Amanda Colledge v Bakersfield Holdings Pty Ltd ATF Separovic Family Trust

[2016] FWC 6707

[2016] FWC 6707

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Amanda Colledge
v
Bakersfield Holdings Pty Ltd ATF Separovic Family Trust
(U2016/2910)

DEPUTY PRESIDENT CLANCY MELBOURNE, 16 SEPTEMBER 2016

Application for relief from unfair dismissal – application within time.

[1] Ms Amanda Colledge alleged that the termination of her employment by Bakersfield Holdings Pty Ltd ATF Separovic Family Trust (Bakersfield) was unfair. An application for unfair dismissal remedy was filed by her on 17 June 2016.

[2] Bakersfield initially objected to the application on the following grounds:

● Ms Colledge was not employed for the minimum employment period required for a person to be protected from unfair dismissal;
● It is a small business and the dismissal was consistent with the Small Business Fair Dismissal Code; and
● The application of Ms Colledge was lodged out of time.

[3] At the commencement of the hearing, Bakersfield advised it no longer pressed the jurisdictional objection that Ms Colledge had not served the minimum employment period. It also advised it had 15 employees at the time of dismissal and so was not a small business employer within the meaning of s.23 of the Fair Work Act 2009 (the Act).

[4] This matter proceeded on the basis that the sole question for determination was whether I should grant Ms Colledge an extension of time for the making of her unfair dismissal application.

Preliminary procedural matter

[5] In the Form F2-Unfair Dismissal Application (Application), Ms Colledge named Bakersfield Holdings Pty Ltd as the Respondent. In the Form F3-Employer Response to Unfair Dismissal Application, the legal name of the business was recorded as Bakersfield Holding Pty Ltd ATF Separovic Family Trust. Ms Scarff, who appeared for Bakersfield, confirmed that the Respondent is in fact Bakersfield Holdings Pty Ltd ATF Separovic Family Trust. I therefore amended the Application to this effect and I note my doing so comes within the circumstances in which it has been held this can be done pursuant to s.586 of the Act. 1

[6] At the hearing, Ms Colledge gave evidence, addressed the material she had filed and was cross-examined. Ms Scarff made submissions on behalf of Bakersfield.

When did the termination of Ms Colledge’s employment take effect?

[7] At the hearing, Ms Colledge initially said that the termination date was 17 June 2016 and her application was therefore not out of time. 2 Ms Colledge said she attended a meeting with her employer, Mr Tony Separovic, on 17 May 2016 where he said “I just don’t think we’re speaking the same language” and they then proceeded to discuss a handover which was to be comprehensive, as there was someone new starting in her role on 18 May 2016.3 Ms Colledge said she did not believe her employment was being terminated with immediate effect4 and Mr Separovic did not mention a finishing date, just that a payment in lieu of four weeks would be made, which she assumed would be the date termination took effect.5 Ms Colledge said she presumed she had been placed on ‘garden leave’, which she claimed was very common for someone in her position.6 At the meeting, Ms Colledge said she would need a day to collect herself, being 18 May 2016, and Mr Separovic agreed to this. Ms Colledge said she left the meeting thinking “I’ve got a month and I’ve got to make myself available for a month…”7 As it turned out, she did not attend the workplace on either 18 May 2016 or 19 May 2016 and tendered a medical certificate which covered both days.8

[8] Ms Colledge said that in the meeting of 17 May 2016, no timeframe for a handover was discussed and she had assumed “it would take as long as it was going to take” and after 20 June 2016, she would not have to attend to anything. 9

[9] Ms Colledge said she had interpreted the statement of Mr Separovic that four weeks’ notice “will be paid to you in lieu of notice on the basis you’ll provide the new practice manager with a competent handover” as meaning she would be on ‘garden leave.’ 10 She said she interpreted ‘paid in lieu of notice’ to mean that while she did not have to physically attend the office whilst providing the handover, she was expected to be available for that period of time.11

[10] I asked Ms Colledge when it was she thought the handover with the new employee was finalised. She said if she had received a phone call anywhere up to and including 20 June 2016, she would have been required to respond, but it was up to Bakersfield to contact her. 12

[11] Ms Colledge received an email from Mr Separovic on 19 May 2016 13 which stated:

“I confirm that on Tuesday, 17 March [sic] 2016 your employment was formally terminated by Separovic Injury Lawyers.

As you are aware, the termination of your employment occurred within your probation period and we are required to provide you with a period of two (2) weeks notice pursuant to your engagement of employment letter.

At the meeting on 17 May 2016, you were advised that the reason for your termination included, inter alia, ongoing issues with your communication. You are also aware there have been ongoing issues with your performance throughout the probation period and make [sic] yourself available.

As a gesture of goodwill, I was prepared to offer you an additional two (2) weeks notice being a total of four (4) weeks that would be paid to you in lieu of notice on the basis that you would provide the new Practice Manager with a competent handover.

You indicated you preferred not to come in on Wednesday, 18 May 2016 and would rather not face the staff.

You were requested by our Ms Eleanor Scarff (under my direction) to attend our firm this week in person to provide a handover to the New Practice Manager as you have indicated a preference not to meet with staff. However you have refused.  You have subsequently provided us with a medical certificate stating that you are unfit for work from 18 May 2016 to 19 May 2016 (inclusive).

I have not heard from you as to whether you will be attending our offices tomorrow, 20 May 2016. I have tried to accommodate for you to attend our offices out of office hours or alternatively on a Saturday but you have refused.

Further, I have been advised by the new Practice Manager that you have not been helpful in providing information to him.

I spent three (3) hours this morning going through your office just sorting out miscellaneous paperwork and fileaways.

In light of the above, I am of the view you have breached your agreement to assist with providing a competent handover. I am now, at additional expense, arranging for Yvette Black to provide a handover to the New Practice Manager.

Accordingly, I have arranged for your annual leave entitlements to be paid to you today during today’s pay run and I will also arrange two (2) weeks notice to be paid to you shortly.

I was of the understanding that you had at your home, some work-related fileaways and other paperwork. Can you please confirm whether you have any work related items that need to be returned?

I wish you all the best for the future.”

[12] At the hearing, Ms Colledge said she was “more than happy to provide the period of handover and be contacted, and did respond and responded regularly, responded in a very timely manner…it wasn’t until he sent this email that I – my concerns were drawn because it’s very – it’s not what was said. It just wasn’t what the – my understanding of the meeting was about…” 14

[13] On 20 May 2016, Ms Colledge responded 15 to Mr Separovic’s email and disputed that her dismissal occurred during her probation period or that any notice paid was conditional. She indicated that following 17 May 2016, she had received and attended to phone calls from the new Practice Manager and other Bakersfield employees on 18 and 19 May 2016 and included a summary of these communications. Ms Colledge also challenged Mr Separovic’s decision to rescind the four weeks’ notice that was to be paid to her and confirmed she did not have any of Bakersfield’s property at home. She indicated that she did not have a problem attending the office the following day, subject to the outcome of a doctor’s appointment that afternoon, and that she would make herself available by phone, if necessary.

[14] Mr Separovic responded to this email soon after, advising that four weeks’ notice would be paid and “there are no hard feelings and good luck for the future.” 16

[15] Ms Colledge did not perform any further work for Bakersfield after the email correspondence of 20 May 2016 and she said there was no other contact from Bakersfield between 21 May 2016 and 17 June 2016, apart from one email requesting her to provide her AUSkey password. 17

[16] On 17 June 2016, 18 Ms Colledge wrote to Mr Separovic advising she was yet to secure new employment and was intending to “make a claim.”

[17] Mr Separovic responded by email on 21 June 2016. 19 This response included:

“Pursuant to your letter of engagement, I was only required to provide you with a 2 week notice period. You refused to work your notice period and were not willing to provide a handover to the new practice manager, Adam, despite assurances that you would do the same. Notwithstanding this, I generously agreed to pay you this period in lieu of notice as well as providing you with a further additional 2 weeks salary being a total of 4 weeks paid to you in lieu of notice.”

[18] Bakersfield tendered pay slips 20 for Ms Colledge which indicate that 54.46 hours of unused holiday pay and 80 hours of base pay was paid to Ms Colledge on 19 May 2016. On 20 May 2016, a further 136 hours of base pay was paid to Ms Colledge. The final payment to Ms Colledge occurred on 24 May 2016, when 6.15 hours of unused, accrued annual leave was paid.21

[19] Ms Colledge later said during the hearing that she considered her employment terminated on 20 June 2016, 22 despite having lodged her Application on 17 June 2016. She said she was unsure what implications flowed from the email from Mr Separovic of 19 May 2016, given that the email and the meeting were her only pieces of information.23 She said she believed the termination was effective on 20 June 2016 because that was the date until which her payment in lieu was paid.24

[20] Bakersfield submitted that Ms Colledge’s dismissal took effect on 17 May 2016 25 and this was confirmed in writing on 19 May 2016.26 It submitted if the date of dismissal was found by the Commission to be 20 June 2016, the Application was premature and therefore invalid.27

[21] For completeness, it is worth setting out Clause 8 of Ms Colledge’s Letter of Engagement – Terms of Employment 28 with Bakersfield:

“8. NOTICE TO CEASE EMPLOYMENT

With regard to the period of notice for cessation of employment:

• During the probation period, the notice period to cease employment is entirely at the employer’s discretion but will not be less than two (2) weeks, nor exceed four (4) weeks.



• Following the probation period either party to provide a minimum of four (4) weeks’ notice of cessation of employment.



• Alternatively whatever period is mutually agreed.”

Consideration

[22] Section 394(1) of the Act provides that a person who has been dismissed may apply for an unfair dismissal remedy and s.386(1) of the Act outlines when a person has been ‘dismissed’ as follows:

“(1)  A person has been dismissed if:

(a)  the person's employment with his or her employer has been terminated on the employer's initiative; or

(b)  the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[23] In Mihajlovic v Lifeline Macarthur, 29 a Full Bench of the Commission gave meaning to the term ‘dismissed’ and determined when it can be said that the employment of an employment terminated on notice ends, stating:

“…a person’s “employment with his or her employer has been terminated on the employer’s initiative” when the person’s employment relationship with the employer has ended, and that where the employee has been terminated on notice, the employment relationship ends when the notice period expires. Because s.386(1) defines when a person has been dismissed for the purpose of s.394(1), the same propositions apply to the meaning of the expression “A person who has been dismissed” in s.394(1). Section 394(1) therefore requires a person’s employment to have terminated in order for that person to make an application for an unfair dismissal remedy.” 30 (my emphasis)

[24] The question of when the employment relationship ends when an employee is terminated with pay in lieu of notice was considered by Chief Justice Wilcox in Siagian v Sanel Pty Ltd (Siagian). 31 His Honour stated that the question of whether a payment in lieu of notice immediately terminates the employment is always one of fact but conceded that the parties will not have normally made their position clear, leaving the decision-making body to put its own interpretation on their actions.32 His Honour expressed the opinion that there is a prima facie position where parties use the words “payment in lieu of notice” and having considered a range of authorities, then said:

“In his work The Contract of Employment (1975) M R Freedland at 188 says:

"It would seem that a lawful termination by payment in lieu of notice normally results in an immediate termination of the contract of employment. The termination will not be projected to the end of the notional period of notice. The payment should be regarded as a lump-sum payment, equal to the amount of wages during the period of notice, rather than as payment of actual wages for a period of notice during which the services of the employee are not required. ... It would seem also that termination with payment in lieu of notice will, in practice, be regarded as resulting in an immediate termination of employment for the purposes of liabilities of employer and employee to social security contributions. It would in general seem correct to hold that such payments in lieu of notice result in an immediate termination of the contract of employment because the payment is related to wages only in that these quantify the payment."

I think these statements are justified by the authorities. It seems to me that, in the absence of evidence of a contrary intention, it should usually be inferred that the employer intended the termination to take effect immediately. This conclusion not only reflects the more accurate meaning of the phrase "payment in lieu of notice"; it accords with common sense. An employer who wishes to terminate an employee's services, and is prepared to pay out a period of notice without requiring the employee to work, will surely usually wish to end the relationship immediately. If the employee is not to work, there is no advantage to the employer in keeping the relationship alive during the period for which payment is made; and there is the disadvantage that the employer will be burdened with employment related costs, such as workers' compensation insurance, payroll tax, liability for leave payments etc. The employer also incurs the risk that some new burden will be imposed in respect of the employment during the period.” 33

[25] Ms Colledge’s Letter of Engagement – Terms of Employment 34provided for a notice periodof not less than two (2) weeks during the probationary period (the first six (6) months of employment) and four (4) weeks thereafter. While it also recorded that the parties could agree to an alternative period, there was no express right for Bakersfield to terminate the employment of Ms Colledge with pay in lieu of notice.

[26] Having considered Siagian and the evidence, I am satisfied that Ms Colledge’s employment was terminated on notice on 17 May 2016, with four weeks’ notice expiring on 14 June 2016, and a handover to be completed by her. Though these terms were not reduced to writing, I consider that Ms Colledge’s evidence 35 and Mr Separovic’s email of 19 May 2016 demonstrate that four weeks’ notice was the period discussed and agreed at the meeting on 17 May 2016 and Ms Colledge was required to perform ongoing duties in the form of a handover during this period. I am fortified in this view having regard to Mr Separovic’s statement in his email dated 21 June 2016 “You refused to work your notice period”, which confirmed the agreement of the parties that Ms Colledge serve her notice period. Therefore, I do not find that Bakersfield intended the termination to take effect immediately.

[27] In his subsequent email of 19 May 2016, 36 Mr Separovic indicated that Bakersfield was not satisfied Ms Colledge was adequately meeting her obligations to provide a handover. He alleged this constituted a breach of the agreement that Ms Colledge assist with providing a competent handover and he indicated annual leave entitlements and two (2) weeks’ notice would be paid to Ms Colledge. The query regarding the return of work-related material and the final words of the email, “I wish you all the best for the future,” indicated it was Bakersfield’s intention to immediately end the employment relationship.

[28] However, I do not consider that Ms Colledge’s reply email of 20 May 2016 37 indicates she consented to the variation Mr Separovic had sought to impose. The comments in her email, outlined above in paragraph [13] above, indicate it was her view that she had been providing a competent handover, despite being unwell. Her statements “I have no problem attending the office tomorrow to give Adam any assistance that he requires to perform the role, dependant on the outcome of my doctor’s appointment this afternoon. Regardless, I will again make myself available by phone if necessary” do not, in my view, provide a basis for the acceptance of the proposition that she agreed to vary the arrangement for her to provide a handover during her notice period. While Ms Colledge requested early payment of her “four weeks’ payment in Lieu,” I consider she was simply asserting her contractual right under the Letter of Engagement – Terms of Employment.

[29] It was noted by Hatcher VP in the initial Mihajlovic v Lifeline Macarthur 38 decision that:

“…A notice of termination of employment, once sent, cannot unilaterally be withdrawn. It follows that neither can it unilaterally be varied in a way which changes its effect. The notice takes effect in accordance with its terms, properly construed.” 39 (references omitted)

[30] The Vice President cited the decision of Gray J in Birrell v Australian National Airlines Commission 40(Birrell), in which His Honour endorsed the principle that unilateral withdrawal of a notice of termination of a contract of employment is not possible.41 These authorities make it clear that when an employee is terminated with notice, the employment relationship ends when that period expires, unless there is mutual agreement to vary the agreement. While Bakersfield sought to vary the agreement that had been made regarding the notice period and handover, I find that mutual agreement to this variation was lacking.

[31] Therefore, I conclude that Ms Colledge’s dismissal took effect on 14 June 2016 and not on 17 May 2016 as contended by Bakersfield. To the extent that Bakersfield’s objection to Ms Colledge’s application for an extension of time was based on that contention, it must be rejected. The question of whether the time for Ms Colledge to make her unfair dismissal application under s.394 of the Act to the Commission should be granted to the actual date of lodgement does not therefore arise.

[32] For completeness, Ms Colledge’s mistaken belief that she was on ‘garden leave’ is not of consequence to my findings, as I have formed the view that the evidence establishes that on 17 May 2016 her employment was terminated on four weeks’ notice, during which a handover was to be completed by her. No doubt, Ms Colledge was subsequently confused as to when her employment ended, but I considered the content of Mr Separovic’s email correspondence, the timing of various payments made to her and her lack of technical knowledge relating to the legalities associated with bringing an employment relationship to an end contributed to this confusion. To the extent that Mr Separovic or anyone else could have provided clarity through oral testimony, this did not occur.

[33] As I have found that Ms Colledge’s dismissal took effect on 14 June 2016, her application filed on 17 June 2016 is within time and no extension of time is necessary. Consequently, the matter will now be referred to the Conciliation Unit for further programming.

DEPUTY PRESIDENT

Appearances:

Ms A Colledge on her own behalf.

Ms E Scarff for the Respondent.

Hearing details:

2016.

Melbourne and Perth via video link:

August 4.

 1   Djula v Centurion Transport Co. Pty Ltd [2015] FWCFB 2371 (unreported, Catanzariti VP, Harrison SDP, Bull C, 12 May 2015) at [28].

 2   Transcript PN 148-149.

 3   Transcript PN 157.

 4   Transcript PN 336.

 5   Transcript PN 161.

 6   Transcript PN 157.

 7   Transcript PN 293.

 8   Exhibit A4.

 9   Transcript PN 295-296.

 10   Transcript PN 181.

 11   Transcript PN 188 and PN 198.

 12   Transcript PN 200.

 13   Exhibit A6.

 14   Transcript PN 176.

 15   Exhibit A7.

 16   Exhibit A8.

 17   Transcript PN 263-265.

 18   Exhibit A9.

 19   Exhibit A10.

 20   Exhibits R1, R2, R3, R4.

 21   Exhibit R4.

 22   Transcript PN 201.

 23   Transcript PN 212.

 24   Transcript PN 201.

 25   Transcript PN 435.

 26   Respondent’s Outline of Argument: Objections at question [1b].

 27   Transcript PN 437.

 28   Exhibit A3.

 29   [2014] FWCFB 1070.

 30 Ibid at [17].

 31 (1994) 54 IR 185.

 32   Ibid at p.203.

 33   Ibid at pp. 205-206.

 34   Exhibit A3.

 35   Transcript PN 160 and 161.

 36   Exhibit A6.

 37   Exhibit A7.

 38   [2013] FWC 9804.

 39 Ibid at [13].

 40 (1984) 5 FCR 447.

 41   Ibid at p.458.

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