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Jurisdiction of international companies with Australian-based employees under the spotlight

Jurisdiction of international companies with Australian-based employees under the spotlight

A Chinese employee’s future is ‘up in the air’ after his airline employer was given leave to appeal a Fair Work unfair dismissal decision which had noted their ‘sinister’ recall of the employee to Beijing.

The case has raised some jurisdictional questions for international companies operating in Australia.

Capital Airlines Co Limited T/A Beijing Capital Airlines sought to appeal a decision by Commissioner Johns made on 12 March 2019 in which the Commissioner found that the dismissal by the appellant of Xueyang Shan on 4 January 2019 was harsh, unjust and unreasonable.

On 9 April 2018, Mr Shan entered a customs controlled area without authorisation to collect his luggage. He was reported to the Australian Border Force and, on 1 September 2018, the sales manager was issued with a fine of $420 for breaching s.234A (1) of the Customs Act 1901.

He paid the fine and believed that to be the end of the matter. On 23 November 2018, the airline directed Mr Shan to return to its headquarters in Beijing. He refused and was sacked on 4 January 2019.

The airline sought to appeal the original decision on seven grounds but Commissioner John’s view that the airline’s direction to the respondent to return to Beijing had a “more sinister reason” behind it became the key issue at the hearing to grant the appeal.

In his original decision Commissioner Johns had reasoned that the airline’s stated reason for the recall “to avoid further risks to company operations” was not a lawful or reasonable direction.

Commissioner Johns accepted Mr Shan’s submission that the ‘sinister’ purpose behind the memo was to have him return to Beijing where he would lose the protections of Australian law.

Vice President Catanzariti, Senior Deputy President Hamberger and Commissioner Bissett found that Commissioner Johns was wrong to ascribe any ‘sinister’ motive for the recall to Beijing stating that there was “simply no evidentiary basis for any such finding”.