Ms Stanfield had worked at a childcare centre since 1990. Her employer sold that childcare business in June 2007. She moved with the sale to the buyer. The sale agreement between the seller and the buyer said that employees' employment conditions were to be "no less favourable than their existing conditions".
Six months after the sale, the buyer dismissed her. She made an unfair dismissal claim against the buyer. To validly make that claim, she needed to have worked for the buyer for a qualifying period. She had not been employed by the buyer for that period.
The question was whether when her employer sold the childcare business in which she was employed:
The Australian Industrial Relations Commission (Commission) determined that even though she had worked in the childcare business for many years, she had not completed the required qualifying period of employment with the buyer. Therefore, she could not make the unfair dismissal application.
The case is Stanfield v Childcare Services Pty Ltd  AIRC 127 (11 February 2008).
An employee can claim unfair dismissal under the Workplace Relations Act 1996 (Act) only if they have completed a 6 month qualifying period of employment (unless another period is agreed in writing by the employee and employer before the employment starts).
Ms Stanfield asserted that:
The Commission determined that it had no jurisdiction to deal with Ms Stanfield's unfair dismissal application because:
If a buyer of a business offers employment to employees of the seller, then the employees' rights to make unfair dismissal claims will be subject to a new 6 month qualifying period — unless a written agreement between the new employer and the employee provides otherwise. (The agreement for the sale of the business between the seller and the buyer is not sufficient to be a written agreement between employer and employee, to vary the qualifying period of employment.)
Consequently, if a seller of a business wishes to ensure the interests of its employees are protected, then the seller should require the buyer to enter into a written agreement with each employee to the effect that no qualifying period will apply to their new employment for the purposes of unfair dismissal claims. That requirement can be a settlement obligation under the business sale contract.
Until the buyer enters into that written agreement with the employee, the requirement may still only be enforced by the seller (not the employee). However, this approach has two primary benefits:
Geoff Musgrove is a partner in the Maddocks Commercial team.
Geoff's principal areas of practice are:
Geoff acts for a wide range of commercial, government, accounting, manufacturing, professional and rural industry clients.
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