Chad Lewis v Blake Edward Morphett T/A Sweet Desires Patisserie

[2016] FWC 1503

[2016] FWC 1503

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.773—Termination of employment

Chad Lewis
v
Blake Edward Morphett T/A Sweet Desires Patisserie
(C2015/5235)

COMMISSIONER WILLIAMS PERTH, 10 MARCH 2016

Application to deal with an unlawful termination dispute - extension of time.

[1] This matter concerns an application made under section 773 of the Fair Work Act 2009 (the Act) by Mr Chad Lewis (Mr Lewis or the applicant). The respondent is Blake Edward Morphett T/A Sweet Desires Patisserie (the respondent).

[2] Mr Lewis’s application was made more than 21 days after the applicant says his employment was terminated. Mr Lewis now seeks that the Commission allow a further period for him to make his application. The respondent opposes the Commission allowing an extension of time to Mr Lewis to make his application.

The facts

[3] At the hearing of this matter Mr Lewis gave evidence as did Mr Morphett.

[4] There is no dispute that Mr Lewis had been employed by Mr Morphett since 2012. On 22 July 2015 Mr Lewis resigned from his employment. Mr Lewis asserts that the circumstances leading up to his resignation mean he was constructively dismissed from his employment.

[5] Mr Lewis gave evidence as to what steps he took after his employment ended and I accept his evidence that the actions he took were as follows. On 23 July 2015, the day after his employment ended, Mr Lewis had a discussion with Mr Robson of Robson Hayes Legal who agreed to consider whether he had any claims against his employer. The same day Mr Robson emailed Mr Lewis some initial questions and provided to him a search conducted on the ASIC register in relation to Morph Enterprise Pty Ltd.

[6] Between 23 July 2015 and 4 August 2015 assisted by his fiancé, Mr Lewis prepared a document setting out the factual matters concerning what he viewed as his termination of employment. This was sent to Mr Robson on 4 August 2015. The following day, 5 August 2015, Mr Lewis signed a costs agreement with Robson Hayes Legal for the preparation of an application to the Commission.

[7] Over the following days Mr Lewis assisted by his fiancé and Mr Robson revised the documents to be filed with the Commission. On 11 August 2015 Mr Robson provided a finalised general protections application to Mr Lewis by email.

[8] On 12 August 2015 Mr Lewis’s fiancé, as his representative, filed a Form F8 - General Protections Application Involving Dismissal (Form F8) under section 365 of the Act. The respondent was identified as Morph Enterprise Pty Ltd ACN 116 334 108, T/A Sweet Desires Patisserie and the contact person was Mr Blake Morphett. The application says that Mr Lewis was dismissed on 22 July 2015 and further that he “…had no choice but to resign due to the conduct of the employer. Please see attachment A.” Attachment A comprises 22 typed pages with 171 numbered paragraphs which sets out the background facts in great detail and specifies the alleged contraventions by the employer of the general protections provisions of the Act.

[9] Mr Lewis also gave evidence as to what Mr Robson told him in October 2015 his lawyers had done prior to providing Mr Lewis with the general protections application on 11 August 2015 which Mr Lewis had then filed in the Commission. Mr Robson told him they had undertaken ABN register searches and business name register searches for both Morph Enterprise Pty Ltd and in relation to Mr Blake Morphett. Further a review of the website of Sweet Desires Patisserie and its Facebook page was undertaken.

[10] With respect to the legal identity of his employer Mr Lewis’s evidence which I accept is that when he was first employed his understanding was that Mr Morphett was a sole trader conducting the business himself. He was not provided with a written employment contract at any stage.

[11] His evidence is that he received a pay slip on 7 July 2015 1 which is headed as follows:

“Sweet Desires ABN. 34 116 334 108”

[12] Mr Lewis’s evidence is that on around 8 July 2015 Mr Morphett’s wife Jenna explained to a gathering of staff including Mr Lewis that Sweet Desires Patisserie had now grown enough to become a company and would be known as Morph Enterprises. Under cross-examination Mr Lewis did not accept that what the employees were told was that the business was “...going to become a company...” in the future. Mr Lewis was adamant that Mr Morphett’s wife said the business is now a company as distinct from was becoming a company in the future.

[13] The evidence of Mr Morphett confirms that there was a meeting of staff on 8 July 2015 at which he and his wife attended. He says that his wife told the staff that we will be becoming a company and we will give you employment contracts once it is finalised. His evidence also is that the legal arrangements behind the scenes were such that on 8 July 2015 Sweet Desires Patisserie was operating as a sole trader and was not incorporated.

[14] Whilst there is a conflict between the evidence of Mr Lewis and Mr Morphett as to what was actually said to staff on 8 July 2015 by Mrs Morphett I do accept the evidence of Mr Lewis that his understanding after the meeting was that Sweet Desires Patisserie was no longer a sole trader but was a company.

[15] Mr Lewis under cross examination agreed that a series of payslips had been emailed by his employer to his email address. His evidence however was that he has a limited understanding of computers and does not regularly use a computer. Mr Lewis is a pastry chef and only learned to use email the previous year. His evidence was that he has sent only about five emails in his life.

[16] Mr Morphett’s evidence was that from April 2015 through to July 2015 the business of Sweet Desires Patisserie was in the process of changing ownership but it was not until 23 July 2015 that ASIC finally registered Morph Enterprise Pty Ltd as the business trading as Sweet Desires Patisserie.

[17] Mr Morphett says that payslips were automatically sent to Mr Lewis’s email address via the MYOB accounting software. His evidence, which I accept, is that payslips were sent which over the course of four pay dates included two different ABN numbers adjacent to the name Sweet Desires as follows:

• Payment date 30 June 2015 ABN 85 739 064 301



• Payment date 07 July 2015 ABN 34 116 334 108



• Payment date 14 July 2015 ABN 34 116 334 108



• Payment date 21 July 2015 ABN 85 739 064 301

[18] Mr Morphett’s evidence is that the incorrect ABN number had been included on a number of the payslips the business had sent to Mr Lewis but this was never corrected and the company never advised him it was wrong.

[19] On 19 August 2015 the respondent filed its Form F8 which Mr Lewis received the same day. The respondent objected to the application on the grounds that the applicant was not dismissed but rather voluntarily resigned. The response detailed a further jurisdictional objection to the effect that Morph Enterprise Pty Ltd, the first respondent, only commenced trading as a constitutional corporation on 1 August 2015, after the applicant’s resignation.

[20] Mr Lewis sent the Form F8 to Mr Robson the next day, Thursday 20 August 2015 and on Monday 24 and Tuesday 25 August 2015 Mr Robson responded by email regarding the possibility of filing and an unlawful termination application under section 773 of the Act. On Thursday 27 August 2015 Mr Robson emailed to Mr Lewis and his fiancé a finalised document for the filing of an unlawful termination application under section 773 and Mr Lewis’s fiancé filed that unlawful termination application the same day in the Commission.

Consideration

[21] The statutory requirements that an application such as this is to be made within 21 days after the employment is terminated and the discretionary power for the Commission to extend the time within which such an application is made are contained in section 774 of the Act which is set out below.

“774 Time for application

(1) An application under section 773 must be made:

(a) within 21 days after the employment was terminated; or

(b) within such further period as the FWC allows under subsection (2).

(2) The FWC may allow a further period if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) any action taken by the employee to dispute the termination; and

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

(d) the merits of the application; and

(e) fairness as between the person and other persons in a like position.”

The reason for the delay

[22] Mr Lewis’s employment ended on 22 July 2015. 21 days later on 12 August 2015 he filed an application under section 365 of the Act alleging that he was dismissed in contravention of the general protections provisions. 7 days later on 19 August 2015 Mr Lewis received a copy of the employer’s response to his application objecting to it because his employer was not a national systems employer. 8 days later on 27 August 2015 Mr Lewis filed this application under section 773 alleging the termination was in contravention of subsection 772 (1) of the Act.

[23] As can be seen above section 774 requires that an application such as this one made under section 773 must be made within 21 days after the employment is terminated. Mr Lewis’s current application has been made more than 21 days after his employment was terminated.

[24] The reason for the delay in making the application was that Mr Lewis wrongly filed an application under section 365 on the understanding that his employer was a national systems employer which was incorrect. This first application was filed within the 21 day time limit. Mr Lewis first became aware he had filed the wrong application 7 days after he had filed it when he received his employer’s response. A further 8 days passed whilst Mr Lewis took legal advice and gave instructions for the preparation of this current application.

[25] As can be seen from the above the majority of the delay in making this application comprises the 21 days that was spent preparing the incorrect application and a further 7 days during which Mr Lewis was unaware that he had filed a wrong application.

[26] There have been a number of cases in the past where the Commission has dealt with the situation where an employee has either wrongly filed an application under section 365 when they should have filed an application under section 773 or vice versa. Where an employee is unrepresented and makes this error as to which of these two very similar applications they should file and this is the sole reason for the delay the Commission has commonly found this to be an acceptable reason for the delay which weighs in favour of finding that there were exceptional circumstances.

[27] Similarly where an employer has sought legal advice or representation and the evidence demonstrates that a similar jurisdictional error was made by the employee’s legal representative the Commission has held that where this is the sole reason for the delay this representational error is also an acceptable reason for the delay which weighs in favour of finding there are exceptional circumstances. 2

[28] In this instance Mr Lewis was not self-represented but sought legal advice immediately after his employment ended as to what action he could take. He relied on that legal advice which was to file an application under section 365 and he did so within 21 days of his employment ending. Consequently for Mr Lewis it is submitted that the delay in making the current application was largely because the wrong application was made in the first instance and this was because of representational error which is an acceptable explanation for the delay.

[29] The respondent takes issue with this submission arguing that there is a distinction to be drawn between a delay caused by a representatives error where the applicant is blameless and a similar delay which the applicant has contributed to which they say is the case here.

[30] What the evidence demonstrates is that Mr Lewis, a pastry cook, at the commencement of his employment understood his employer to be a sole trader however following the announcement made by Mrs Morphett to staff on 8 July 2015 his understanding was that this had changed and Sweet Desires Patisserie had now become a company. Other evidence demonstrates that his understanding about this was incorrect but I do accept that he honestly believed this to be the case. Immediately after his employment ended Mr Lewis sought legal advice as to his situation and provides information to his legal representatives about his employer including his understanding that there had been a change as explained above. Mr Lewis had not been reckless or careless in terms of the information he had provided to his representatives. From this point onwards he was entitled to and did rely upon the advice of his legal representatives who after some investigations drafted up for him an application under section 365 of the Act on the basis that his employer was a national systems employer. This of course was not the case but neither he nor his legal representatives became aware of this until the respondent’s reply was received. In all the circumstances then the reason for that part of the delay up to the date of receiving the employer’s response was representational error. This was an acceptable reason for this part of the delay.

[31] Mr Lewis did not delay in seeking further legal advice and immediately upon receiving the employer’s response again sought advice from his legal representatives. There was a further period of 8 days which passed whilst Mr Lewis’s legal representatives reviewed the respondent’s reply and objection and gave him advice on an alternative application under section 773 which was prepared and then filed by Mr Lewis. These reasons for this period of the delay are also acceptable reasons for delay. Mr Lewis was entitled to take further legal advice as he did in the face if the employer’s response to his original application.

[32] In summary I am satisfied that there were acceptable reasons for all of the delay in the making of this application.

Other action taken to dispute the dismissal

[33] Mr Lewis has not taken any other action to dispute his dismissal other than filing the first section 365 application and then this application.

Prejudice to the employer

[34] There is no evidence that the period of delay in this instance if an extension of time was to be allowed is prejudicial to the employer. The employer has been on notice from the filing of the section 365 application of the basis on which Mr Lewis challenges his dismissal.

The merits of the application

[35] The extension of time application is not a substitute for a full hearing of the merits of the application. On the limited material before the Commission at this stage I would view the merits of the application as a neutral factor in determining the extension of time question.

[36] I note the respondent challenges the jurisdiction of the Commission to deal with an application under section 773 on the basis that it does not accept that there has been a termination of Mr Lewis’s employment. It is further argued that this jurisdictional fact needs to be determined before the Commission’s power to extend time is enlivened. In this regard I simply point out that the Commission has on a number of previous occasions considered the limited role the Commission has in dealing with applications whether made under section 773 or section 365 which operate under similar legislative schemes within the Act.

[37] Full Bench decisions of the Commission have previously found that the Commission does not have the power to determine whether there is a proper jurisdictional basis for such applications. That power is preserved to the Courts under the scheme of the Act. A Full Bench of the Commission in Hewitt v Topero Nominees Pty Ltd T/A Michael’s Camera Video Digital 3considered the structure of the subdivision of the Act dealing with section 365 and found that the subdivision does not contemplate that the Commission would engage in any sort of determinative process in dealing with a section 365 application. The Full Bench went on at paragraph [50] to say:

“…We do not accept that the Commission needs to be satisfied that the applicant has been ‘dismissed’ from their employment before holding a section 368 conference. It is sufficient that the Commission has before it an application that on its face alleges a dismissal…”

[38] That decision refers to similar observations made with respect to applications under section 773 by a previous Full Bench in Hetherington v Gregory the Harrington Village Motel. 4

[39] Consequently the other jurisdictional objections the respondent has raised as to whether or not there has been a termination of employment in this instance are not relevant to the question the Commission is now considering as to whether or not there are exceptional circumstances warranting an extension of time.

Fairness as between Mr Lewis and others

[40] There is no evidence that this is a relevant consideration.

Conclusion

[41] As I have found above there are acceptable reasons for all of the delay in this instance which weigh in favour of concluding that there are exceptional circumstances in this case.

[42] Considering the other factors that Mr Lewis has not taken any other action to dispute his dismissal, there is no prejudice to the employer if an extension of time is allowed and the merits of the application are a neutral consideration I am overall satisfied that there are exceptional circumstances in this case that warrants the Commission exercising its discretion to allow a further period for Mr Lewis to make this application. An order to that effect will now be issued.

[43] The parties will be contacted in due course to program a conciliation conference.

COMMISSIONER

Appearances:

M. Robson of Robson Hayes Legal for the applicant.

C. Tsang of Lavan Legal for the respondent.

Hearing details:

2015.

Perth: December 15.

 1   Exhibit A1, C-L1.

 2   [2011] FWA 5453, [2012] FWA 7266 & [2013] FWC 5357.

 3   [2013] FWCFB 6321.

 4   [2012] FWAFB 2104.

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