Donna Evans v South Australian Road Runners Club Inc T/A South Australian Road Runners Club Inc (“Sarrc”)

[2015] FWC 4779

[2015] FWC 4779

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Donna Evans
v
South Australian Road Runners Club Inc T/A South Australian Road Runners Club Inc (“SARRC”)
(U2015/5889)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 17 JULY 2015

Application for relief from unfair dismissal - extension of time not granted.

[1] Ms Evans has lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of her employment with the South Australian Road Runners Club Inc (SARRC).

[2] Ms Evans’ application was lodged on 11 June 2015. The application advised that Ms Evans’ employment was terminated with effect from 23 March 2015. The application asked that the following information be taken into account:

“The Applicant recently learned of facts that indicate that her previous position at SARRC as ‘General Manager’, from which she was purportedly made redundant, is presently being performed by an ex-SARRC Board Member, Mr Pieter de Wit. Mr de Wit was present as a SARRC Board Member during the meeting on 23 March 2015 during which the Applicant was informed that her position had been made redundant.

Mr de Wit was appointed to the role of ‘Manager’ at SARRC around the end of May 2015; approximately 2 months after the Applicant was made redundant. Mr de Wit resigned as a SARRC Board Member prior to taking the ‘Manager’ role, which has the same, or substantially the same, duties as the Applicant’s previous role as ‘General Manager’. Mr de Wit’s appointment as ‘Manager’ (and that the Applicant’s previous job as General Manager is now performed by Mr de Wit) only came to the Applicant’s attention on the evening of Friday 5 June 2015.

The Applicant immediately sought legal advice regarding the circumstances and her “redundancy”. In addition to filing this application the Applicant’s legal representative wrote to Ms Leanne Frederiksen, President SARRC Board, on 11 June 2015 on the Applicant’s behalf to dispute that the dismissal was a genuine redundancy and to seek an explanation regarding Mr de Wit’s performance of the ‘Manager’ position. The Applicant also made an offer in an attempt to resolve the matter.” 1

[3] On 19 June 2015 my Associate corresponded with both Ms Evans and SARRC and advised that the extension of time issue would be considered through a telephone conference on 15 July 2015. Substantial information about the extension of time issue was provided to the parties. Ms Evans was directed to provide a witness statement and a copy of any document relied upon relative to the extension of time issue by 8 July 2015.

[4] Additional information was received from Ms Evans. This information confirmed that Ms Evans understood that her position as General Manager of SARRC had been made redundant on the basis of advice provided to her. On 5 June 2015 she advised that she became aware that Mr de Wit had taken on the General Manager function. She subsequently contacted her lawyer and provided instructions for the lodgement of the application.

[5] The Employer’s Response to the application indicated that SARRC opposed the extension of time and maintained its position that the termination of Ms Evans’ employment was as a result of a genuine redundancy. Additionally, SARRC asserted that it was a small business and that the termination of Ms Evans’ employment was consistent with the Small Business Fair Dismissal Code.

[6] In written submissions provided prior to the conference the SARRC advised that Ms Evans’ position was abolished at the time she was made redundant and that, at that time “the intention was that her duties would be absorbed by other employees/Board members in a voluntary capacity.” 2 SARRC further stated:

“14.6 The Respondent submits that its circumstances changed since the termination of the Applicant’s employment following the resignation of the Accounts & Administration Coordinator on 30 March 2015. This led to the creation of the Office Manger role in May 2015.

14.7 The Office Manager role is made up of some of the Applicant’s former duties (with most being absorbed amongst other employees or Board members) (see annexure SAR-2), but predominantly comprises of the Accounts & Administration Coordinator’s former duties. Annexed and marked “SAR-3” and “SAR-4” are copies of the Office Manager’s and the former Accounts & Administration Coordinator’s position description respectively, which reflects same.

14.8 The Respondent has re-named the new position “Office Manager” to reflect the broad administrative nature of the role. Further, the person appointed to the Office Manager position by the Respondent is paid a significantly lower salary to reflect the lower-level and different position. Specifically, the Applicant was paid $86,250 per annum (inclusive of superannuation), and the current Office Manager is paid $54,750 per annum (inclusive of superannuation).”

[7] Ms Evans participated in the telephone conference but was represented by Mr Rochow, of counsel. Ms Frederiksen, a member of the Board of SARRC also participated in this conference but SARRC was represented by Ms Burfoot, of counsel. In both instances, permission was granted pursuant to s.596(2)(a) of the FW Act. My conclusions about the extension of time issue were reached on the basis of all of the information before me. I note that a sound file record of this telephone conference was kept.

[8] Section 394 relevantly states:

“394 Application for unfair dismissal remedy

....

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(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.”

[9] On the information before me I am satisfied that the application was made some 58 days outside of the 21 day time limit and hence, can only be pursued if this time limit is extended. I have considered the provisions of s.394(3) in the context of the Full Bench decision in Nulty v Blue Star Group Pty Ltd 3 which stated:

“[10] It is convenient to deal first with the meaning of the expression “exceptional circumstances” in s.366(2). In Cheval Properties Pty Ltd v Smithers a Full Bench of FWA considered the meaning of the expression “exceptional circumstances” in s.394(3) and held:

“[5] The word “exceptional” is relevantly defined in The Macquarie Dictionary as “forming an exception or unusual instance; unusual; extraordinary.” We can apprehend no reason for giving the word a meaning other than its ordinary meaning for the purposes of s.394(3) of the FW Act.”

[11] Given that s.366(2) is in relevantly identical terms to s.394(3), this statement of principle is equally applicable to s.366(2).

[12] The ordinary meaning of the expression “exceptional circumstances” was considered by Rares J in Ho v Professional Services Review Committee No 295, a case involving in s.106KA of the Health Insurance Act 1973 (Cth). His Honour observed:

“23. I am of opinion that the expression ‘exceptional circumstances’ requires consideration of all the circumstances. In Griffiths v The Queen (1989) 167 CLR 372 at 379 Brennan and Dawson JJ considered a statutory provision which entitled either a parole board or a court to specify a shorter non-parole period than that required under another section only if it determined that the circumstances justified that course. They said of the appellant’s circumstances:

‘Although no one of these factors was exceptional, in combination they may reasonably be regarded as amounting to exceptional circumstances.’

24. Brennan and Dawson JJ held that the failure in that case to evaluate the relevant circumstances in combination was a failure to consider matters which were relevant to the exercise of the discretion under the section (167 CLR at 379). Deane J, (with whom Gaudron and McHugh JJ expressed their concurrence on this point, albeit that they were dissenting) explained that the power under consideration allowed departure from the norm only in the exceptional or special case where the circumstances justified it (167 CLR at 383, 397).

25. And, in Baker v The Queen (2004) 223 CLR 513 at 573 [173] Callinan J referred with approval to what Lord Bingham of Cornhill CJ had said in R v Kelly (Edward) [2000] QB 198 at 208, namely:

‘We must construe “exceptional” as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered.’

26. Exceptional circumstances within the meaning of s 106KA(2) can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. Thus, the sun and moon appear in the sky everyday and there is nothing exceptional about seeing them both simultaneously during day time. But an eclipse, whether lunar or solar, is exceptional, even though it can be predicted, because it is outside the usual course of events.

27. It is not correct to construe ‘exceptional circumstances’ as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural ‘circumstances’ as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of ‘exceptional circumstances’ in s 106KA(2) includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon. And, the section is directed to the circumstances of the actual practitioner, not a hypothetical being, when he or she initiates or renders the services.”

[13] In summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.”

[10] Ms Evans’ reasons for the delay are fundamentally based on her assessment, in early June 2015, that her position was not redundant and was being undertaken by Mr de Wit. I accept that, once she made that assessment, she acted quickly to pursue this application.

[11] I have considered the extent to which Ms Evans’ position is comparable with that considered by Sams DP in Cross and others v Banana Coast Community Credit Union Ltd T/A BCU (Banana Coast). 4 In that matter, at first instance, the Deputy President considered each of the factors referenced in s.394(3). With respect to the applicant’s subsequent awareness that their termination of employment may not have been a result of a genuine redundancy he concluded:

“[51] In my view, this is a rare and unusual case. I am satisfied that an honestly and reasonably held belief that an earlier redundancy may not have been genuine, and the belief is based on plausible information, may constitute ‘exceptional circumstances’ for the purposes of s 394(3) of the Act. It follows that I reject Ms Paterson’s submission that a dismissal cannot be unfair based on matters that occur after the dismissal took effect.”

[12] The Deputy President later recognised the significant component of the delay in that matter which related to inaction on the part of the applicant’s union and characterised this as representative error. He ultimately concluded that the requisite circumstances for an extension of time had been made out.

[13] I note that the Deputy President’s decision in that matter was the subject of an appeal. In that decision 5 the Full Bench concluded that:

“[19] In our view, the decision under appeal properly considers each of the factors required to be considered under s.394(3) of the Act. The Deputy President considered the representational error in the context of the factor whether the employees took action to dispute their dismissals - not in relation to the reasons for the delay. We see no error in this approach. The arguments of error are not strong and essentially amount to disagreement with the consideration of the factors required to be taken into account. We have not been satisfied that it is in the public interest to grant permission to appeal. Permission is denied and the application for permission to appeal is determined accordingly.”

[14] In Rowley v RSL (QLD) War Veterans Homes Ltd T/A RSL Care 6 Commissioner Simpson concluded:

“[21] The principle reasons given for the delay relied upon by the Applicant is she was misled at the time of her termination about her redundancy and subsequent information gained post the redundancy points to the redundancy not being genuine. Having considered the material put before me I am inclined to accept the Respondents submission that the new material that has come into the knowledge of the Applicant well outside the statutory timeframe for filing an unfair dismissal application is not substantial information on which a reasonable inference could be drawn to support a view that the Applicants redundancy was not genuine. On that basis I conclude the reason given for the delay is not an exceptional circumstance.”

[15] Those two decisions demonstrate the inherent difficulty associated with consideration of a late unfair dismissal application in terms of the requirement to establish exceptional circumstances where an employee asserts that a redundancy was a sham but only became aware of that redundancy at a later time. As the Full Bench decision in Banana Coast confirms, the potential exists for an extension of time to be granted on the basis that the FWC concludes that an employee could, after the 21 day period honestly and reasonably understand that their redundancy was not genuine. It seems to me that there are a number of factors which may become relevant in the assessment of the particular circumstances. Firstly, it would generally be necessary that there is a clear indication that the redundancy was a sham. Secondly, the duration of the time involved becomes important in that, the longer the period of time, the greater the potential for subsequent changes in the employer’s business which reflect different business circumstances. It would be unfair to effectively stop a business from being able to adjust its structure to accommodate unforeseen events. Thirdly, the utility of the application may become a relevant consideration.

[16] In Ms Evans’ case, I have attached substantial significance to the advice provided by SARRC to the effect that the current Office Manager position differs from the functions previously undertaken by Ms Evans. My comparison of the information about the current and previous roles indicates that there are significant differences. I am not satisfied that Ms Evans’ advice that Mr de Wit has asserted on social media, that his job function is the same as that which she previously held establishes that the two jobs are the same. In any event, I not satisfied that such an assertion would override the information before me which is indicative of a contrary position. A further factor relates to the SARRC advice that the position currently held by Mr de Wit was established only after the resignation of another employee on 30 March 2015 and that it was not created until May 2015. In this regard it appears that the initial restructuring of the SARRC business was further modified after the resignation of the Accounts and Administration Coordinator on 30 March 2015. Whilst it may well be that this resignation was prompted by a reduction in the work hours for that employee, there is nothing before me to indicate that this was part of an overall strategy to improperly characterise the termination of Ms Evans employment. In reaching this conclusion, I have also noted the substantial difference in salary which is in the order of $30,000 per annum. This differential further supports the extent to which there has been a significant restructuring of the SARRC operations.

[17] Consequently, I am not satisfied that Ms Evans has established to me that it is likely that her redundancy was a sham such that her circumstances should be regarded as exceptional. As a result, there is a significant difference between Ms Evans situation and that which applied in Banana Coast.

[18] A further consideration in this respect relates to the time delay involved. In this case the delay is substantial and lends support to the explanation of the nature of the changes made by SARRC. It lends credibility to the SARRC position that it made Ms Evans’ position redundant as a result of its financial circumstances and that, at that time it intended that her duties would be absorbed by its Board members in a voluntary capacity, and by other employees. It also lends credibility to the SARRC assertion that the position of Office Manager was established only after the resignation of the Accounts and Administration Coordinator. Again, the particular circumstances here are not indicative of an obvious sham arrangement.

[19] Thirdly, Ms Evans has indicated a desire to pursue this application so as to protect her personal reputation. The information before me does not establish that the termination of her employment represented a criticism of that performance as distinct from a decision by the SARRC that the structure which previously applied could not be afforded.

[20] Having considered the entirety of the material before me, I am not satisfied that Ms Evans has established that the reason for the significant delay in this matter represented an exceptional circumstance. An extension of time for the lodgement of an unfair dismissal application cannot simply follow from an employee becoming aware of doubts about the validity of a redundancy. Whilst I have no question about Ms Evans’ honesty in believing that her redundancy was a sham, the material before me does not establish that these doubts were properly founded in this instance.

[21] Ms Evans became aware of the termination of her employment on the day on which it took effect. Apart from this application she did not take other action to dispute the termination of her employment. I do not consider that an extension of time of this magnitude would prejudice the Respondent, but this, of itself, does not provide a basis for an extension of time.

[22] The merits of the application involve somewhat circular considerations related to the reason for the delay. Whilst the information before me does not enable a definite conclusion, if SARRC establishes the advice it has provided to me about the restructuring of its operations and the extent to which it consulted with Ms Evans and considered redeployment opportunities, I consider it unlikely that the application would be successful. Accordingly I have regarded the merits of the application as a factor which does not favour the extension of time.

[23] I am not satisfied that considerations of fairness relative to other persons in similar positions establish that an extension of time should be granted in these circumstances.

[24] Accordingly I have concluded that the material before me does not establish that Ms Evans’ circumstances can be regarded as exceptional so as to warrant an extension of time. The application will be dismissed on this basis and an Order (PR569402) giving effect to this decision will be issued.

Appearances (by telephone):

L Rochow of counsel for the applicant.

C Burfoot of counsel for the respondent.

Hearing (Conference) details:

2015.

Adelaide:

July 15.

 1   Form F2, para 1.4

 2   SARRC submissions, para 14.5

 3   [2011] FWAFB 975

 4   [2012] FWA 7681

 5   [2012] FWAFB 10165

 6   [2014] FWC 5326

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<Price code C, PR569401>