This appeal decision of the Fair Work Commission deals with the complex issue of length of employment and transfer of employment in the context of an unfair dismissal claim.
“Overview
[1]
Damian Marchese seeks to appeal, if permission is granted, against a decision of Commissioner Allison of 15 October 2025.1 Mr Marchese (Appellant) had made an application for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009 (Cth) (the Act). The application was against Cubism Projects Pty Ltd (Cubism). The Commissioner dismissed the application, finding that Mr Marchese was not protected from unfair dismissal because he had not completed the minimum employment period.
[2]
We have reached the same conclusion, but for different reasons. In the circumstances, and for the reasons below, we have decided that permission to appeal should be granted, but the appeal should be dismissed.
Background
[3]
Cubism is a construction project company specialising in industrial and commercial design and construction. It engaged a labour hire firm, Fetch Personnel (Fetch), which employed Mr Marchese. Mr Marchese worked as a site manager on four of Cubism’s projects in the period 2023 to 2024 while in Fetch’s employ. Cubism directly employed Mr Marchese
1 [2025] FWC 2107 (‘Decision’).
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DECISION
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from 23 July 2024. On 2 May 2025, Cubism purported to accept Mr Marchese’s resignation. Mr Marchese made his unfair dismissal application on 6 May 2025.
[4]
The Commission cannot grant an unfair dismissal remedy unless the employee was “protected from unfair dismissal” when they were dismissed. To be protected from unfair dismissal an employee must, inter alia, have completed the minimum employment period.2
[5]
As Cubism is a small business, the minimum employment period was one year. As can be appreciated, if the employment with Fetch counted towards the minimum employment period, Mr Marchese would have completed it. If not, he would not have completed the minimum employment period and would not have been eligible to make his application. This was the central issue in the decision below.
Statutory provisions
[6]
Section 394(1) of the Act provides that a person who has been dismissed may apply to the Commission for an order under Division 4 granting a remedy. Section 390(1) provides that the Commission may order a person’s reinstatement, or the payment of compensation to a person, if (among other things) the Commission is satisfied that the person is ‘protected from unfair dismissal’. Section 382(a) provides that one element of a person being protected from unfair dismissal is that the person ‘is an employee who has completed a period of employment with his or her employer of at least the minimum employment period’. The phrase ‘minimum employment period’ is defined in s 383 as follows:
“383 Meaning of minimum employment period
The minimum employment period is:
(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:
(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or
(b) if the employer is a small business employer—one year ending at that time.”
[7]
Section 384(1) of the Act provides that an employee’s period of employment with an employer is the period of continuous service the employee has completed with the employer. The terms ‘service’ and ‘continuous service’ are defined in s 22. There are periods that do not count towards service but do not break continuity of service. Section 22 deals with the question of when service with one employer counts as service with another in subsection 22(5), as follows:
“22 Meanings of service and continuous service
…
When service with one employer counts as service with another employer
(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:
(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and
2 Fair Work Act 2009 (Cth) (‘Fair Work Act’), s 382(a).
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(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.
Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).”
[8]
Subsection 22(7) provides for the circumstances in which there is a transfer of employment. It is not in dispute that Cubism and Fetch are not associated entities within the meaning of the term for the purposes of the Act.3 For non-associated entities the relevant provision is as follows:
“Meaning of transfer of employment etc.
(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:
…
(b) the following conditions are satisfied:
(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;
(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.
…”
[9]
Relevantly, “transferring employee” is defined in section 311 of the Act (see s 12). It is defined in relation to “the transfer of business” in which the transferring employee ceases to be employed by one employer and becomes employed by another. Subsections (1) and (2) define “transfer of business” and “transferring employee” respectively as follows:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
3 See Fair Work Act [n 2], s 12, which provides that “associated entity” has the meaning given by section 50AAA of the Corporations Act 2001 (Cth).
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(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.”
[10]
Section 311 of the Act sets out four situations giving rise to a transfer of business, in subsections (3) to (6). They arise where there is a transfer of assets, outsourcing, insourcing, or a change of employing entities within a corporate group. In this case Mr Marchese relied on subsection 311(5) which relates to insourcing and provides as follows:
“New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.”
[11]
Having set out those provisions we now turn to the decision from which Mr Marchese seeks permission to appeal.
Decision under appeal
[12]
In the decision the Commissioner found that the minimum employment period was one year and considered what periods of employment would be taken into account in deciding whether Mr Marchese had completed it.
[13]
The Commissioner considered Mr Marchese’s submissions as to why his prior service with Fetch should be counted towards the minimum employment period. The Commissioner summarised the arguments as falling within three categories which were:
•
that the work Mr Marchese performed as a site supervisor is integral to Cubism;
•
that there was a transfer of business between Fetch and Cubism, to the effect that his prior service with Fetch should be considered service with Cubism; and
•
that his work while engaged by Fetch constituted casual employment with Cubism.
[14]
As to the argument regarding transfer of business, the Commissioner said the key question was whether Mr Marchese was a transferring employee in relation to a transfer of business from Fetch to Cubism. The Commissioner considered section 311 of the Act which relates to transfer of business of various kinds set out in subsections 311(3) to (6) and said that in this case the question was whether there had been a transfer of business on the basis set out in section 311(5). That subsection relates to insourcing previously outsourced work (our paraphrasing). In that regard Mr Marchese submitted that his role as a site supervisor had been outsourced via Fetch and then brought in-house to Cubism once he was directly employed by
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Cubism.4 In contrast, Cubism submitted that whilst Cubism engages labour hire providers to provide temporary and supplementary labour, this is different to outsourcing any work or business function.5 Alternatively, Cubism submitted that if it had outsourced work to Fetch, it has never ceased to outsource work as required in s 311(5)(b).6
[15]
The Commissioner found that Cubism had outsourced work to Fetch and other labour hire providers to provide supplementary labour for time-defined projects. However, the Commissioner also found that Cubism had not ceased to outsource work to Fetch when it directly engaged Mr Marchese. Therefore, the requirements of s 311(5) had not been met, and there had been no transfer of business between Fetch and Cubism. Accordingly, Mr Marchese’s employment with Fetch did not count towards continuous service with Cubism as a result of a transfer of business. Further, the Commission expressed doubt as to whether, even if there had been a transfer of business, Mr Marchese’s work while in the employ of Fetch constituted continuous service given the breaks between his work on different projects.
[16]
Mr Marchese submitted that the fact that Cubism had offered him a reduced probationary period indicated that his service with Fetch should count toward the minimum employment period. The Commissioner did not accept this submission, on the basis that the probationary period was a separate matter to the minimum employment period.
[17]
Mr Marchese submitted that he had had a reasonable expectation of continuing employment as a casual employee. The Commissioner considered that in the absence of a transfer of business, extending the period of employment beyond one year, the question of whether Mr Marchese’s casual engagements counted towards his minimum employment period was not relevant.
[18]
The Commissioner considered Mr Marchese’s submissions about Cubism having a high degree of control over his day-to-day work were not relevant to the question of whether there had been a transfer of business, and that on the evidence the work arrangements during Mr Marchese’s engagement with Fetch were uncontroversial and standard.
[19]
The Commissioner found that as Mr Marchese’s services with Fetch did not count towards his period of employment with Cubism, Mr Marchese had not completed the minimum period of employment required. Accordingly, Mr Marchese was not a person protected from unfair dismissal, and his application was required to be dismissed.
Grounds of appeal
[20]
The notice of appeal lists ten grounds of appeal. The appellant, who was self-represented, did not draft the grounds succinctly. We summarise the grounds as follows:
Ground 1: that the Commissioner erred in law by construing s.311(5)(b) as requiring Cubism to have completely ceased outsourcing work to Fetch generally, and by relying
4 Relying on Taulapapa v Toll Personnel Pty Ltd [2018] FWC 6242 (‘Taulapapa’).
5 Relying on Abbott v Acciona Infrastructure Australia Pty Ltd [2018] FWC 5609 (‘Abbott v Acciona’).
6 Relying on Joseph Tiaki v Yarra City Council t/a Yarra City Council [2018] FWC 214.
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on Cubism’s continued engagement of a site supervisor through Fetch as a basis for concluding that Cubism had not ceased to outsource work to Fetch.
Ground 2: that the Commissioner erred by failing to properly apply or distinguish the reasoning in Taulapapa v Toll Personnel Pty Ltd (Taulapapa),7 and by relying on Abbott v Acciona Infrastructure Australia Pty Ltd (Abbott v Acciona)8 and Tiaki v Yarra City Council.9
Ground 3: that the Commissioner erred in fact and law by failing to properly consider the evidentiary significance of the reduced probationary period, which constituted an express admission by the employer of the Appellant’s prior continuous service.
Ground 4: that the Commissioner made a jurisdictional error by failing to consider whether Mr Marchese’s service with Fetch was regular, systematic, and continuous under s 384(1)–(2) and s 22(1) of the Act. Further the Commissioner erred by relying on minor “gaps” between projects as evidence of non-continuous service.
Ground 5: that the Commissioner made a jurisdictional error by failing to take into account the degree of control and integration of Mr Marchese into Cubism’s business while he was employed by Fetch, in deciding whether there had been a transfer of business, leading to a finding inconsistent with “Quest South Perth.”10
Ground 6: that the Commissioner’s reasoning in relation to section 311 of the Act lacked internal consistency and was manifestly unreasonable because though each of the requirements in ss 311(1)(a), (b) and (c) were met, the Commissioner concluded there was no transfer of business.
Ground 7: that the Commissioner failed to articulate a clear and logical path of reasoning.
Ground 8: that the Commissioner erred by interpreting section 311(5) narrowly contrary to the beneficial and remedial purpose of the Act to protect continuity of employment in transfer situations.
Ground 9: that the Commissioner made a jurisdictional error by failing to make findings on whether Mr Marchese had been performing ‘transferring work’ under section 311(1)(c) at the time of re-engagement.
Ground 10: the Commissioner erred by using language reflecting a premature acceptance of Cubism’s assertion that Mr Marchese had resigned, which Mr Marchese submitted was a disputed issue central to the proceedings, and this error amounted to apprehended bias.
7 [2018] FWC 6242.
8 [2018] FWC 5609.
9 [2018] FWC 214.
10 Though no full citation was given in the notice of appeal we take this as being a reference to Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45; 256 CLR 137.
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[21]
The appellant’s written outline of submissions recast and renumbered these grounds. For clarity we have retained the numbering from the notice of appeal in this decision unless specified otherwise. Aside from the renumbering there were some material changes, as follows:
(a) Grounds 2 and 7 were combined into new ground 6, which also included a new assertion that the Commissioner failed to consider a direct admission at PN227 and to address the closest factual analogue, Taulapapa.
(b) It appeared from the outline that Ground 8 was no longer pressed as an appeal ground but instead formed part of the submission in support of the claim that granting permission to appeal would be in the public interest.
(c) It appeared from the outline that Ground 9 was longer pressed.
Permission to appeal
[22]
There is no right to appeal. An appeal may only be made with the permission of the Commission. The Full Bench must grant permission to appeal if satisfied that it is in the public interest to do so.11 Otherwise, the Full Bench has a broad discretion as to whether permission to appeal should be granted.12
[23]
This discretion is further confined in respect of applications for permission to appeal deriving from unfair dismissal proceedings under Part 3-2 of the Act. Section 400 of the Act provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.
[24]
Section 400 evinces an intention that the avenue of appeal for unfair dismissal proceedings ought to be confined more than appeals from other kinds of proceedings, thus the commonly quoted characterisation of the test being a “stringent one”.13 Permission to appeal
11 Fair Work Act (n 2) s 604(2).
12 Wan v Australian Industrial Relations Commission [2001] FCA 1803; (2001) 116 FCR 481, [30] (Spender, Kiefel, Dowsett JJ); Ferrymen Pty Ltd v Maritime Union of Australia [2013] FWCFB 8025; (2013) 238 IR 258, [9]-[12]. Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78, [34] and [43] (Buchanan J); Workpac Pty Ltd v Bambach [2012] FWAFB 3206; (2012) 220 IR 313 at [14]; Barwon Health – Geelong Hospital v Colson [2013] FWCFB 4515; (2013) 233 IR 364, [6].
13 Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78, [34] and [43] (Buchanan J); Workpac Pty Ltd v Bambach [2012] FWAFB 3206; (2012) 220 IR 313, [14]; Barwon Health – Geelong Hospital v Colson [2013] FWCFB 4515; (2013) 233 IR 364, [6].
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can only be granted if the Full Bench is satisfied it is in the public interest to do so, and no residual discretion exists if that threshold is not met.14
[25]
The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgement.15 In GlaxoSmithKline Australia Pty Ltd v Makin,16 a Full Bench identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.”17
[26]
Section 400(2) provides that, with respect to factual findings made in unfair dismissal proceedings, review on appeal is only available if there has been a “significant” error of fact. A person may not appeal on grounds of an alleged error of fact that does not reach the significance threshold.18
[27]
The Notice of Appeal relied on the following factors in support of the appellant’s contention that it would be in the public interest to grant permission to appeal:
1. The appeal raises important questions of law and principle concerning the correct construction of ss.311(5) and 384 in the context of labour-hire and project-based construction work.
2. The decision, if uncorrected, risks inconsistent application of authority (Taulapapa) and undermines the legislative intent to protect ongoing workers from jurisdictional exclusion.
[28]
We will now briefly refer to the parties’ submissions.
Submissions
[29]
Mr Marchese filed an outline of submissions on 18 November 2025, submitting that he was a transferring employee. He submitted that there had been a transfer of business, because the employer had ceased outsourcing his role to the labour hire provider, and had then employed him directly. He pointed out that he had worked on Cubism-controlled projects exclusively while he was employed through Fetch. He said he had direct communication and control from Cubism, and that they had controlled his work in their projects directly, not through Fetch. He said his role, including his duties, site access, reporting structure and supervision, did not
14 Virgin Australia Airlines Pty Ltd v Dylan Macnish [2025] FWCFB 6, [22].
15 O’Sullivan v Farrer (1989) 168 CLR 210 (Mason CJ, Brennan, Dawson and Gaudron JJ); applied in Hogan v Hinch (2011) 85 ALJR 398, [69] (Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ); Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78, [44]-[46].
16 [2010] FWAFB 5343; (2010) 197 IR 266.
17 Ibid [27].
18 BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89; (2020) 276 FCR 9, [22] (Besanko, Perram and Jagot JJ).
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change when he became directly employed. He said he was integrated into the company and attended work functions, which indicated that he was not supplementary. He submitted that the fact that all of his previous engagements had been through a labour-hire company meant that his role had been outsourced. He submitted that by directly hiring him, Cubism had internalised his role.
[30]
The Respondent filed its outline on 2 December 2025. The Respondent submitted that Mr Marchese had not established that permission to appeal should be granted. It submitted it was not in the public interest to grant permission, and there was no appealable error. It submitted the Commission at first instance had considered the relevant statutory provisions as well as relevant decisions, including Taulapapa and Abbott v Acciona, and had made findings in line with witness evidence. It submitted section 311(1)(d) was not satisfied, and that even if it was found to have been outsourcing, outsourcing had not ceased, as the labour hire company continued to supply site supervisors to Cubism. As to the public interest it submitted there is no inconsistency in first instance authority, the case does not raise a question requiring appellate guidance, and the outcome is not counterintuitive or unjust.
Consideration
[31]
In deciding whether to grant permission to appeal, a Full Bench will review the appeal grounds to consider whether they raise an arguable case of appealable error, as an appeal cannot ultimately succeed in the absence of error. However, it is unnecessary and inappropriate to conduct a detailed examination of the appeal grounds.19
[32]
We now turn to reviewing the appeal grounds. We consider grounds 2, 4 and 5 to be misconceived, for the following reasons:
(a) Contrary to Mr Marchese’s submissions Taulapapa v Toll Personnel Pty Ltd,20 is a single member decision. Failure to follow it would not constitute an appealable error.
(b) We agree with the Commissioner that the question of whether Mr Marchese’s employment with Fetch was regular, systematic, and continuous did not arise unless the employment with Fetch counted toward the minimum employment period. Similarly, consideration of section 384(2)(b) did not arise unless Mr Marchese was a transferring employee in relation to a transfer of business from an old employer to a new employer, which the Commission found was not the case.
(c) The degree of control and integration would have been relevant had the argument been about whether Mr Marchese had been, in truth, an employee of Cubism, rather than an employee of Fetch, prior to 23 July 2024. But that was not the basis on which Mr Marchese’s case had been conducted.
[33]
We discern no error in relation to ground 3. We agree with the Commissioner that the probationary period was not relevant to the question of whether Mr Marchese had met the minimum employment period. The Commission’s jurisdiction to order an unfair dismissal
19 See: Trustee for the MTGI Trust v Johnston [2016] FCAFC 140, [82].
20 [2018] FWC 6242. Mr Marchese’s written outline referred to this decision as the “controlling Full Bench authority” and gave an incorrect citation (Appellant’s outline of submissions filed 18 November 2025, [15]).
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remedy depended on whether Mr Marchese had completed the minimum employment period within the meaning of that term for the purposes of the statute, not whether the parties had agreed to a shorter probation period.
[34]
As to ground 6 (and, for completeness, ground 9, albeit it does not appear to have been pressed) we discern no error in relation to the Commission’s findings under section 311(1) of the Act. The Commissioner’s findings in relation to section 311(1)(a), (b) and (c) appear at paragraph [30] of the decision at first instance. Immediately afterwards, the Commission goes on to say:
“However, for there to be a transfer of business s 311(1)(d) must also be met. Similarly, for Mr Marchese to be a transferring employee in relation to a transfer of business, there must be a transfer of business under s 311(1), which requires s 311(d) to be met.”
[35]
The first sentence of that paragraph refers to subsection 311(1). The second is clearly about subsection 311(2). We agree with the Commissioner’s construction of both. We discern no appealable error in that regard.
[36]
As indicated above, appeal ground 7 was that the Commissioner failed to articulate a clear and logical path of reasoning. A Full Bench in Shop, Distributive and Allied Employees’ Association v Lokrum Pty Ltd trading as Grill’d Norwood,21 summarised some relevant principles as to the adequacy of written reasons. In relation to showing the path of reasoning, the Full Bench said:
“Although the reasons of a decision-maker must articulate the essential grounds for reaching the decision and address material questions of fact and law in a manner which discloses the steps which lead to a particular result, “the reasons need not be lengthy or elaborate and need not spell out every detail in the reasoning process or deal with every matter of fact or law which was raised in the proceedings”. A decision-maker is not expected to set out every consideration which passes through the decision-maker’s mind or to refer to “every piece of evidence and every contention” made by a party.”
(footnotes omitted)
[37]
We consider the Commissioner’s reasons are consistent with this principle. The logical path shows that the Commissioner considered the question of whether there had been a transfer of business, on the basis that if there had been, the service with Fetch would have been taken into account in deciding whether the minimum employment period had been completed. The Commissioner explained the reasons for the finding that there had not been a transfer of business. We discern no appealable error in respect of the adequacy of the reasons.
[38]
As indicated above, ground 10 rested on a claim that a reference to Mr Marchese as having resigned gives rise to a reasonable apprehension of bias. The Commissioner explicitly stated that no finding was made in relation to the other jurisdictional issue of whether there was a dismissal (or a resignation), or whether any dismissal was, in fact, unfair. The Commissioner noted that Cubism contended that Mr Marchese’s letter of 10 April was a resignation letter, but that Mr Marchese denied that. Relying on Mr Richards’ witness statement the Commissioner
21 [2025] FWCFB 125.
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said Cubism had employed a total of eight employees “at the time of Mr Marchese’s resignation.” Having regard to the fact that the Commissioner was here referring specifically to Mr Richards’ statement, and the Commission’s explicit statements that no finding had been made in respect of the issue of resignation, we do not consider that a fair-minded lay observer might reasonably apprehend, from this reference to “resignation”, that the Commissioner might not bring an impartial mind to the resolution of the question that she was required to decide, which was whether Mr Marchese had completed the minimum employment period. We do not consider ground 10 raises an appealable error.
[39]
As indicated above Mr Marchese recast the grounds of appeal in his outline of submissions, and the new ground 6 added a contention that the Commissioner failed to consider a direct admission made at PN227 of the transcript. That part of the transcript is a question from Mr Marchese to Mr Marcus Richards, a Director of Cubism, in which the latter agrees that Cubism had ceased engaging Fetch for Mr Marchese’s services in or around July 2024. Though Mr Marchese describes this as an admission, it was not in contest that the Appellant became a direct employee of Cubism from 23 July 2024. It necessarily follows that Cubism ceased engaging Fetch Personnel for Mr Marchese’s services at that point. The Commissioner did not refer specifically to paragraph PN227 of the transcript but there was no need for that reference, and the failure to have done so does not give rise to any appealable error. At the hearing of the appeal, we heard from Mr Marchese about other parts of the transcript, including at PN233 and following, and at PN244 and following. Mr Richards had agreed, under cross-examination, that it had “ceased to outsource the specific work” to Fetch. This had been followed by an exchange between Mr Marchese and the Commissioner in which the Commissioner indicated that it was not for Mr Richards to answer legal questions about the meaning of ‘outsourcing.’22 We agree Mr Richards’ opinion about what did or did not constitute outsourcing, for the purposes of s 311 of the Act, would not have assisted the Commissioner. We discern no appealable error in the Commissioner’s treatment of Mr Richards’ evidence in this regard.
[40]
Grounds 1 and 8 go to the construction of subsection 311(5). The question of whether there had been a transfer of business as contemplated by subsection 311(5) was the central issue for the Commission to resolve in deciding whether Mr Marchese had completed the minimum employment period. As indicated above, ground 8 does not appear to have been pressed but in any event the statutory purpose will be relevant to construing the provision. There are a number of single member decisions in relation to subsections 311(4) and (5) of the Act,23 but no Full Bench authority of which we are aware.24 For the reasons that follow we consider the decision at first instance was affected by appealable error, in respect of the Commissioner’s application of section 311.
22 Transcript, first instance, PN250.
23 See the discussion in Abbott v Acciona, [15] – [23]. See also Taulapapa; Mr Trent Morgan v ADB Safegate Australia Pty Ltd [2026] FWC 539; OZ Minerals Carrapateena Pty Ltd [2026] FWC 669; Mario Mondino v Connect Group Electrical Pty Ltd [2026] FWC 1303; Mr Matthew Young v Veolia Environmental Services (Australia) Pty Ltd [2025] FWC 1898; David Howarth v ResourceCo Pty Ltd [2023] FWC 1771; Anei Arol v Brimbank City Council [2023] FWC 930; Ross Richards v Barro Group Pty Ltd [2020] FWC 2687; Te Ahi Kaa Roa Maxwell v Alcoa of Australia Limited [2020] FWC 962; and Scott Jury v Chandler Macleod Group Limited [2019] FWC 4838; 288 IR 71.
24 Appeal by John Lucas Hotel Management Services [2013] FWCFB 1198 related to subsection 311(3). In Creative Every Day Pty Ltd t/as Sameway Magazine v Ms Yin Fun Leung [2019] FWCFB 5416, the relevant finding in relation to section 311 had been made in a different decision to the one under appeal. Application by CSR & Holcim Staff Association [2015] FWCFB 6463 related to a situation where employees were transferred to a new corporate entity which had been established for the purposes of a joint venture.
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[41]
The starting point for ascertaining the meaning of a statutory provision is the text of the statute, having regard to its context and purpose at the same time.25 It is permissible to have regard to extrinsic materials in order to identify the context and purpose of a statutory provision, including the identification of any mischief to which a legislative amendment was directed.26
[42]
Section 311 is brought into the consideration of the minimum employment period under the unfair dismissal part of the Act, Part 3-2. Under section 390 the Commission may order a remedy for unfair dismissal only if, relevantly, the person was “protected from unfair dismissal” at the time of being dismissed. Section 382 of the Act provides that a person is protected from unfair dismissal if the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period. For small businesses the period is one year.27 An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.28
[43]
It is this reference to continuous service with the employer that raises the question of whether service with another employer can be taken into account. On a plain reading of section 384(1), it would not be. But section 384(1) must be read in light of the meaning of the term “continuous service” for the purposes of that section.
[44]
Section 12 provides that “continuous service” has a meaning affected by section 22. Relevantly, section 22 provides that a period of service by an employee with their employer is a period during which the employee is employed by the employer,29 with some exclusions that are not presently relevant.
[45]
Section 22 also provides for situations in which service with one employer counts as service with another. If there is a “transfer of employment” in relation to the employee, then service with the first employer counts as service with the second employer, and the period between the two does not break continuity of service.30 A “transfer of employment” can occur between associated entities, or between non-associated entities. For non-associated entities there is a “transfer of employment” if “the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer.”31
[46]
When calculating the minimum employment period, service with a past employer (that is not an associated entity) is counted only where there has been a transfer of business.
[47]
The Act provides for a limited set of circumstances in which service with an old employer does not count towards the minimum employment period with the new employer,
25 SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362, [14] (Kiefel CJ, Nettle, Gordon and Edelman JJ).
26 PB Contractors Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCAFC 70, [60].
27 Fair Work Act (n 2) s 383.
28 Ibid, s 384(2).
29 Ibid, s 22(1).
30 Ibid, s 22(5).
31 Ibid, s 22(7).
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following a transfer of business. The requirements for this are set out in section 384(2)(b). But as indicated above, consideration of section 384(2)(b) does not arise unless it is first established that a transfer of business has occurred.
[48]
The Act’s Dictionary contains definitions of transfer of business and transferring employee which refer to,32 relevantly, section 311. So, the definitions in section 311 apply to the use of those terms in section 22.
[49]
This means that the extension of the period of employment with an employer, to include service with a former employer, is relevantly contingent upon there having been a transfer of business as contemplated by Part 2-8.
[50]
Section 311 of the Act is excerpted above. It provides for when there is a transfer of business. Subsection 311(1) sets out four preconditions. The first three preconditions relate to an employee. If the three are met, the employee is a transferring employee, by operation of subsection 311(2). If all four are met, there is a transfer of business. For the fourth precondition (in subs 311(1)(d)) to be met, one of the situations in subsections 311(3), (4), (5), or (6) has to exist. It is significant that this provision is directed to situations where there is a transfer of business, a concept that in this statute goes beyond the sale of a business to other situations, specifically, outsourcing/insourcing, and transfers within the same corporate group.
[51]
Section 311 must be considered in its context. The object of the Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. Relevantly, the Act indicates this is to be achieved by providing workplace relations laws that are fair to working Australians, promote job security and gender equality, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations. It is also to be achieved by ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards, and national minimum wage orders, and by achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action.33
[52]
Part 2-8 of the Act provides for the transfer of business. The object of Part 2-8 is to provide a balance between the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and the interests of employers in running their enterprises efficiently, if there is a transfer of business from one employer to another employer.34 Part 2-8 also has a guide provision,35 which says, relevantly, that the Part provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another. The Part allows for the Commission to make orders, including orders in relation to
32 Ibid, s 12.
33 Ibid, s 3.
34 Ibid, s 309.
35 Ibid, s 307
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which instrument will apply to the new employer, and both transferring and non-transferring employees.36
[53]
The meaning of “transfer of business” also affects the operation of other provisions of the Act, relevant to employee entitlements and rights, including ss 328 (which provides for employer obligations in relation to guarantee of annual earnings) and 341 (the meaning of “workplace right” for the purposes of the general protections provisions). To the extent that the National Employment Standards provide for service-based accruals of entitlements, an employee’s rights, and an employer’s liabilities, in that regard are affected by the meaning of continuous service as affected by section 22, and, in turn, by section 311.
[54]
Having regard to that legislative context it is clear the primary purpose of the Part is to provide for what happens in relation to applicable enterprise agreements, certain modern awards, and other instruments where there is a transfer of business, in furtherance of the Act’s object of providing a safety net via, inter alia, modern awards, and of achieving productivity and fairness through enterprise bargaining. It also operates to affect other rights and liabilities under the Act, including but not limited to eligibility for an unfair dismissal remedy.
[55]
The legislative context also now includes regulated labour hire arrangement orders, enacted more than a decade after the transfer of business provisions. Section 306E of the Fair Work Act provides for the making of regulated labour hire arrangement orders in certain circumstances where a labour hire provider supplies employees to perform work for a regulated host. Subsection 306E(1A) provides that the Commission must not make the order unless it is satisfied that the performance of the work is not or will not be for the provision of a service, rather than the supply of labour, having regard to the matters in subsection (7A).
[56]
The distinction in section 306E is as between the supply of labour, on one hand, and service contracting, on the other. It does not refer to “outsourcing.” It is not necessary for us to consider the extent to which the concepts of outsourcing in section 311 and service contracting in section 306E are aligned, or otherwise. We do note, though, that the distinction drawn between supply of labour and service contracting in section 306E would not be inconsistent with the distinction drawn by the Commission in Abbott v Acciona,37 and other single member decisions, between an employer engaging supplementary labour through a labour hire company and outsourcing work.
[57]
As to context extrinsic to the legislation, we consider it relevant to observe that the transfer of business provisions were enacted at a point in time after consideration of the predecessor provisions of the Workplace Relations Act 1996 (Cth) by the High Court of Australia. The explanatory memorandum to the bill for the Act (the explanatory memorandum)38 referred to that litigation, and indicated that the (then) new transfer of business provisions were a departure from the previously applying provisions:39
36 Fair Work Act (n 2) ss 318, 319.
37 Abbott v Acciona (n 5) [47].
38 The Fair Work Bill 2009 (Cth), formerly cited as the Fair Work Bill 2008 (Cth).
39 Explanatory memorandum to the Fair Work Bill 2009 (‘the explanatory memorandum’), [1205]-[1206].
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“The WR Act provisions are based on earlier provisions construed by the High Court in PP Consultants Pty Ltd v Finance Sector Union of Australia (2000) 201 CLR 648 and Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194. In deciding whether there has been a transmission of business between private sector entities for the purposes of the WR Act, courts and tribunals have examined the character of the business (or part) in the hands of both the old employer and the new employer – where the character of the business is the same, there is likely to be a transmission of business. There must also be a succession, assignment or transmission of a business’ – that is, some assets (tangible or intangible) must move between the old employer and the new employer.
Although the provisions of this Part use the term transfer of business, they are not intended to require the focus under current Part 11 of the WR Act on what the business’ of the old employer is and whether the new employer has in some way taken over that business’. They instead focus on whether there has been a transfer of work between two employers and the reason for the transfer of that work or, viewed another way, the connection between the two employers.”
[58]
It can be appreciated from this that the term “work” in section 311 of the Act is used in contradistinction to the character of the business. PP Consultants Pty Ltd v Finance Sector Union of Australia40 related to a situation where a bank outsourced some functions to a pharmacy. The High Court of Australia found there was no transmission of business. There had also been Federal Court (including Full Court) litigation in relation to whether specific instances of outsourcing constituted a transmission of business, which had yielded differing results depending on the character of the business to which the work was outsourced.41
[59]
The context to which we have referred assists in understanding the purpose of section 311 and the focus on the transferred work. Reading the provision in its historical and legislative context, the reference to “work” should be understood as requiring a comparison between what work was done by the first employer before the events said to constitute a transfer, and what work was done by the new employer afterwards. Here, we consider the work to have been site supervision. Identifying the work is not sufficient to establish a transfer of business. A connection must be found, for the purposes of subsection 311(1)(d), by reference to subsections 311(3) to (6). The term “outsource” in subsections 311(4) and (5) must have some work to do. This must mean that establishing that there has been transferring work is not in itself sufficient to establish that outsourcing or subsequent insourcing has occurred and has given rise to a transfer of business.
[60]
We note in passing that there does not have to have been a transfer of business under subsection 311(4) in order for subsection (5) to be enlivened. It would be possible for an enterprise to outsource wholly new work. In that case subsection 311(1)(a), (b), and (c) would not be met and there would be no transfer of business at the point of outsourcing. But if that
40 (2000) 201 CLR 648.
41 CPSU, Community Public Sector Union & Anor v Stellar Call Centres Pty Ltd [1999] FCA 1224; 92 IR 224; Stellar Call Centres Pty Ltd v CEPU [2001] FCA 106; 106 FCR 302; North Western Healthcare Network v Health Services Union of Australia [1999] FCA 897; (1999) 92 FCR 477; Employment National Ltd v CPSU [2000] FCA 452; 173 ALR 201; Minister of State for Employment, Workplace Relations and Small Business v Community and Public Sector Union [2001] FCA 316; 109 FCR 303.
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occurred, and the work was later insourced, that could give rise to a transfer of business in reliance on subsection 311(5) provided all of the conditions in subsection 311(1) were met.
[61]
In some relevant single member decisions, the Macquarie Dictionary definition of outsourcing has been considered.42 That definition “to contract (work) outside the company rather than employ more in-house staff.” The same dictionary defines “in-house” as, relevantly, “of or relating to work performed for an organisation by employees of that organisation, as opposed to that which is outsourced.” Neither of the two corresponding definitions is entirely apt to cover a person who performs work in-house under the company’s control and supervision but is not an employee of that company, which is generally the case with labour hire. This is perhaps not surprising given the Macquarie dictionary’s definition of the verb to employ is broad. In any event the distinction drawn in the definitions referred to above, between outsourced and in-house work gives an indication of what is generally meant by outsourcing: contracting or otherwise making an arrangement with an external supplier (i.e., outside the employer’s enterprise) for the performance of work, rather than having people perform the work within the employer’s enterprise.
[62]
We consider the context and purpose of the relevant legislative provisions are consistent with that ordinary meaning of “outsource.” The explanatory memorandum provides support for this view. Its explanation of section 311(4) states:43
“Subclause 311(4) provides that a transfer of business occurs where, in addition to the elements in paragraphs 311(1)(a) to (c) being satisfied, the old employer or an associated entity of the old employer outsources work to the new employer or an associated entity of the new employer. This is intended to cover the situation where an employer (the old employer) decides that it no longer wishes to perform work of a particular type, or no longer wishes to perform as much work of a particular type, and so engages a third party to perform that work instead and that third party engages employees of the old employer to continue performing that work. This provision applies irrespective of whether there is a transfer of assets between the old employer and the new employer.”
[63]
The explanatory memorandum gives an example of outsourcing, as follows:
Kambo & Partners is a human resources consultancy firm in Victoria. Kambo employs four security guards who staff its reception desk and keep the business’s premises secure. Kambo decides that it no longer wishes to employ security guards itself, and enters into a contract (an outsourcing arrangement) with Elvis Security Pty Ltd (Elvis Security) under which Elvis Security will provide security services to Kambo’s premises. Elvis Security offers employment to the four security guards employed by Kambo and they accept the offers. They perform substantially the same work for Elvis Security as they performed for Kambo. This would be a transfer of business.
42 Including Abbott v Acciona, [22] and Taulapapa, [37]; see also for example OZ Minerals Carrapateena Pty Ltd [2026] FWC 669, [15]; Mr Matthew Young v Veolia Environmental Services (Australia) Pty Ltd [2025] FWC 1898, [52]; David Howarth v ResourceCo Pty Ltd [2023] FWC 1771, [36]; Mr Ross Richards v Barro Group Pty Ltd [2020] FWC 2687, [10]; Mr Scott Jury v Chandler Macleod Group Limited [2019] FWC 4838, [26].
43 The explanatory memorandum (n 39) [1224].
[2026] FWCFB 218
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[64]
Subsection 311(5) is then explained as follows:44
The intention of this subclause is that a transfer of business occurs where a new employer decides to in-source the work previously done by the transferring employee of the old employer.
[65]
The explanatory memorandum then continues the previous example as follows:
After two years, Kambo decides that it no longer wishes to outsource the security work at its premises and wishes again to engage employees itself to perform this work. Kambo terminates the outsourcing contract that it made with Elvis Security and offers employment to the security guards employed by Elvis Security. They accept the offers and perform substantially the same work as employees of Kambo as they previously performed as employees of Elvis Security, namely, providing security services at Kambo’s premises. This would be a transfer of business.
[66]
The explanatory memorandum refers to a situation where particular work is outsourced or insourced. The example given is not one where the entity conducts its own security operation and engages supplementary labour, via labour hire providers, for that purpose. We consider that the engagement of supplementary labour, via a labour hire provider, to work in the business falls outside the ordinary meaning of outsourcing and is not consistent with the description of the provisions’ operation in the explanatory memorandum.
[67]
As can be appreciated from the excerpt set out above, subsection 311(5) is met only if the new employer had previously outsourced the transferring work to the old employer (or an associated entity of it). If the bare engagement of supplementary labour, via labour hire, does not constitute outsourcing, it follows that the direct employment of a former labour hire worker does not of itself give rise to the connection, insourcing, contemplated by subsection 311(5).
[68]
If directly employing someone into the same work they were doing as a labour hire worker was sufficient of itself to constitute insourcing attracting the operation of section 311(5), it follows that the provisions in relation to transferrable instruments would apply on each occasion that happened. There are various ramifications of this. One is that the new employer would likely become covered by the labour hire provider’s enterprise agreement (if it had one) in relation to the transferring work, displacing, in respect of the now direct employee, the new employer’s own enterprise agreement (see ss 312 and 313 of the Act). Additional new employees could also be covered by the now-transferred enterprise agreement (s 314). The result could be that the company could have a mix of longer-standing direct hire employees covered by the company’s enterprise agreement and newer employees covered by the labour hire provider’s enterprise agreement as a transferable instrument. The employer would have to consider whether to make an application under section 318 every time it directly hired someone who had previously been working on a labour hire basis, to perform the same work. We doubt these consequences were intended.
[69]
As indicated above Mr Marchese contends, either as a discrete appeal ground or in support of the public interest claim, that the Commission had erred by interpreting section
44 The explanatory memorandum, [1226].
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311(5) narrowly contrary to the beneficial and remedial purpose of the Act to protect continuity of employment in transfer situations. We consider that the unfair dismissal part is clearly beneficial and remedial legislation. We also accept that the transfer of business part has a beneficial purpose which is to provide for the application of industrial instruments to employers and employers in transfer of business situations. This purpose means Part 2-8 is concerned with the rights of employees, and former and new employers, if a transfer of business occurs. Having regard to the objects of the Part these provisions attempt to strike a balance. We do not consider that the beneficial nature of these provisions means that we should strain for a construction that enlarges the scope of the situations set out in subsections 311(3) to (6).
[70]
Taken in context and with regard to the purpose as we have described it above, we do not consider that section 311 is aimed at a situation involving the direct hire of formerly supplementary labour, without more. The outsourcing and insourcing provisions are directed towards establishing the requisite connection to establish a transfer of business triggering rights and powers in relation to, primarily, transferring enterprise agreements and other instruments.
[71]
Appeal ground 1 refers to section 311(5)(b), which deals with “transferring work” where the new employer has ceased to outsource the work to the old employer. Essentially Mr Marchese argues that as he was doing the same work before and after becoming directly employed, that was sufficient to establish the transfer of business and have his service with the labour hire provider taken into account. He contends that the Commissioner’s decision required Cubism to have completely ceased outsourcing work to Fetch generally. He argues the Commissioner erred in law by finding that Cubism “did not cease to outsource work to Fetch” and relying on the fact that “at the time of the hearing Cubism engaged two site supervisors directly, and one site supervisor through Fetch.” 45
[72]
The Commissioner at first instance found that:46
•
Cubism directly engaged a small number of on-going key operational staff, including site supervisors.
•
Cubism then supplemented its directly employed operational staff with labour hire staff to cover time-defined projects (i.e. labour hire employees are not engaged on an ongoing basis, they are employed for the length of a particular project).
•
Cubism outsourced work to Fetch and other labour hire providers to provide supplementary labour for time defined projects.
•
The evidence does not establish that Mr Marchese’s engagement with Cubism equates to a ceasing of outsourced work for the purposes of s 311(5).
[73]
We accept the Commissioner’s findings that Cubism directly engaged a small number of on-going key operational staff, including site supervisors, and then supplemented its directly employed staff with labour hire staff.
[74]
Mr Marchese, in his submissions, sought to draw a distinction between an essential and integrated role such as his, and ‘mere’ supplementary labour.47 In oral submissions he
45 Mr Marchese’s Outline of submissions filed 18 November 2025, [12].
46 Decision (n 1) [51]-[54].
47 Mr Marchese’s Outline of submissions filed 18 November 2025, [12].
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developed this submission by indicating that as his position was a single, one-person, significant, management position, he did not supplement anyone.
[75]
We do not accept Mr Marchese’s characterisation of supplementary labour. In the context of labour hire, the term usually indicates that the labour hire workers are engaged in addition to direct hire employees. We do not consider the term denotes or connotes anything about the importance of a position or its place in an enterprise’s hierarchy.
[76]
Mr Marchese’s submissions that the role was integrated also tend toward the conclusion that this was a labour hire arrangement not an example of outsourcing. The degree of integration suggests that he was working in-house, rather than for an external supplier to whom work had been outsourced.
[77]
We consider engaging supplementary labour via labour hire providers, and outsourcing, to be distinct concepts. This is not to say there cannot be ambiguity as to whether a particular factual situation is one of labour hire or outsourcing. As indicated above, in Abbott v Acciona the Commission drew a distinction between labour hire and outsourcing. In doing so it acknowledged that there would be occasions where the distinction is difficult to establish, and that the side of the line that a particular case falls on will be determined by the facts and circumstances of that case. This difficulty is not unique. A similar exercise has to be undertaken in relation to distinguishing between the supply of labour and the provision of a service for the purposes of section 306E of the Act, or to distinguish between employees and independent contractors. Attempts by legislatures and courts to codify or neatly categorise different arrangements are often challenged if not defeated by innovation in commercial arrangements.
[78]
We consider that Cubism had not outsourced the work in relation to time-defined projects, or site supervision generally, only by engaging supplementary labour hire staff to perform the work. Relatedly, given that Cubism engaged employees and supplementary labour to perform site supervision work for it, and under its control, we consider that Cubism had not outsourced its site supervision work to a third party or parties. The work that Mr Marchese performed had not been outsourced. As outsourcing had not occurred, a subsequent cessation of outsourcing (that is, insourcing) could not occur. In those circumstances we do not consider that a finding that the employer had engaged supplementary labour hire established the requisite connection for the purposes of sections 311(1)(d) and 311(5).
[79]
As can be appreciated we consider the Commissioner erred in finding that the work had previously been outsourced to Fetch. Therefore, we consider there was no outsourced work susceptible of being insourced. We agree with the Commissioner at first instance that the direct employment of Mr Marchese did not constitute a cessation of outsourcing. However, we have reached that conclusion for reasons different to those relied upon by the Commissioner.
[80]
Our conclusion means that the service with Fetch would not be counted towards Mr Marchese’s minimum employment period with Cubism. Consequently, Mr Marchese had not completed the minimum employment period at the time his employment ended. The outcome is that the Commission did not have jurisdiction to make an order for an unfair dismissal remedy, in respect of the cessation of Mr Marchese’s employment. That is to say, though we consider the Commissioner erred, that does not change the final result.
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[81]
Having found appealable error, we turn to considering the public interest. We find that it is in the public interest to grant permission to appeal. The construction of section 311 is an issue of importance and general application. We also observe the absence of a Full Bench authority that is directly on point in respect of section 311(5) of the Act. We do not accept the Respondent’s submission that this case does not raise a question requiring appellate guidance.
[82]
In those circumstances we consider the appropriate course of action is to grant permission to appeal. However, as the error we have found would not alter the outcome, the appeal should be dismissed.
Conclusion and Order
[83]
Permission to appeal is granted. The appeal is dismissed. We order accordingly”.
Appeal by Marchese v Cubism Projects Pty Ltd- [2026] FWCFB 218 delivered 18 August 2026 per Asbury VP, Clancy DP and Butler DP