Business sale creates confusion about who's responsible for employment obligations
25 Apr 2025
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The Fair Work Commission (FWC) recently dealt with an unfair dismissal claim stemming from a business ownership change.
The worker claimed she was dismissed unfairly when a new owner took over the business where she worked as a manager. She argued that despite the change in business ownership, her employment continued with the new owner, and that she was then dismissed without proper notice just days after the takeover.
The case centered on whether an employment relationship ever existed between the worker and the new business owner.
This question turned on issues about business transfers, secondment agreements, and the legal status of employees during ownership transitions.
Australian Skin Clinics operates as a franchise business providing cosmetic procedures. The franchise outlet at Westfield Knox shopping centre was initially operated by one company before being taken over by a new franchise operator.
The worker was employed from November 2023 as a clinic manager. In early 2025, trading difficulties led the franchisor to approach an existing franchisee to replace the original franchise owner and take over the clinic.
The transaction was structured as a business and asset sale. The contract required the original franchise owner to terminate all employees and settle their entitlements before completing the sale.
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