Bernie Ryan v Power & Data Support Services Pty Ltd

[2015] FWC 2430

[2015] FWC 2430 [Note: Appeals pursuant to s.604 (C2015/2379 were lodged against this decision - refer to Full Bench decision dated 5 June 2015 [[2015] FWCFB 3498] and 2 July 2015 [[2015] FWCFB 4393] respectively for result of appeals.]

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s 394 - Application for unfair dismissal remedy

Bernie Ryan
v
Power & Data Support Services Pty Ltd
(U2014/16762)

DEPUTY PRESIDENT SAMS SYDNEY, 14 APRIL 2015

Application for relief from unfair dismissal - application lodged out of time - ‘exceptional circumstances’ - alleged lodgement difficulties - settlement discussions - no exceptional circumstances - application not devoid of merit - discretion exercised not to extend time - application dismissed.

[1] This decision arises from an application for an extension of time for the lodgement for an unfair dismissal remedy, pursuant to s 394(3) of the Fair Work Act 2009 (the ‘Act’). Mr Bernie Ryan (the ‘applicant’) was dismissed from his employment with Power & Data Support Services Pty Ltd (the ‘respondent’) on 5 December 2014. The applicant lodged an application for an unfair dismissal remedy with the Fair Work Commission (the ‘Commission’) on 30 December 2014. The Act mandates a 21 day time limit for initiating an application for a remedy for unfair dismissal. His application was therefore lodged 5 days outside the statutory time limit set out in s 394(2)(a) of the Act.

[2] On 2 February 2015, the Commission wrote to the applicant in the following terms:

‘You have lodged an application seeking a remedy for what you say was an unfair dismissal from your employment.

If you have a lawyer you should provide a copy of this letter to him or her. If a lawyer is to appear for you, or present material for you, they will need to seek permission to do so. You should draw this requirement to their attention.

The Fair Work Act 2009 allows you 21 days to lodge this application. Your application appears to be outside that time frame. You must seek an extension of time if you want your application to proceed. Your application has been allocated to me to decide whether or not to extend the time for you.

When deciding whether or not to extend the time for you the Fair Work Act 2009 obliges me to consider a number of issues which I have set out below.

● the reason for the delay;
● whether the person first became aware of the dismissal after it had taken effect;
● any action taken by the person to dispute the dismissal;
● prejudice to the employer (including prejudice caused by the delay);
● the merits of the application; and
● fairness as between the person and other persons in a similar position.

Please supply me with a written statement within 14 days explaining why you think I should decide in favour of extending the time for you. Please consider the specific issues which I have set out above, and address them in your written statement if you can. Unless you request a hearing in person or request to be heard by telephone or video, this written statement and any documents you supply with it will be what I rely on when I consider your application. As an example, if you rely on a medical condition, you should supply a medical certificate or report.

If no statement is received and no request is made for you to be heard in person, by telephone or by video conference then I will consider your extension of time application on the material before me without further notice to you.

If I decide to refuse your application I will issue an Order dismissing your application. If I refuse your application and you wish to appeal my decision, you must lodge your appeal within 21 days.

If your statement persuades me that there might be exceptional circumstances justifying an extension of time for the lodgement of your application I will give your former employer an opportunity to be heard, either in writing or in person. They may make an application to me, or another member of the Fair Work Commission, if appropriate regarding how they should be heard.

If you prefer to make your statement in person I might hear the application myself or it may be listed before another member of the Fair Work Commission. Your former employer will be asked to attend on the same day and put their opposition, if any, to the extension of time. They may seek to oppose your application in writing. Consideration will be given to that request and, if granted, you will be able to respond.

If you do not understand any of the process set out in this correspondence, you may telephone my associate, Sarah King, [number supplied] to make enquiries.’

[3] The applicant provided a written submission and supporting documents in support of his application for an extension of time on 8 February 2015. In light of its content, I sought a response from the respondent, which was provided on 3 March 2015. The applicant provided a further written response on 10 March 2015. Having considered this material, including the originating Form F2 application and the Form F3 Employer’s Response, I issued an order refusing an extension of time and dismissed the application on 13 March 2015. What follows are my reasons for doing so.

RELEVANT STATUTORY PROVISIONS AND PRINCIPLES

[4] The relevant legislative framework, governing the exercise of the Commission’s discretion in relation to applications of this kind, is set out as follows:

‘394 Application for unfair dismissal remedy

...

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.’

[5] The meaning of ‘exceptional circumstances’ was considered in Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975 (‘Nulty’). While Nulty was decided under the General Protections provisions of the Act, the definition of ‘exceptional circumstances’ has been held to have the same meaning where it appears in other sections of the Act, most notably in s 394(3). In Nulty, the Full Bench of the Commission said:

‘[10] It is convenient to deal first with the meaning of the expression “exceptional circumstances” in s.366(2). In Cheval Properties Pty Ltd v Smithers a Full Bench of FWA considered the meaning of the expression “exceptional circumstances” in s.394(3) and held:

“[5] The word “exceptional” is relevantly defined in The Macquarie Dictionary as “forming an exception or unusual instance; unusual; extraordinary.” We can apprehend no reason for giving the word a meaning other than its ordinary meaning for the purposes of s.394(3) of the FW Act.”

[11] Given that s.366(2) is in relevantly identical terms to s.394(3), this statement of principle is equally applicable to s.366(2).

[12] The ordinary meaning of the expression “exceptional circumstances” was considered by Rares J in Ho v Professional Services Review Committee No 295 a case involving in s.106KA of the Health Insurance Act 1973 (Cth). His Honour observed:

“23. I am of opinion that the expression ‘exceptional circumstances’ requires consideration of all the circumstances. In Griffiths v The Queen (1989) 167 CLR 372 at 379 Brennan and Dawson JJ considered a statutory provision which entitled either a parole board or a court to specify a shorter non-parole period than that required under another section only if it determined that the circumstances justified that course. They said of the appellant’s circumstances:

‘Although no one of these factors was exceptional, in combination they may reasonably be regarded as amounting to exceptional circumstances.’

24. Brennan and Dawson JJ held that the failure in that case to evaluate the relevant circumstances in combination was a failure to consider matters which were relevant to the exercise of the discretion under the section (167 CLR at 379). Deane J, (with whom Gaudron and McHugh JJ expressed their concurrence on this point, albeit that they were dissenting) explained that the power under consideration allowed departure from the norm only in the exceptional or special case where the circumstances justified it (167 CLR at 383, 397).

25. And, in Baker v The Queen (2004) 223 CLR 513 at 573 [173] Callinan J referred with approval to what Lord Bingham of Cornhill CJ had said in R v Kelly (Edward) [2000] QB 198 at 208, namely:

‘We must construe "exceptional" as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered.’

26. Exceptional circumstances within the meaning of s 106KA(2) can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. Thus, the sun and moon appear in the sky everyday and there is nothing exceptional about seeing them both simultaneously during day time. But an eclipse, whether lunar or solar, is exceptional, even though it can be predicted, because it is outside the usual course of events.

27. It is not correct to construe ‘exceptional circumstances’ as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural ‘circumstances’ as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of ‘exceptional circumstances’ in s 106KA(2) includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon. And, the section is directed to the circumstances of the actual practitioner, not a hypothetical being, when he or she initiates or renders the services.”

[13] In summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[14] Mere ignorance of the statutory time limit in s.366(1)(a) is not an exceptional circumstance. Indeed, unfortunately, it would seem to be all too common for dismissed employees to be unaware of the time limits imposed in relation to making an application for an unfair dismissal remedy or a general protections FWA application. The parliament has chosen to condition the discretion to extend time for making such applications on the existence of “exceptional circumstances”. In doing so the parliament must be presumed to have proceeded on the basis that an employee who is aggrieved at being dismissed ordinarily ought be expected to seek out information on any remedy they may have in a timely fashion such that delay on account of ignorance of the statutory time limit is not, of itself, an exceptional circumstance.

[15] A finding that there are “exceptional circumstances”, taking into account the matters specified in paragraphs 366(2)(a) to (e), is necessary before the discretion to extend time is enlivened. That is, even when “exceptional circumstances” are established, there remains a discretion to grant or refuse an extension of time. That discretion should be exercised having regard to all the circumstances including, in particular, the matters specified in paragraphs 366(2)(a) to (e) and will come down to a consideration of whether, given the exceptional circumstances found, it is fair and equitable that time should be extended [Endnotes not reproduced].’

[6] It is plain from the above extract from Nulty that all of the factors outlined in s 394(3), must be considered when deciding whether or not ‘exceptional circumstances’ have been established. Even if ‘exceptional circumstances’ are established, this is merely the jurisdictional gateway for the exercise of the Commission’s discretion to extend the time for filing an unfair dismissal application. Put another way, ‘exceptional circumstances’ may be found to have existed, but the Commission may still refuse to exercise a discretion to accept the application out of time; See: Nulty at para [15]. A recent Full Bench of the Commission in Lombardo v Commonwealth of Australia[2014] FWCFB 2288 succinctly described the Commission’s decision making process under 394(3) of the Act as: ‘The test for granting an extension of time involves both a broad discretion and a high hurdle of ‘exceptional circumstances.’ I now turn to each of the criteria under s 394(3) of the Act.

CONSIDERATION

Reasons for the delay (s 394(3)(a))

[7] In his initial written response, the applicant described his dismissal ‘without any due process’ as being a reason for the delay. He said that he lodged an application on 19 December 2014 and that he had since been told that there had been an IT failure on that day. He provided screenshots which he claimed supported this failure. He noted that the Commission did not provide confirmation of a successful application when it is submitted. He had been told that the Commission would advise of the application fee exemption in due course. He said he had followed up his application and had taken into account daylight saving and reduced staff at the Commission over the Christmas break. However, the respondent had engaged in ‘delaying tactics’.

[8] In response, Ms J Hignett, Solicitor for the respondent put that the applicant’s claim that he was dismissed ‘without due process’ did not constitute an ‘exceptional circumstance’, within the meaning of s 394(3) of the Act. Additionally, the screenshots provided by the applicant were dated 30 December 2014 and were not evidence that he had attempted to lodge an application on 19 December 2014. There was no evidence to demonstrate that the applicant had attempted to contact the Commission between 19 and 30 December 2014. He had referred to being in Brisbane at the time and could have attended the Commission personally to make his application.

[9] Ms Hignett noted that the applicant had said that he had attended the ‘Ombudsman’s Office’ in Cairns, where he was told to email his unfair dismissal application. In any event, an attempt to lodge an application in the wrong jurisdiction would not constitute ‘exceptional circumstances’. The applicant had not demonstrated that he had made valid attempts to lodge his application and for this reason, this matter could be distinguished from Johnston v Joy Manufacturing Co Pty Ltd t/as Joy Mining Machinery[2010] FWA 1394.

[10] In response, the applicant maintained that the circumstances of his dismissal, without due process and where he was accused of stealing, constituted a valid reason for the delay. He said that one of the screenshots provided was of his own computer history, which demonstrated that he had been on the Commission’s website that day.

[11] In addition, the applicant complained that he had been attempting to resolve the matter directly with the respondent’s representatives, but they had made clear on 19 December 2014 that they would not be entering into any settlement agreement with him. He had attended the Fair Work Ombudsman’s (FWO) office in Cairns and he had been unaware that FWO could not accept applications to the Commission. He identified a number of emails which he said demonstrated that the respondent had deliberately delayed settlement.

[12] He also said that he had only been in Brisbane briefly and would not have been able to attend the Commission’s offices during business hours. The applicant had checked his email when possible and had not followed up on his application as it was common knowledge that government departments had lower staff over the Christmas period. After checking on 29 December 2014 and noting that there was still no response, he called the Commission on 30 December 2014.

[13] The applicant said that his case was ‘exceptional’ as he had never encountered any similar event thoughout his long working life.

[14] Having considered the material filed by the parties and the Commission’s records, I find that the application was lodged on 30 January 2015. In any event, I am not persuaded that the reasons provided by the applicant for the delay in filing his unfair dismissal application are ‘exceptional circumstances’, as contemplated by the Act. The evidence provided by the applicant (See Annexure A - Screenshots of the applicant’s personal computer registry, indicating access to the Commission’s website, does not demonstrate the filing of an application) does not positively demonstrate that he lodged or attempted to lodge his application on 19 December 2014. Enquiries with the Commission’s IT department confirmed that no such document was lodged on this date. This is not a conflict of evidence, because it is the applicant’s own evidence which does not provide an evidentiary foundation for his submission.

[15] Further, while I accept that the applicant was engaged in discussions with the respondent and its representative as to settlement, this represented no bar to the application being lodged within time. It was open to the applicant to lodge his application within the statutory 21 day time period and to continue these discussions with the respondent’s representative; indeed, this is often the case in many unfair dismissal cases. If settlement is reached, a discontinuance of the application is a simple process and can be made over the phone.

[16] I also note that while the respondent’s representative did postpone a meeting on 9 January 2015, it was said to be on the basis that ‘I do not think we can have a productive meeting until you advise, in writing the basis and details of your claim. You need to justify the amount of $150,000.’An invoice for a total $150,000 was sent to the respondent on 18 December 2014. This postponement cannot be said to be an ‘exceptional circumstance’ within the meaning of s 394(3) of the Act.

[17] For the sake of completeness, I find that the submission that the applicant had not previously encountered a similar situation, as constituting an ‘exceptional circumstance’ to be misconceived. Most dismissed employees would consider their dismissal to be an ‘exceptional’ incident in their working lives, particularly if it had never happened before. But that is simply not the test for the purposes of s 394(3) of the Act.

When the person first became aware of the dismissal after it had taken effect (s 394(3)(b))

[18] The applicant said that he only became ‘fully aware’ that he had been dismissed on 19 December 2014 when the respondent’s solicitor had put the view that he was not an employee and required him to sign a document which put him under obligations of confidentiality.

[19] Ms Hignett observed that it was the applicant’s evidence that he had sought clarification of whether he was terminated. This contributed to a finding that the applicant was actually a contractor. The chronology of events surrounding the applicant’s dismissal were as follows. On 5 December 2014, the applicant had a disagreement with Mr Leo Ward, Director of the respondent. Mr Ward believed that the applicant had been dishonest in his claim that the respondent’s accountant had required Mr Ward to return certain money to the business. After a heated discussion, the applicant left the workplace. He did not return until Tuesday 9 December with copies of current balances in the accounts of Mr Ward and the respondent. He demanded a third of the money held in all accounts and demanded a payment of $150,000. Mr Ward proceeded to close access to these accounts to the applicant. The respondent denied terminating the applicant’s engagement as a contractor. Rather, the applicant had resigned or abandoned his employment, on or about 5 December 2014.

[20] In response, the applicant strongly denied the version of events set out by Ms Hignett. Rather, he believed he had been terminated after being accused of stealing. He had then gone to the Bank to confirm that money was still in Mr Ward’s account. The applicant claimed he attended the office on ‘Monday 7 December’ (presumably Monday 8 December) and had worked over the weekend on the Staff Christmas and advance pays. He denied having demanded ‘any particular amount of money’, although there had been discussions of money owed to him. The applicant maintained that he had been an employee and referred to the ‘ATO rules’ in this respect. He denied abandoning or resigning his position.

[21] On his own evidence, the applicant stated that Mr Ward had said to him, ‘go on get out - get out now - you’re done that’s the end of you’ at the meeting of 5 December 2014. He had employed a new bookkeeper the following day. There could hardly be a more unequivocal and definite expression of the termination of whatever arrangements the respondent had with the applicant (be they as an employee or as a contractor). I find that the applicant was aware that the relationship between the parties was terminated at this time. The submission made by the applicant that he was not ‘fully aware’ that he was terminated until 19 December 2014, is either confused or disingenuous. This weighs against an extension of time being granted.

Any action taken by the person to dispute the dismissal (s 394(3)(c))

[22] The applicant claimed to have made every attempt to meet with his employer and its solicitor. He had met with his employer on 9 December 2014. He complained that the respondent’s solicitor had unreasonably cancelled meetings at the last minute. The applicant also provided a number of emails to the respondent’s representative, relating to settling the matter. This included an invoice to the respondent for $150,000. Ms Hignett acknowledged that the respondent had engaged in settlement discussions with the applicant. The applicant responded that he had agreed to a settlement amount with Mr Ward on 7 December 2014, but the respondent had subsequently reneged on the agreement.

[23] While I accept that the applicant engaged in settlement discussions with the respondent throughout December 2014 and January 2015, it appears that he was seeking compensation and/or repayment on a number of bases. In any event, settlement discussions between the parties do not constitute any impediment to lodging an unfair dismissal application, if only to serve as ‘insurance’, should the negotiations fail. This factor weighs against a grant of an extension of time in this matter.

Prejudice to the employer (s 394(3)(d))

[24] The applicant submitted that there was no prejudice to the respondent. Ms Hignett referred to Prasad v Alcatel-Lucent Australia Ltd (2011) 29 IR 236 and put that the mere absence of prejudice was an insufficient basis to grant an extension of time. The applicant responded that there was no prejudice caused to the respondent as a new bookkeeper had been employed shortly afterwards. This is a neutral factor in my consideration of whether to grant an extension of time.

The merits of the application (s 384(3)(e))

[25] In his Form F2 application, the applicant said he had been accused of misappropriating two Zurich Insurance cheques from Mr Ward’s account into his own account. In fact, he said he had drawn these cheques into the respondent’s account after he had obtained advice from the Australian Tax Office and Zurich Insurance that by drawing down his director’s salary while on extended leave due to serious health issues, Mr Ward may have committed fraud. He and Mr Ward had engaged in a heated discussion about the matter and Mr Ward had said, ‘Go on - get out now - you’re done that’s the end of you’. The applicant described a poor relationship with Mr Ward as constituting ‘mental abuse’ over the period of the previous year. He had been given no notice of any performance issues, no termination letter and his outstanding entitlements had not been paid to him. He said that on 18 December 2014, the respondent’s solicitor had said, ‘Leo has withdrawn any offer to you, as he thinks you have been stealing from him for years.’

[26] In its Form F3 Employer’s response, the respondent said that the applicant had been a contractor providing business management, planning, operational logistics, financial and accounting services and that he employed and managed staff as a contractor. The applicant had not been dismissed. He simply did not return to work after 5 December 2014.

[27] In his written statement, the applicant said that his contract with the respondent was a ‘sham’ and that the respondent had been made aware of this by two chartered accountants. He noted that a signed termination letter given to him by the respondent on 19 December 2014 listed ‘redundancy’ as the reason for his termination. Mr Ward had been seriously ill since July 2014 and the applicant had been running the respondent’s business since that time. Prior to their verbal altercation on 5 December, Mr Ward had not spoken to him since August 2014. He claimed Mr Ward owed him ‘promised gifts’ following his funding of the company so that it could continue trading in 2009.

[28] Ms Hignett maintained that the application had very limited prospects of success because the applicant was engaged as an independent contractor. In addition, the applicant had not been dismissed at the initiative of the respondent. It is telling that the applicant had cancelled his ABN on 7 December 2014.

[29] The applicant referred to the ‘ATO rules’ and maintained that he was an employee of the respondent. He referred to another ‘employee’ and suggested that the respondent had also engaged in a ‘sham’ contracting arrangement with that person. The applicant clarified that he had cancelled his ABN on 20 February 2015, but had told the ATO that 7 December 2014 was the last day he had worked for the respondent.

[30] It is important for applicants to understand that a consideration of the merits of an application, at such an early stage in the proceedings and without the benefit of tested evidence, will only ever be on a prima facie basis. In Kornicki v Telstra Network Technology Group P3168, a Full Bench of the Australian Industrial Relations Commission said:

‘The merits of the substantive application. If the application has no merit then it would not be unfair to refuse to extend the time period for lodgment. However we wish to emphasise that a consideration of the merits of the substantive application for relief in the context of an extension of time application does not require a detailed analysis of the substantive merits. It would be sufficient for the applicant to establish that the substantive application was not without merit.’

[31] The applicant repeatedly referred to rules set out by the Australian Taxation Office in relation to his status as an employee or as a contractor. I note that, while such rules may be a relevant consideration, they are not determinative for the purposes of the Fair Work Act 2009; See: Hollis v Vabu Pty Ltd (2001) 207 CLR 21. The applicant’s status as a contractor or an employee of the respondent is not resolved and would need to be tested by further evidence; although this may represent a further jurisdictional hurdle for the applicant to overcome. It is curious, nevertheless, that the applicant would invoice the respondent for monies allegedly owed to him, if he was not a contractor. However, given the conflicting reasons given by the parties for the applicant’s alleged termination without notice, it cannot be said that the applicant’s case is devoid of merit.

Fairness as between the applicant and other persons in a similar position (s 394(3)(f))
[32] In addressing this criterion, the applicant again identified his difficulties in lodging his application. I refer to my reasons on this point set out above.

CONCLUSION

[33] Having considered and balanced all of the matters which the Commission is required to take into account under s 394(3) of the Act, I am not satisfied that there are ‘exceptional circumstances’ which would warrant the Commission granting an exception to the statutory time limit for the lodgement of this unfair dismissal application. In my opinion, the circumstances, as disclosed by the material submitted by the applicant, are not ‘out of the ordinary course, unusual, special or uncommon’. Even if I am wrong about this conclusion and ‘exceptional circumstances’ had been established, after considering the extensive material filed in this matter, I would decline to exercise my discretion to extend the time for the filing of this application; See: Nulty at para [15]. The application for an unfair dismissal remedy must be dismissed. I confirm my order of 13 March 2015.

DEPUTY PRESIDENT

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Annexure A