Helen Phi v Cunningham International Pty Ltd
[2023] FWC 2335
•15 SEPTEMBER 2023
| [2023] FWC 2335 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Helen Phi
v
Cunningham International Pty Ltd
(U2023/7764)
| COMMISSIONER LEE | MELBOURNE, 15 SEPTEMBER 2023 |
Application for an unfair dismissal remedy
Introduction
This is an edited version of my decision delivered ex tempore and recorded in transcript on 1 September 2023. I refused to grant an extension of time and will issue an order to that effect upon publication of this decision.
Ms Helen Phi (Applicant) commenced employment with Cunningham International Pty Ltd (Respondent) on or about May 2016. Ms Phi was employed in a position of what one would describe as a tax agent, lodging BAS statements and tax returns and some other associated matters. However, I note there is a dispute about what her role was in the company, although, it is not necessary to determine that matter to finality.
The reason given by the Respondent for the decision to terminate the Applicant's employment was, according to the Applicant, that the husband of Ms Nguyen, who was the director, was not comfortable sharing the same office as the Applicant. In contrast, the Respondent maintains that the Applicant was a partner in the business and that the partnership dissolved by mutual agreement. In any event, the Applicant has applied for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (Cth) (Act). That application was lodged on 18 August 2023.
Application was filed outside the statutory timeframe
Applications for an unfair dismissal remedy must be made within 21 days after the dismissal took effect. The Applicant maintains her employment was terminated by the Respondent with effect from 27 July 2022. As stated earlier, the Respondent maintains that the Applicant was not an employee and that the business partnership ended by mutual agreement on 21 July 2022, but, for the purposes of dealing with the extension of time, I have proceeded to determine this matter on the assumption that ultimately the Applicant would be successful in her argument, should the matter proceed, that she was an employee and that she was dismissed on the initiative of the employer on 27 July 2022.
Based on the termination date taking effect on 27 July 2022, the application for a remedy should have been lodged by no later than 17 August 2022. The application was therefore lodged one year and one day or 366 days outside of the time prescribed. The Act allows the Commission to consider extending the period within which an application for an unfair dismissal remedy may be made if it is satisfied that there are exceptional circumstances.
Before dealing with the evidentiary matters, I will just outline a few things about the principles that are to be applied in considering whether I should exercise my discretion to extend time.
As is evident from the text of s.394 of the Act, the statute allows me to allow a further period, but the discretion will only be exercised if I am first satisfied that there are exceptional circumstances which warrant the consideration of the exercise of my discretion. The matters that I need to take into account in considering whether or not I am satisfied that there are exceptional circumstances are:
· the reason for the delay;
· whether the applicant first became aware of the dismissal after the date it took effect;
· any action taken by the applicant to dispute the dismissal;
· prejudice to the respondent, including prejudice caused by the delay;
· the merits of the application; and
· fairness as between the applicant and other persons in a similar position.
Each of the matters need to be taken into account in assessing whether there are exceptional circumstances. The requirement that these matters be taken into account means that each matter must be considered and given appropriate weight in assessing whether there are exceptional circumstances. The individual matters might not, viewed in isolation, be particularly significant, so it is necessary also to consider the matters collectively and to ask whether collectively the matters show exceptional circumstances.
Briefly, exceptional circumstances are circumstances that are out of the ordinary course, unusual, special or uncommon, but the circumstances themselves do not need to be unique or unprecedented, nor do they need to be very rare. I must be satisfied that, taking into account s.394(3), there are exceptional circumstances.
I will now turn to consider those matters in the context of the application.
Reason for the delay
The Act does not specify what reason for delay might tell in favour of granting an extension. However, decisions of the Commission have referred to an acceptable or reasonable explanation. The absence of any explanation for any part of the delay will usually weigh against an Applicant in the assessment of whether there are exceptional circumstances and a credible explanation for the entirety of the delay will usually weigh in the applicant's favour. However, all of the circumstances have to be considered.
In respect of the reasons for the delay in this matter, the Applicant has referred to the fact that, sadly, her father passed away on 2 April 2022 and she was deeply upset and was grieving in respect of that event, and that on 7 July 2022, she returned to Vietnam for her father's 100-day worship ceremony. Other factors that the Applicant has drawn to my attention include that she didn't take any action to dispute the dismissal at the time because she was emotional and vulnerable and grieving for her father, that she sent an SMS to Ms Nguyen saying:
“I did whatever you told me to do. I never argue. I cannot think anything clearly after my dad's passing away. You kicked me out of the company immediately without my consent.”[1]
I asked some questions of the Applicant today about that particular SMS and, while it is written in Vietnamese, there was no contest that it states what the applicant claims it does and, importantly, it does not indicate that she was taking any action with that SMS to dispute her dismissal in the sense of seeking re-employment or any such matter:
“Even after I departed and moved on with the clients who chose to stay with me, Ms Nguyen still did not cooperate and refused to release clients' information.”[2]
So, the exchanges with Ms Nguyen subsequent to the purported dismissal appear to be directed to releasing client information as opposed to a contest over the dismissal. Similarly, paragraph 14 of the Applicants witness statement indicates that Ms Nguyen allegedly refused to pay back fees from clients[3], and there was a dispute about that. Again, not a dispute about the dismissal. Going back to the reason for the delay, the Applicant indicated:
“I had to move on from scratch with no client’s backed-up database. It took almost a year for me to recover, that's why I did not lodge the complaint sooner. Until now I still don't accept the reason of the dismissal.”[4]
At other points in her evidence, the Applicant refers to being shattered by her father's passing, and that she was desperate and depressed by the mistreatment from Ms Nguyen.[5]
However, in evidence presented at the hearing as to what the Applicant has been doing this last year, Ms Phi confirmed that she has been operating her new business and she has been engaging in servicing clients.[6] Ms Phi refers to an email in her evidence.[7]
Ms Phi confirmed that that was an email that she sent to an organisation called Reckon. It reads:
“Good afternoon Team Reckon. My name is Helen Phi, an extra user in Cunningham International Pty Ltd. Marry...”
I'm presuming that is meant to be 'Mary'
“...and I decided to not work together, so I moved out and worked for myself. Each person will control the customers of their own.”
The email then sets out proposed arrangements for invoicing. That email, importantly, was sent on 29 July 2022. That was two days after the purported dismissal and evidences that the Applicant was taking steps in regard to moving to start operating her own business as soon as two days after the purported dismissal. I should note that the text of that email is also consistent with the Respondent's submission that the separation was a mutual one.
While I accept that the Applicant was upset after the alleged dismissal, the Applicant has not provided any medical evidence that she was impeded from lodging an unfair dismissal claim and, indeed, the evidence is to the contrary, that is that she was capable of operating, at least to some extent, her business during the last year and would have been in a position to lodge an unfair dismissal claim.
Evaluating the evidence in respect of reason for the delay, the application, as I have noted, is a year late. That is a significant period of time. While I accept that the Applicant was upset by the passing of her father in April 2022 and I accept that she was upset by the manner of her purported dismissal, it is not uncommon amongst those who are dismissed that they are upset, but that is not an unusual or exceptional circumstance.
The circumstances here is that there is no indication that the Applicant was incapacitated in any way from her grief such that she was unable to lodge an application; in fact, as I said earlier, the evidence is to the contrary and during the year, she has been able to continue engaging in the work that she undertakes as a tax agent. Overall, having regard to all of the evidence, I am not satisfied that there is an acceptable reason for this very long delay in lodging an application.
In conclusion, in the circumstances, I am not satisfied the Applicant has provided an acceptable explanation for the delay and that is a matter that weighs against the Applicant in this case.
Whether Applicant first became aware of the dismissal after the date it took effect
Turning to the question as to whether the Applicant first became aware of the dismissal after it took effect, the evidence is the Applicant understood on 27 July 2022, the date of dismissal, that her employment would end on that date. She was well aware of the dismissal when it took effect. In the circumstances, that is a matter that is neutral and does not weigh in favour of the applicant or against her.
Action taken by the Applicant to dispute her dismissal
In respect to action taken by the Applicant to dispute the dismissal, the evidence on this is limited, but, essentially, the Applicant has sent a couple of emails to the Respondent in August 2022 and then a further SMS or email at a later time. As I said earlier, those exchanges were directed at disputes that the Applicant was having with the Respondent about the treatment of clients and other matters. I don't regard those emails as evidence that there was a dispute of the dismissal per se. In the circumstances, I think, particularly having regard to the fact that there was a significant period of time of the delay, there was a lot of opportunity for the Applicant, if she was wanting to engage in contesting the dismissal, to have done so. Therefore my consideration on this factor is that the failure to take action to dispute the dismissal is a matter that weighs slightly against the Applicant.
Prejudice
Turning to the question of prejudice, the mere absence of prejudice is not necessarily a factor which weighs in favour of an Applicant for an extension of time. There was no evidence of prejudice submitted by the Respondent on the day of the Hearing, so there is no evidence of prejudice. The Respondent has submitted that there was some level of prejudice given the length of time. My consideration on this is that, on any view, one year late is a very long period of time. It would be what one would describe as a long delay. Generally, it has been held that a long delay gives rise to a general presumption of prejudice. The citation for that is Brisbane South Regional Health Authority v Taylor [1996] HCA 25. I am satisfied in the circumstances of this case that the very long delay will result in some prejudice to the employer and, in the circumstances, that is a matter that weighs against the Applicant.
Merits of the application
In respect to the merits of the application, in cases such as this, where the substantial merits of an application are not fully examined into or agitated, it is appropriate that I make an assessment about the merits of the case based on the limited material that is available to me through the prism of viewing the Applicant's case at its most favourable.
On this particular matter, the Applicant's argument is that she was an employee and that essentially there was no valid reason for the dismissal because the purported reason for the dismissal was the husband of the director didn't want her in the office anymore and was not comfortable with her being there. Of course, if that was held to be the facts, that would be an indication that the Applicant has a very strong case that the dismissal was not fair.
However, the Respondent submits that the Applicant was not an employee as a matter of fact or law and was a partner in the business and that the partnership dissolved on 21 July 2022 by mutual agreement. Further, that the Applicant has since set up her own business and secured a number of past clients of the Respondent's business.
The true situation as to whether the Applicant was an employee or a partner or in some way a contractor is a little murky, to say the least. There is evidence in the material that there was superannuation paid to the Applicant, consistent with her being an employee, but, as I understood the Applicant's evidence, she was paid what was purported to be a wage, but that that was paid to her company, her ABN, through her ABN number. There is also evidence that the Applicant was paid wages[8], but there is that conflict with the Applicant's evidence that she had had an ABN set up from early in the time of her purported employment and that she was paid on that basis.
It goes without saying that if the Applicant was not an employee, that would be fatal to her case; there would be no jurisdiction for the matter to be dealt with here as an unfair dismissal. However, of course, that is a matter that would need to be determined based on a full examination of the facts, which it is not appropriate to undertake here.
I should add that there were other relevant factors, including that the Applicant was apparently a 50 per cent shareholder in the business. Of course, she may well have still been an employee notwithstanding that, but, as I say, the position is murky. There is also the factor to consider that, even if the applicant was an employee, the email sent from the Applicant to “Team Reckon” on 29 July 2022[9] is consistent with the notion that there was a mutual separation as opposed to a dismissal, but, again, that would be a matter that would have to be tested on further evidence.
Overall, taking into account all of the factors, I am satisfied that it is at least arguable that the Applicant was an employee and it is arguable that she was unfairly dismissed. It seems to me, therefore, that her claim on a preliminary assessment basis is not without merit. That is not to suggest that it would succeed, but I am satisfied there is at least some merit which would give the Applicant a justifiable reason to pursue her claim for unfair dismissal and, in the circumstances, that is a matter that weighs in favour of the Applicant in this matter.
Fairness as between the Applicant and other persons in a similar position
Turning to fairness as between the Applicant and other persons in a similar position, cases of this kind will generally turn on their own facts. However, this consideration is concerned with the importance of the application of consistent principles in cases of this kind, thus ensuring fairness as between the Applicant and other persons in a similar or like position. This consideration may relate to matters currently before the Commission or to matters previously decided by the Commission. It may also relate to the position of various employees and an employer responding to an unfair dismissal application.
In this matter, the Respondent made some submissions on this point that, with respect to them, were of no particular relevance consistent with that, and the Applicant had nothing to say about the matter, so, essentially my conclusion on this is that neither party has brought to my attention any relevant matter concerning this consideration and I am unaware of any relevant matter and I therefore consider this to be a neutral consideration.
Conclusion
Statutory time limits that are applicable to the exercise of a person's right to bring an unfair dismissal remedy application are an expression of the parliament's intention that rights should be exercised promptly so as to bring about certainty. Time limits seek to balance the right to bring an action against the desirability for prompt action and certainty. The reason for time limits is that parties should be able to know that if there is a question about an action that has been taken by one party, in this case in relation to a dismissal, that the right to question that action will be exercised promptly; otherwise, except in exceptional circumstances, the right to bring the action will be lost. A person who seeks relief from an unfair dismissal must make the application within 21 days after it takes effect and it is only in exceptional circumstances that the Commission will consider whether to allow a further period.
Weighing all of the matters that I must weigh and taking into account the matters set out in section 394(3) of the Act, I am not satisfied that there are exceptional circumstances in this case warranting a consideration of the exercise of my discretion to allow a further period.
As I have indicated, taking into account the reason for the delay, that is a factor that weighs against the Applicant; the consideration as to when the Applicant first became aware of the dismissal is a neutral one; whether there was action taken to dispute the dismissal weighs slightly against the Applicant; the matter of prejudice to the employer, given the length of the delay, I am satisfied weighs against the Applicant; in respect of the merits consideration, that's a factor, for the reasons I have set out, I think weighs in favour of the Applicant, and the fairness consideration is a neutral one.
With the exception of the merits consideration, all factors either weigh against the Applicant or are neutral. I don't think that the merits consideration is of such weight that it weighs so strongly in favour of the Applicant that it overcomes the factors weighing against that I have set out.
Taking into account all of the factors, I am not satisfied that there are exceptional circumstances warranting a consideration of the exercise of my discretion to allow a further period. In those circumstances, as I have indicated, I am not satisfied that there are exceptional circumstances and therefore there is no basis on which to consider whether I should exercise my discretion to extend the time allowed for making an application.
An extension of time is therefore refused and the application for an unfair dismissal remedy made by the Applicant is dismissed and an order[10] to that effect will separately be issued.
That concludes the decision.
COMMISSIONER
[1] Witness statement of Helen Phi at [12] and Appendix J.
[2] Ibid at [13] and Appendix K.
[3] Ibid at [14].
[4] Ibid at [15].
[5] Ibid at [18].
[6] PN116 and PN117.
[7] Exhibit R1.
[8] Witness statement of Helen Phi at [4] and Appendix E.
[9] Exhibit R1.
[10] PR766195.
Printed by authority of the Commonwealth Government Printer
<PR766138>
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