{"id":128,"date":"2019-01-25T04:56:00","date_gmt":"2019-01-25T04:56:00","guid":{"rendered":"https:\/\/justrelations.com.au\/blog\/?p=128"},"modified":"2026-11-04T05:01:39","modified_gmt":"2026-11-04T05:01:39","slug":"long-service-employees-service-carried-across-business-transfer","status":"publish","type":"post","link":"https:\/\/justrelations.com.au\/blog\/2019\/01\/25\/long-service-employees-service-carried-across-business-transfer\/","title":{"rendered":"Long-Service Employee\u2019s Service Carried Across Business Transfer"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Case:<\/strong> <em>Sherwood v Milestone GI Pty Ltd<\/em> [2019] FWC 476<br><strong>Decision date:<\/strong> 25 January 2019<br><strong>Commission Member:<\/strong> Deputy President Clancy<br><strong>Outcome:<\/strong> Minimum employment period objection dismissed<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Overview<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Fair Work Commission rejected an employer\u2019s jurisdictional objection that a dismissed employee had not completed the minimum employment period required to make an unfair dismissal application.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The employee had worked for the former business for more than 10 years before the business was transferred to a new owner. Although the new employer argued that her employment with it had lasted only around eight weeks, the Commission found that her earlier service counted towards her period of employment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The decision illustrates the importance of identifying whether a transfer of business and transfer of employment have occurred when determining an employee\u2019s eligibility to pursue an unfair dismissal claim.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Background<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The employee commenced full-time employment with Australian Consolidated Insurance Services (ACIS), the business operated by the Richard L Matthews Family Trust, on 10 February 2008. She worked as Fire Manager in the Mount Waverley office.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In September 2018, the business transferred to Milestone GI Pty Ltd. The business continued trading as ACIS from the same premises. Its clients, client lists, work, furniture and equipment transferred to Milestone, and the employee continued performing substantially the same role.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The employee\u2019s long service leave and personal leave transferred to Milestone. Her accrued annual leave was paid out by the former business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On 30 October 2018, her employment was terminated on the stated ground of redundancy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Milestone argued that she had only been employed by it from 5 September 2018 and therefore had not completed the one-year minimum employment period applicable to a small business employer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The legal issue<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The question was whether the employee\u2019s service with ACIS counted as service with Milestone for the purposes of the minimum employment period under the <em>Fair Work Act 2009<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Commission considered the provisions dealing with:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"\"><strong>Section 311:<\/strong> When a transfer of business occurs.<\/li>\n\n\n\n<li class=\"\"><strong>Section 22:<\/strong> When service with one employer counts as service with another employer following a transfer of employment.<\/li>\n\n\n\n<li class=\"\"><strong>Sections 382\u2013384:<\/strong> Protection from unfair dismissal and the minimum employment period.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Milestone was accepted to be a small business employer, meaning the relevant minimum employment period was one year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Commission\u2019s findings<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">A transfer of business had occurred<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Commission found that the employee had moved to Milestone within three months of the end of her employment with ACIS and performed the same or substantially the same work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There was also a connection between the businesses. Milestone acquired the ACIS client list and clients, used assets associated with the work, and operated from the same premises.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Commission was therefore satisfied that a transfer of business had occurred and that the employee was a transferring employee.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The employee\u2019s previous service counted<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">ACIS and Milestone were not associated entities. However, under s 22(7)(b), a transfer of employment can occur between non-associated entities where the employee is a transferring employee in a transfer of business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Commission found that the employee\u2019s service with ACIS counted as service with Milestone under s 22(5).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Section 384(2)(b) provides an exception where the new employer informs the employee in writing, before the new employment starts, that the earlier service will not be recognised.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Milestone\u2019s director wanted a \u201cclean cut\u201d between the periods of employment. However, he conceded that the employee had not been informed in writing before commencing with Milestone that her previous service would not be recognised. The issue had not been discussed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a result, the employee\u2019s approximately 10 years and eight months of service with ACIS counted towards her period of employment with Milestone.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Outcome<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Commission dismissed Milestone\u2019s jurisdictional objection. The employee had completed the relevant minimum employment period and could proceed with her unfair dismissal application.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The matter was remitted to the Unfair Dismissal Case Management Team for further programming.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The decision did <strong>not<\/strong> determine Milestone\u2019s other objections, including its arguments that the dismissal was a genuine redundancy and that it had complied with the Small Business Fair Dismissal Code.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Significance<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The decision confirms that a change in business ownership does not necessarily reset an employee\u2019s service for unfair dismissal eligibility.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where a business transfers to a new employer, service with the former employer may count even where the employers are not associated entities. The statutory exception requires the new employer to have provided written notice, before the new employment commenced, that the earlier service would not be recognised.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Employers and employees should therefore examine the substance of a business transfer and the statutory service provisions, rather than relying only on the date employment formally commenced with the new entity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Representatives<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"\"><strong>Applicant:<\/strong> N Dircks, paid agent<\/li>\n\n\n\n<li class=\"\"><strong>Respondent:<\/strong> Zik Cai, Director of Milestone GI Pty Ltd<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Categories<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"\">Unfair dismissal<\/li>\n\n\n\n<li class=\"\">Minimum employment period<\/li>\n\n\n\n<li class=\"\">Transfer of business<\/li>\n\n\n\n<li class=\"\">Transfer of employment<\/li>\n\n\n\n<li class=\"\">Continuous service<\/li>\n\n\n\n<li class=\"\">Small business employer<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Tags<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><code>minimum employment period<\/code> <code>transfer of business<\/code> <code>transfer of employment<\/code> <code>continuous service<\/code> <code>s22<\/code> <code>s311<\/code> <code>s384<\/code> <code>jurisdictional objection<\/code><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Disclaimer:<\/strong> This case summary is provided for general information only. It is not legal advice. Just Relations provides employee representation and is not a law firm. Its representatives are not solicitors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Case: Sherwood v Milestone GI Pty Ltd [2019] FWC 476Decision date: 25 January 2019Commission Member: Deputy President ClancyOutcome: Minimum employment [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[9,28],"tags":[],"class_list":["post-128","post","type-post","status-publish","format-standard","hentry","category-small-business","category-transfer-of-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - 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