Harsh Shrotriya v Redwood and Co Pty Ltd T/A Redwood and Co

[2017] FWC 2356

[2017] FWC 2356

FAIR WORK COMMISSION

DECISION

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

Harsh Shrotriya
v
Redwood & Co Pty Ltd T/A Redwood & Co
(U2017/1265)

COMMISSIONER JOHNS SYDNEY, 10 MAY 2017

Application for an unfair dismissal remedy – extension of time – repudiation of employment contract.

Introduction

[1] On 7 February 2017 Mr Harsh Vardhan Shrotriya (applicant) made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (FW Act) for a remedy in respect of his dismissal by Redwood & Co Pty Ltd T/A Redwood & Co (Redwood/respondent).

[2] On 9 March 2017 the respondent filed a response to the unfair dismissal application. In its response it raised two objections to the Commission exercising jurisdiction in relation to the matter on the grounds that, it submitted:

a) the applicant’s application was lodged outside of the 21 day time limit prescribed by s.394 of the FW Act (OOT Objection), and

b) the dismissal was a case of genuine redundancy (GR Objection).

[3] Conciliation was attempted however it was unsuccessful. Subsequently the matter was listed for a jurisdictional hearing.

[4] At the jurisdictional hearing the applicant represented himself, and Mr Goran Stevanovic, Director of the respondent appeared for Redwood.

Submissions and evidence
[5] In addition to the evidence received and submissions made at the jurisdictional hearing the parties had, prior to the hearing, filed the following material which the Commission, as presently constituted, has had regard to:

a) Form F2 – Unfair Dismissal Application,

b) Form F3 – Employer Response,

c) Statement of Mr Shrotriya (annexures included) (Exhibit A1),

d) Further Statement of Mr Shrotriya on Extension of Time (Exhibit A2), and

e) Respondent’s Submissions (Exhibit R1),

Agreed Matters

[6] The following matters were either agreed between the parties or not otherwise substantially contested:

a) at the time of the dismissal the respondent, Redwood Carpentry, Sequoia Holdings, JMG and Sequoia Painting were associated entities for the purposes of s.23(3) of the FW Act, 1

b) at the time of the dismissal, the respondent and its associated entities employed more than 15 people, 2

c) On 13 May 2016 the applicant signed an employment contract with the respondent (Employment Contract), 3

d) on 14 June 2016 the applicant commenced his employment with the respondent as a Contracts Manager, 4

e) on 30 November 2016 a meeting was conducted between the applicant, Mr Stevanovic, Matt Bennett (Project Manager) and Jane Shaw (Business Manager/Human Resources). 5 The meeting minutes recorded that the applicant was informed he was being made redundant due the loss of a large client. The applicant accepted this to be a true record of what happened at that meeting,6

f) on 5 December 2017 the respondent emailed the applicant a letter terminating his employment (Termination Letter) (dated 30 November), informing him that the termination would take effect from 7 December 2017,

g) on 7 December 2016 the applicant worked his last day with the respondent, 7

h) on 7 December 2016 the applicant emailed the respondent stating that “the (termination) notice is not proper”, 8

i) on 10 January 2017 the applicant emailed Mr Stevanovic stating that the termination of his employment was improper for a number of reasons. Of those reasons, the applicant relied upon his first point in that email, being “it (the termination letter) does not satisfy the requirement of clause 6.2 of the employment agreement”,  9

j) later on the 10 January 2017 Mr Bennett sent an email to the applicant. Mr Stevanovic and Ms Shaw were copied into the email. In that email Mr Bennett wrote “I advised him (Mr Shrotriya) he was redundant…He still believes his redundancy was not appropriate”. Further in that email the respondent referred to the applicant as a “former employee”, 10

k) on 11 January 2017 Mr Stevanovic emailed Mr Shrotriya reiterating that, as of 7 December 2017 he was no longer considered an employee, 11

l) on 12 January 2017 Mr Shrotriya emailed Mr Stevanovic and advised that he maintained that his employment with the respondent had continued as the termination letter handed to him on 7 December 2017 did not comply with the terms in his Employment Contract or relevant laws. Further, Mr Shrotriya outlined that he believed the respondent had repudiated on the Employment Contract,  12 and

m) on 20 January 2017 Mr Shrotriya emailed Mr Stevanovic and advised that he had at that time “terminated” his own employment. 13

The jurisdictional objection

[7] On 9 March 2017 the respondent indicated its objection to the Commission exercising its jurisdiction to deal with the Application because it was lodged more than 21 days after the dismissal took effect. The respondent submitted that the applicant’s employment was terminated on 7 December 2017, meaning the applicant had until 28 December 2017 to lodge his application within time. If the respondent is correct this would mean that the applicant’s application lodged on 7 February 2017 was 41 days out of time.

[8] The applicant submitted that his employment with the respondent came to an end on 20 January 2017 when he emailed a “letter of termination” to the respondent. The applicant contended that the respondent’s actions in terminating his employment on 7 December 2016 cannot be deemed to be effective because the respondent did not comply with the terms of the Employment Contract when dismissing him. Further, the applicant submitted that the respondent’s failure to reply to his email dated 12 January 2017 was repudiation of the Employment Contract and for that reason he was forced to resign.

[9] First the respondent’s OOT Objection will be considered. If the OOT Objection is upheld, it will not be necessary for me to consider the GR Objection. If the OOT objection is dismissed then I must consider the GR Objection. The applicant’s application for an extension of time rests on whether his dismissal took effect on 7 December 2016 (when the applicant was handed the Termination Letter) or 20 January 2017 (when the applicant says he accepted the respondent’s repudiation of the Employment Contract).

When did the termination take effect?
[10] The respondent’s submission on this matter was simply that, as per the Termination Letter, the applicant was dismissed on 7 December 2017.

[11] The applicant submitted that the respondent repudiated the Employment Contract because:

a) the respondent failed to comply with clause 6.2 of the Employment Contract, which stipulated that the respondent would make a payment of four weeks’ notice upon termination, and

b) in the applicant’s mind, because of the respondent’s failure to comply with clause 6.2 he was still an employee when he emailed the respondent on 12 January 2017 requesting that they take action on his “improper dismissal”. He took the respondent’s lack of reply to be a repudiation of the Employment Contract.

[12] In making his submission the applicant relied on the Full Bench’s decision in Tamicka Louise Dover-Ray v Real Insurance Pty Ltd 14(Tamicka). In brief, the Tamicka matter involved a dispute regarding whether the applicant’s employment was terminated at the employer’s initiative or was a resignation by the applicant. In that matter the applicant had made a complaint of sexual harassment against a manager. The employer found that the applicant’s allegations were not substantiated and did not occur. The employer then issued the applicant with a show cause letter, alleging that the applicant had demonstrated a willingness to act in a way that is contrary to the employer’s interests and that her actions warranted a summary dismissal. The applicant was given a period of time to show cause as to why she should not be dismissed. The applicant disputed the employer’s allegations and refuted that her complaint was falsely made. Further, the applicant submitted to the employer that she had no obligation to show cause as she had not undertaken in any behaviour which could permit the company to dismiss her. The respondent then informed the applicant that her reply did not justify her actions and her actions warranted a summary dismissal. The respondent made an offer to the applicant that she end her employment by mutual agreement. The applicant rejected the offer. The respondent did not reply or make a counter offer. The applicant then informed the respondent that given she was not permitted to attend her workplace and the respondent had not advised whether or not she had been summarily dismissed. The applicant accepted the respondent’s lack of response as a constructive dismissal and subsequently made an application for an unfair dismissal.

[13] The dispute in Tamicka turned on whether the applicant’s employment came to an end by way of resignation or repudiation by the respondent.

[14] In Tamicka the Full Bench found that:

“[21] This case is properly analysed by reference to principles of repudiation. In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd 15 Gleeson CJ, Gummow, Heydon and Crennan JJ noted:16


“The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. … Secondly, it may refer to any breach of contract which justifies termination by the other party. … There may be cases where a failure to perform, even if not a breach of an essential term (as to which more will be said), manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.

In the past, some judges have used the word "repudiation" to mean termination, applying it, not to the conduct of the party in default, but to the conduct of the party relying upon such default. It would be better if this were avoided.”

[22] As is apparent from this extract, the test for intention is not a subjective one depending on the actual intention of the repudiating party. Intention is to be judged from what the other party reasonably infers from the actions or words of the party who is alleged to have repudiated the contract. 17

[23] A repudiation of a contract does not automatically terminate that contract. Rather, the contract comes to an end only when the other party elects to accept such repudiation. 18 Such acceptance may be by words or conduct. The learned authors of Macken’s Law of Employment19 note that acceptance of a repudiation may be easily inferred.20

…

[26] In summary, the contract of employment in this case was repudiated by the respondent, albeit for reasons that the respondent regards as sound. That repudiation was accepted by the appellant by the act of filing her application for relief against termination of employment. As such, the contract of employment was terminated on the date that application for relief was filed but is nonetheless properly to be regarded as a termination at the initiative of the employer because it was the respondent’s repudiation which, accepted by the appellant, brought the employment to an end. The letter of 29 June 2009 has no relevance to the issue at hand: the contract of employment had already terminated by the time that letter was sent.”

(Emphasis Added)

[15] The applicant submitted that the respondent’s failure to comply with clause 6.2 or to reply to his email, was and act of repudiation which he did not accept until 20 January 2017. 21

[16] During the hearing the respondent admitted to its failure to properly comply with clause 6.2 of the Employment Contract. Around the time the respondent handed the applicant the Termination Letter, the respondent paid the applicant 1 weeks’ notice. However, the applicant submitted the respondent owed him 4 weeks’ notice total. The respondent submitted it owed him 2 weeks’ notice total. During the proceedings the respondent conceded that the notice owed to the applicant was 4 weeks in total and as a result Mr Stevanovic undertook to the Commission to pay the remaining 3 weeks’ notice to the applicant within 2 weeks of the hearing date. 22

[17] Although the respondent conceded it had failed to properly comply with clause 6.2, it argued that, regardless of that fact, the applicant’s employment was terminated on 30 November 2016, with effect from 7 December 2016. The respondent submitted that the applicant did not raise any concerns about the termination process during the meeting on 30 November 2016.

[18] It is clear from the Tamicka decision that in order for the argument of repudiation to stand, the party making the allegation of repudiation must at some stage accept the opposing parties’ repudiating conduct. However, an issue arises with the applicant’s argument that the respondent had repudiated the Employment Contract by failing to comply with clause 6.2 because the respondent’s conduct (in failing to comply with clause 6.2), is not an action which the applicant could have “accepted” as repudiation.

[19] The respondent’s failure to comply with clause 6.2 is simply a breach of contract. It is not conduct which can be classified as a repudiation of the Employment Contract. If a dispute arises about the amount of notice to be paid, it does not follow that the dismissed employee is to be treated as a continuing employee of the employer until the dispute regarding notice is resolved. The employee’s remedy for such a breach lies in an action for breach of contract.

[20] I do not accept the applicant’s argument that the respondent had repudiated the Employment Contract by failing to comply with clause 6.2.

[21] In Ayub v NSW Trains 23 (Ayub) the Full Bench considered the proper construction of s.394(2)(a):

“[24]We now turn to the proper construction of s.394(2)(a) itself. It may immediately be observed that the provision which operates by reference is concerned with the date of effect of the dismissal. Section 386(1), which we have earlier set out, makes it clear that a dismissal for the purpose of Pt.3-2 of the FW Act is constituted by the termination of the employment relationship. As was observed by the High Court in Visscher v Giudice the termination of an employment relationship and the termination of an employment contract are different concepts, and a wrongful dismissal from employment may not be effective in discharging the contract if the employee elects not to accept the employer’s repudiatory breach. This will rarely be of legal significance, since the employee will not after dismissal be entitled to remuneration if he or she keeps the contract on foot, and will not other than in exceptional circumstances be able to obtain specific performance of the contract. This led it to be said in Byrne v Australian Airlines Ltd that “[t]he possible continuation of the contract of employment after a wrongful dismissal will, therefore, ordinarily be of no real significance as it will for all practical purposes be at an end”. There is no reason to conclude therefore that the relevant legal principles applicable to the termination of the employment contract which we have earlier summarised would not equally be applicable to the termination of the employment relationship.”

(Emphasis Added)

[22] The applicant conceded that on the meeting of 30 November 2016, he was informed and understood that his employment was being terminated due to redundancy. The letter sent to the applicant on 5 December 2016 again reiterated what was mentioned at the meeting. The applicant accepted that he ceased work with the employer on 7 December 2016. The applicant accepted he had been paid all of his entitlements on or around 20 December 2016. 24

[23] In the Ayub decision, the Full Bench makes clear that the date of dismissal occurs when employment relationship is terminated. Considering the factual matters above, the Commission, as presently constituted, finds that the applicant’s employment relationship with the respondent had come to an end on 7 December 2016. Consequently, his application was lodged 41 days out of time.

[24] I must now determine whether or not an extension of time to lodge his application should be granted to the applicant.

Legislative scheme

[25] Relevant to the Commission considering whether an extension of time to lodge the application should be granted is s 394(3) of the FW Act:

“(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.”

[26] Section 394(3) of the FW Act states that the Commission may allow a further period to lodge an application provided there are “exceptional circumstances” taking into account the five nominated criteria. The principles are well established and set out in a decision of a Full Bench of Fair Work Australia (as the national tribunal was then called) in Nulty v Blue Star Group. 25 In that matter the Full Bench held the following in relation to “exceptional circumstances”:

“[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.”  26

Consideration of s.394 criteria
Section 394(3)(a) - The reason for the delay

[27] There were 62 days between the applicant’s dismissal and the date he filed his unfair dismissal application in the Commission. Therefore the applicant must provide reason for a 41 day delay period.

[28] In part the applicant rejects that there was any delay because he says the employment relationship ended on 20 January 2017 when he accepted the respondent’s repudiation of the Employment Contract. For the reasons set out above I have rejected that submission.

[29] In explaining the reasons for delay the applicant submitted reasons to the following effect:

a) he genuinely thought the Employment Contract and his employment remained on foot because:

i. the respondent failed to issue a proper redundancy letter,

ii. the respondent failed to comply with clause 6.2 of the Employment Contract,

b) the applicant was overseas from 8 December 2016 to 4 January 2017, and

c) the applicant had been corresponding with the respondent about his concerns with his dismissal, namely that the respondent had failed to properly dismiss him and that his dismissal was not a case of genuine redundancy. The applicant submitted that his engagement with the respondent on these issues was a part of the reason he failed to submit his application in time.

[30] The reasons provided by the applicant do not constitute proper reasons for a delay in lodging his unfair dismissal application. The applicant could have filed his unfair dismissal application and continued to dispute those issues separately or concurrently with his unfair dismissal application. The applicant’s delay in lodging his application, in actual fact, arose out of his inability to recognise that the employment relationship had ended on 7 December 2017. His misunderstanding about the distinction between the employment relationship and the Employment Contract is not a valid reason for the delay. It is a well accepted legal principle that ignorance of the law is no excuse.

[31] It is also to be noted that the applicant waited a further 16 days after returning from overseas to lodge his application. It is well established that being overseas is not a valid excuse for lodging an unfair dismissal application out of time. The applicant submitted that the delay from his return to Australia on 4 January 2017, until the date he submitted his application on 20 January 2017, was because he was under the impression he was still an employee of the respondent. For the reasons provided in paragraphs [18] – [23] the applicant was misinformed in having this belief. At the very least the applicant knew that his employer was treating the employment relationship as having ended on 7 December 2016. The applicant could have taken steps to protect his position and filed an unfair dismissal application within time, but chose not to do so.

[32] Therefore this factor weighs against granting the applicant a further period to make his application.

Section 394(3)(b) - Whether the person first became aware of the dismissal after it had taken effect
[33] The applicant accepted that in the meeting held on 30 November 2016 he was informed he was being dismissed by the respondent. 27 The Commission, as presently constituted, is satisfied that the applicant first became aware of the impending cessation of his employment on 30 November 2016 and became aware of the actual cessation on 7 December 2016.

[34] Therefore this factor weighs against granting the applicant a further period to make his application.

Section 394(3)(c) - Any action taken by the person to dispute the dismissal
[35] The actions taken by the applicant to dispute the dismissal are outlined above. At all times he has disputed the fact that he had been dismissed and the genuineness of the redundancy.

[36] The actions taken by the applicant weighs in favour of granting him a further period to make his application.

Section 394(3)(d) - Prejudice to the employer (including prejudice caused by the delay)
[37] The respondent accepted that it would not be prejudiced if the applicant was granted an extension of time to file his application. 28

[38] The Commission, as presently constituted, is satisfied that the respondent would not be prejudiced if an extension of time was granted to the applicant.

[39] This factor is a neutral consideration.

Section 394(3)(e) - The merits of the application
[40] In the matter of Kornicki v Telstra-Network Technology Group 29the Commission considered the principles applicable to the extension of time discretion under the former s.170CE(8) of the Workplace Relations Act 1996 (Cth). In that case the Commission said:

“The merits of the substantive application. If the application has no merit then it would not be unfair to refuse to extend the time period for lodgment. However we wish to emphasise that a consideration of the merits of the substantive application for relief in the context of an extension of time application does not require a detailed analysis of the substantive merits. It would be sufficient for the applicant to establish that the substantive application was not without merit.” 30

[41] The Commission, as presently constituted, adopts this reasoning of the Full Bench of the former Commission in relation to the consideration of merits.

[42] Accordingly, in conformance with the accepted practice in relation to jurisdictional hearings I do not in this decision embark upon a detailed consideration of the substantive case. In a jurisdictional hearing the Commission is not in a position to make findings of fact on contested issues. That is an assignment to be undertaken by the Commission during the substantive hearing.

[43] The substantive factual contest between the applicant and the respondent would be whether or not the applicant’s dismissal was a case of genuine redundancy. The respondent submitted that the applicant’s position was made redundant due to the loss of a large client, which meant the respondent could not afford to employ the applicant any longer. Further, it submitted that the applicant’s position had not been replaced and that his duties were being performed by Mr Stevanovic. 31 The applicant contended the genuineness of the redundancy,32 but did not explain further the basis of the same.

[44] Consequently, for present purposes the Commission, as presently constituted, is satisfied that the applicant’s case is one that is without merit or lacking in any substance.

[45] Because the applicant’s case is without merit or lacking in any substance, this factor weighs against granting him a further period to make his application.

Section 394(3)(f) - Fairness as between the person and other persons in a similar position
[46] The parties agreed that this factor is not relevant.

Conclusion

[47] For the reasons set out above, on balance, the Commission is satisfied that there are no exceptional circumstances warranting the applicant being allowed a further period for his application to be made (i.e. being granted an extension of time to lodge his application). There is nothing out of the ordinary, or unusual, or special or uncommon about this matter that would lead me to exercise the discretion to grant an extension of time in favour of the applicant.

[48] An Order to this effect will be issued with this decision.

COMMISSIONER

Appearances:

Mr H Shrotriya for himself

Ms G Stefanovic for the respondent

Hearing details:

2017,

Sydney

April, 24

 1   Transcript PN24-28, PN37

 2   Transcript PN40

 3   Exhibit A1 – Annexure A

 4   Transcript PN47-50

 5   Transcript PN51-52

 6   Transcript PN59-68, PN192

 7   Transcript PN70

 8   Exhibit A2 – Annexure O

 9   Exhibit A2 – Annexure P

 10   Exhibit A2 – Annexure Q

 11   Exhibit A2 –Annexure R

 12   Exhibit A2 – Annexure S

 13   Exhibit A1 – Annexure B

 14   [2010] FWAFB 2670

 15 (2007) 233 CLR 115.

 16 (2007) 233 CLR 115 at paras [44] – [45].

 17   See, for example, Loughridge v Lavery [1969] VR 912 at 923.

 18   Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 at 450-453, 461-463, 465-467; Byrne v Australian Airlines Ltd

(1995) CLR 410 at 427-428; Visscher v The Honourable President Justice Guidice (2009) 239 CLR 361.

 19   Sappiedeen, O’Grady, and Warburton, Macken’s Law of Employment (Lawbook Co, 6th edn).

 20   Ibid at [7.220].

 21   Transcript PN168

 22   Transcript PN121-122

 23   [2016] FWCFB 5500

 24   Transcript PN71-74

 25 [2011] 203 IR 1

 26 Ibid [13].

 27   Transcript PN51-60

 28   Transcript PN124

 29   Print P3168, 22 July 1997 per Ross VP, Watson SDP and Gay C.

 30   Ibid.

 31   Transcript PN221

 32   Transcript PN187

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