For the purposes of determining whether an employer is a small business employer under the Fair Work Act, which has implications in unfair dismissal cases both as to the required length of the qualifying period of employment of an employee and whether the Small Business Fair Dismissal Code applies, employees of associated entities also count when determining whether there are 15 or more employees.
In Pretorius v Gardens of Italy Pty Ltd (2016) FWC 2503 delivered 22 April 2016, O’Callaghan SDP included in the count employees of a South African company (with no apparent commercial presence in Australia) because the directors of the respondent (of whom the applicant was the only employee) were also directorts of the South African entity.
“Gardens of Italy Close Corporation manufactures and sells garden products in South Africa. Gardens of Italy sells garden products, some of which are apparently made by Gardens of Italy Close Corporation. Even more significantly, the evidence of Mr Schmidt confirms that he and his wife control both corporations in a manner consistent with s.50AAA(7) of the Corporations Act. There is nothing in that section, nor for that matter, in s.23 of the FW Act which permits or requires that employees engaged by Gardens of Italy Close Corporation not be taken into account in counting the employees of Gardens of Italy for the purposes of the small business definition. This finding should not be misconstrued in that it does not suggest that employees of Gardens of Italy Close Corporation have any form of access to the jurisdiction established by the FW Act. It is simply the case that, notwithstanding that Gardens of Italy is, by itself, a small business, the Corporations Act requires that I take into account the employees of the related, but overseas operated, Gardens of Italy Close Corporation.
The Deputy President was at pains to ensure that both parties understood that his findings were not to be considered dispositive of any other legal issue involved in the case, by which I presume he meant whether the respondent was a national system employer and of course the merits of the application.