Carolyn Cann v Rockdrill Services Australia Pty Ltd

[2014] FWC 701

[2014] FWC 701

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Carolyn Cann
v
Rockdrill Services Australia Pty Ltd
(U2013/3457)

COMMISSIONER GREGORY MELBOURNE, 11 FEBRUARY 2014

Application for extension of time.

Introduction

[1] Ms Carolyn Cann has been employed by Rockdrill Services Australia Pty Ltd (Rockdrill) as a finance/administrative assistant since April 2012. In September 2013 she was told her role was to be outsourced. She was also told Rockdrill did not have other suitable redeployment options for her. She was therefore made redundant on 9 September 2013.

[2] Ms Cann was disappointed by this decision but did nothing in response within the 21 day statutory time period in which to lodge an unfair dismissal application. However, on 18 October 2013 she met with a former work colleague who said her role had been “backfilled” by another person. This discussion caused Ms Cann to question whether her “role was genuinely redundant” 1 and further to this she stated:

“...had I been made aware earlier of the situation then I would have submitted my application within the required timeframe.” 2

[3] The discussion with her former colleague took place on Friday 18 October 2013. Ms Cann lodged her unfair dismissal application three days later on Monday 21 October 2013, twenty-one days after the expiry of the statutory period.

The Issue to Be Decided

[4] Section 394(3) of the Fair Work Act 2009 (Cth) enables a further period for an application to be made if the Commission is satisfied there are “exceptional circumstances,” taking into account the various matters specified in the sub section. Therefore, are there “exceptional circumstances” in this case to justify Ms Cann being granted an extended period in which to lodge her application?

The Evidence and Submissions

[5] Ms Cann was made redundant on 9 September 2013 following separate discussions with one of the directors of Rockdrill, Mr Clingeleffer. She said she was told at the time the decision was made because the Company had decided to outsource her functions. She was disappointed by the decision but did not take action during the subsequent 21 day period to lodge an unfair dismissal application. However, on 18 October she met with one of her former colleagues, simply for the purpose of a “catch up.” Her former workmate told Ms Cann she believed her role had been “backfilled” by another person and from what she understood this situation was to be ongoing.

[6] Ms Cann was disappointed and annoyed by what she heard and proceeded to lodge an unfair dismissal application, believing her dismissal was not a case of “genuine redundancy.” The discussion with her former colleague took place on Friday afternoon and she proceeded to lodge her application on the following Monday.

[7] Ms Cann said she was particularly disappointed because she believed Rockdrill had decided she did not have the skills and abilities to take on what she understood to be an ongoing role. These concerns were accentuated by the content of an email she had seen dated 28 August 2013 from Debra Rogers, the Finance Administrator at Rockdrill, to an accounting firm that provided services to the Company. Ms Cann had previously reported to Ms Rogers. The subject matter of the email was indicated to be “New position – sent off for action this morning.” It continued to indicate:

“After sleeping on it last night, Andrew and I both agreed that this should be the way we go with assistance in here, and that the Jenny situation should be treated separately.

Carolyn is off again today but hopefully back tomorrow.

Currently everything is about a week behind but I will try my best to catch up (as you know things keep cropping up). Just keeping you in the loop.” 3

[8] Attached to the email was a document headed “Job Description – Senior Bookkeeper,” which set out the various requirements of the proposed role. Ms Cann believed this was an ongoing position within Rockdrill, and one she was qualified to take on given her extensive experience and abilities, and the description of the duties involved. It also proposed a salary that was $5,000 less p.a. than what she was earning.

[9] However, she submits she was not in a position to take up these issues with her former employer until the information gained in the discussions on 18 October with her former colleague. Until that point she had no reason to doubt what she had been told by Rockdrill about her role being outsourced and her position being made redundant.

[10] However, Ms Cann did indicate in cross examination she had “my suspicions” 4 about the possibility of being replaced prior to the discussions on 18 October and she had, in fact, been in contact with a law firm about those concerns.5 This occurred prior to her dismissal6 and the first occasion was “... probably around the first week of August.”7 She followed up those discussions on at least two further occasions.

[11] She also confirmed in answers provided to the Commission that she had concerns about her situation at Rockdrill in the weeks leading up to her termination. She had sought legal advice on more than one occasion as a result of those concerns, and was made aware in those discussions about the 21 day time period provided for by the Fair Work Act for lodging an unfair dismissal application. She also acknowledged in cross-examination there was nothing actually preventing her from lodging an application within that time period.

[12] Ms Cann’s submissions also sought to rely on the decision of Deputy President Sams in Rodney Cross, Karin Thompson and Denis Payne v Bananacoast Community Credit Union Ltd T/A BCU 8(Bananacoast). In that matter three employees obtained information a month after being told they were redundant, which convinced them that their terminations were not for reasons of genuine redundancy. They subsequently sought to argue that these were “exceptional circumstances” and warranted an extended period being granted in which to lodge their unfair dismissal claims. Sams DP summarised their argument in the following terms:

“Shortly stated, the ‘exceptional circumstances’ relied upon was the view that their redundancies were not genuine and had they known, at the time, what they know now, they would have challenged the fairness of their terminations of employment.” 9

[13] Ms Cann submitted the key aspect of that decision was DP Sams’ finding that there was at least a prima facie case of the employee’s concerns being reasonably held. Her submissions made reference to the following extract from the decision:

“In my view, this is a rare and unusual case. I am satisfied that an honestly and reasonably held belief that an earlier redundancy may not have been genuine, and the belief is based on plausible information, may constitute ‘exceptional circumstances’ for the purposes of s 394(3) of the Act. It follows that I reject Ms Paterson’s submission that a dismissal cannot be unfair based on matters that occur after the dismissal took effect.” 10

In her submission she was in a similar situation.

[14] Rockdrill submits Ms Cann’s termination is a case of genuine redundancy as a result of its decision to outsource the functions she previously performed. It canvassed a range of options before coming to this decision. The email dated 28 August from Ms Rogers, referred to by Ms Cann, was one example of these options under consideration. It was finally rejected in favour of the decision to outsource the functions.

[15] Mr Clingeleffer is the Manufacturing Manager and a Director of Rockdrill. He met with Ms Cann on 4 September 2013 and indicated a restructure within the organisation was likely to mean her role would be made redundant. The content of those discussions was confirmed in a letter provided to Ms Cann later that day. It stated in part:

“As discussed, we have also looked at whether redeployment to another role within RDSA is possible for you.

I would welcome any input from you as to how we may be able to lessen the impact the restructure will have on your employment with us and ask that you provide that to myself by end of business Thursday 5th September 2013.

I will be in contact with you again shortly when we know the full implications of the restructure on your employment with us. You are welcome to bring a support person to this meeting if you wish.” 11

[16] Mr Clingeleffer said it was then confirmed the position would be outsourced and he met again with Ms Cann on 6 September to confirm this outcome. He also indicated a review of the organisation had determined no other opportunities were available for redeployment elsewhere. Ms Cann was then advised her termination would take effect from close of business Monday 9 September 2013.

[17] Rockdrill acknowledges another person was brought into the business for a short period of time during the transition to the new outsourced arrangements, but that person was not engaged as an employee. She was instead a contractor provided by a labour hire company. She performed duties that were significantly different from those performed by Ms Cann, and the labour hire firm was paid an hourly rate well in excess of the rate paid to Ms Cann.

[18] Rockdrill also submits the person who met with Ms Cann in October, following her termination, was physically located in another building and had no direct involvement or understanding of the processes of change and restructure being implemented that finally resulted in Ms Cann being made redundant.

[19] Rockdrill also sought to distinguish the decision in Bananacoast on several grounds. It noted, in particular, that the employees in that matter received information from various sources and reviewed and discussed that information with each other before deciding to proceed with their applications. The information they relied upon was, accordingly, considered and constituted “plausible information” compared with that relied upon by Ms Cann. It also submits evidence of representative error was a factor in the decision.

[20] Rockdrill also made submissions about the various matters in s.394(3) the Commission is required to have regard to. It submitted, firstly, there is nothing exceptional about the reason for the delay in making application and:

“...it hardly unusual or rare for an employee to hear about and misinterpret changes which have occurred at a former workplace and to feel hard done by, without knowing the full story.” 12

Secondly, it submitted Ms Cann was aware of her dismissal from the time it occurred, and there was nothing preventing her from lodging an application in the 21 day period that followed.

[21] Thirdly, Rockdrill submits Ms Cann took no action to dispute her dismissal during the 21 day period, despite having previously had discussions with a law firm on several occasions about her concerns. In this context it made reference to the following extract from the decision of DP Sams in Bananacoast when he stated:

“As an aside, I just do not understand why parties choose to wait in such circumstances. After all, the forms and the application of simple in general in nature and can be readily downloaded from the FWA website. Applications can always be discontinued, at any stage, if the Union came to the conclusion that the claims were unmeritorious.” 13

[22] It also submits it would be significantly prejudiced, particularly as a small manufacturing business already dealing with a downturn in the mining industry, if it were now required to respond to an unfair dismissal application pursued by Ms Cann. It also submitted there was little evidence of merit in terms of the substantive application. Ms Cann had been informed of the decision to terminate her employment, and the reason why that decision had been made. She was told there were no suitable redeployment options. Her position has not been “backfilled by another employee.” 14 A labour hire person had instead been placed in the business on a short-term basis carrying out different tasks from those performed by Ms Cann as part of the transition to the new outsourced arrangements. It also submits Ms Cann’s belief that her termination was not a case of genuine redundancy is based on two misconceptions. Firstly, the email dated 28 August was only one of several options being considered. It was not a final position and was ultimately not the decision implemented. Secondly, the former colleague she met with on 18 October was not in a position to know what was happening in terms of the outsourcing of the finance/administrative arrangements, and this was borne out by the fact the information she conveyed in the meeting with Ms Cann was not correct. Rockdrill also submits the final consideration in s.394(3) is neutral because there were no other employees dismissed at the same time.

[23] Rockdrill also relied on the Full Bench decisions in Cheval Properties Pty Ltd t/as Penrith Hotel Motel v Janette Smithers 15 (Cheval Properties) and Cheyne Leanne Nulty v Blue Star Group Pty Ltd16(Blue Star Group) in terms of what is required to constitute “exceptional circumstances” for the purposes of s.394(3) of the Fair Work Act.

Consideration

[24] A number of decisions of this Tribunal and its predecessors have considered what is required to find that “exceptional circumstances” exist to justify an extension of time being granted to make an unfair dismissal application. Rockdrill made reference in its submissions to the often cited decisions in Cheval Properties and Blue Star Group. In the latter decision the Full Bench stated at paragraphs [13] – [15]:

“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.

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.

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.” 17

[25] As the decision indicates s.394(3) requires consideration by the Commission of each of the matters set out in (a) to (f). “Exceptional circumstances” might also be found to exist because of a single factor or a combination of factors. I now turn to deal with the relevant circumstances and the submissions of the parties in this matter by reference to those considerations.

(a) The reason for the delay

[26] Ms Cann’s reasons for not lodging her application within the 21 day period have already been detailed. In summary, she submits she was told she had been made redundant because of an operational restructure, which saw her position outsourced, in circumstances where she believes she did not have the ability or opportunity at the time to question or take issue with what she had been told. It was only after the passage of time, and the understandings gained from discussions with a former colleague, that she concluded what she had been told initially about the reasons for her termination was incorrect. I accept that in some cases the actual reason why an employee is terminated may only come to light, or be capable of being established with the passage of time. In some circumstances, as DP Sams found in Bananacoast, this might give cause to bring the matter within the realm of “exceptional circumstances” and warrant an extension of time being granted.

[27] Rockdrill also made reference to other decisions of the Tribunal where it was found information gained after the event did not justify an extension of time being granted. However, without going to the detail of those matters they can be distinguished in each case from the present matter by the significant length of time that had elapsed since the employees were dismissed;188 days in one instance and longer in the other. These are significantly different circumstances from the present matter where the application is only 21 days “out of time”.

[28] However, the circumstances in this matter are also different from those considered by DP Sams in one other important respect. I don’t doubt that Ms Cann was disappointed and annoyed by what she was told in the discussions with her former colleague on 18 October, and again had cause to feel aggrieved about her dismissal. However, her evidence indicates she clearly had concerns prior to this time about her role and position at Rockdrill. She had, in fact, sought legal advice more than a month before her termination and had followed up those discussions on more than one occasion. She said she was advised in those discussions about the 21 day time period for lodging an unfair dismissal application. Clearly her concerns might well have crystallised or “boiled over” as a result of what she heard in the meeting with her former colleague on 18 October. However, I am also satisfied she was clearly concerned about what was happening at Rockdrill prior to her termination. She was also aware of the statutory timeframe for lodging an unfair dismissal application, and yet took no action to make application within the 21 day period that followed. I am satisfied an employee in that situation with the same concerns and the same understanding about the processes involved could ordinarily be expected, in all of those circumstances, to pursue any remedy open to them in a timely fashion. In this context reference has already been made to the statement of DP Sams in Bananacoast at paragraph [56].

(b) Whether the person first became aware of the dismissal after it had taken effect

[29] The evidence indicates Ms Cann was clearly aware of the dismissal at the time it occurred. It had, in fact, first been foreshadowed in her discussions with one of the Directors of the Company five days earlier.

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

[30] Ms Cann acknowledges no action was taken to dispute the dismissal immediately after it occurred, or indeed in the 21 days that followed. As indicated, she submits this was primarily because she was not then in possession of information that gave her cause to believe her termination was anything other than a “genuine redundancy.”

(d) Prejudice to the Employer

[31] Rockdrill submits it is a relatively small organisation and any requirement to defend an unfair dismissal claim will be a significant distraction from its principal business activities, particularly at a time when it is already dealing with the impact of a downturn in the mining industry.

(e) Merits of the Application

[32] Both parties made submissions about the respective merits of the application. Ms Cann submits she has a strong case to challenge whether her dismissal constitutes a “genuine redundancy.” As indicated, she points to the fact another person was engaged, at least for a period of time following her termination, to carry out responsibilities she submits she was capable of performing. She also submits her former employer did not give proper consideration to appropriate redeployment opportunities within the business. However, Rockdrill submits Ms Cann does not have a strong case. It submits a true understanding of what occurred at the time of her termination simply confirms she was genuinely made redundant as part of the outsourcing of her role and responsibilities. It submits she has a mistaken understanding of what occurred, particularly in regard to the short term engagement of the labour hire contractor. It also submits there were no possible redeployment options.

[33] In the absence of detailed evidence going to merit I am not in a position to make conclusive findings of fact about what are clearly contested issues. I also note the relevance of the issue of “merit” when determining an application for an extension of time was considered by a Full Bench of the Australian Industrial Relations Commission in Kyvelos v. Champion Socks Pty Limited 18 when dealing with similar legislative provisions to those now contained in the Fair Work Act. The Full Bench held:

“In considering whether to accept an application which has been lodged outside the time prescribed in s.170CE(7) the Commission may consider whether, on the basis of the material relied on by the parties, the applicant has a sufficient case on the merits although the discretion should be exercised having primary regard to the circumstances which led to the late lodgement.” 19

The Full Bench continued:

“It should be emphasised that in considering the merits the Commission is not in a position to make findings of fact on contested issues, unless evidence is called on those
issues. Evidence is rarely called on the merits and there are sound reasons why the Commission should not embark on a detailed consideration of the substantive case in an application pursuant to s.170CE(8). In particular, it is undesirable that parties be exposed to the requirement to present their evidentiary cases twice.” 20

[34] As indicated, I have not formed a concluded view about the respective merits of the matter, based on the limited submissions and evidence provided. However, the decision of the Full Bench suggests it is unnecessary to do so at this point. I am accordingly satisfied the respective merits of the application are a neutral consideration in terms of whether I should exercise the discretion available in s.394(3).

(f) Fairness as between the person and others in a similar position

[35] This is of limited relevance in the present matter. Ms Cann was the only person whose employment was terminated at the time.

Conclusion

[36] In conclusion, I am not satisfied “exceptional circumstances” exist in the present matter to warrant an exercise of the discretion to extend the time in which to make an application. I have come to this view, in particular, given the reasons for the delay. The discussions Ms Cann had on 18 October with her former work colleague were clearly not the first occasion she had cause to have concerns about her role and position at Rockdrill. She had those concerns in early August, four to five weeks before being dismissed. She sought legal advice then and on several occasions afterwards. She was advised in those discussions about the statutory time limit in which to make an application. Nothing prevented her from lodging a claim within that time period. She did not do so. I am not satisfied the discussions she later had on 18 October, and the conclusions she then came to, constitute those unusual, special, or uncommon “exceptional circumstances” that might provide an excuse or valid reason as to why the application was not lodged within the twenty one day period. I also note the evidence indicates what she was told in those discussions was not correct. Aside from any other considerations this raises an issue about whether the view she came to could be considered to be reasonably held.

[37] Ms Cann had reason, opportunity and the understanding to lodge an unfair dismissal application within the 21 day period following her dismissal. She chose not to do so. I am not satisfied that “exceptional circumstances” exist so as to warrant an extension of time in which to lodge an application. The application is dismissed.

COMMISSIONER

Appearances:

Mr Drew Marsh of Lander and Rodgers on behalf of the Applicant.

Mr Tom Page of Victorian Employers’ Chamber of Commerce and Industry on behalf of the Respondent.

Hearing details:

2014.

Melbourne:

24 January.

 1   Submissions of Carolyn Cann at para 4

 2   Ibid at para 5

 3   Exhibit M1 at page 1

 4   Transcript at PN133

 5   Ibid at PN134

 6   Ibid at PN147

 7   Ibid at PN151

 8   [2012] FWA 7681

 9   Ibid at [6]

 10   Ibid at [51]

 11   Exhibit P1 at attachment AC-1

 12   Transcript at PN434

 13   [2012] FWA 7681 at [56]

 14   Transcript at PN467

 15   [2010] FWAFB 7251

 16   [2011] FWAFB 975

 17   Ibid at [13]-[15]

 18   Dec 1294/00 M Print T2421

 19   Ibid at [14]

 20   Ibid

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