Eoin Molony v ATM Logistics Pty Ltd T/A ATM Logistics
[2017] FWC 3712
•23 AUGUST 2017
| [2017] FWC 3712 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.365—General protections
Eoin Molony
v
ATM Logistics Pty Ltd T/A ATM Logistics
(C2017/2285)
COMMISSIONER LEE | MELBOURNE, 23 AUGUST 2017 |
Application to deal with contraventions involving dismissal - extension of time.
Introduction
[1] Mr Eoin Molony (the Applicant) lodged an application with the Fair Work Commission (the Commission) pursuant to s.365 of the Fair Work Act 2009 (the Act) to deal with a general protections dispute involving dismissal. The Respondent to the application is ATM Logistics Pty Ltd T/A ATM Logistics (the Respondent). The application concerns an allegation of adverse action having been taken by the Respondent, namely the dismissal of the Applicant in contravention of the general protections set out in Part 3-1 of the Act. The application was lodged with the Commission on 28 April 2017.
[2] There is a dispute as to whether there was a dismissal at all and if there was a dismissal, the date the dismissal took effect. In his witness statement filed prior to the hearing the Applicant claimed that his phone was disconnected on Friday, 7 April 2017 whilst he was still performing work tasks and duties for the Respondent and that he believed the termination of his employment took effect on Monday, 10 April 2017 being the date he received an email from Mr Scott Tibbits, Managing Director of the Respondent. 1 During the hearing, the Applicant gave evidence that he was unaware that his employment had been terminated until 7 April 2017, the date that his phone was disconnected.2 The Respondent claims that the Applicant’s employment ended on 9 March 2017 when the Applicant sent a letter to Mr John Tibbits, Director of the Respondent, accepting “on settlement today” an agreed gross sum which included a “tax free redundancy” payment.3
[3] The application was made on 28 April 2017. If the Applicant’s employment ended on either 7 April or 10 April 2017 the application was made within the statutory time limit. However if the Applicant’s employment ended on 9 March 2017, the application was made 29 days outside the statutory time limit. In the event that I find that the Applicant’s employment did end on 9 March 2017, the Applicant submits that the evidence supports a finding that there are exceptional circumstances that would warrant the exercise of my discretion to allow a further period within which the application under s.365 of the Act may be made.
[4] The matter was listed for Objections Conference/Hearing by Telephone before me on 13 July 2017. Mr Francis Ruggiero was granted permission to appear for the Applicant and Mr John Sneddon was granted permission to appear for the Respondent as I was satisfied that granting permission would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.
The evidence
[5] The Applicant commenced employment as a salesman with the Respondent on 11 March 2002. The Applicant resided in Melbourne and worked from his home for the Respondent. 4 It appears there was a close relationship between the Applicant and Mr John Tibbits up until the recent events outlined later in this decision. The Applicant was also a share holder in the business, owning 10% of the total shareholding.
[6] Mr John Tibbits gave evidence that throughout February 2017 until 9 March 2017 the Applicant telephoned him frequently to discuss “desperately” wanting to sell his 10% shareholding. Mr John Tibbits described the calls as relentless stating:
“During these telephone conversations, Eoin stressed to me that he wanted to:
(a) relocate from Melbourne (where he was employed) to Sydney to be with his partner;
(b) buy an apartment in Sydney and the “money” he required was to be a part of the purchase price;
(c) change the manner in which he was working, in order to accommodate his new partner and potentially work less hours; and
(d) in his words “begin his new life” in Sydney.” 5
[7] During the hearing, the Applicant confirmed that this occurred although disputed the assertion that he sought to change the “manner in which he was working”. 6
[8] The version of events after this point digress somewhat, with the Applicant claiming that he was looking to “cash in some dividends” from the company 7 and Mr John Tibbits claiming the Applicant wanted to sell his shares to him, that he was reluctant to purchase his shares but ultimately did agree to purchase them.8 The Applicant claims that Mr John Tibbits said he would have to sell his shares if he wanted money.9
[9] Some discussions ensued which ultimately led to Mr John Tibbits putting a proposal (the proposal) to the Applicant. The proposal was in the form of a letter dated 8 March 2017 that was drafted for the Applicant to sign and return to the Respondent as an indication of agreement to the proposal. The letter is addressed to the Directors of ATM Logistics Pty Ltd and reads as follows:
“Re: Share Sale / Deed of Release
Dear John,
With respect to my sale of shares in ATM Logistics P/L; I acknowledge that in return for the sum of $325,000 I am selling my 10% interest in the company, and forgiving all or any entitlements related to my employment.
I further acknowledge that during my employment over the past 15 years I have exhausted all Annual Leave, and Long Service Leave.
I, Eoin Molony (Employee), hereby relinquish any rights to sue ATM Logistics Pty Ltd (Employer) at any stage in the future for any reason related to the employment. Further litigation will not be an option, and this Deed can be relied upon in the event that further legal action is taken.
I understand that the Gross Sum of $325,000 includes a tax free redundancy of $84,471. I wish to Salary Sacrifice $10,000 from the Gross Payment into the Eoin Molony Superannuation Fund; and also request that the sum of $10,000 be withheld by ATM Logistics Pty Ltd as the agreed purchase price of the company car currently provided (VW Passat R36 Rego RTS17)
Thus a nett payment of $305,000 will be paid to my nominated Bank Account; $10,000 will be paid to my Superannuation Fund immediately upon settlement, and will arrange transfer of ownership of the VW Passat R36.
Eoin Molony” 10
[10] The proposal letter was prepared on the Respondent’s behalf by Mr Tony Ponti, an Accountant for the Respondent. 11 It is clear the proposal provided for the payment of a total of $325,000 to the Applicant, the purchasing of the Applicant’s shares, the forgiving of all entitlements related to employment including annual leave and long service leave and the withholding of $10,000 as payment for a motor vehicle and a further $10,000 withheld to contribute to the Applicant’s superannuation fund. The proposal indicates that the $325,000 amount includes a payment of $84,471 as a payment for “tax free redundancy”. I note that the proposal makes no mention of the Applicant becoming a contractor rather than an employee for the Respondent. The proposal was approved by Mr John Tibbits on 7 March 2017.12
[11] On 8 March 2017 Mr Ponti personally provided the proposal to the Applicant as well as the relevant share transfer forms. The Applicant did not sign the letter and said he needed time to consider it and took the letter away. The Applicant was concerned the content of the letter did not reflect the agreement he had reached with Mr John Tibbits. 13 The Applicant met with Mr Ponti again the next day on 9 March 2017. The Applicant provided an alternate signed letter that he had prepared and a copy of the signed share transfer documents. The share transfer form records the value of the consideration for the shares as $220,529.00.14 There is some dispute as to whether the Applicant handed both documents over in a sealed envelope or showed Mr Ponti the document but it is not necessary in the circumstances that I resolve that factual dispute. The alternate letter prepared by the Applicant is addressed to Mr John Tibbits of ATM Logistics and reads as follows:
“Dear John
With respect to my sale of Shares in ATM Logistics Pty Ltd:
I acknowledge that in return for the sum of $325,000.00 I am selling my 10% interest in the company ATM Logistics Pty Ltd.
On settlement today I will accept as agreed the gross sum of $325,000.00 which includes:
- Tax free redundancy of $84,471.00
- I wish to sacrifice $10,000.00 from the gross payment into Eoin Molony Superannuation Fund and
- Also request that the sum of $10,000.00 be withheld by ATM Logistics Pty Ltd as the agreed purchase price of the company car currently provided (VW Passat R36 Rego RTS17)
The net amount of $305,000.00 will be paid to my Bank account at the NAB today Thursday, 9 March 2017.
(Bank account details omitted)
And the car transferred to my name as soon as I can get a road worthy certificate.
I trust your promise that I will be signing a contract to continue my employment as a subcontractor for the Group which will be executed and agreed upon as soon as possible.
I am looking forward to continuing working with ATM Logistics as I have done over the last 15 years and the continuation of my loyalty to you John and the business. My love and passion for ATM and the industry will continue as normal as it always was.
Eoin Molony” 15
[12] The major differences between the two letters seem to be that the Applicant’s letter omits the general release and does not contemplate that the payment satisfied the Respondent’s obligations in respect to his annual leave or long service leave. The Applicant’s letter also refers to and accepts a “promise” that he will be signing a contract to continue working for the Respondent as a subcontractor to be executed and agreed as soon as possible. The Applicant maintained that the agreement that reached with Mr John Tibbits was that he would be paid $325,000 for his shares divided as: 10% of the reserves in cash and investments (approximately $2.4 million) and the remainder of the money to cover the cost of “all sins” because of the “shenanigans” involving the Respondent. The claimed “shenanigans” appear to relate to alleged payments to family members. 16
[13] Mr Scott Tibbits is the Managing Director of the Respondent and the son of Mr John Tibbits. Mr John Tibbits gave evidence that he was informed by Mr Scott Tibbits, passing on information from Mr Ponti, that the “signed documents had been received from Eoin”. 17 Mr John Tibbits assumed that the signed documents included the proposal of 8 March that he had approved. Acting on that assumption, Mr John Tibbits transferred the amount of $305,000 to the Applicant’s bank account that same day. The following week on 13 March 2017 Mr John Tibbits discovered that the Applicant had signed the alternate letter that the Applicant had drafted and not the version that he had approved. The evidence of Mr John Tibbits was that when this was discovered he was shocked and believed that he had been deliberately deceived and tricked into making the settlement payment.18
[14] Having learned of this, Mr John Tibbits said he rang the Applicant on 13 March expressing his disappointment and asked him to sign the document that Mr John Tibbits had approved “…so we could continue as normal and we could prepare the contractors agreement for his ongoing involvement with ATM logistics”. Mr John Tibbits also reiterated to the Applicant that the “deal” was that the $100,000 was to cover any or all entitlements. Mr John Tibbits states that the Applicant refused to sign that 8 March proposal. 19 During the hearing, Mr John Tibbits was asked if he accepted the letter from the Applicant dated 9 March and answered “no, that wasn’t accepted”.20
[15] There is a dispute as to what happened after 9 March 2017 and up to 7 April 2017 in respect to the employment relationship. The evidence in chief of the Respondent was that the Applicant did not conduct any work nor have any “relevant” contact with clients during that period. 21 However, during the hearing, Mr John Tibbits stated that he assumed the Respondent had no working arrangement with the Applicant as they had not been able to contact him and he had not provided any invoices as a contractor. Mr John Tibbits contacted a number of clients most of whom said that they had not seen the Applicant during that period but that some clients had seen the Applicant. Mr John Tibbits referred to phone records (that were not produced) which he said showed that the majority of the conversations were between Scott Tibbits, John Tibbits and Yola Grieg. Mr John Tibbits also conceded that the Applicant “volunteered” to assist in a crisis on 30 March 2017.22 When asked why the Applicant would do this work if he was no longer working for the Respondent Mr John Tibbits replied “I have absolutely no idea”.23 This then led to the following exchange:
“Maybe because he thought he was still working for you?---Maybe he was preparing an invoice to be a contractor.
Did you receive an invoice?---No, I didn't.” 24
[16] Under cross-examination, Mr John Tibbits agreed that he had “no idea” what the Applicant was doing. 25 When asked to confirm that answer Mr John Tibbits replied:
“So you don't know whether or not he was actually working or not?---I certainly do by the decision made - one month after this melee, we established that he was not communicating as he had done and as was his position prior to 9 March with our client base or in general with our agent base and we had to make the decision as that phone was the conduit to running an express interstate business and we had to make that decision to take over control of that phone, which we did at 5 o'clock on a Friday afternoon after I had informed Eoin that I had to do such a thing.” 26
[17] The Applicant claims that he “worked right through” the 9 March to 7 April period and made numerous phone calls on 30 March 2017.
[18] Mr John Tibbits said that to the extent that the Applicant was working during the relevant period he did so as a contractor. However, he agreed that no invoices were submitted by the Applicant. 27 Moreover it is apparent that the arrangements for the Applicant to operate as a contractor were not finalised. Mr John Tibbits claims that the 9 March letter indicated that the Applicant was a contractor from that point forward. However, the 9 March letter from the Applicant referred to the promise to sign a contract to be executed and agreed as soon as possible. It is common ground that a written contract was not entered into nor produced. Mr John Tibbits gave evidence that the contractor arrangement was a “gentleman’s agreement”.28 Mr John Tibbits also stated that it was he who proposed that the Applicant become a contractor29 and that the Applicant did not accept his proposition.30 However, at another point Mr John Tibbits claims that the Applicant was “happy” with the payment of $150,000 as a contractor arrangement.31 Mr John Tibbits also gave evidence that that Applicant’s “…contractual situation would commence immediately he had accepted the $150,000 gross offer and started sending us invoices as a contractor for us to pay”.32 The Applicant was not paid any wages for the period after 9 March.33
[19] The Applicant gave evidence, on which he was not challenged, that the following occurred:
“On Friday 31 March 2017 over 3 weeks after the alleged final day of employment Scott Tibbits rang me to say his dad John Tibbits was upset and suggested that we do the following, as he really wanted me to work with him into the future:
- Pay me for the month of March in full.
- Pay me to take the month of April off as it was the quietest month with Easter, Anzac Day and school holidays.” 34
[20] There is also an email sent by the Applicant to Mr Scott Tibbits on 4 April 2017 asking for finalisation of a share transfer payment through payment to the Applicant of the balance being $20,000. The email also states “I will continue working for ATM logistics as National Manager”. 35 When Mr John Tibbits was asked why the Applicant would send that if he had accepted a position as a contractor he replied that he had “no idea”.36
[21] On 10 April 2017, Mr Scott Tibbits wrote to the Applicant and referenced the Applicant’s last day of employment as being 9 March 2017. This letter also referred to the Applicant’s acceptance of a redundancy on 9 March. The letter also includes the following paragraph:
“As agreed during negotiations for your sale of shares & redundancy as National Manager, it was agreed your consultancy business may be in a position to offer management services around new sales opportunities, and various other management consultancy services you may be in a position to offer. We refer previous correspondence outlining an agreed daily rate for such services, and the discussion regarding attaching any approved travel expenses. It was agreed that such services would be invoiced by a separate legal entity, with detailed descriptions of any services rendered for any individual days invoiced; please submit any such invoices to John Tibbits for approval, along with any approved travel expenses relating to days invoiced. These invoices will be paid 14 days from invoice date, following approval.” 37
[22] On 11 April 2017, the Applicant sent a letter to Mr Scott and Mr John Tibbits which stated that he had not resigned and had never been advised to do so and that he had sold his shares on the promise that he would continue to work with ATM as its National Manager. 38
[23] On 13 April 2017, Mr John Tibbits sent a letter to the Applicant in the following terms, omitting formal parts:
“CONFIRMATION OF CESSATION OF EMPLOYMENT
We refer to our recent communications concerning the redundancy of your role as National Sales Manager in our Melbourne office, effective 9 March 2017.
On or about 8 March 2017, we offered you a redundancy package totalling $100,000.00 (which included your redundancy pay, payment in lieu of your notice period and your statutory entitlements).
On or about 9 March 2017, you accepted this package and it was paid in full into your nominated bank accounts (as directed by you).
We sincerely thank you for service with the company and wish you all the best in your future endeavours.” 39
[24] There was a considerable difference in the evidence of the Applicant and Mr John Tibbits as to who was pressuring whom. The Respondent submits that it was the Applicant who approached Mr John Tibbits about a payment of money and that he was keen to help the Applicant. This led to him putting together a proposal that could bring about a situation where the amount of money sought by the Applicant could be paid to him. Mr John Tibbits says it was for this reason that the package was put together, including the payment of voluntary redundancy and the associated move to a contractor arrangement. His evidence is that if the Applicant had not made the request there would have been no proposal and Applicant would still be employed as an employee. 40 Mr John Tibbits accepts that there was pressure on the Applicant but that this was associated with the Applicant needing to meet a settlement deadline to purchase a property in Sydney. The Applicant conceded that the pressure for the payment was created by the fact that “my deadline was coming forward” but also claims he did not contribute to that pressure.41
[25] The Applicant accepts that he initiated the request for payment but that as a result he was “forced to settle in this way”. Further that while both letters refer to him becoming redundant there was no intention of him becoming redundant as he was to continue working and the notion of him being redundant was a “sham” and he should not have written the letter. Mr John Tibbits stated during the hearing that the redundancy pay arrangement was a sham. 42
[26] The Applicant gave evidence that Mr Scott Tibbits told him on two occasions that he had to become a contractor and that he could not continue being an employee. Further, that during those conversations Mr Scott Tibbits said to him “nobody would employ a 66 year old as he may fall over and break a hip and sue them and the best way is to become a contractor and cover your own risks”. 43 When Mr John Tibbits was asked if he was aware of that statement he stated that he believed that Scott Tibbits made that statement in April or May.44 When asked why he would make that statement, Mr John Tibbits replied as follows:
“Because he was totally frustrated with the lack of communication and totally - he had become delinquent in his job as the managing director of ATM Logistics because we had no knowledge at all of any management being provided by Mr Molony and Mr Tibbits, after the event, was - had reached a point of complete frustration because he could not do his job as the managing director”. 45
[27] In this matter, it is first necessary to determine the date that the dismissal took effect. If the Applicant’s employment ended on 7 April or 10 April 2017 then the application is within time and an extension of time is not required and consideration of the factors in S366(2) is not necessary. If the Applicant’s employment ended on 9 March 2017, I need to consider if a further period should be allowed.
Law to be applied to consideration of when the dismissal took effect
[28] A dismissal does not take effect unless and until it is communicated to the employee who is being dismissed. 46 Whether an employment relationship exists is a question of fact (unless a law deems an employment relationship to exist when it otherwise would not).47
Consideration of when employment relationship ended
[29] The Respondent claims that the Applicant was not dismissed. However, it also submitted that if the Applicant’s employment was a dismissal then the latest date that the dismissal took effect was 9 March 2017, the same day that the Applicant prepared and provided the 9 March letter and the day the Applicant was paid the sum of $305,000. The evidence that supports a conclusion that the dismissal took effect on the 9 March is the terms of the 9 March letter which demonstrates the preparedness of the Applicant to accept a payment for redundancy “on settlement today” as well as a payment for the sale of his shares. The payment for redundancy and the amount is common to both letters. While the Applicant sought to muddy the waters as to what the value of the share transaction was, it is apparent that the value of the share transaction component of the payment was $220,529. 48 The tax free payment for redundancy was $84,471. Added together, these two amounts equal $305,000, the amount that was paid to the Applicant on 9 March.
[30] While both letters referred to the payment of $325,000, the missing $20,000 is explained by the component common to both letters that $10,000 was to be held for the value of the motor vehicle (the ownership of which was to be transferred to the Applicant) and a further $10,000 to be paid into the Applicant’s superannuation fund. Mr John Tibbits confirmed during the hearing that the payment of superannuation had been made at the end of April. He also indicated that the company still owned the motor vehicle. 49 Mr John Tibbits gave evidence that the payment included a $100,000 payment to cover “any or all entitlements Eoin [the Applicant] may have had in relation to his employment”.50 However, if it is a fact that the payment of $84,471 was a payment for redundancy, the only payment ultimately made to the Applicant that is not a payment for shares or redundancy is the $10,000 that was paid to his superannuation fund.
[31] Despite the terms of both the 9 March letter and the 8 March letter, both the Applicant and Mr John Tibbits now say though for slightly different reasons, that the redundancy payment was a “sham”. If the payment for redundancy is a sham, and in light of the evidence of the two men it is more than likely that it is. This is consistent with the payment of the $84,471 being a payment for accrued entitlements as attested to by Mr John Tibbits or a payment for “shenanigans” as attested to by the Applicant. Either way, it was not a payment for redundancy. The Respondent cannot on the one hand point to the letter of 9 March and say that it evidences that the employment relationship ended on 9 March by way of redundancy and at the same time maintain that the redundancy payment is a sham and that the payment included $100,000 as payment for accrued entitlements. A redundancy payment is a payment for redundancy. It cannot simultaneously be a payment for entitlements. Despite the terms of both the 8 March and 9 March letters referring to the Applicant as being redundant it is apparent that this was a sham arrangement. Ultimately, the payment was made in return for the sale of the shares and some additional payment for “sins” or “shenanigans”. The additional payment may have been for accrued entitlements but this is by no means clear. While the letters purported to make a payment for redundancy, the evidence of the two men demonstrates that this was done purely as a tax minimisation exercise and is now recognised by both of them as a sham arrangement. When all of the evidence is considered it is clear that, despite the wording of the 9 March letter, there was no actual redundancy.
[32] There is also the matter of the letter of 9 March referring to the Applicant expecting to take up the “promise” of continuing to work as a subcontractor. The Respondent seeks to characterise that as evidence that any work done by the Applicant for the Respondent after 9 March must have been done as a contractor. However, it was clear as per the terms of the 9 March letter that this was based on an expectation that a contract would be signed and executed. There was an expectation, but no concluded agreement on a contractor relationship evident in the 9 March letter. That is, the 9 March letter does not of itself demonstrate that the Applicant commenced working as a contractor after 9 March.
[33] It is common ground that the Applicant was doing at least some work for the Respondent after 9 March, though there is a dispute about how much work he was doing. The evidence of Mr John Tibbits was very inconsistent on this point. His evidence in chief was that the Applicant did no work for the Respondent. His evidence at the hearing was more circumspect and he accepted that he had done some work and that he had been in contact with at least some clients. Ultimately, Mr John Tibbits conceded that he did not know what the Applicant was doing and had no idea why the Applicant assisted during the crisis associated with the cyclone at the end of March 2017. The Applicant on the other hand was clear that he continued to work “normally” after 9 March up until 7 April. The Applicants evidence was more consistent on this point and to the extent the evidence differs on this matter, I prefer the evidence of the Applicant.
[34] As the Applicant was working at least in some capacity after 9 March, the question to be determined is was he doing so as a contractor or an employee? There is little to nothing in the way of evidence to suggest that he was doing so as a contractor. The summary of the relevant evidence is as follows:
- Mr John Tibbits urged the Applicant on 13 March to sign the 8 March letter so that they could continue as normal and prepare the contractor’s agreement for his ongoing involvement with the Respondent. This again evidences an intention to enter into an agreement where the Applicant would be engaged as a contractor but only on the basis that the terms of the 8 March letter were agreed to. This is inconsistent with the notion that a contract for service relationship simply commenced on 9 March.
- Mr John Tibbits’ evidence was that the Applicants engagement as a contractor would start after the Applicant had accepted the $150,000 gross offer and sent invoices. However, he admits that the Applicant did not accept the proposition that he became a contractor 51 nor did the Applicant send any invoices.
- The email sent by the Applicant to Mr Scott Tibbits on 4 April states that the Applicant will continue to work as National Manager.
- The 10 April email from Mr Scott Tibbits to the Applicant clearly refers to an agreement that the Applicant’s “consultancy business may be in a position to offer management services…” (emphasis added) 52 This is not consistent with a finding that a contractor relationship was already in place, rather reflects a continuing attempt to establish one.
- The statement that Mr Scott Tibbits made in April or May suggesting that the Applicant become a contractor because nobody would employ a 66 year old is consistent with a finding that Mr Scott Tibbits wanted the Applicant to agree to a contractor relationship in April but that the Applicant had not agreed.
- The Applicant continued to use the Respondent’s telephone during the period and it was only disconnected on 7 April when Mr John Tibbits decided that the Applicant was not “communicating as he had done and as was his position prior to 9 March with our client base or in general with our agent base…” 53
[35] I note that the Applicant received no wages for the month of March at least after 9 March. The unchallenged evidence of the Applicant is that there was discussion with Mr Scott Tibbits about him being paid for the month of March and taking leave. However, it is more plausible and indeed likely that the failure to make a payment of wages for the period is a consequence of the protracted and ultimately unsuccessful attempt to establish a contractor relationship with the Applicant.
[36] Considering all of the relevant evidence, it is clear that the Applicant and the Respondent sought to enter into an arrangement for the Applicant to sell his shares, and receive a payment for those shares as well as additional matters. In a contractual sense, what the $315,000 payment to the Applicant was in exchange for is by no means clear. What is clear on the evidence is that the employment relationship did not end and the Applicant continued to work, at least in some capacity, for the Respondent up until 7 April 2017. The evidence weighs heavily towards a finding that the Applicant was not working as a contractor for the Respondent during that time. It is apparent in the circumstances that the work done by the Applicant during the period 9 March to 7 April was performed as an employee. Therefore, the employment relationship continued beyond 9 March until 7 April when the Applicant’s telephone was cancelled. It was at that point that the dismissal took effect.
[37] As the dismissal took effect on 7 April 2017, the application is made within the statutory period and it is not necessary to allow a further period within which the application may be made. However, if I am wrong in this conclusion and the dismissal took effect on 9 March 2017 for the reasons set out below I am satisfied that there are exceptional circumstances warranting the granting of a further period for the making of an application under s.365 of the Act.
The law to be applied
[38] Section 366(1) of the Act provides as follows:
“(1) An application under section 365 must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (2).”
[39] Subsection 366(2) of the Act provides that the Commission may allow a further period for an application to be made if it is satisfied there are exceptional circumstances. The Commission in concluding whether exceptional circumstances exist must take into account the following factors
“(2) The FWC may allow a further period if the FWC is satisfied that there are exceptional circumstances, taking into account:
(a) the reason for the delay; and
(b) any action taken by the person to dispute the dismissal; and
(c) prejudice to the employer (including prejudice caused by the delay); and
(d) the merits of the application; and
(e) fairness as between the person and other persons in a like position.”
Consideration
[40] I have considered the evidence and submissions, including the written submissions that were filed and the oral submissions made during the hearing against the criteria in section 366 of the Act.
[41] Subsection 366(2) of the Act requires that, in deciding whether to grant an extension of time, I must consider if there are exceptional circumstances taking into account a number of factors. The term exceptional circumstances was considered by the Full Bench in Nulty v Blue Star Group Pty Ltd54, where the Full Bench stated that:
“[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.
...
[15] A finding that there are “exceptional circumstances”, taking into account the matters specified in paragraphs 366(2)(a) to (e), is necessary before the discretion to extend time is enlivened. That is, even when “exceptional circumstances” are established, there remains a discretion to grant or refuse an extension of time. That discretion should be exercised having regard to all the circumstances including, in particular, the matters specified in paragraphs 366(2)(a) to (e) and will come down to a consideration of whether, given the exceptional circumstances found, it is fair and equitable that time should be extended.” 55
[42] I will adopt the approach of the Full Bench as to the meaning of exceptional circumstances in my determination of this matter.
Matters to be taken into account pursuant to section 366(2)
[43] In deciding whether to allow a further period for an application to be made the Commission must take into account the matters set out in s.366(2) above. I will deal with each of those matters separately.
(a) The reason for the delay
[44] The Applicant submits that the Commission should consider the behaviour of the Respondent in exerting pressure, duress and coercion on the Applicant to forgive and relinquish all his accrued legal entitlements. In addition that the Applicant was being forced to cease working as an employee to become a contractor and personally assume all occupational health and safety risks. The Respondent sought to remove itself from its legal obligations under the guise the Applicant was 66 years old and no one would employ him and he could as a contractor assume all the risks on his own. 56
[45] The Respondent submits that the Applicant has not provided any reason for the delay nor circumstances to be taken into consideration when determining whether to exercise the discretion to extend the time for lodging the application. 57
[46] I am not satisfied that the Applicant has provided an acceptable reason for the delay. The Applicants submission in respect to the reason for the delay appears to relate more to the merits of the application. Even if it is accepted that the Respondent exerted pressure on the Applicant to forego his entitlements and cease working this is not an acceptable reason for the delay. There is no acceptable reason for the delay and this weighs against granting the extension.
(b) Any action taken by the person to dispute the dismissal
[47] Action taken by an employee to contest the dismissal, other than lodging a general protections application, may favour the granting of an extension of time.58 The Applicant made no submission directed to this factor. This is a neutral consideration.
(c) Prejudice to the employer (including prejudice caused by the delay)
[48] Prejudice to the employer will go against the granting of an extension of time.59 The Applicant submits that there has been no disadvantage or unfairness to the Respondent and that the delay has been caused by the Respondent. 60 The Respondent submits that they are prejudiced to the extent that they would be required to defend the application and that the application is inappropriate because the Applicant was not dismissed.61
[49] While I note the Respondent’s submission I am satisfied that the Respondent will not suffer any significant prejudice. The absence of prejudice is itself an insufficient basis for granting an extension of time, and in the circumstances of this case, I regard this factor as neutral.
(d) Merits of the application
[50] The Applicant submits that he has provided material establishing a highly meritorious claim, which will persuade the Commission to accept the only reason for the delay in lodgement is the Applicant believed he was employed until 10 April 2017. The Respondent submits the application is without merit and that the Applicant was not dismissed within the meaning of the Act. There is clearly a significant factual dispute as to the circumstances that led to the Applicant being paid the $325,000 and his employment coming to an end.
[51] The Applicant alleges that the Respondent has breached s.351 of the Act, being that adverse action has been taken by the Respondent, namely the dismissal of the Applicant because of his age. While there are disputed facts, it was conceded by Mr John Tibbits that his son Mr Scott Tibbits said to the Applicant, in April or May, words to the effect of “nobody would employ a 66 year old as he may fall over and break a hip and sue them and the best way is to become a contractor and cover your own risks”. 62 This is a significant concession and is evidence that may lead to a finding of a contravention of s.351 of the Act on the basis of age. The Respondent submits that the age of the Applicant had nothing to do with the ending of the Applicants employment63 however this submission does not sit comfortably with the Respondent’s own evidence.
[52] The Applicant also alleges contravention of s. 358 of the Act. Section 358 is in the following terms:
“358 Dismissing to engage as independent contractor
An employer must not dismiss, or threaten to dismiss, an individual who:
(a) is an employee of the employer; and
(b) performs particular work for the employer;
in order to engage the individual as an independent contractor to perform the same, or substantially the same, work under a contract for services.”
[53] I note that whether or not there is a dismissal in this matter is disputed. Assuming that there was in fact a dismissal, it appears strongly arguable on the common evidence that there was a contravention of this section. Key evidence on this point is the following concession by Mr John Tibbits during the hearing:
“You used the word “delinquent”, Mr Tibbits?---The statement that I now have in front of me says that nobody would employ a 66 year old as he might fall over, et cetera, et cetera. What Scott has suggested is correct. We knew that he wished to work fewer hours over time but at his discretion and we agreed that part of the - we agreed between us that he would become a contractor, which is business practice in the transport industry, particularly in the brokerage industry, that he would become a contractor to allow him, effectively, to take advantage of his redundancy pay, which was a sham on behalf of the taxation department, sadly, not this company.” 64
[54] As to the other alleged contravention, the Respondent submits, and I agree, that in so far as the application makes reference to the exercise of other potential workplace rights, those workplace rights have not been articulated. 65 For the purposes of determining an extension of time application the Commission should not embark on a detailed consideration of the substantive application.66 However having regard to the consideration above, I consider the application to have substantial merit. This weighs in favour of granting the extension.
(e) Fairness as between the person and other persons in a like position
[55] There is no particular relevance of this factor in this matter and it is a neutral consideration.
Conclusion
[56] I am not satisfied there is an acceptable reason for the delay. This weighs against allowing an additional period for the application to be made.
[57] The factors related to consideration of action taken to dispute the dismissal, prejudice to the employer and fairness between the Applicant and persons in a like position are all neutral considerations.
[58] I consider that the application does have considerable merit and this weighs in favour of granting the application.
[59] Taking into account all of the relevant factors, the strong merit of the application is the factor that weighs in favour of granting the extension. This has to be weighed against there being an absence of an acceptable reason for the delay. The other factors are neutral considerations.
[60] Having considered all of the factors, I am satisfied that the strength of the merit case combined with the rather extraordinary circumstances surrounding this matter are sufficient to satisfy me that there are exceptional circumstances that warrant allowing a further period for the making of an application under s.365 of the Act. In Haining v Deputy President Drake (Haining)67 Wilcox and Marshall JJ said:
“If a case seems highly meritorious, that might legitimately persuade the decision maker to accept the adequacy of an explanation that would not pass muster in a case of little apparent merit.”68
[61] Relevantly in Haining Moore J said:
“Circumstances can arise where no explanation or no adequate explanation is given for the delay in instituting proceedings but it is nonetheless in the interests of justice to extend time.”69
[62] Taking into account all of the factors set out in s.366(2) of the Act I am satisfied there are exceptional circumstances that warrant allowing a further period for the making of an application under s.365 of the Act.
[63] In view of my earlier finding that the dismissal took effect on 7 April 2017 it is not necessary to allow a further period within which the application may be made as the application has been made within the statutory time frame. The jurisdictional objection raised by the Respondent is therefore dismissed.
[64] However, if I am wrong in this conclusion and the dismissal did indeed take effect on 9 March 2017, I allow the Applicant an extension so that the period within which the Applicant can make his application is extended to 28 April 2017.
[65] An order will be issued concurrently with this decision.
COMMISSIONER
Appearances:
F Ruggiero for the Applicant
J Sneddon for the Respondent
Hearing details:
2017
Melbourne (Telephone Hearing):
13 July.
Final written submissions:
7 July 2017
1 Form F8 – General protections application involving dismissal, Attachment C
2 PN204 - PN205
3 Exhibit R1, Statutory Declaration of John Phillip Tibbits, Annexure G
4 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [3]
5 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [5] – [[6] (a) – (d)]
6 PN151 - PN154
7 PN126
8 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [7] –[8]
9 PN147
10 Exhibit R1, Statutory Declaration of John Phillip Tibbits, Annexure D
11 PN67. PN308
12 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [18]
13 Exhibit A1, Statutory Declaration of Eoin Molony, [[5] 5.1(e)(iii)(3)(B)(vi)]
14 Exhibit R1, Statutory Declaration of John Phillip Tibbits, Annexure G
15 Exhibit R1, Statutory Declaration of John Phillip Tibbits, Annexure G
16 Exhibit A1, Statutory Declaration of Eoin Molony, [[5] 5.1(e)(iii)(A)]
17 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [22]
18 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [28]
19 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [30] – [31]
20 PN309
21 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [32]
22 PN356 - PN362
23 PN363
24 PN364 – PN365
25 PN359
26 PN360
27 PN365
28 PN333
29 PN270 - PN271
30 PN275 – PN276
31 PN332
32 PN305
33 PN369
34 Exhibit A1, Statutory Declaration of Eoin Molony, [[5] 5.1(e)(b)]
35 Form F8 – General protections application involving dismissal, Attachment B
36 PN344 – PN345
37 Form F8 – General protections application involving dismissal, Attachment C
38 Form F8A – Response to general protections application, Attachment E
39 Form F8 – General protections application involving dismissal, Attachment D
40 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [38]
41 PN87
42 PN331
43 PN327
44 PN328
45 PN329
46 Burns v Aboriginal Legal Service of Western Australia (Inc) (unreported, AIRCFB, Williams SDP, Acton SDP, Gregor C, 21 November 2000) Print T3496 [24]
47 Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 427
48 Exhibit R1, Statutory Declaration of John Phillip Tibbits, Annexure G
49 PN344
50 Exhibit R1, Statutory Declaration of John Phillip Tibbits, [30]
51 PN307
52 Form F8 – General protections application involving dismissal, Attachment C
53 PN360
54 Nulty v Blue Star Group Pty Ltd (2011) 203 IR 1
55 Nulty v Blue Star Group Pty Ltd (2011) 203 IR 1 [13], [15]
56 Applicant’s Outline of Submissions, filed 7 July 2017, [14] – [15]
57 Respondent’s Outline of argument: Extension of time, filed 6 July 2017, [45]
58 Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299-300
59 Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299-300
60 Applicant’s Outline of argument: Extension of time, filed 7 July 2017, Q1f
61 Respondent’s Outline of argument: Extension of time, filed 6 July 2017, [24] – [26]
62 PN327 - PN328
63 Respondent’s Outline of argument: Extension of time, filed 6 July 2017, [33]
64 PN331
65 Respondent’s Outline of argument: Extension of time, filed 6 July 2017, [36]
66 Kyvelos v Champion Socks Pty Ltd, Print T2421 [14]
67 Haining v Deputy President Drake (1998) 87 FCR 248
68 Haining v Deputy President Drake (1998) 87 FCR 248, 250
69 Haining v Deputy President Drake (1998) 87 FCR 248, 252
Printed by authority of the Commonwealth Government Printer
<Price code C, PR594556>
0
7
0