The concept of transfer of employment in the fair work system

 

This is what the Fair Work Commission’s unfair dismissal benchbook says about the statutory concept of a transfer of employment.

 

“What is a transfer of employment?

Service with one employer will count as service with a second employer in different circumstances depending on the relationship between the two employers. In this regard, it is important to determine if the employers are associated entities or not.

Transfer of employment between associated entities

Service with one employer (first or old employer) will count as service with another employer (second or new employer) if two conditions are met:

  • the second employer is an associated entity of the first employer, and
  • an employee becomes employed by the second employer within 3 months of their employment being terminated by the first employer.208

What is an associated entity?

An associated entity is defined in s.50AAA of the Corporations Act.209

An entity (the associate) may be an associated entity of another entity (the principal) in the following circumstances:

  • the associate and principal are related bodies corporate
  • the principal controls the associate
  • the associate controls the principal and the operations, resources or affairs of the principal are material to the associate
  • the associate has a qualifying investment in the principal, has significant influence over the principal and the interest is material to the associate
  • the principal has a qualifying investment in the associate, has significant influence over the associate and the interest is material to the principal, or
  • a third entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the third entity.210”