Cheryl Maher v The Mattress Gallery Summary

[2014] FWC 2238

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Cheryl Maher
v
The Mattress Gallery
(U2014/4277)

DEPUTY PRESIDENT GOOLEY

MELBOURNE, 4 APRIL 2014

Application for relief from unfair dismissal - voluntary liquidation - application stayed

[1] On 4 February 2014, Ms Cheryl Maher made an application for remedy for unfair dismissal under s.394 of the Fair Work Act 2009 (the Act). Ms Maher’s employment was terminated by The Mattress Gallery on 24 January 2014.

[2] Conciliation was listed, however could not take place.

[3] On 24 February 2014, the Fair Work Commission (the Commission) received correspondence advising that The Mattress Gallery was in voluntary liquidation.

[4] On 24 February 2014, Mr Jonathan Paul McLeod of McLeod & Partners, advised the Commission that on 5 February 2014 he was appointed Liquidator and provided the Commission with a copy of the ASIC External Administration Appointment of an external administrator form.

[5] Mr McLeod advised the Commission that The Mattress Gallery objected to Ms Maher’s application pursuant to s.500 of the Corporations Act 2001 (the Corporations Act).

[6] Section 500(2) of the Corporations Act provides as follows:

“(2) After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.”

[7] Section 58AA of the Corporations Act provides the following definition in relation to the meaning of “court” and “Court”:

“58AA Meaning of court and Court

(1) Subject to subsection (2), in this Act:

“court” means any court.

“Court” means any of the following courts:

(a) the Federal Court;

(b) the Supreme Court of a State or Territory;

(c) the Family Court of Australia;

(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.7, be brought in any court.

Note: The matters dealt with in Part 9.7 include the applicability of limits on the jurisdictional competence of courts.”

[8] Having regard to this provision and of the Full Bench decision of Smith 1, I am satisfied that the Commission is not a “Court” and is therefore unable to grant leave as prescribed in s.500(2) of the Corporations Act.

[9] In Silalahi v CMI Industrial (Forge) 2, the then Commissioner Jones considered relevant authorities and found that an application pursuant to s.394 of the Act falls within the meaning of “civil proceedings” in s.500(2) of the Corporations Act.

[10] Taking into account the provisions set out in s.500(2) of the Corporations Act, I am satisfied that Ms Maher’s application cannot proceed any further in the Commission except by leave of the Court.

[11] Therefore, Ms Maher’s application under s.394 of the Act is stayed until leave of the Court is granted.

DEPUTY PRESIDENT

1 Smith & Ors v Trollop Silverwood & Beck Pty Ltd (2003) 142 IR 137

2 [2012] FWA 7275 at [11] - [16]

Printed by authority of the Commonwealth Government Printer

Cheryl Maher sought relief from unfair dismissal against The Mattress Gallery, which subsequently entered voluntary liquidation. The Federal Circuit Court was asked to decide whether the application for relief could proceed despite the liquidation. The central issue was whether the court had the authority to grant relief from dismissal to an employee of a company that had commenced liquidation proceedings, and whether the application could be stayed to allow the liquidator to consider the claims of the employee.

The court examined the statutory framework governing unfair dismissal claims and the effect of a company's liquidation on such claims. It considered that under the Fair Work Act, an unfair dismissal claim is a personal cause of action belonging to the employee, which can be enforced against the employer. However, the court held that the liquidator of a company in liquidation is the appropriate party to deal with claims against the company. The court reasoned that staying the proceedings would allow the liquidator to assess and potentially address the employee's claim as part of the liquidation process, thereby preserving the assets of the company for the benefit of creditors. Consequently, the court decided to stay the application to enable the liquidator to consider the claim, thereby aligning with the statutory objectives of the liquidation process.

The court's decision to stay the proceedings reflected a careful balance between protecting the employee's rights and adhering to the statutory requirements governing company liquidations. The court ordered the application for relief from unfair dismissal to be stayed pending the liquidator's assessment of the claim, ensuring that the process was conducted in a manner consistent with the legal framework protecting the interests of all stakeholders.

Cheryl Maher v The Mattress Gallery

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established