Craig Hollins v Qbit Trading Pty Ltd

[2015] FWC 5220

[2015] FWC 5220

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Craig Hollins
v
Qbit Trading Pty Ltd
(U2015/5871)

COMMISSIONER BISSETT MELBOURNE, 7 AUGUST 2015

Application for relief from unfair dismissal - extension of time - no exceptional circumstances - application not granted.

[1] Mr Craig Hollins has made an application to the Fair Work Commission (the Commission) pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking relief from unfair dismissal. Mr Hollins was a Director of Qbit Trading Pty Ltd (Qbit) and undertook work for Qbit.

[2] There are two jurisdictional matters before the Commission to be determined:

• if an extension of time for making the unfair dismissal application should be granted, and



• whether Mr Hollins was an employee of Qbit.

[3] The determination of whether Mr Hollins was an employee will only be dealt with if the application was made within time or an extension of time is granted. The extension of time matter proceeds on the assumption (without finding) that Mr Hollins was an employee.

[4] Qbit says it terminated Mr Hollins employment on 4 May 2015. Mr Hollins says he was not aware his employment was terminated until at least 26 May 2015.

[5] Mr Hollins made his application to the Commission on 11 June 2015. Qbit says that the application was made 16 days out of time. Qbit says that, in the alternative, if Mr Hollins application was made within time, he is not an employee and therefore cannot make an application for unfair dismissal.

[6] Mr Hollins represented himself in the proceedings. At the commencement of proceedings I granted permission for Qbit to be represented by a lawyer.

[7] Mr Hollins gave evidence on his own behalf. Evidence was given for Qbit by Mr David Musarra and Mr Fabio Suffel. Mr Musarra and Mr Suffel are also Directors of Qbit and work in the business.

[8] The Commission can extend the time for making an application for unfair dismissal.
Section 394(3) of the Act states:

394 Application for unfair dismissal remedy

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

(a) the reason for the delay; and

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

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

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

(e) the merits of the application; and

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

Reason for the delay

[9] Mr Hollins says there was no delay in him making his application as he was not aware his employment had been terminated until at least 26 May 2015 in which case his application was made within the time prescribed by the Act. Mr Hollins says that if he knew his employment had been terminated earlier he would have made his application earlier.

[10] Qbit says that Mr Hollins made his application on 11 June 2015 the day after negotiations broke down between Mr Hollins and other Directors of Qbit on the sale price of Mr Hollins interest in the business. Qbit says that those negotiations failed on 10 June 2015 and the Mr Hollins made the unfair dismissal application the following day as a means of putting pressure on the Qbit Directors to resolve the sale price.

When the person first became aware of the dismissal

[11] The determination of whether or not the application was, in fact, out of time, rests on a determination of when Mr Hollins became aware that his employment had been terminated.

[12] It is agreed that on 5 May 2015 Mr Hollins attended a regular 7:30 am meeting with the other two Directors of Qbit, Mr Musarra and Mr Suffel. Mr Musarra and Mr Suffel each had a prepared statement they read to Mr Hollins.

[13] Mr Musarra’s statement was short and went to the growth (or lack thereof) of Qbit. Mr Musarra finished by saying:

We are here to say goodbye. Our business relationship is ending today.

Both Fabio and I have come to a realisation over a period of years that we do not trust your work ethic or your decision making.

[14] Mr Musarra’s evidence is that Mr Suffel verbally told Mr Hollins that his employment was terminated.

[15] Mr Musarra also attached to his witness statement a copy of the minutes of the Directors’ meeting of Qbit Trading for 5 May 2015 (the 7:30am meeting). These minutes record that it was resolved that the employment of Mr Hollins by Qbit be terminated and that Mr Hollins be paid 5 weeks’ pay in lieu of notice. The minutes are signed by Mr Musarra as Chairperson and dated 5 May 2015. A copy of the resolutions of the Directors for Qbit (and a related company) was signed by Mr Musarra and Mr Suffel.

[16] Mr Musarra agreed that he did not provide a copy of the minutes or resolutions to Mr Hollins.

[17] Mr Suffel’s prepared statement was longer and his evidence is that, as he read it out, he ran his finger down the page to make sure he did not miss anything. Mr Suffel’s evidence is that, included in what he said were the words:

As Directors of Qbit Trading we effective immediately are terminating your employment. Qbit Trading will pay you 5 weeks’ pay in lieu of notice and the other entitlements that are owed to you as soon as possible.

[18] He says he also said:

As you are no longer employed by Qbit as with any person that leaves Qbit the following needs to be complied with.

[19] Mr Suffel then proceeded to read out a list of items of company property that needed to be returned. Mr Hollins interrupted him and said words to the effect that, ‘I know this drill, I have done it before’, handed over a range of items and left the premises. Mr Hollins does not dispute that he said words to the effect that he knew the drill nor that he handed over company property.

[20] Mr Suffel could not remember seeing the minutes of the Directors meeting dated 5 May 2015 until a few days later, he says in draft form, and does not recall when he signed the resolutions.

[21] Mr Suffel agreed that it would be unusual for Mr Hollins to forget that he was told his employment had been terminated as he had a good memory.

[22] Mr Hollins’ evidence is that he recalls the statement read by Mr Musarra and the statement read by Mr Suffel except that he has no recollection of Mr Suffel telling him his employment was terminated. His evidence is that he would have remembered if he had been told this.

[23] A further meeting was held between the three Directors (off site) on 8 May 2015. Mr Musarra’s evidence is that the following conversation took place:

Hollins: I still want to be a shareholder of Qbit as I see Qbit going places.

Musarra: No Craig. You’re not in the business but we will take what you are saying on board.

Musarra/Suffel: How would you like us to tell the staff that you have left Qbit.

Hollins: Tell them I am on leave.

Musarra: No. You are no longer employed.

Hollins: Tell them I am on gardening leave.

Musarra: No you are not on gardening leave, you no longer work in the business.

[24] Mr Hollins denies that this conversation took place.

[25] On 11 May 2015 Mr Hollins sent an email to Mr Musarra and Mr Suffel in which he proposed a re-worded email be sent to distributors of the company that advised that Mr Hollins was ‘no longer taking an active part in Qbit.’ Mr Hollins says these words proposed by him did not mean he was no longer working for Qbit.

[26] On 15 May 2015 Mr Hollins sent an email to Mr Musarra and Mr Suffel which said, in part:

I get it that you do not want me to be part of the management team. To be honest I agree with you…I’m astounded at the speed you’ve moved to cut me out of the business.

[27] On 19 May 2015 Mr Hollins sent a further email to Mr Musarra and Mr Suffel in which he said:

I notice the option to look at Qbit’s bank accounts has been removed from my profile. This is premature whilst I’m still a shareholder and director…Whilst I understand you do not want me in the business day to day, you cannot simply take away my rights and responsibilities as a director…

[28] On 26 May 2015 there was a meeting of the shareholders of Qbit and related companies where a resolution was passed removing Mr Hollins as a Director of Qbit. He says that at this time he was told he was no longer working at Qbit.

[29] Mr Hollins says that he continued to receive regular fortnightly pays from Qbit into June 2015. He says that on 5 June 2015 he received an email from Mr Musarra advising that a final payment was made that day which concluded his 5 weeks’ pay in lieu of notice. He says he also receive amended payslips for the previous three pays. Mr Hollins says the amended payslips showed that he had been paid ‘in lieu’ of notice where the previous pay slips (only one of which was produced to the Commission for the period 2 – 15 May 2015) indicated he had received 80 hours of ‘normal’ pay.

[30] Mr Hollins says that normal practice in the company is that when an employee’s employment is terminated they are paid their notice and any accrued leave straight away. That he received his pay in lieu of notice across three pays indicates that his employment was not terminated on 5 May 2015.

[31] Mr Hollins gives evidence of the negotiations that took place between him and Mr Musarra and Mr Suffel on a sale price for his share of Qbit. He says that he offered to buy Mr Mussara’s share for double that price but this was rejected by Mr Musarra. Mr Musarra did not dispute this.

[32] Qbit says that the evidence shows that Mr Hollins was told on 5 May 2015 that his employment was terminated. He was told his employment was terminated and he handed back the company property he had with him. Qbit also says that it can be inferred from the emails sent by Mr Hollins following 5 May 2015 that he was aware his employment had been terminated.

[33] I consider it reasonable, on the basis of the emails Mr Hollins sent to Mr Musarra and Mr Suffel, to conclude that he was aware that he no longer had an employment relationship with Qbit and that the only relationship between him and the Qbit was that of Director/shareholder. I am satisfied that Mr Hollins was aware of this by 19 May 2015 (though possibly earlier). Mr Hollins statements that ‘You do not want me to be part of the management team’, ‘You do not want me in the business day to day’ and ‘I’m still a shareholder and director’ are strong indicators that he knew he no longer had an employment relationship with Qbit.

[34] Whilst Mr Hollins is adamant that he was not told on 5 May 2015 that his employment had been terminated I am satisfied that by 19 May 2015 at the latest he was aware that his employment had been terminated. In making this finding I make no adverse finding in respect of the evidence in relation to the meeting of 5 May 2015.

[35] Mr Hollins says that on 8 June 2015 he travelled to Taiwan along with a distributor for Qbit and that he did this as an employee of Qbit. It is agreed that this travel was approved prior to the 5 May 2015 when Qbit says it terminated his employment and certainly before 26 May 2015 when he was removed as a Director of Qbit.

[36] It was not clear in the hearing before me why Mr Musarra and Mr Suffel allowed Mr Hollins to continue to represent the company after the 5 May 2015 when they say they terminated his employment and after he was removed as a Director and, on all accounts, knew he was no longer employed by Qbit. The explanations on this matter are lacking any coherent basis. It is, however, not a matter that needs to be resolved for the purpose of this application.

[37] A termination of employment ‘does not take effect unless it is communicated to the employee whose employment is being terminated’. 1 Even if I accept Mr Hollins evidence that he was not told on 5 May 2015 that his employment had been terminated I am satisfied that by 19 May 2015 the circumstances of his separation from Qbit were clear to Mr Hollins and that by this date he was aware his employment had been terminated.

[38] In Sutherland v Sydney Property Finders Pty Limited 2 Deputy President Sams considered a circumstance not dissimilar to the one before me. In Sutherland Mr Sutherland was advised on 22 August 2014 that his employment was terminated and that he would receive the applicable pay in lieu of notice. Mr Sutherland claimed that the effective date of his dismissal was four weeks later at the expiration of the notice period. In that case there was also some delay in the final payment in lieu of notice to Mr Sutherland. The Deputy President concluded:

…the fact that there was some delay in making the in lieu payments cannot be held to prolong the employment relationship until such payments are made. Moreover, it is not uncommon for dismissed employees to challenge the payments made to them on termination. Often the payments are not made for many weeks, while the dispute is resolved or is simply delayed because of a company’s pay cycle. To suggest that these circumstances somehow means the employment relationship ‘remains on foot’ is illogical nonsense. 3

[39] I agree with the reasons of DP Sams that to suggest it might somehow be delayed because of a delay in payment of monies owed in lieu of notice is a nonsense. The submission of Mr Hollins on this point is therefore rejected. Whilst I find the reasons for the delay in making the payment in lieu of notice to Mr Hollins unconvincing to say the least this does not affect my decision as to the date Mr Hollins became aware of the dismissal.

Action taken to dispute the dismissal, prejudice to the employer, and fairness between Mr Hollins and others in a similar situation

[40] No evidence or submissions were made on these issues. I therefore make no findings.

Merits of the application

[41] Mr Hollins says that his employment was terminated to force him to sell his shares in the business.

[42] The complexity in this matter is the parallel actions being taken by Qbit to remove Mr Hollins as a Director and have him sell his interest in the business. Much of the communication between Mr Hollins and Mr Musarra and Mr Suffel related in part to the value of Mr Hollins’ interest.

[43] If Mr Hollins is correct that his employment was terminated to force his to sell his interest in Qbit this suggest there is some merit in his application.

Conclusion

[44] I have found that Mr Hollins became aware of his dismissal by 19 May 2015 at the latest. To make his application for unfair dismissal within the time limit prescribed by the Act his application should have been made by 9 June 2015. Mr Hollins’ application was made two days later on 11 June 2015. His application is still therefore outside the statutory time period set by the Act and an extension of time within which to make the application is still required.

[45] It is clear from the submissions and evidence of all parties to this matter that the termination of Mr Hollins employment is inextricably tied up with the decision to remove him as a Director of Qbit. It is interesting in this respect to note that the 5 May 2015 was the date required for the notice and resolutions of the shareholders meeting of 26 May 2015 to be given and it was on this day Mr Hollins was required to hand over all of his company property and had his access to all Qbit systems removed. The timing suggests that Mr Musarra and Mr Suffel wanted to ensure that Mr Hollins had no access to Qbit property or clients once he became aware that they intended to remove him as a Director.

[46] Whilst the circumstances surrounding the termination of Mr Hollins employment are unusual I do not consider that it is appropriate – if this was part of the reason – for an application for unfair dismissal to be used as leverage in bargaining around the sale of interest in a business. The ‘exceptional circumstances’ contemplated in s.394 of the Act do not, in my opinion, extend to such commercial considerations nor do they extend to taking into account difficulties in such negotiations even if there is no secondary purpose in the application itself..

[47] Having found that Mr Hollins was aware by 19 May 2015 that his employment had been terminated and hence that he was aware of his dismissal, I am not satisfied there are exceptional circumstances that warrant an extension of time within which to make the application.

[48] Mr Hollins application is not made within the time limits prescribed by the Act. The Commission therefore has no jurisdiction to deal with the matter.

[49] The application is dismissed. An Order to this affect will be issued with this decision.

COMMISSIONER

Appearances:

C. Hollins for himself.

B. Jackson of DLA Piper for the Respondent.

Hearing details:

2015.

Melbourne and Perth (video hearing):

July 29.

 1   AIRC, Print T3496.

 2   [2015] FWC 1312.

 3   Ibid, [44].

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