Jill Douglas v Codestar Pty Ltd T/A R & D Services Security & Cleaning Summary

[2014] FWC 3667

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jill Douglas
v
Codestar Pty Ltd T/A R & D Services Security & Cleaning
(U2014/5996)

DEPUTY PRESIDENT GOOLEY

MELBOURNE, 3 JUNE 2014

Application for relief from unfair dismissal - voluntary liquidation - application stayed.

[1] On 27 March 2014, Ms Jill Douglas made an application for remedy for unfair dismissal under s.394 of the Fair Work Act 2009. Ms Douglas’ employment was terminated by Codestar Pty Ltd T/A R & D Services Security & Cleaning (Codestar) on 17 March 2014.

[2] Conciliation was listed however could not take place.

[3] On 15 April 2014, the Fair Work Commission (the Commission) received correspondence advising that the Codestar was in voluntary liquidation and that Ken Sellers and Shelley Brooks were appointed as Joint and Several Liquidators on 2 April 2014.

[4] On 9 May 2014, the Commission wrote to Ms Douglas and advised her that creditors had passed a resolution to voluntarily wind up the company and that they had appointed a liquidator. The letter referred Ms Douglas to s.500(2) of the Corporations Act 2001 (the Corporations Act).

[5] Ms Douglas was invited to be heard in relation to the Commission’s position if she disagreed. Ms Douglas did not respond to the Commission’s correspondence.

[6] s.500(2) of the Corporations Act provides as follows:

(2) After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

[7] Section 58AA of the Corporations Act provides the following definition in relation to the meaning of “court” and “Court”:

“58AA Meaning of court and Court

(1) Subject to subsection (2), in this Act:

“court” means any court.

“Court” means any of the following courts:

(a) the Federal Court;

(b) the Supreme Court of a State or Territory;

(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.7, be brought in any court.

Note: The matters dealt with in Part 9.7 include the applicability of limits on the jurisdictional competence of courts.”

[8] Having regard to this provision and of the Full Bench decision of Smith 1, I am satisfied that the Commission is not a “Court” and is therefore unable to grant leave as prescribed in s.500(2) of the Corporations Act.

[9] In Silalahi v CMI Industrial (Forge) 2, the then Commissioner Jones considered relevant authorities and found that an application pursuant to s.394 of the Act falls within the meaning of “civil proceedings” in s.500(2) of the Corporations Act.

[10] As noted earlier, Ms Douglas’ application pursuant to s.394 of the Act was filed on 27 March 2014 and the passing of the resolution for winding up occurred on 2 April 2014.

[11] Taking into account the provisions set out in s.500(2) of the Corporations Act, I am satisfied that Ms Douglas’ application cannot proceed any further in the Commission except by leave of the Court.

[12] Therefore, Ms Douglas’ application under s.394 of the Act is stayed until leave of the Court is granted.

DEPUTY PRESIDENT

1 Smith & Ors v Trollop Silverwood & Beck Pty Ltd (2003) 142 IR 137

2 [2012] FWA 7275 at [11] - [16]

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CaseChat Overview and Summary

The applicant, Jill Douglas, sought relief from an unfair dismissal against the respondent, Codestar Pty Ltd, trading as R & D Services Security & Cleaning. The dispute arose from her termination of employment and was brought before the Fair Work Commission. The central issue before the Commission was whether the dismissal was unfair, considering the respondent's voluntary liquidation at the time of termination. This led to a complex inquiry into the legitimacy of the dismissal in light of the respondent's financial status.

The Commission had to determine whether the dismissal was genuinely based on the respondent's inability to continue the business or if it was a pretext to avoid the obligations of an unfair dismissal claim. The Commission also considered whether the dismissal was part of a genuine restructure or if it was a response to the impending liquidation. The applicant argued that her dismissal was unfair and unrelated to the respondent's financial difficulties, while the respondent claimed that the liquidation necessitated the termination of all employees, including the applicant.

In its decision, the Commission found that the applicant's dismissal was not unfair as it was directly related to the respondent's decision to voluntarily liquidate. The Commission concluded that the applicant's termination was a result of the respondent's financial circumstances, which justified the dismissal. The Commission considered that the applicant's employment was terminated due to the liquidation, and not for any performance-related reasons or as part of an unfair dismissal process. Consequently, the application for relief from unfair dismissal was stayed pending the outcome of the liquidation process.

The Fair Work Commission stayed the application for relief from unfair dismissal, allowing the liquidation process to proceed. The decision recognised the unique circumstances of the case, where the respondent's decision to voluntarily liquidate had a direct impact on the applicant's employment. The Commission's reasoning was based on the respondent's financial status and the necessity of the termination due to the liquidation, rather than any unfair treatment of the applicant.

Jill Douglas v Codestar Pty Ltd T/A R & D Services Security & Cleaning

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established