Reorganisation of business – legitimate reason for dismissal

THE Australian Industrial Relations Commission has recently found that the dismissal of an employee from employment following the reorganisation of a business was not unfair.

From 1995 until 2002 the applicant owned a childcare business and was its director. He also worked in the business, which was subsequently sold on July 1 2002.

The new owner (‘the employer’) engaged the applicant’s services following the changeover ‘for a period of time yet to be determined so that a smooth transition can be fully effected’.

The applicant acknowledged that his hours of work ‘progressively reduced’ and, as such, the commission found that he must have appreciated that the continuing need for his expensive services was similarly reducing.

The employer gave evidence that the applicant was retained in employment due to an expectation that he would soon be employed full-time in another early childhood centre to be owned by the employer.

However, the purpose for which the applicant had been employed was exhausted by late 2002 as the employer’s attempts to expand her daycare enterprise to other locations were abandoned.

The employer’s father also gave evidence that he offered the applicant employment at a childcare centre he was planning to purchase, however, the applicant refused this offer.

The commission found that the employer had legitimately attempted to find alternative work for the applicant.

The commission considered that in the context of ensuring a ‘fair go all round’ it would be unfair to permit what was a considerate gesture towards the applicant to count against the respondent.

The commission, after considering all the factors, found that on balance the dismissal of the applicant due to the reorganisation of the business was not unfair.

This case highlights the point that an employer should not be disadvantaged because it attempts to continue an employment relationship while it reorganises its business.

If the employee is dismissed after such attempts fail then, so long as there is a fair process in conducting the dismissal, there will be no legitimate basis for an unfair dismissal application.

Carla Paratore, solicitor

9288 6940

Michael Jensen, associate

9288 6944

Liquor in schools

THE question of the appropriateness of selling liquor on school premises has received some press lately.

As part of fundraising activities at its school fete Sorrento Primary School sold liquor to parents in a beer garden.

Apparently both the school’s principal and parents and citizens association supported this and the appropriate permission was obtained from the licensing authority.

The situation has, however, attracted criticism and a call for banning such sales at schools.

The Liquor Licensing Act regulates and controls the sale of liquor in Western Australia.

Provided the occupier of premises approves and an appropriate licence to sell has been issued a privilege to sell liquor may be exercised.

There are strict guidelines in place regarding responsible selling of liquor and a total embargo on supplying people under 18 years of age with liquor in licensed premises.

In the Sorrento case no one seems to have complained as to how the privileges of the licence were exercised and the legal requirements were satisfied.

This scenario raises the broader philosophical question as to the time and circumstances when young people should be exposed to liquor.

If our society regards liquor as such a dangerous substance that children should be sheltered from its consumption under the supervision of parents and teachers alike then the call for this ban is justified.

Surely the way for our youths to be exposed to the social pleasures of moderate drinking is in a caring family or nurturing school environment.

How else will our youngsters be equipped to handle liquor the day they turn 18?

Dominique Hartfield, solicitor

9228 6868

Dan Mossenson, chairman of partners

9288 6769

CLERP 9 on track

THE Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill 2003 is on track to be enacted for commencement on July 1 2004.

The bill was passed by the House of Representatives on February 16 and on March 1 was introduced to the Senate.

The bill aims to improve the operation of the market by promoting transparency and accountability in shareholder participation.

The main areas the bill reforms are audit, financial reporting, disclosure to shareholders, improved participation by shareholders, enforcement procedures for continuous disclosure and management of conflicts of interest by financial services licensees.

ASIC has recently published a guide titled Building the CLERP 9 Administrative Framework, which sets out how ASIC plans to issue guidance to the public and interested parties on its implementation of the bill.

ASIC’s guide can be obtained from its website at

Tracey Wood, senior associate

9288 6923





Add your comment

BNIQ sponsored byECU School of Business and Law


6th-Australian Institute of Management WA20,000
7th-Murdoch University16,584
8th-South Regional TAFE10,549
9th-Central Regional TAFE10,000
49 tertiary education & training providers ranked by total number of students in WA

Number of Employees

BNiQ Disclaimer