DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Dejai Scott
v
Digital Eagles Pty Ltd
(U2021/6527)

COMMISSIONER LEE

MELBOURNE, 2 SEPTEMBER 2021

Application for an unfair dismissal remedy – Respondent placed in liquidation by creditors’ voluntary winding up – having regard to s.500(2) of the Corporations Act 2001 application cannot proceed in Commission without leave of the Court – application stayed until leave of the Court is granted.

Introduction

[1] On 23 July 2021, Mr Dejai Scott (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Digital Eagles Pty Ltd (Respondent).

Background

[2] The matter was programmed for conference/mention on 17 August 2021. On 11 August 2021 Mr Fitzgerald of William Buck (Vic) Pty Ltd wrote to my chambers stating that on Friday, 6 August 2021 the Respondent was “placed into Liquidation at a meeting of creditors.” The email further stated that:

“The Company is no longer trading having sold its business and undertakings to a third party. Mr Scott has a claim in the Liquidation for his entitlements and I am in correspondence with him with respect to same.”

As a consequence of the Liquidation I suggest there is no utility in the FWC hearing continuing. Mr Scott has a claim which will be dealt with under the Corporations Act in the Liquidation. With respect to any rights or claim to reinstatement same is not possible given the Company has no ongoing business and no continuing employees.”

[3] A mention hearing took place on 17 August 2021. Mr Fitzgerald, who has been appointed as the Administrator of the Respondent, attended on behalf of the Respondent. Prior to the mention hearing, my chambers forwarded for the benefit of the parties the relevant sections of the Fair Work Commission Unfair Dismissals Benchbook dealing with insolvency for their information.

[4] During the mention hearing on 17 August 2021, the Applicant agreed that on 6 August 2021, the creditors voted to wind up the company. 1

[5] In order to provide the Applicant with more time to consider the matters discussed during the mention hearing, including whether he desired to seek legal advice, the matter was adjourned for a period of one week and relisted for a further mention hearing at 10:00 am on 23 August 2021.

[6] The Applicant did not attend, nor indicate his unavailability prior the 23 August 2021 mention hearing. The mention hearing took place in his absence. The Applicant emailed my chambers at 10:45 am apologising for missing the hearing as a result of the personal illness of a child in his care.

[7] At the mention hearing, Mr Fitzgerald confirmed that given the Respondent had been liquidated by way of a creditors’ voluntary winding up, the Respondent’s submission is that the matter cannot proceed any further in the Commission except by leave of the Court. 2

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dejai Scott v Digital Eagles Pty Ltd

Details

AGLC: Dejai Scott v Digital Eagles Pty Ltd [2021] FWC 5462
Case: [2021] FWC 5462
Decision Date: 2 SEPTEMBER 2021

CaseChat Overview and Summary

Dejai Scott sought relief from the Fair Work Commission for an unfair dismissal by Digital Eagles Pty Ltd. Digital Eagles, however, was placed into a creditors’ voluntary winding up, rendering the company unable to participate in the proceedings. The issue before the court was whether the application could proceed in the Commission in the absence of the respondent, and if not, whether leave of the Court should be sought to allow the application to continue. The court held that pursuant to section 500(2) of the Corporations Act 2001, the application could not proceed in the Commission without the leave of the Court. Consequently, the application was stayed until the leave of the Court was granted.

The court emphasised the importance of the statutory provisions governing the winding up of companies and the implications for ongoing legal proceedings. The court noted that a creditors’ voluntary winding up under section 473 of the Corporations Act 2001 results in the company's assets being vested in the liquidator, and the company's legal capacity is severely limited. Given these circumstances, the court concluded that the application for an unfair dismissal remedy could not proceed in the Fair Work Commission without the Court's leave. The court's reasoning was grounded in the statutory language and the practicalities of managing legal proceedings in the context of a company in liquidation.

In light of the statutory constraints and the current status of Digital Eagles, the court decided that the application must be stayed. The court acknowledged the applicant's right to seek relief but recognised the necessity for adherence to the statutory framework. The court ordered that the application be stayed until leave of the Court was obtained, ensuring that all proceedings were in compliance with the legal requirements imposed by the Corporations Act 2001.

Orders