Diana Tansey v Codebots Pty Ltd

[2021] FWC 4076

[2021] FWC 4076

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Diana Tansey
v
Codebots Pty Ltd
(U2021/1424)

DEPUTY PRESIDENT LAKE BRISBANE, 12 JULY 2021

Application for an unfair dismissal remedy – jurisdictional objection – whether there was a dismissal – whether the application was made within time – the Applicant was dismissed – application made within time – jurisdictional objections dismissed.

[1] This decision concerns an application by Ms Diana Tansey (the Applicant) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). The Applicant claims that she was dismissed from her employment with Codebots Pty Ltd (the Respondent) and that dismissal was harsh, unjust and unreasonable.

[2] The Respondent objects to the application on the grounds that the Applicant was not dismissed within the meaning of s.386 of the Act and that, even if she was, her application was lodged out of the time period prescribed by s.394 of the Act. The Respondent also claims that the Applicant has identified the wrong employing entity.

[3] Section 396 of the Act requires that the Commission decide four preliminary matters before considering the merits of an unfair dismissal application. I am satisfied that the Applicant was a person protected from unfair dismissal, as she had completed the minimum employment period and earned less than the high-income threshold. I am also satisfied that the Respondent is not a small business, so the Small Business Fair Dismissal Code is not relevant. Further, it is not suggested that the alleged dismissal was a case of genuine redundancy.

[4] To determine whether the fourth preliminary matter is met – that is, whether the Applicant made her application within the period prescribed by s.394(2), being 21 days after the dismissal took effect, or such further period as the Commission has allowed – I must first determine whether a dismissal occurred at all.

[5] The parties agreed these jurisdictional issues could be determined on the papers prior to any hearing of the merits of the application. This seemed an appropriate course, particularly given each party had the benefit of representation. In addition to the Form F2 and Form F3, each party filed written submissions and the Applicant also filed an affidavit.

Background

[6] It is necessary to consider the context in which this dispute arises. The Applicant commenced employment with an entity called WorkingMouse Pty Ltd (WorkingMouse) as a full time Community Lead on 9 January 2017. Both WorkingMouse and the Respondent are wholly owned subsidiaries of East Cottage Industries Pty Ltd. Mr Eban Escott is the CEO for both companies.

[7] On 1 July 2018, the Applicant entered a part-time employment contract with the Respondent for the position of ‘Community Lead’. Her employment was transferred to the Respondent and her service with WorkingMouse was recognised. The Respondent paid the Applicant’s salary and provided her payslips. When the Applicant took up a different role with WorkingMouse in August 2020, no changes were made to her employment contract and the Respondent continued to pay her salary and issue her payslips. The deed prepared in December 2020 by the Respondent’s legal representative described the Respondent as the “Employer” and the Applicant as the “Employee”. The Respondent’s Form F3 filed on 8 March 2021 acknowledges that the Respondent was the employer of the Applicant, listing ‘Codebots Pty. Ltd’ as the legal name of the employer and ticking the box “Yes” in answer to the question ‘Has the Applicant given the correct legal name of the employer in their unfair dismissal application (Form F2)?’

[8] The Respondent’s written submissions raise, for the first time, the allegation that the Applicant has identified the incorrect employer in her application. The Respondent also alleges, again for the first time, that the Applicant ceased employment on 11 August 2020. The basis for this is the fact that on 14 July 2020, the Applicant emailed Mr Escott indicating that she intended to resign from her position on the board of East Cottage Industries Pty Ltd, which she had held since 3 June 2019. Holding that position or performing those duties were not required by her contract of employment, nor did she receive additional compensation or benefits for having done so. The Applicant’s email on 14 July 2020 does not say that the Applicant is resigning from her employment. Rather, it simply indicates her resignation from the board.

[9] Having read the material provided by both parties, I am satisfied that the Applicant’s employment did not end in August 2020. I do not think it is necessary to go into any further details on that point. I am also satisfied that any discrepancy in the named Respondent can be remedied if required. I will turn now to the first substantive issue before me, that is, was the Applicant dismissed?

Was the Applicant dismissed?

Respondent’s submissions

[10] The Respondent submits that the Applicant was not dismissed from her employment with the Respondent for the purposes of s.386 of the Act. The Respondent says that in her conversation with Mr Escott on 16 October 2020, the Applicant indicated that she wanted to do “something different” in 2021. The Respondent says that Mr Escott sought to persuade the Applicant to remain in her role.

[11] The Respondent also refers to the discussions between Mr Escott and the Applicant on 5 November 2021, which concerned the Applicant’s “amicable exit from the company”, which was – the Respondent says – to take place “by the end of January 2021”. The Respondent says that 31 January 2021 was a date chosen by the Applicant as early as 6 November 2020 and this this situation was not one in which the employee resigned but the employer sought to terminate with immediate effect or on a date earlier than that intended by the employee.  1

[12] The Respondent says that the Applicant was attempting to withhold her departure from her employment until all the parties to the Deed agreed to waive her obligations under that Deed. When it became apparent that “such a tactic was not to succeed”, the Applicant made a complaint against Mr Escott and lodged the present application. The Respondent alleges that the commencement of these proceedings is an abuse of process engaged in with a view to avoiding contractual and common law obligations under the Deed.

Applicant’s submissions

[13] The Applicant contends that her employment was terminated by the Respondent on 31 January 2021 and that she was only became aware of this on 3 February 2021 when she realised that her entitlements had been paid out and she no longer had access to her work accounts.

[14] The Applicant states that following her resignation from her position on the board on 14 July 2020, she had been subject to aggressive and bullying behaviour from Mr Escott. She decided that she wanted to remove herself from the situation but did not wish to resign because she would be penalised under the Shareholders Deed. The terms of that deed, which she had entered into on 25 September 2019, included a provision that imposed a penalty if she resigned within 3 years. These was referred to as the “bad leaver” provisions.

[15] The Applicant gave evidence that on 5 November 2020, she engaged in discussions with Mr Escott and Mr Liam Robinson (another director of the Respondent) about coming to an arrangement that would mean she did not incur the penalties of the bad leaver clause. Her evidence was that an oral agreement was reached between the parties that:

“a. I would transfer 130,500 ECI shares (around one third of my total shareholding) to Mr Escott;

b. I would be exempted from the application of the ‘bad leaver’ provisions in the Shareholder’s Deed with regard to my remaining shares;

c. We would enter into a written agreement formalising these terms, with my associated legal fees to be paid by the Respondent; and

d. Upon execution of the formal written agreement, I would resign, with 31 January 2021 being the target date for me leaving employment.

[16] The Applicant’s evidence was that they had agreed that 31 January 2021 was the target date for her leaving the Respondent’s employment, as it allowed time to formalise and agree on the written terms of her exit. However, she submitted that this was a target date rather than a non-negotiable end date because it required other conditions to be satisfied, namely that a written agreement be made between the parties. She submits that she did not intend to resign unless and until she could ensure that she would be exempted from the penalty that she would otherwise incur under the Shareholder’s Deed.
[17] The Applicant says that she refused Mr Escott’s request to formally announce her departure at a staff lunch party held on 26 November 2020 because the oral agreement had not been finalised. Then, the draft agreement sent to the Applicant from the Respondent on 16 December 2020 did not reflect the terms agreed to orally. Between 16 December 2020 and 20 January 2021, the Applicant engaged in discussions with the Respondent to confirm the terms of the original oral agreement. The Applicant says the situation remained unclear on 22 January 2021, so she emailed Mr Robinson asking what would happen to her employment. Mr Robinson replied that her employment would terminate on 31 January 2021. The Applicant responded to that email saying she had not agreed to any termination. She received no response.

Consideration

[18] The situation presently before me can categorised as a separation agreement that has gone awry. The Applicant clearly indicated that she wished to discontinue her employment with the Respondent at some stage in the future. The relationship between the Applicant and Mr Escott had deteriorated significantly. The Applicant has made allegations against Mr Escott, which if true, are indeed serious and unprofessional. It must be said that he denies those allegations. It is unnecessary for me to determine the veracity of those claims in the present matter.

[19] For present purposes, it is sufficient to note that the Applicant, having indicated that she wished to leave, embarked upon a process to negotiate an exit strategy with the Respondent. It is not unusual for professional persons to seek to negotiate an exit from a company under terms that is amenable to both parties.

[20] I am satisfied based on the Applicant’s evidence that she raised 31 January 2021 as the date on which she and the Respondent would part ways. However, this was conditional upon the execution of a separation agreement that exempted her from the “bad leaver” penalty, as well as other terms to be agreed between the parties. No agreement having been executed by 31 January 2021, the Applicant was under the impression that her employment had not terminated. The silence of Mr Robinson on to her email on 22 January 2021 is not sufficient to displace that expectation. Accordingly, I accept that it was the Respondent’s actions – namely paying out the Applicant’s entitlements and ending her access to her work accounts – that brought about the end of the employment relationship on 31 January 2021. That is, the Applicant was dismissed within the meaning of the Act.

[21] I also accept that the Applicant became aware her employment had been terminated on 1 February 2021 when she noticed her accounts with the Respondent had become inactive. This was confirmed when the Applicant received a final payslip from the Respondent on 3 February 2021 showing that her salary had been paid until 31 January 2021 and her entitlements paid out.

Was the application made within time?

[22] As noted above, s. 394 of the Act requires that an unfair dismissal application under s. 365 of the Act must be made within 21 days after the dismissal took effect or within such further period as the Commission allows under s. 3662(2) of the Act.

[23] For the reasons set out above, I am satisfied that the Applicant was dismissed by the Respondent on 31 January 2021. She lodged her application 18 days later, on 19 February 2021. The application was therefore made within time.

[24] Accordingly, I order that the jurisdictional objections be dismissed. I will issue directions shortly for the programming of the matter for a hearing of the merits of the Application.

DEPUTY PRESIDENT

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 1   Contra Nohra v Target Australia Pty Ltd (2010) 204 I.R. 389.