FWC allows workers' claims to proceed despite naming incorrect corporate entity
The Fair Work Commission (FWC) recently dealt with a jurisdictional objection concerning whether workers had correctly identified their employer in unfair dismissal applications.
Three workers filed claims against a company they believed was their employer, citing documentation and communications that consistently referenced this company's business name.
However, their pay slips, superannuation contributions, and tax documents all named a different entity within the same corporate group.
The case highlights significant challenges faced by workers who deal with corporate structures, where multiple entities operate under shared business names and branding while maintaining separate legal identities.
Three workers filed unfair dismissal applications claiming they were dismissed by Loughlin Pty Ltd, which operated a business called Insight Charity Fundraising Services.
This business conducted fundraising raffles for charities and was part of a corporate group that included several entities: Insight Holdings Consolidated Pty Ltd, Insight FTS Pty Ltd, and Insight Human Resources Pty Ltd.
Pay slips showed the workers were paid by Insight FTS throughout their employment. Superannuation contributions were also made by Insight FTS for their benefit.
Loughlin opposed the applications, arguing it did not employ or dismiss the workers. It maintained that the workers should have named Insight FTS as the employer in their unfair dismissal applications.
The workers gave evidence they understood they worked for "Insight Charity Fundraising Services," not Insight FTS. They submitted documentation showing phone scripts, emails, and reference letters that referred to the business as Insight Charity Fundraising Services.
One worker testified she started working as a casual telemarketer in September 2017. She provided evidence about her duties and her role as a safety delegate and union delegate.
Another worker stated she declined to sign a part-time employment contract because she was concerned it would affect her delegate roles. She said she always understood her employer was Insight Charity Fundraising Services.
The chief operating officer gave evidence that the workers were casual employees of Insight FTS. He provided copies of payslips identifying Insight FTS as the employer and stated Insight FTS had employed over 3,500 people over 14 years.
The managing director explained that service companies had been used within the Insight Group to manage potential conflict of interest risks. He outlined how Insight Holdings entered contracts with charity clients, Loughlin managed the campaigns, and Insight FTS employed and managed telephone sales staff.
He testified that Insight FTS had its own financial accounts, paid superannuation and payroll tax, was registered for GST, and was a party to an enterprise agreement with employees.
The FWC referenced established legal principles for determining the "true employer" in corporate group settings, noting that while it's not unusual for one company in a group to employ labour for others, there must be a rational business explanation for such arrangements.
Justice Buchanan's guidance from a previous case was cited: "Nevertheless, it must be possible to identify a rational explanation for the arrangement and the explanation must be satisfactorily related to an intelligible business objective."
The FWC also noted that the New South Wales Court of Appeal had confirmed that the "substance and totality of the relationship" must be considered, and that employment documents are relevant but "not determinative of who is the employer."
The FWC found that Insight FTS was indeed the true employer of the workers. Unlike cases where shell companies without assets were found not to be true employers, Insight FTS paid workers directly and had a revenue stream.
The FWC placed significant weight on the enterprise agreement between the workers' union and Insight FTS: "[It is] difficult to accept [the workers'] argument that Insight FTS is not their 'true employer' in circumstances whereby their union, the UWU, is on the record accepting that Insight FTS is the 'true employer' since at least 2017."
The FWC concluded: "[I] consider the documentary evidence in this case falls strongly in favour of finding that Insight FTS was the 'true employer' of [the workers]. This is consistent with pay slips, employment contract, draft contracts, group certificates, superannuation contribution payments, and workers' compensation premium payments."
Despite finding the workers had named the wrong employer, the FWC allowed them to amend their applications to name Insight FTS as the respondent.
The FWC noted: "[Although] I have found against [the workers] in terms of the 'true employer' issue, their argument was not without merit. The Insight Group's internal arrangements are reasonably confusing and even [the managing director] and [the chief operating officer] had some difficulty explaining them."
The FWC also expressed concerns about recent developments: "[I am] also somewhat confused about [the managing director's] actions in seemingly closing the operations of Insight FTS in late 2024... It also appears there are still telemarketers performing work... It is unclear who is employing these people if Insight FTS is not operating."
The FWC determined: "I find that Insight FTS was the 'true employer' of [the workers]. I have allowed [the workers'] unfair dismissal applications to be amended to identify Insight FTS as the employer. The jurisdictional objection falls away with my decision to amend the applications."
This case illustrates the importance of clear corporate structures and consistent branding across employment documentation. While business names may provide a unified front for marketing purposes, employment relationships must be properly documented with the correct legal entity identified as the employer.
