Vincent de Paul Society (WA) Incorporated’ sets out the organisation is a lay Catholic, benevolent and charitable organisation whose objects are:

(a) for its Members to live the Gospel message by serving Christ in the poor with love, respect, justice, hope and joy by sharing their skills and talents, and what has been given to the Society, on a person-to-person basis with those in need;

(b) to seek to cooperate in shaping a more just, compassionate Australia and to share the Society’s resources with our twinned countries;

(c) to work with and assist people in need whilst respecting their dignity, sharing our hope and encouraging them to take control of their own future;

(d) to promote informed discussion on the plight of those in need and to advocate improved services and facilities for them;

(e) to liaise with and share resources with other charitable and benevolent organisations with the objective of assisting those people in need;

(f) to follow the teaching and charism of Blessed Frederic Ozanam; and

(g) to ensure that the basic principles and The Rule of the Society are respected.

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

25      To support its activities St Vincent de Paul Inc receives revenue through different sources:

(a) retail and distribution centre sales;

(b) donations and gifts;

(c) State and Commonwealth government funding which SVDP [St Vincent de Paul Inc] is required to periodically submit tenders for;

(d) fundraising appeals and events;

(e) corporate sponsorships; and

(f) specialist community services contributions.

26      St Vincent de Paul Inc expends funds on operational activities and delivery of programs and services to support vulnerable members of the Western Australian community.

27      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.

28      In 2021-2022 the revenue raised by St Vincent de Paul Inc was apportioned from the following sources:

(a) Fundraising represented 10% of total revenue.

(b) Government and other grant funding represented 19% of total revenue.

(c) Retail and distribution centre sales represented 52% of total revenue.

(d) Specialist Community Services Contributions represented 3% of total revenue.

(e) Other income represented 1% of total revenue.

(f) Non-operating activities, including bequests. Gain on sale of property, plant and equipment represented 4% of total revenue; and

(g) Non-recurring activities, including Jobkeeper payments, represented 9% of total revenue.

29      Ms Courtenay-Clack contended that the retail and distribution centre sales were not trading because the items that were retailed through the centres were donated and not purchased by St Vincent de Paul Inc. There is no evidence before the Commission concerning the source of the items sold through the retail and distribution centres. Ms Courtenay-Clack did not submit any evidence nor did she seek to establish this fact through the cross-examination of the witness evidence given on behalf of St Vincent de Paul Inc.

30      The meaning of trading is not limited to the sale of items previously purchased by a supplier. As established in Lawrence, citing R v The Judges of the Federal Court of Australia; Ex parte Western Australia National Football League (Inc) [1979] HCA 6; (1979) 143 CLR 190 (Adamson), ‘trading’ is not given a narrow construction and extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trade in services. The means by which St Vincent de Paul Inc procures items for sale through its retail and distribution centres does not detract from the trading nature of the activity conducted through the retail and distribution centres.

31      I find that the retail and distribution centre sales have the character of trading activities. 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] FCA 50; (1978) 36 FLR 134 (139, 159 - 160) cited in Lawrence.

32      The proportion of activities and revenue related to the retail and distribution centre sales are not slight or incidental. These activities account for at least 50% of the revenue of the organisation.

33      In Bankstown at [52] the Full Court observed that there is no bright line that determines what proportion of trading activities is substantial. The purpose of St Vincent de Paul Inc may not be commercial in nature, however, clearly the trading activities engaged in to support the operations of the organisation are not insubstantial, not trivial, insignificant, marginal, minor nor incidental.

34      Where the respondent is a not for profit organisation the correct identification of the employer and, therefore, the correct jurisdiction, is not always readily evident. See the contrasting decisions of Lawrence and that of the Full Court of the Federal Court in Bankstown. In such circumstances navigating the path to the correct jurisdiction may be assisted by obtaining the expertise of a union, industrial agent or lawyer.

Conclusion

35      For these reasons I conclude that St Vincent de Paul Inc is a trading corporation. This finding reflects an overall assessment of the nature of the operations and activities on the evidence before me.

36      In concluding that St Vincent de Paul Inc is a trading corporation I must conclude that the Commission lacks the necessary jurisdiction to hear and determine this matter and dismiss the application.