Service with old employer counts as service with new employer

By Portner Press on August 5th, 2019
  1. Termination of Employment
  2. Unfair Dismissal

The Fair Work Commission (FWC) has ruled that a café worker who was dismissed shortly after a new buyer took over the business is entitled to unfair dismissal protection, as his period of service under the old employer counts towards his service with the new employer.

The new owner of Sacred Alley Espresso Bar in Melbourne raised a jurisdictional objection to the employee’s unfair dismissal application, claiming he was not a transferring employee in relation to a transfer of business and thus hadn’t completed the minimum employment period required to qualify for unfair dismissal protection.

The new owner contested that the employee’s position had actually changed. She said she had only offered the employee, who previously worked full-time, employment on a temporary trial basis paid at an increased casual rate, which she said he agreed to.

She said she then had “serious reservations” about the employee’s performance and fit for the new role and dismissed him after several verbal warnings about three weeks later.

The employee disputed this, saying that he had not been warned about his work performance by the new employer and that he was not given any reason why he was dismissed. He also said there was no clear evidence that he was engaged as a casual as he performed the same full-time hours under the new owners.

The FWC found that the employee did meet the definition of a transferring employee because he was employed by the new owner within three months of the transfer of the business and undertook work which was the same as the work he performed under the old employer.

The unfair dismissal application was relisted for a later hearing.

Do you know all the obligations you have to existing employees when buying a business?

Find out by reading chapter S6 Sale of Business in the Employment Law Practical Handbook.

You can access it on a free, no-obligation trial if you aren’t already a subscriber.

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