The Case

Burdziejko v ERGT Australia Pty Ltd (2015)

On 10 June 2014, Hays, a labour hire company, engaged Ms Burdziejko to undertake work for ERGT Australia Pty Ltd. On 3 September 2014, ERGT offered to directly employ Ms Burdziejko to undertake the same work.

ERGT terminated Ms Burdziejko’s employment on 19 December 2014. In response, she made an unfair dismissal claim against the employer.

ERGT claimed that Ms Burdziejko was not entitled to make an unfair dismissal claim as ERGT had employed her for less than 6 months (the qualifying period for an unfair dismissal claim). Ms Burdziejko argued that there had been a transfer of business, and therefore her time with Hays counted as service for the purpose of unfair dismissal.

The Verdict

For a transfer of business to occur, the following preconditions must exist:

• the employee’s employment with the old employer must have terminated;
• within 3 months, the employee of the old employer must become an employee of the new employer;
• the work of the employee under the new employer must be the same or substantially the same as their work under the old employer; and
• there must be a connection between the old and the new employer.

The FWC accepted that the first three preconditions were met. However, the final condition was in dispute. The FWC had to decide whether there was a connection between the old employer (Hays) and the new employer (ERGT).

The FW Act provides that a connection exists when a new employer (in this case, ERGT) outsources work to the old employer (in this case, Hays), but the new employer then ceases to outsource the work and performs the work itself.

The FWC found that there was a connection, and therefore a transfer of business had occurred. Given that ERGT had not expressly informed Ms Burdziejko that it would not recognise her previous service with Hays, this period of service was included.

As such, the FWC found that Ms Burdziejko had served the qualifying period (i.e. 6 months) and could bring an unfair dismissal claim.

The Lesson

Be careful if you bring previously outsourced work in-house, as this may trigger the transfer of business provisions. This can have repercussions not only for employees qualifying for unfair dismissal claims, but also in relation to their leave accrual.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.