Guilt by association: Successful claim for unfair dismissal from related entities

On 9 March 2016, Vice President Watson handed down the decision of Atherinos -v- Bariano Group Pty Ltd in case about unfair dismissal and related entities.

The decision is a reminder that employers cannot rely on an employee being employed by different entities over different periods if they are associated, when attempting to claim that an employee has not worked the statutory requirement of 12 months for a small business.

The facts

In this particular case, Ms Atherinos worked for Bariano Group Pty Ltd, changed employment to an associated entity, then returned back to Bariano Group Pty Ltd between October 2014 and July 2015.

Ms Atherinos was dismissed when she was transferred back to the South Yarra store. Factually there appeared to be three separate contracts of employment as entitlements were paid out at the end of the service with each store, and there was a clear change of duties and responsibility to the locations.

Notwithstanding this however, His Honour took the view that the employment was continuous across the different sites, even though she was employed by an associated entity. Moreover, when considering if there was a genuine redundancy, His Honour was of the view that the movement of Ms Atherinos from one store to another, and her commencement of employment on a trial basis at different locations was to prevent her from claiming that she had continuous employment.

The Outcome? Unfair Dismissal.

In the circumstances, her dismissal constituted an unfair dismissal within the provisions of the Fair Work Act.

This decision is a helpful reminder for all employers that shifting employees between associated entities:

1. Will not break the chain of continuous employment.
2. When considering redundancy, employers should be mindful of specific award provisions in relation to the obligation to consult when introducing major workplace changes that will significantly affect employees.
3. Moving an employee from one store location to another, and commencing employment on a trial basis will not then re-affect their employment.

If you would like some advice on your contracting/employment arrangements, please contact Chris Morey, Director of Dispute Resolution or Adam Foster, Associate, Dispute Resolution and Employment Law on (03) 9629 9629.

If you would like to discuss employee termination further, please contact Adam Foster, Associate, Dispute Resolution and Employment Law on (03) 9629 9629.