Emma Wild v Escala Partners Ltd. T/A Escala Partners

[2018] FWC 2777

[2018] FWC 2777

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365—General protections

Emma Wild
v
Escala Partners Ltd. T/A Escala Partners; Matthew Zanders
(C2018/1284)

COMMISSIONER SAUNDERS NEWCASTLE, 17 MAY 2018

Application to deal with contraventions involving dismissal – date on which employment relationship came to an end – application filed within time .

[1] On 9 March 2018, Ms Emma Wild filed in the Fair Work Commission (Commission) a general protections application involving an alleged dismissal (Application). In that Application, Ms Wild contends that Escala Partners Ltd (Escala) and Mr Matthew Zander, Investment Advisor of Escala, contravened s.340 of the Fair Work Act (Cth) (Act).

[2] Ms Wild contends that she was dismissed on 19 February 2018. Escala contends Ms Wild resigned on 19 December 2017. As Ms Wild filed her Application more than 21 days after 19 December 2017, Escala contends that the Commission cannot deal with the dispute in accordance with s.368 of the Act unless an extension of time is granted pursuant to s.366 of the Act.

[3] In Hewitt v Topero Nominees Pty Ltd, 1 a Full Bench of the Commission decided that the Commission is not empowered to make a determination that an applicant in a s.365 proceeding had been “dismissed” from their employment on the basis that Subdivision A of Division 8 of Part 3-1 of the Act does not confer any determinative power on the Commission (except under s.366 to extend the time within which a s.365 application must be made). The determinative power contained in s.366 does not involve any determination of the merits of a s.365 application. Accordingly, I do not have the power to, and will not, determine whether Ms Wild resigned or was dismissed.

[4] On 11 May 2018, I conducted a hearing by telephone in relation to the confined question of when Ms Wild’s employment relationship with Escala came to an end. If it came to an end in December 2017, as contended for by Escala, then the Application was filed out of time and Ms Wild will need an extension of time to proceed with her Application. If, on the other hand, Ms Wild’s employment relationship with Escala came to an end on 19 February 2018, as she contends, then her Application was filed within time and there is no need to consider her application for an extension of time.

[5] At the hearing on 11 May 2018, Ms Wild gave evidence, as did Mr Pep Perry, Partner and CEO of Escala.

Applicable legal principles

[6] Section 366 of the Act requires an application under s.365 to be made within 21 days after the dismissal took effect or within such further period as the Commission allows under s.366(2).

[7] “Dismissed” is defined in s.386(1) of the Act as follows:

“A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[8] A dismissal takes effect when the employment relationship has ended. 2 The termination of the employment relationship is a different concept from the termination of an employment contract.3

[9] The employment relationship, in Australia, operates within a legal framework defined by statute and by common law principles, informing the construction and content of the contract of employment. 4

[10] The unfair dismissal regime in Part 3-2 of the Act applies to “national system employees” and “national system employers”. 5 National system employees are employees of national system employers, being employers which bear particular characteristics such as to make them amenable to particular heads of legislative power of the Commonwealth in s.51 of the Constitution.6 Beyond this, the Act does not seek to establish a statutory definition of what constitutes an employee. National system employees for the purposes of Part 3-2 of the Act are parties to an employment relationship at law.7

[11] Whether an employment relationship continues to exist is a question of fact. 8 The range of facts or factors which may need to be examined to answer the question of whether an employment relationship continues to exist will be determined by the circumstances of a particular case, and may include, without limitation, whether the employee is being paid a wage or other benefits or entitlements, whether the employee is attending or performing work for the employer, whether the employer is exercising, or has the ability to exercise, control over the execution of work by the employee,9 and the terms of the employment contract.

[12] I accept that the subjective understanding of the employer and/or employee may in some cases be relevant to the determination of the factual question about whether the employment relationship continues to exist, but in most cases the primary focus will be on what the parties have said and done.

Relevant Facts

[13] Ms Wild commenced employment with Escala in the full-time position of Front Office Manager and Events Coordinator on 14 August 2017.

[14] Ms Wild’s written employment agreement with Escala includes the following relevant terms and conditions:

“2.0 Duties

Duties and Reporting

2.1 The duties of your position include all duties relevant to your professional capacity of which you are employed and other such duties reasonably allocated to you. Your duties and title are detailed within Schedule 2.

2.2 You will report to the Chief Executive Officer/Partner and the Sydney Office Manager/s.

2.3 Your duties and responsibilities may be varied to accommodate Escala’s business requirements. If this change occurs, your terms and conditions within this Agreement remain unchanged, unless otherwise agreed.

Requirements

2.4 In the Position, you agree to:

• devote your whole time and attention and the whole of your skills to your duties during the hours of work and such reasonable additional hours that may be necessary to perform your duties;…

• use your best endeavours to promote the business interests of Escala;…

• comply with all reasonable and lawful directions of Escala.

2.5 Without prior written approval of Escala you agree not to:

• undertake any other trade, business or profession; and

• Be involved in any activity, which creates or may create a conflict of interest with Escala, the requirements of your position or your ability to carry out your duties. This includes without limitation, being engaged as a consultant, employee, director, partner, executive, officer, mentor, major shareholder, franchisee, trustee or executor. Should any prospective conflict of interest arise, you agree to immediately notify Escala to obtain written permission to engage in such interest or activities…

5.0 Hours of Work

5.1 The standard working week is 37.5 hours per week for full–time employees, usually worked from 8.30am – 5.00pm (excluding 1 hour lunch break)…

6.0 Location and Travel

6.1 You will be located in Sydney, Australia as specified in Schedule 2. With mutual agreement, Escala may change your place of work to another location…

9.0 Probation Period…

9.3 During the probationary period, either you or Escala may terminate your employment with one week notice. In its discretion, Escala may elect make a payment in lieu of notice…

13.0 Termination of Employment

Termination with Notice/Notice Period

13.1 In the event that either party wishes to terminate this Agreement after completion of your probation period, you or Escala are to provide:

• 1 month written notice.

Restrictions

13.2 During your notice period, you will continue to be employed by Escala and you must not engage or prepare to engage in any business activity that is the same or similar to the business activities of Escala in whole or part. You must continue to act in accordance with your Agreement obligations and requirements and remain subject to Escala is lawful and reasonable directions, including being available if needed.

You will assist with an efficient and thorough transition of all clients that you managed or that you had relationships with, to other Escala employees, as directed by the CEO.

13.3 During any resignation or termination notice period, and during any investigation period, Escala may:

• direct you not to present to work;

• direct you not to perform some or all of your duties; …

• remove and refuse you access to Escala’s property including intellectual and confidential property.

Payment in Lieu of Notice

13.4 In its absolute discretion, Escala may elect to provide full or part payment in lieu of notice upon termination (including summary termination). Such payment will be calculated on your base salary. You remain bound by the non—compete period (clause 13.5 within this Agreement), whereby you must not engage or prepare to engage in any business activity that is the same or similar to the business activities of Escala in whole or part…”

[15] On 15 November 2017, Escala notified Ms Wild of its decision to extend her probationary period until 14 February 2018.

[16] Ms Wild claims that she was systematically bullied, harassed, belittled and intimidated by Mr Zander from the commencement of her employment with Escala.

[17] On 13 December 2017, Ms Wild sent an email to Ms Natalie Allamby, Escala’s Human Resources Manager, in which she raised various concerns about Mr Zander’s actions. Ms Wild concluded that email in the following way:

“I feel I have remained professional during this difficult period with Matt [Zander] despite his treatment of me. I do not know whether you have taken action or plan to but I hope for a speedy resolution to this problem.”

[18] Ms Wild says she became increasingly emotionally distressed about the way she was being treated by Mr Zander and as a result took two days of personal leave on 14 and 15 December 2017.

[19] By email sent on 14 December 2017, Mr Perry informed Ms Wild that “I am up in Sydney on the 19^th again and we can catch up on this issue [concerning Mr Zander] when I am there”.

[20] Ms Wild and Mr Perry each gave evidence about their meeting on 19 December 2017. Such evidence was given orally at the hearing on 11 May 2018 and in their respective witness statements. I have had regard to all that evidence in determining the date on which the employment relationship between Ms Wild and Escala came to an end. I set out in paragraphs [21] to [27] below my findings in relation to what I consider to be the significant aspects of the meeting between Ms Wild and Mr Perry on 19 December 2017.

[21] I accept that Ms Wild was highly stressed and emotional at the time of her meeting with Mr Perry on 19 December 2017. She says that this was as a result of the way Mr Zander was treating her and on account of the fact that nothing was being done about such treatment, despite Ms Wild raising the issue with Escala. Mr Perry accepts that he had compassion for Ms Wild in the meeting on 19 December 2017.

[22] Mr Perry says that his meeting with Ms Wild commenced at about 11:15am on 19 December 2017. Ms Wild contends that the meeting commenced at about 2pm. I do not need to determine when the meeting commenced, but it is significant that it commenced and concluded well before Ms Wild’s usual finish time of about 5pm. This is significant because:

• Ms Wild had packed up her belongings, which she says were limited to her bag, shoes and jacket, before the commencement of her meeting with Mr Perry on 19 December 2017. Ms Wild confirmed during cross examination that this was the case; and

• after her meeting with Mr Perry on 19 December 2017, Ms Wild left Escala’s premises. Mr Perry gave unchallenged evidence to this effect.

[23] Because I do not have the power in the context of the present application to determine whether Ms Wild resigned or was dismissed, I will not make findings about the parts of the conversation between Ms Wild and Mr Perry on 19 December 2017 in which it is alleged that Ms Wild said she resigned or other like matters.

[24] There is no dispute and I find on the evidence that during the meeting on 19 December 2017, Ms Wild raised issues concerning alleged unsatisfactory behaviour by Mr Zander. I accept Ms Wild’s evidence that she said to Mr Perry words to the effect: “I can’t be here now because of Matt [Zander].”

[25] I am also satisfied on the basis of evidence given by both Mr Perry and Ms Wild that Mr Perry told Ms Wild at the meeting on 19 December 2017 that Escala would not be dismissing Mr Zander.

[26] I accept Mr Perry’s unchallenged evidence that at the meeting on 19 December 2017 Ms Wild said words to the effect that she was struggling a lot with being at Escala, that it did not work for her any more, and that she just did not see any good outcome in the future.

[27] There is no dispute and I find on the evidence that during the meeting on 19 December 2017:

• Mr Perry and Ms Wild agreed that her last day in the office would be 19 December 2017;

• Mr Perry wished Ms Wild the best of luck with the future;

• Mr Perry spoke to Ms Wild about him providing assistance to help her get another job; and

• Mr Perry agreed that Escala would continue to pay Ms Wild after 19 December 2017. Ms Wild contends that Mr Perry said Escala would continue to pay her until she found another job. Mr Perry contends that he said Escala would pay Ms Wild until the end of the holiday period so that she would have plenty of time to look for a new job. I do not need to determine whether the agreement was to pay Ms Wild until she “found another job” or until the “end of the holidays”. The significant point in the context of the present dispute is the fact that an agreement was made to the effect that 19 December 2017 would be Ms Wild’s last day in the office but Escala would continue to pay her for a period after that time; and

• Ms Wild thanked Mr Perry and gave him a hug goodbye.

[28] On 20 December 2017, Mr Perry wrote a letter to Ms Wild in the following terms:

“Dear Emma,

As per our discussion on 19.12.2017, you agreed that your last day in the office would be 19.12.217. By mutual agreement you will be paid monthly (as per usual), with your conclusion date being 19.02.2018.

We thank you for all your assistance throughout your employment and wish you all the very best with your future endeavours.

Regards

Pep Perry

Chief Executive Officer/Partner”

[29] On 21 December 2017, Ms Allamby sent an email in the following terms to Ms Wild:

“Hi Emma,

I hope you are well.

Can you please let me know if you received my letter which confirms some dates. I sent it by email on Wednesday.

Thanks

Natalie Allamby”

[30] On 22 December 2017, Ms Wild sent an email in the following terms to Ms Allamby (cc to Mr Perry), responding to Mr Perry’s letter of 20 December 2017:

“Hi again Natalie,

That is actually quite disappointing to see. Pep told me he would pay me until I got another job due to the bullying I received at work. I remember this clearly as I thought it quite generous. I would not have taken advantage of his kind offer as I planned to get back into the workforce as soon as possible. At no stage did he and I discuss two months severance pay.

There is no way I can get a job in two months from now, no-one hires over the Christmas period.

At this stage, I feel vulnerable and my confidence has been rocked and now, given this new information, am under enormous pressure.

My doctor has prescribed medication for me due to what happened at work. I haven’t needed this before.

I am hopeful we can work out an amount of severance time/pay that is mutually beneficial, gives me time to feel well enough to get a job and has a finite time for Escala. Please discuss this with Pep.

Emma”

[31] Ms Wild received her usual monthly salary and superannuation contributions during January 2018 and February 2018. That is, she was paid her usual salary and superannuation contributions were paid by Escala into her superannuation fund in the period from 19 December 2017 to 19 February 2018.

[32] On 14 February 2018, the payment made by Escala to Ms Wild included an amount in respect of her accrued annual leave, including annual leave accrued in the period from 19 December 2017 to 19 February 2018. Ms Wild’s payslips dated 14 December 2017, 12 January 2018 and 14 February 2018 all show Ms Wild receiving base salary, accruing annual leave and having superannuation guarantee contributions made on her behalf in the period from 19 December 2017 to 19 February 2018.

Subjective understandings

[33] I do not accept the evidence Ms Wild gave in cross examination that in the 19 December 2017 meeting, she was contemplating coming back to work at Escala because she “wanted to face up to a bully”. Her evidence in that regard is not plausible in light of (a) Mr Perry’s unchallenged evidence that at the meeting on 19 December 2017, Ms Wild said words to the effect that she was struggling a lot with being at Escala, that it did not work for her any more, and that she just did not see any good outcome in the future, (b) her agreement that 19 December 2017 would be her last day in the office, and (c) Ms Wild’s email sent on 22 December 2017 in which she referred to her plan to “get back into the workforce as soon as possible”, 10 obviously (from the context of the email) with a different employer.

[34] However, I accept, on the balance of probabilities, Ms Wild’s evidence that she understood and believed from her discussion with Mr Perry on 19 December 2017 that she would remain employed by Escala until she found other employment, but that after receiving the 20 December 2017 letter from Escala she understood and believed her employment with Escala would end on 19 February 2018. Ms Wild stood firm when cross examined about those matters. Further, in my view, it is plausible that a lay person, particularly one in an emotionally distressed state, such as Ms Wild, would believe that they would remain employed by their employer while they were being paid their usual salary, even though their last day in the office was 19 December 2017. Ms Wild’s email of 22 December 2017 to Ms Allamby does not make any reference to her belief that she remained employed by Escala, but it is clear from the email that Ms Wild’s main focus at that time was ensuring that she continued to be paid during the period of time she needed to recover and find another job. I do not consider that email, including the references in it to “severance pay”, “severance time/pay” or Ms Wild’s need to get another job, as inconsistent with Ms Wild’s evidence as to her understanding and belief concerning her ongoing employment with Escala.

[35] Ms Wild says she cannot recall whether she told Escala’s insurer, EML, in 2018 that her “last day of employment with Escala was in December 2017”. Even if I accepted that Ms Wild made such a statement to EML, it would not alter my conclusion as to Ms Wild’s understanding and belief concerning her ongoing employment with Escala from and after 19 December 2017 because (a) Ms Wild’s discussions with EML took place at least three months after her meeting with Mr Perry on 19 December 2017 when she formed the belief about her continued employment with Escala and (b) in the context of explaining to an insurer the events which gave rise to Ms Wild’s Workcover claim, it would be a simple matter for an employee, such as Ms Wild, to refer to her “last day of employment”, or her “last day in the office”, interchangeably and without any intention of making an admission or otherwise conveying that she understood her employment relationship with Escala came to an end on 19 December 2017.

[36] I accept that Mr Perry believed on and from his meeting with Ms Wild on 19 December 2017 that the employment relationship between Escala and Ms Wild ceased on 19 December 2017, but that Escala had agreed to continue to make payments to Ms Wild for a period after 19 December 2017. I accept Mr Perry’s explanation that he arranged for Escala to continue to pay Ms Wild her usual salary during the period from 19 December 2017 to 19 February 2018 because that was the easiest and most cost effective and efficient way to arrange for additional payments to be made to Ms Wild after 19 December 2017, particularly having regard to the fact that it would have been difficult to arrange for Escala’s payroll staff to calculate and make a payment of salary in advance to Ms Wild prior to Christmas. Mr Perry explained that the time, cost and inconvenience associated with making a payment to Ms Wild prior to Christmas would have outweighed the additional costs Escala incurred by making monthly salary payments to Ms Wild in January and February 2018, even having regard to the additional annual leave Ms Wild accrued and was paid in respect of the period from 19 December 2017 to 19 February 2018.

[37] Mr Perry’s subjective understanding of when the employment relationship between Escala and Ms Wild came to an end provides some support for Escala’s contention that the relationship ceased on 19 December 2017. Similarly, Ms Wild’s subjective understanding on the same question provides some support for her contention that the relationship ceased on 19 February 2018. I will give some weight to the evidence of each of Mr Perry and Ms Wild in that regard, but the weight to be given to such evidence will be limited because I am of the view that the more persuasive evidence in relation to the factual question of when the employment relationship came to an end is what the parties said and did, as summarised in paragraphs [15] to [32] above.

When did Ms Wild’s employment relationship with Escala come to an end?

[38] The fact that Escala promised to continue to pay Ms Wild her usual salary after 19 December 2017, and in fact did so until 19 February 2018, points to a continuation of the employment relationship until 19 February 2018. So too does the fact that Escala:

• made superannuation contributions on Ms Wild’s behalf, as though she were still employed, in the period from 19 December 2017 to 19 February 2018;

• did not make any payment in lieu of notice to Ms Wild in December 2017;

• did not pay any accrued annual leave to Ms Wild in December 2017 and instead made such a payment to Ms Wild on 14 February 2018; and

• permitted Ms Wild to accrue annual leave in the period from 19 December 2017 to 19 February 2018 and then paid such accrued annual leave to Ms Wild, together with her other accrued annual leave, on 14 February 2018.

[39] The letter sent to Ms Wild by Escala on 20 December 2017 is ambiguous. It refers to Ms Wild’s “last day in the office” being 19 December 2017 and her “conclusion date being 19.02.2018”. That Ms Wild would not be in the office after 19 December 2017 did not necessarily suggest that her employment relationship with Escala had come to an end. Ms Wild’s employment agreement expressly conferred on Escala the right “during any resignation or termination notice period, and during any investigation period” to direct Ms Wild “not to present to work”, direct her “not to perform some or all” of her duties, and/or “remove and refuse” Ms Wild access to Escala’s property. 11 The employment agreement clearly contemplated the possibility that the employment relationship would continue to exist during such a period.

[40] The reference in the 20 December 2017 letter to Ms Wild’s “conclusion date being 19.02.2018” is capable of being understood as either the conclusion of the employment relationship or the conclusion of the monthly salary payments. In my view, the better construction of the letter is that the “conclusion date” refers to the date on which the monthly salary payments would cease. That is the subject with which the second sentence of the letter is concerned. In addition, the final paragraph of the 20 December 2017 provides further context and suggests that the employment relationship was at an end:

“We thank you for all your assistance throughout your employment and wish you all the very best with your future endeavours.”

[41] Accordingly, on balance I am of the view that the 20 December 2017 letter to Ms Wild supports a finding of fact that the employment relationship came to an end on 19 December 2017. Such a conclusion is also supported by the following facts, matters and circumstances:

• Ms Wild packed up her belongings prior to her meeting with Mr Perry on 19 December 2017 and left Escala’s premises shortly after that meeting, which was prior to the conclusion of Ms Wild’s usual finishing time. Ms Wild did not return to Escala’s workplace, nor did she undertake any further work for Escala, at any time after 19 December 2017;

• Ms Wild was distressed at the way she believed she had been treated by Mr Zander in the period leading up to the meeting on 19 December 2017, and she came to understand from Mr Perry during that meeting that Mr Zander was not going to be dismissed by Escala;

• my earlier findings in relation to what was said and agreed in the meeting on 19 December 2017, namely:

o Ms Wild said words to the effect that she was struggling a lot with being at Escala, that it did not work for her any more, and that she just did not see any good outcome in the future;

o Mr Perry and Ms Wild agreed that her last day in the office would be 19 December 2017;

o Mr Perry wished Ms Wild the best of luck with the future;

o Mr Perry spoke to Ms Wild about him providing assistance to help her get another job; and

o Ms Wild thanked Mr Perry and gave him a hug goodbye.

• Ms Wild was free to obtain and commence employment with a new employer at any time after 19 December 2017. So much is clear from the both the discussion between Ms Wild and Mr Perry on 19 December 2017 and Ms Wild’s email to Ms Allamby (cc to Mr Perry) on 22 December 2017. In my view, this is a strong indicator that the employment relationship came to an end on 19 December 2017. The right of an employer to exercise control over the work undertaken by an employee, including the right to issue lawful and reasonable directions to undertake work, is an important aspect of an employment relationship. An absence of such a right is a telling factor against a finding that an employment relationship continues to exist. Given that Ms Wild was free to obtain and commence employment with a new employer at any time after 19 December 2017, Escala did not have the right after 19 December 2017 to exercise control over any work undertaken by Ms Wild, including the right to issue lawful and reasonable directions for her to undertake work for Escala; and

• Ms Wild’s right to obtain and commence alternative employment at any time after 19 December 2017 may be contrasted to the situation of an employee who is placed on “garden leave” during a notice period. An employee on “garden leave” is subject to a direction to attend and/or undertake work during the “garden leave” period and undoubtedly remains employed by his or her employer during that period. 12

[42] Although some facts, matters and circumstances support a finding that the employment relationship between Ms Wild and Escala continued to 19 February 2018, 13 I am persuaded by the facts, matters and circumstances referred to in paragraph [41] above that the employment relationship in fact came to an end on 19 December 2017, at which time an agreement was made whereby Escala would continue to pay Ms Wild for a period of time.

Conclusion

[43] For the reasons set out above, I find that Ms Wild’s employment relationship with Escala ceased on 19 December 2017. Accordingly, Ms Wild’s Application was filed out of time and a further hearing will be required to determine whether I should exercise my discretion to extend the time for filing the Application.

COMMISSIONER

Appearances:

P. Forster, solicitor for Ms Wild.

A. Aleksov, of counsel, instructed by K Kordanovski for the Respondent.

Hearing details:

2018.

Newcastle:

11 May

Printed by authority of the Commonwealth Government Printer

<PR607177>

 1 (2013) 238 IR 42

 2   Siagian v Sanel Pty Ltd [1994] IRCA 2 (Wilcox CJ); Metropolitan Fire and Emergency Services Board v Duggan [2017] FWCFB 4878 at [21]

 3   Visscher v Giudice and Others (2009) 258 ALR 651 at [53] to [55] per Heydon, Crennan, Keifel and Bell JJ; Metropolitan Fire and Emergency Services Board v Duggan [2017] FWCFB 4878 at [21]-[22]; Khayam v Navitas English Pty Ltd[2017] FWCFB 5162 at [31]-[50]

 4   Commonwealth Bank of Australia v Barker (2014) 312 ALR 356 at 357 [1].

 5 s.380 of the Act

 6   Ayub v NSW Trains[2016] FWCFB 5500 at [25]

 7   Ibid

 8   Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 428; Metropolitan Fire and Emergency Services Board v Duggan [2017] FWCFB 4878 at [27]

 9   Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404; Stevens v Brodribb Sawmilling Co. Pty Ltd (1986) 160 CLR 16 at 24 & 35; Forstaff v Chief Commissioner of State Revenue (2004) 144 IR 1 at [91]

 10   See paragraph [30] above

 11   Clause 13.3 of Ms Wild’s employment agreement. See paragraph [14] above.

 12   See, for example, clauses 13.2 and 13.3 of Ms Wild’s employment agreement at paragraph [14] above

 13   See paragraphs [34] and [38] above