Brooke Lesley Kennedy v Yamari Ochre Pty Ltd
[2023] FWC 1982
•9 AUGUST 2023
| [2023] FWC 1982 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Brooke Lesley Kennedy
v
Yamari Ochre Pty Ltd
(U2023/4790)
| COMMISSIONER CRAWFORD | SYDNEY, 9 AUGUST 2023 |
Unfair dismissal application filed out of time
Background
Brooke Kennedy (Ms Kennedy) has made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for an order granting a remedy, alleging that she had been unfairly dismissed from her employment with Yamari Ochre Pty Ltd (Yamari Ochre).
Ms Kennedy was dismissed on 22 December 2022 for alleged serious misconduct and breach of fiduciary duty. Ms Kennedy filed an unfair dismissal application on 31 May 2023.
Yamari Ochre has objected to the application on the ground that the application is out of time.
Before considering the merits of the application, the Commission must determine the jurisdictional issues identified in s.396 of the FW Act, one of which is whether the application was made out of time.[1]
Time limit for an unfair dismissal application
Section 394(2) of the FW Act provides that an unfair dismissal application must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the Commission allows.
Was the Application made within 21 days after the dismissal took effect?
As the Full Bench has stated in relation to a general protections application but equally applicable here, “[t]he 21 day period prescribed… does not include the day on which the dismissal took effect.”[2]
Given Ms Kennedy was dismissed on 22 December 2022, the 21-day period referred to in s.394(2)(a) of the FW Act ended on 12 January 2023. The application was filed on 31 May 2023. There is no dispute between the parties about these dates and hence that the application was filed 139 days outside the 21-day period. As a result, Ms Kennedy needs to rely on the Commission allowing a further period for the filing of the application pursuant to s.394(2)(b) of the FW Act.
Was the application made within such further period as the Commission allows?
Under s. 394(3) of the FW Act, the Commission may allow a further period for an unfair dismissal application to be made if the Commission is satisfied that there are exceptional circumstances, taking into account:
(a) the reason for the delay; and
(b) whether Ms Kennedy first became aware of the dismissal after it had taken effect; and
(c) any action taken by Ms Kennedy 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 Ms Kennedy and other persons in a similar position.
Each of the above matters must be considered in assessing whether there are exceptional circumstances.[3]
Procedural history
On 15 June 2023, I issued directions for the filing of material and listed a hearing/determinative conference regarding the extension of time issue for 4 July 2023. The parties filed material in accordance with the directions. On 3 July 2023, Ms Kennedy wrote to the Commission and indicated she objected to Yamari Ochre being legally represented at the determinative conference/hearing on 4 July 2023 and indicated that if permission was granted, she would seek an adjournment to arrange legal representation.
At the beginning of the determinative conference/hearing on 4 July 2023, I heard the parties on the issue of whether permission should be granted under s.596 of the FW Act for Yamari Ochre to be legally represented. I decided to grant permission on the basis it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. Having reached this conclusion, I heard the parties on the issue of whether Ms Kennedy’s request for the matter to be adjourned to enable her to seek legal representation should be granted. I decided in the circumstances it was appropriate to adjourn the determinative conference/hearing to enable Ms Kennedy to seek legal representation. I was concerned Ms Kennedy would be disadvantaged if I did not adjourn the matter given Yamari Ochre was being represented by an experienced barrister. Yamari Ochre also agreed it would suffer little, if any, prejudice from the adjournment. I decided to list the matter for determinative conference/hearing on 3 August 2023 and granted both parties permission to be legally represented at the determinative conference/hearing.
In addition, I indicated the adjournment provided an opportunity for the parties to address some deficiencies with the filed material which were discussed during the determinative conference/hearing on 4 July 2023. I directed Ms Kennedy to file an amended version of the application which identified remedies falling with the unfair dismissal jurisdiction and Yamari Ochre to provide further material regarding the reason for dismissal. On 25 July, Ms Kennedy's representative sought leave to file an amended F2 and "jurisdictional objection hearing submissions" in addition to clarification on the remedy sought. On 25 July, I granted both parties permission to "file any additional material they wish to rely upon" by 28 July 2023. Both parties filed material in accordance with this direction ahead of the determinative conference/hearing on 3 August 2023.
At the commencement of the determinative conference/hearing on 3 August 2023, I indicated my provisional view was that it was appropriate to conduct a hearing rather than a determinative conference,[4] particularly given both parties were legally represented and intended to cross-examine the other party’s witness. The parties consented to this approach. I determined a hearing would be conducted.
Material filed
Ms Kennedy relied on the following material in support of her request for an extension of time to file an unfair dismissal application:
· Form F2 application dated 31 May 2023;
· Statement of Ms Kennedy dated 23 June 2023. This contained 11 attachments. I marked this Exhibit A1 and Ms Kennedy was cross-examined;
· Amended Form F2 application dated 28 July 2023; and
· Outline of submissions dated 28 July 2023.
Mr Tamas also provided oral closing submissions on behalf of Ms Kennedy at the hearing on 3 August 2023.
Yamari Ochre relied on the following material in opposition to the granting of an extension of time:
· Form F3 employer response date 13 June 2023;
· Statement of Sarah Franks dated 30 June 2023. This contained 13 attachments. I marked this Exhibit R1 and Ms Franks was cross-examined;
· Statement of Ms Franks dated 30 July 2023. This contained 10 attachments. I marked this Exhibit R2 and Ms Franks was cross-examined;
· A tax invoice to Ms Kennedy from Johnson Advisory Pty Ltd dated 22 March 2023. This invoice is for an amount of $180 plus GST for ‘General advice on employee payout and leave entitlements including contact with the Fair Work Ombudsman and General advisory (sic) – Employee Payout’. I marked this Exhibit R3;
· A letter to Ms Franks sent by Chamberlains Law Firm (Chamberlains) on behalf of Ms Kennedy dated 21 December 2022. I marked this Exhibit R4; and
· Outline of submissions dated 30 June 2023.
Mr Foran also provided oral closing submissions on behalf of Yamari Ochre at the hearing on 3 August 2023.
Further material
During Mr Foran’s oral closing submissions at the hearing on 3 August 2023, I requested further submissions about the following legal points:
· Any relevant authorities regarding the extent to which the purported exceptional circumstances need to be linked to the reasons for the delay in filing; and
· Whether the consideration of the merits of the application for the purposes of s.394(3)(e) of the FW Act can involve consideration of what remedy, if any, could be awarded if the Commission determines the dismissal was unfair.
I directed Yamari Ochre to file any further submissions on these issues by 5pm on Friday, 4 August 2023. I indicated Ms Kennedy would be provided with an opportunity to respond to any issues raised in the further submissions by 5pm on Tuesday, 8 August 2023.
Yamari Ochre filed a further submission largely directed at these issues on 4 August 2023 in accordance with my direction.
On 8 August 2023, Ms Kennedy filed a further submission and eight documents which can generally be described as medical evidence.
On 9 August 2023, Yamari Ochre wrote to the Commission objecting to the admission of the further material filed by Ms Kennedy on the basis that ‘the further materials go well beyond a reply to [Yamari Ochre’s] submissions’.
I agreed with the point raised by Yamari Ochre and do not consider there was any legitimate doubt about the scope of reply I permitted for Ms Kennedy. Chambers sent the following response to the parties on 9 August 2023:
“Dear Parties,
The Commissioner has reviewed the further material submitted on behalf of Ms Kennedy and the objection raised by Yamari Ochre Pty Ltd (Yamari Ochre).
The Commissioner has determined that he will not have regard to any of the further material filed on behalf of Ms Kennedy. As identified by Yamari Ochre, the opportunity to file further material was limited to two confined legal issues that arose during the hearing on 3 August 2023. The Commissioner provided Ms Kennedy with an opportunity to respond to the further legal submissions filed by Yamari Ochre. This was not an invitation at large to file further evidence and submissions.
While the Commissioner is conscious of the difficulties faced by Ms Kennedy and that various legal representatives have been involved in her case, admitting this further evidence and submissions would mean that Yamari Ochre would have to be provided with an opportunity to respond and may mean a further hearing would need to be conducted to enable cross-examination to occur. In circumstances where the parties have already been provided with various opportunities to file material and an adjournment of the initial hearing date was granted at Ms Kennedy’s request, the Commissioner is not prepared to further delay the proceedings.
The Commissioner also notes the further evidence filed on behalf of Ms Kennedy appears to relate to events earlier in the year and it is not apparent why this evidence could not have been filed at an earlier time. Further, the evidence appears to relate to issues that have already been raised in the proceedings and would fall into a category of an improvement to the existing evidence, rather than the raising of any materially new issues.
The Commissioner has indicated his decision on the extension of time issue will be issued this week.”
Summary of the evidence
I have considered all the evidence relied on by the parties. The following is a summary of some key aspects of the evidence. I have attempted to minimise the disclosure of commercial information.
Ms Kennedy
Ms Kennedy’s statement dated 23 June 2023 provided the following evidence in support of her request for an extension:
· Ms Kennedy’s termination letter dated 22 December 2022;
· Ms Kennedy engaged Chamberlains on 23 December 2022 following receipt of the termination letter. This led to Chamberlains writing an email to Ms Franks on 23 December 2022 headed ‘Withdrawal of purported termination’. The email indicated Ms Kennedy intended to continue in her role in the absence of any evidence from Ms Franks in support of the dismissal. Mr Kennedy continued in her role until 13 February 2023 when she handed her phone and computer back to Ms Franks;
· A shareholders meeting was held on 24 January 2023. Ms Franks owns 51% of the shares in Yamari Ochre and Ms Kennedy the other 49%. At the meeting, Ms Franks used her majority votes to carry a series of resolutions against Ms Kennedy. Ms Kennedy caused her solicitor to email Ms Franks’ lawyers, Argyl Law, following this meeting to reserve all her rights;
· On 3 February 2023, a without prejudice meeting was held between Chamberlains and Argyl Law.
· On 13 February 2023, Ms Franks collected Ms Kennedy’s work phone and laptop;
· On 1 March 2023, it was confirmed that Ms Kennedy’s husband would require chemotherapy because his cancer had spread;
· On 13 March 2023, Chamberlains sent an offer letter to Argyl Law which proposed that Ms Kennedy would accept her employment terminated on 22 December 2022 if an amount of $38,498.70 was paid to her for outstanding entitlements;
· On 6 April 2023, Ms Kennedy gave birth to her third child via a caesarean section. Ms Kennedy indicated she was under extreme stress and anxiety during the last four months of her pregnancy and had experienced preeclampsia during her first pregnancy. This was substantiated by medical evidence from 2018. Ms Kennedy was encouraged to avoid stress to reduce the risk of this condition occurring again. Ms Kennedy attached a letter on NSW Health letterhead indicating she was referred to the Social Work Antenatal service by a midwife on 17 January 2023 for assessment and support due to work stressors; and
· Ms Kennedy’s husband commenced chemotherapy on 17 April 2023. He is required to attend hospital two days per week and needs transport to and from the hospital and home care following the treatment. He is also on daily chemotherapy and immunotherapy medication. The treatment was substantiated by an attached medical certificate from Dr Simran Dhugga on behalf of Dr Xaiver Badoux (Specialist) dated 16 June 2023.
Ms Kennedy was cross-examined during the hearing on 3 August 2023. Ms Kennedy presented as a truthful and genuine witness. Ms Kennedy gave evidence that she was not aware of the unfair dismissal jurisdiction until some time in March 2023 when it was mentioned by a family friend. Ms Kennedy stated Chamberlains did not advise her about the unfair dismissal jurisdiction or the 21-day timeframe while she engaged them from 23 December 2023 until around March 2023. Ms Kennedy gave evidence she is not familiar with legal processes and relied on advice from her legal representatives. Ms Kennedy admitted her husband was able to fly to Queensland to attend a Gala Dinner on 6 May 2023. Ms Kennedy was extensively questioned about the steps she was able to take after 22 December 2022, despite the various issues she was dealing with, including instructing Chamberlains and attending a shareholder meeting on 24 January 2023. Ms Kennedy stated that although Chamberlains threatened litigation on her behalf, she did not ultimately commence proceedings in relation to the shareholder dispute because she was ‘not capable of doing anything’. Ms Kennedy maintained she was ‘highly stressed’ from 22 December 2022 onwards. Ms Kennedy stated that she spoke with a solicitor named Liam from Assembly Law prior to filing her unfair dismissal application on 31 May 2023. This is why the firm’s name appears on the original unfair dismissal application from.
Ms Franks
Ms Franks’ statement dated 30 June 2023 indicated she terminated Ms Kennedy’s employment on 22 December 2022. The statement then referred to, and attached, various correspondence between Ms Kennedy and Ms Franks, and their legal representatives, from 23 December 2022 to 10 February 2023. The statement indicated Yamari Ochre has engaged employees to replace Ms Kennedy since her departure and that Ms Kennedy has not commenced any other proceedings against it.
Ms Franks’ statement dated 30 July 2023 provided further information about the operations of Yamari Ochre and the reason for Ms Kennedy’s dismissal. Ms Franks stated:
· A discussion occurred between Ms Kennedy and Ms Franks on approximately 29 July 2022 where Ms Kennedy indicated she did not want to work full-time for Yamari Ochre anymore. This subsequently led to steps being taken to look for additional staff. The recruitment process led to a review of expenditure so an affordable salary rate could be identified;[5]
· The review of expenditure identified that a business operated by Ms Kennedy’s husband, Corporate Branding Solutions Pty Ltd t/as 1800 for Promo (1800), was Yamari Ochre’s third biggest expenditure item, including rent. Ms Franks stated she was not aware that 1800 had been engaged to provide many of the relevant services to Yamari Ochre.[6] Ms Franks became concerned around this time that Ms Kennedy was diverting business away from Yamari Ochre and towards 1800;[7]
· A meeting occurred on 8 December 2022 between Ms Franks, Ms Kennedy, their husbands and a prospective employee. Ms Franks’ husband suggested a salary in excess of that received by Ms Kennedy, given the prospective employee’s qualifications and experience. Ms Kennedy appeared offended and subsequently emailed Ms Franks to communicate this;[8]
· On 9 December 2022, Ms Franks noticed in Xero records that Ms Kennedy’s salary had been increased without her knowledge. Further issues arose on 9 December 2022 regarding the approval of payments by Yamari Ochre to 1800;[9]
· On 10 December 2022, Ms Franks became aware Ms Kennedy had placed a hold on Yamari Ochre’s NAB accounts;[10]
· On 12 December 2022, Ms Franks became aware her access to some Yamari Ochre files had been restricted, including a document containing relevant passwords;[11]
· On 13 December 2022, Ms Franks lost all access to emails, passwords and files relating to the Yamari Ochre business. Around this time, Ms Franks observed that Ms Kennedy had changed her title on her LinkedIn page to ‘Managing Director’ of Yamari Ochre which was problematic due to accreditation requirements;[12]
· On 14 December 2022, Ms Franks was informed that a significant number of files had been deleted from Yamari Ochre’s Google Drive folder, including artwork;[13]
· On 22 December 2022, Ms Franks summarily terminated Ms Kennedy’s employment and subsequently engaged a forensic expert to restore her access to Yamari Ochre’s files and accounts and review actions potentially taken by Ms Kennedy;[14] and
· The forensic report raised further concerns about Ms Kennedy’s conduct including that she was forwarding phone enquiries made to Yamari Ochre directly to 1800.[15]
Ms Franks was cross-examined and presented as a truthful witness. Ms Franks admitted Yamari Ochre did not have a policy regarding file management and that she did not know it was Ms Kennedy that deleted the relevant files. Ms Franks also admitted Ms Kennedy’s husband was a previous owner of Yamari Ochre and it was intended that Yamari Ochre and 1800 would work together. Ms Franks confirmed Yamari Ochre was renting its premises from 1800.
Summary of the submissions
Ms Kennedy
Ms Kennedy submitted that the delay in filing was caused by the following reasons:
· Ms Kennedy sought legal advice immediately after receiving the termination letter on 22 December 2022 and was not informed by Chamberlains about the unfair dismissal jurisdiction or the 21-day filing period. Chamberlains attempted to negotiate a commercial resolution on Ms Kennedy’s behalf and sought further information about the reason for dismissal which was not provided by Yamari Ochre;
· Ms Kennedy became aware that her husband’s medical condition was becoming more serious from around December 2022 onwards and on 1 March 2023 it was confirmed that the cancer had spread and chemotherapy was required;
· Ms Kennedy was heavily pregnant in early 2023 leading up to the birth of her third child on 6 April 2023. Ms Kennedy was concerned the stress associated with her work dispute may have caused preeclampsia, which she suffered in her first pregnancy; and
· After giving birth, Ms Kennedy was the primary caretaker for her husband, her newborn baby and two other children.
Ms Kennedy submitted she provided full instructions to Chamberlains and was not provided with the ‘best advice available’.[16]
Ms Kennedy submitted she was heavily stressed from the employment dispute and family circumstances and filed evidence to purportedly substantiate that mental incapacity prevented her from lodging within the 21-day timeframe.
Ms Kennedy submitted there was no valid reason for her dismissal and there were substantial procedural fairness deficiencies. As a result, the merits of the case weigh in favour of the granting of an extension.
Ms Kennedy submitted there has been no prejudice to Yamari Ochre and if the Commission finds some has been suffered, this has been significantly contributed to by its conduct during the dismissal process.
Ms Kennedy submitted extensions have been granted in other similar circumstances and it would be unfair if an extension is not allowed to Ms Kennedy.
Yamari Ochre
Yamari Ochre submitted it was clear the effective date of Ms Kennedy’s dismissal was 22 December 2022 and that she became aware of the dismissal on that date.
Yamari Ochre highlighted that Ms Kennedy’s pregnancy, her health and her husband’s medical condition did not prevent her taking various steps to instruct lawyers from 23 December 2022 until at least 10 February 2023. Yamari Ochre also highlighted that Ms Kennedy was able to attend a shareholders’ meeting on 24 January 2023. Yamari Ochre submitted Ms Kennedy has failed to provide evidence to substantiate why these factors prevented her from filing an unfair dismissal application. For example, Yamari Ochre highlighted that Ms Kennedy’s husband was able to travel to Queensland for a Gala Dinner on 6 May 2023 which demonstrates she was not required to provide care 24-hours per day, seven days per week. Yamari Ochre further identified that Ms Kennedy was able to file an unfair dismissal application on 31 May 2023, despite still having all her caring responsibilities.
Yamari Ochre submitted Ms Kennedy disputed the reason for her dismissal but made a conscious decision not to bring proceedings until 31 May 2023.
Yamari Ochre submitted that it suffered prejudice from the late filing because it was entitled to assume Ms Kennedy would have commenced proceedings within 21 days and because two employees have been hired since Ms Kennedy was dismissed. Yamari Ochre also referred to a general presumption that a long delay causes prejudice.[17]
Yamari Ochre submitted that the argument around representative error was not previously raised by Ms Kennedy and no evidence has been adduced by Ms Kennedy regarding whether Chamberlains advised her of the filing deadline or not. Yamari Ochre submitted evidence from the relevant law firm would normally be adduced.
Yamari Ochre referred to authorities establishing that stress from dismissal will not, without more, favour a finding of exceptional circumstances.[18]
Yamari Ochre largely accepted there were procedural fairness deficiencies with the dismissal because Ms Kennedy was not provided with details about the reason for dismissal or an opportunity to respond before the decision was made. However, Yamari Ochre submitted the merits of the application is a neutral factor given there are substantial factual disputes that need to be resolved to determine whether there was a valid reason for dismissal. Further, Ms Kennedy seeks compensation and the application of the formula from Sprigg[19] is unlikely to result in any relief.
Consideration
When did the dismissal take effect?
The correspondence between Chamberlains and Argyl suggests there was initially a dispute about whether Ms Kennedy had been dismissed on 22 December 2022. However, this point was not pressed by Ms Kennedy as part of the unfair dismissal application. I accept Ms Kennedy’s dismissal took effect on 22 December 2022 as specified in the termination letter.
When was the application made?
There is no dispute that Ms Kennedy filed her unfair dismissal application on 31 May 2023.
Reason for the delay
For the application to have been made within 21 days after the dismissal took effect, it needed to have been made by midnight on 12 January 2023. The delay is the period commencing immediately after that time until 31 May 2023, although circumstances arising prior to that delay may be relevant to the reason for the delay.[20]
The reason for the delay is not in itself required to be an exceptional circumstance. It is one of the factors that must be weighed in assessing whether, overall, there are exceptional circumstances.[21]
Ms Kennedy does not need to provide a reason for the entire period of the delay. Depending on all the circumstances, an extension of time may be granted where the Ms Kennedy has not provided any reason for any part of the delay.[22]
The reasons identified by Ms Kennedy for the delay are:
· Ms Kennedy was not aware about the unfair dismissal jurisdiction, or the 21-day filing period, until the jurisdiction was mentioned by a family friend in mid-March 2023;[23]
· On 1 March 2023, it was confirmed that Ms Kennedy’s husband would require chemotherapy because his cancer had spread.[24] This added to the stress Ms Kennedy was feeling from the dispute with Yamari Ochre which was exacerbated because she was heavily pregnant and concerned about developing preeclampsia again;[25]and
· Ms Kennedy gave birth to her third child via a caesarean section on 6 April 2023;[26] and
· Ms Kennedy’s husband commenced chemotherapy treatment on 17 April 2023;[27] and
· Ms Kennedy has been the primary carer for her husband and three young children, including a newborn, since around 6 April 2023.[28]
It is well established that ignorance of the statutory time limit is not an exceptional circumstance.[29] However, this case is more complicated in that Ms Kennedy clearly sought legal assistance immediately after her dismissal. There is no conclusive documentary evidence to establish whether Chamberlains advised Ms Kennedy about the unfair dismissal jurisdiction or the 21-day timeframe for filing an application. Ms Kennedy was adamant they did not and presented as a truthful witness under cross-examination from an experienced barrister. I accept there is merit in Yamari Ochre’s point that Ms Kennedy bears the onus of establishing exceptional circumstances and she could have led further evidence from Chamberlains. On balance, I am prepared to accept her evidence that she gave all relevant information to Chamberlains and was not advised about the jurisdiction or timeframe. I am satisfied this explains the delayed filing until March 2023.
Ms Kennedy has admitted she became aware of the unfair dismissal jurisdiction from a family friend at some point in March 2023 and the application was not filed until 31 May 2023. It is clear from the evidence that:
· Ms Kennedy sought treatment for stress from The Sutherland Hospital Antenatal Service and Social Work Antenatal service after being referred on 17 January 2023 and was a patient before giving birth in April 2023. It is not clear what level of treatment Ms Kennedy received and the letter from Priscilla Craig dated 20 June 2023 does not appear to constitute a medical diagnosis.[30] I accept Ms Kennedy suffered from preeclampsia during a previous pregnancy in 2018 and that she was encouraged to try and minimise stress ahead of the birth;[31]
· Ms Kennedy’s husband attended an appointment on 1 March 2023 and a follow-up appointment with Dr Badoux on 29 March 2023. Ms Kennedy’s husband was diagnosed with multiple myeloma formally on a bone marrow biopsy on 27 March 2023 and has undergone chemotherapy since 17 April 2023. He will be undergoing a stem cell transplant in the near future. Ms Kennedy has been required to care for her husband during this period;[32] and
· Ms Kennedy gave birth to her third child via a caesarean section on 6 April 2023.[33]
I have had difficulty assessing the extent to which this evidence explains the significant delay in Ms Kennedy filing her unfair dismissal application. I am satisfied Ms Kennedy has established she was dealing with a range of very serious challenges from March 2023 onwards that would have made it harder for her to arrange the filing of an unfair dismissal application than would ordinarily be the case. However, I am not satisfied the evidence establishes it was not possible at all for Ms Kennedy to arrange the filing of an unfair dismissal application, despite all these serious challenges. I also accept the submission from Yamari Ochre that Ms Kennedy was still facing many of the same, or similar challenges, when she ultimately filed an unfair dismissal application on 31 May 2023.
I am not prepared to find this factor weighs against a finding of exceptional circumstances, given I have accepted on balance that Chamberlains did not advise Ms Kennedy about the unfair dismissal jurisdiction or filing deadline prior to March 2023 and because Ms Kennedy has clearly established with supporting evidence that she was dealing with a range of serious personal challenges from March 2023 onwards. These challenges did not mean she was completely unable to arrange the filing of an unfair dismissal claim, but they made it much more difficult for her than would ordinarily be the case.
I am also not prepared to find this factor weighs in favour of a finding of exceptional circumstances, despite Ms Kennedy’s serious personal challenges, because I am not satisfied the evidence establishes these challenges completely explain why she failed to file an application until 31 May 2023.
I find the reason for the delay to be a neutral factor in this case.
Did Ms Kennedy first become aware of the dismissal after it had taken effect?
Ms Kennedy was notified of the dismissal on the same day that it took effect and therefore had the benefit of the full period of 21 days to lodge the unfair dismissal application.
What action was taken by Ms Kennedy to dispute the dismissal?
It is clear Ms Kennedy was aggrieved by her dismissal and took immediate steps to engage Chamberlains to protect her rights. This included initially asserting that the termination should be withdrawn.[34] The matter then progressed into a further dispute about shareholder rights under the Corporations Act 2001 (Cth)[35] and a dispute about termination entitlements.[36] A significant amount of correspondence was exchanged between the parties in relation to these issues, as demonstrated by the attachments to Ms Kennedy’s statement and Ms Franks’ statement.
I have difficulty accepting these broader disputes should count against Ms Kennedy in terms of assessing actions she took to dispute the dismissal, particularly given Ms Franks was the one who called the shareholder meeting for 24 January 2023 and used that meeting to ‘ratify the termination’ of Ms Kennedy’s employment.[37] It also appears likely there is a genuine dispute about termination entitlements for Ms Kennedy. It appears to me these matters are in addition to, rather than in lieu of, a dispute about Ms Kennedy’s dismissal.
I find the evidence establishes the parties were in dispute about a range of matters from 22 December 2022 onwards, including Ms Kennedy’s dismissal, the ownership of shares in Yamari Ochre and any termination entitlements owed to Ms Kennedy.
I find Ms Kennedy was taking various steps to dispute all of these issues from 22 December 2022 and was relying on advice from Chamberlains in relation to what course to follow, at least until 13 March 2023.[38] From that point, the actions she was taking to dispute these issues reduced, but that appears to be explained by her pregnancy and the increasing severity of her husband’s medical condition. Ms Kennedy gave evidence she instructed Chamberlains ‘not to file anything’ in March 2023 as she was ‘not capable of doing anything’. I accept this evidence and consider it reflects that Ms Kennedy’s personal challenges had progressed to a point where they were all consuming and taking clear precedence over any legal issues. I see no evidence that Ms Kennedy has walked away from disputing any of these issues since 13 March 2023.
I find this factor weighs in favour of a finding of exceptional circumstances.
What is the prejudice to the employer (including prejudice caused by the delay)?
As submitted by Yamari Ochre, a long delay gives rise to a presumption of prejudice.[39] I am satisfied that a delay of 139 days constitutes a ‘long delay’. I am also satisfied Yamari Ochre was entitled to assume an application would be filed within the 21-day period and that employees were hired after the dismissal took effect, although I note Ms Kennedy does not seek reinstatement. I accept Yamari Ochre is prejudiced by the delay and that this weighs against a finding of exceptional circumstances.
What are the merits of the application?
Given the vastly different accounts of what led to Ms Kennedy’s dismissal on 22 December 2023 and the unusual circumstances of this case, whereby Ms Kennedy also holds 49% of shares in Yamari Ochre, I do not consider it is possible to form any preliminary view about whether a valid reason for dismissal exists.
However, it does appear Ms Kennedy has strong arguments that she was not notified of the reason for dismissal or provided with an opportunity to respond prior to the decision being made.[40]
I am not satisfied there is sufficient evidence to conclude that Ms Kennedy would not be entitled to any remedy as a result of the application of the Sprigg[41] formula as submitted by Yamari Ochre. I note Ms Kennedy gave oral evidence that she remains unemployed, and I have no evidence about whether an order would impact on Yamari Ochre’s viability.
I was not addressed on any other matters that may be significant for the purposes of s.387 of the FW Act.
Given the other factors appear neutral and Ms Kennedy has strong arguments concerning procedural fairness, I find the merits of the application weighs in favour of a finding of exceptional circumstances.
Fairness as between Ms Kennedy and other persons in a similar position
Ms Kennedy made a brief written submission that it would be unfair not to grant her an extension because other persons in similar situations have been granted extensions. That submission was not expanded upon with reference to other cases and all the circumstances of this case. I consider this to be a neutral factor as submitted by Yamari Ochre.
Is the Commission satisfied that there are exceptional circumstances, taking into account the matters above?
I must now consider whether I am satisfied that there are exceptional circumstances, taking into account my findings above.
Briefly, exceptional circumstances are circumstances that are out of the ordinary course, unusual, special or uncommon but the circumstances themselves do not need to be unique nor unprecedented, nor even very rare.[42] Exceptional circumstances may 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 can be considered exceptional.[43] The test of ‘exceptional circumstances’ establishes a ‘high hurdle’ for an applicant for an extension.[44]
Having regard to all of the matters at s.394(3) of the FW Act, I am satisfied that there are exceptional circumstances.
The main reasons for arriving at this decision are the extensive steps Ms Kennedy took to dispute her dismissal and other grievances with Yamari Ochre since 22 December 2022 and because Ms Kennedy appears to have a strong argument that she was not notified of the reason for dismissal or given an opportunity to respond prior to the decision being made. I consider these factors marginally prevail over the prejudice suffered by Yamari Ochre from the delay.
In Ho v Professional Services Review Committee No 295,[45] Rares J provided the following practical example of what constitutes exceptional circumstances with reference to the same test in predecessor legislation:
“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.”
I do not consider that the messy circumstances of Ms Kennedy’s dismissal being part of a broader dispute about shareholdings in Yamari Ochre to be a ‘usual’ event in an unfair dismissal context. Nor do I accept it is part of the usual course of events to be dealing with these significant disputes while discovering a spouse’s cancer has spread and that chemotherapy and a stem cell transplant is required. I also do not consider dealing with a pregnancy, giving birth via a caesarean section and then having to care for a spouse and three children, one being a newborn, is an unexceptional event like the sun and moon being seen ‘simultaneously during day-time’.
While I was not satisfied these factors were sufficient to establish that the reasons for the delay in filing should weigh in favour of a finding of exceptional circumstances, I consider they are collectively, in addition to Chamberlains not advising Ms Kennedy about the filing deadline, ‘exceptional circumstances’ within the meaning of s.366(2) of the FW Act. I note the Full Bench in Stogiannidis[46] stated:
“It is not a pre-condition to the grant of an extension of time that the applicant provide a credible explanation for the entire period of the delay. Indeed, depending on the circumstances, an extension of time may be granted where the application has not provided any explanation for any part of the delay.”
Conclusion
Being satisfied that there are exceptional circumstances, the Commission may consider whether to allow a further period for the application to be made.
Having regard to those exceptional circumstances and the object stated at s.381(2) of the FW Act to ensure that a “fair go all round” is accorded, the Commission is satisfied that it is appropriate to extend the period for the application to be made to 31 May 2023.
Further note
The circumstances of this case are extremely unfortunate. It is clear Ms Kennedy and Ms Franks, and their families, were previously close in a personal and business sense. It is equally clear that there has been a serious, and potentially irreparable, breakdown in those relationships. However, Ms Kennedy remains a 49% shareholder in Yamari Ochre and there are various outstanding matters between the parties. These issues all need to be resolved at some point. That may occur through a series of legal proceedings in various jurisdictions. But that will be a very costly and time-consuming process and the outcomes will not be controlled by the parties. I have previously suggested the parties split the cost of an independent mediator to try and resolve the various issues between them so they can move on with their lives. I reiterate that suggestion here.
COMMISSIONER
Appearances:
M Tamas for the Applicant
M Foran for the Respondent
Hearing details:
2023.
Sydney (in person);
4 July.
2023.
Sydney (in person);
3 August.
[1] Section 396 of the FW Act.
[2] Singh v Trimatic Management Services Pty Ltd [2020] FWCFB 553, [10]. See also Acts Interpretation Act 1901 (Cth) s 36(1) as in force on 25 June 2009; Fair Work Act 2009 (Cth) s 40A.
[3] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd [2018] FWCFB 901, [39].
[4]Section 399 restricts the Commission’s ability to conduct hearings for unfair dismissal applications.
[5] Ms Franks’ statement at [11], [12] and [13].
[6] Ms Franks’ statement at [14].
[7] Ms Franks’s statement at [15].
[8] Ms Franks’ statement at [16].
[9] Ms Franks’ statement at [18].
[10] Ms Franks’ statement at [19].
[11] Ms Franks’ statement at [20].
[12] Ms Franks’ statement at [22].
[13] Ms Franks’ statement at [23].
[14] Ms Franks’ statement at [24] to [26].
[15] Ms Franks’ statement at [27].
[16] Edwards v Tiger Airways Australia Pty Ltd [2017] FWC 4021.
[17] Mr Evan Skinner v The Hospitals Contribution Fund of Australia Ltd T/A HCF [2020] FWCFB 6882 at [33].
[18] Emily Jane Di Pretoro v Christian Schools Tasmania [2023] FWCFB 59.
[19] Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21.
[20] Shaw v Australia and New Zealand Banking Group Ltd [2015] FWCFB 287, [12] (Watson VP and Smith DP).
[21] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901, [39].
[22] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901, [40].
[23] Ms Kennedy’s oral evidence during the hearing.
[24] Ms Kennedy’s statement and attached text messages.
[25] Ms Kennedy’s oral evidence and medical discharge notes from 2018 attached to her statement.
[26] Ms Kennedy’s oral evidence and a Proof of Birth declaration attached to her statement.
[27] Medical report from Dr Dhugga on behalf of Dr Badoux dated 16 June 2023 and attached to Ms Kennedy’s statement.
[28] Ms Kennedy’s oral evidence, her statement and medical report from Dr Dhugga on behalf of Dr Badoux dated 16 June 2023 and attached to Ms Kennedy’s statement.
[29] Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975 at [14].
[30] The letter dated 20 June 2023 is attached to Ms Kennedy’s statement.
[31] Ms Kennedy’s statement and discharge notes attached to her statement.
[32] Letter from Dr Dhugga on behalf of Dr Badoux dated 16 June 2023, attached to Ms Kennedy’s statement.
[33] Proof of birth declaration attached to Ms Kennedy’s statement and her oral evidence.
[34] Email from Mr d’Apice dated 23 December 2022, attached to Ms Kennedy’s statement.
[35] For example, Ms Hucke’s email dated 12 January 2023, attached to Ms Franks’ statement.
[36] For example, Ms Preston’s email dated 13 March 2023, attached to Ms Kennedy’s statement.
[37] Meeting Transcript attached to Ms Franks’ statement.
[38] See Ms Preston’s email dated 13 March 2023, attached to Ms Kennedy’s statement.
[39] Mr Evan Skinner v The Hospitals Contribution Fund of Australia Ltd T/A HCF [2020] FWCFB 6882 at [33].
[40] Crozier v Palazzo Corporation Pty Ltd t/as Noble Park Storage and Transport (Ross VP, Acton SDP, Cribb C, AIRC [Print S5897] 11 May 2000).
[41] Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21.
[42] Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975, [13].
[43] Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975, [13].
[44] Lombardo v Commonwealth of Australia represented by the Department of Education, Employment and Workplace Relations [2014] FWCFB 2288 at [21].
[45] [2007] FCA 388.
[46] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901 at [40].
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