John MacKenzie v Security in Depth Pty Ltd

Case •

[2023] FWC 1051

•

4 MAY 2023
[2023] FWC 1051

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

s.365—General protections

John MacKenzie
v

Security In Depth Pty Ltd

(C2023/721)

DEPUTY PRESIDENT ANDERSON

ADELAIDE, 4 MAY 2023

Application to deal with contraventions involving dismissal – jurisdiction – whether application out of time – date dismissal took effect – resignation – dismissal notified after resignation took effect – no dismissal – no jurisdiction – application dismissed

  1. On 11 February 2023 John MacKenzie (Mr MacKenzie or the applicant) made a general protections application to the Commission under s 365 of the Fair Work Act 2009 (Cth) (FW Act) alleging contraventions of the FW Act associated with his alleged dismissal.

  1. Mr MacKenzie’s application is against his former employer Security in Depth Pty Ltd (Security, the respondent or the employer), which he alleges committed the contraventions.

  1. The respondent opposes the application. It filed a response on 13 March 2023 raising a jurisdictional issue.

  1. The jurisdictional issue is that the application was filed out of time following the termination of employment which occurred either by dismissal or resignation, and that time for late lodgement should not be extended.

  1. Mr MacKenzie submits that his application is not out of time and, in the alternative, if so then time should be extended.

  1. The decision of the Full Court of the Federal Court of Australia in Coles Supply Chain Pty Ltd v Milford[1] requires applications under s 365 to be within jurisdiction before the Commission can exercise powers conferred by s 368. It is thus necessary to determine the jurisdictional issue for Mr Mackenzie’s application to proceed further.

  1. I issued directions on 23 March 2023.

  1. I heard the jurisdictional matter by video on 26 April 2023.

  1. Mr MacKenzie was self-represented. Security were represented by its owner, Mr Connory.

Evidence

  1. In addition to documentary material, I received evidence from seven persons:

Called by Mr MacKenzie

  • John MacKenzie (Applicant);[2]

  • Kaitlyn MacKenzie (Daughter of applicant);[3] and

  • Tina MacKenzie (Wife of applicant).[4]

Called by Security

  • Michael Connory (Owner);[5]

  • Leroy Freeman (Head of Managed Services);[6]

  • Athina Kostoglou (Chief Operating Officer and domestic partner of Owner);[7] and

  • Nathan Kay (Director of Cyber Assurance).[8]

  1. Mr MacKenzie, Mr Connory, Ms Kostoglou and Mr Kay were required for examination.

  1. Some of the documentary material was filed late. Both parties, and in particular the employer, submitted that I should not have regard to late material. For reasons stated at the commencement of the hearing, and after hearing the parties on the issue and taking into account the periods of lateness and their self-representation, I admitted the material filed late, having been satisfied that late filing had not created undue prejudice in responding to matters in issue.

  1. In so doing I highlighted two matters relating to the evidence that are also relevant to this decision.

  1. Firstly, the matter in issue is whether an application within jurisdiction was filed within time or, if not, whether time should be extended. Whilst this requires the Commission to make a finding as to whether a dismissal occurred and if so when it took effect, it does not require a finding as to the merit or otherwise of any decision by either Mr MacKenzie or Security to end the employment relationship. Nor does it require me to make findings as to whether Mr MacKenzie was or was not paid on termination what he claims he was lawfully owed. Aspects of the documentary material, as well as some of the oral evidence, veer into that territory. Those aspects have no probative value to the matters in issue.

  1. Secondly, some evidence is hearsay. Hearsay may be relevant to the limited extent of contextualising reactions to events as distinct from being proof of the truth of what is asserted to have been said by others to others. That aside, I give little weight to hearsay (unless not contested) and treat it as no more probative than that of a submission.

  1. There are some disputed facts.

  1. To the limited extent required, in resolving factual disputes I apply standard tools available to first-instance decision-makers including creditworthiness, plausibility and consistency with the documentary record.

  1. Each of the witnesses were conscientious. Despite the evident strained relationship between Mr MacKenzie and Mr Connory, both gave evidence to the best of their recall. The evidence of Ms Kostoglou was straightforward and reliable. Mr Kay was also conscientious but appeared somewhat uncomfortable. His answers in cross examination and re-examination were direct but somewhat inconsistent.

  1. The primary evidentiary dispute requiring determination concerns what was said between Mr Kay and Mr MacKenzie on 21 December 2022. I make findings concerning that in the body of this decision.

Facts

  1. Security is a private cyber security company providing services nationally mainly to corporate clients. It is based in Victoria where a small office is located but its work is largely conducted remotely. Commonly its staff work from home in Victoria or interstate or on other premises.

  1. Mr MacKenzie commenced employment as a Technical Consultant on 24 August 2022 pursuant to a contract dated 19 August 2022 (Contract).[9]

  1. Mr MacKenzie was and remains a resident of Queensland.

Resignation

  1. In the four months of employment to December 2022 Mr MacKenzie had a number of days of absence due to surgery and took a dislike to Mr Connory’s attitude towards him.

  1. He decided to resign.

  1. On Friday 16 December 2022 Mr MacKenzie sent Mr Connory the following email (copied to Ms Kostoglou):[10]

“Subject: Resignation – 4 weeks’ notice

Dear Michael,

I am writing to formally resign from my position as Cyber Consultant at Security in Depth. I have greatly enjoyed my time at this company and have learned so much during my tenure here. This email provides 4 weeks’ notice.

I have decided to pursue a new opportunity that is an amazing opportunity, but I am grateful for the experience and growth I have gained while working at Security in Depth. I am proud of the work I have done and the contributions I have made during my time here.

I understand that my departure may leave a temporary gap in the team, and I am willing to do what I can to ensure a smooth transition. I am also open to the possibility of returning to the company in the future, either as a fulltime employee or as a contractor for the consulting and education aspects of the business.

I am deeply grateful for the support and guidance I have received from my colleagues and superiors at Security in Depth and I will always look back on my time here with fondness. I hope that we can stay in touch and I wish the company continued success in the future.

Sincerely,
John”

  1. Mr Connory replied that day:[11]

“HI john,

Thanks for this – your resignation is accepted.

We need to tidy up a few areas and as you can imagine – you’re not eligible for paid xmas leave as previously managed.

It’s a bit of work from our end – and would be much easier if you could please provide a detailed list (today please) of all sick leave undertaken and days you have taken as leave that occurred outside of the sick leave.

That would be great.

Thanks
Michael”

  1. Four weeks’ notice from 16 December 2022 meant that the resignation was intended to take effect on Friday 13 January 2023.

  1. At the time of resignation, Mr MacKenzie reported to Mr Kay.

  1. Mr MacKenzie continued working after his resignation. He actively worked (remotely) between 16 December and Wednesday 21 December 2022.

  1. Mr MacKenzie’s evidence was that from 22 December 2022 to 13 January 2023 he was on unpaid leave. No evidence was produced of leave being applied for, leave being approved or leave being taken. I deal further with this issue in the body of this decision.

Events 19, 20, 21 and 22 December

  1. On or about 19 December 2022 Ms Kostoglou had a telephone conversation with Mr MacKenzie. In that call she sought confirmation from Mr MacKenzie that he would complete assigned work until his resignation took effect. Mr MacKenzie indicated that was his intention.

  1. On or about 20 December 2022 Ms Kostoglou browsed a social media site (LinkedIn) and noticed that Mr MacKenzie was promoting a business under his name and a product which she considered to be in competition to the services offered by Security. Ms Kostoglou believed Mr MacKenzie to be acting in breach of his obligations under the Contract. She immediately reported her concerns to Mr Connory, who (according to his evidence) was on holiday in Singapore.

  1. On or about 20 December 2022 Mr Connory decided to terminate Mr MacKenzie’s employment with immediate effect. He formed the view that the alleged conduct was serious misconduct allowing the employer to terminate for cause and without notice under cl 9.5 of the Contract.

  1. Whether Mr Connory made this decision after taking legal advice is not a matter I need determine. There is no direct evidence he did so, though it was suggested by Ms Kostoglou that she believed Mr Connory had spoken to a solicitor.[12]

  1. Mr Connory instructed Mr Kay to contact Mr MacKenzie and terminate his employment with immediate effect. There is no evidence as to how that instruction was communicated or what the terms of the instruction were.

  1. On 21 December 2022 Mr Kay telephoned Mr MacKenzie. Mr Kay’s evidence was that the purpose of the call was to “notify him of the termination of his employment and the immediate revocation of access to Security in Depth systems”.[13] Whether Mr Kay did in fact notify Mr MacKenzie of the termination of employment as distinct from merely advising of the revocation of information technology (IT) access is in dispute. I make findings on this issue in the body of this decision.

  1. At 8.31am on 22 December 2022 (the following day) Mr Kay sent Mr MacKenzie an email:[14]

“Subject: Termination of account access - SiD

Hi John,

As per our discussion yesterday, we have closed off access to our systems.
Please ensure you have removed any instances of our data and client data held on your
systems and data stores.

I hope you a Merry Christmas and New Year, and wish you the best of luck in your new
found role.

Michael has informed me he will be in touch with you once he returns from holidays.

Kind Regards,

Nathan Kay”

  1. Although Mr MacKenzie had earlier discussed with Mr Kay the work files he was to complete in advance of his resignation taking effect, Mr MacKenzie did not actively perform work between 22 December 2022 and 13 January 2023 as he considered himself to be on leave, and had no IT access.

  1. Aside from a skeleton staff working remotely, the business closed down for the Christmas / New Year period between 22 December 2022 and mid-January 2023.

Events January 2023

  1. Mr MacKenzie and other employees were paid monthly.

  1. On 13 January 2023 Mr MacKenzie did not receive a final payment from Security. Nor had he received one earlier. Knowing that monthly payroll was run on the 15th of each month, he decided to wait until 15th January for his final payment of wages, superannuation and accrued entitlements.

  1. Noting that Mr Connory had asked on 16 December 2022 that he provide a list of leave days taken and having not yet done so, on 15 January 2023 Mr MacKenzie sent Mr Connory an email:[15]

“Hi Athina,

(Hi Michael, please pass on as I don’t have Athina’s email in my email directory)

Hope that you and Michael have had a great break and your year is an awesome one!

Find attached information as requested.

1. TFN Form
2. Super Details (so far no super has been paid)
3. Sick Leave and Last Month Calculations

Currently I have approx.

·     7.89 Annual Leave days owing

·     -4.55 Sick Leave days that I owe

·  Owed approximately 6 days from the first week (August) of work as I was paid 4 weeks in the first cycle

Overall, it calculates to approximately 4.66 days owing.

If you need anything, please don’t hesitate to reach out.

Regards
John Mackenzie”

  1. This email led to six emails between the two over the following five days.[16] Mr Connory responded at 9.50am on 17 January:

“Hi John,

Thanks for sending this through – I’m back on board today.

Just FYI – this looks to be a little different from the information we have at the moment – will go over this in the next 48 hours and provide a response.

Thanks
M”

  1. Mr MacKenzie replied on 17 January:

“Hi Michael,

I appreciate that, however, the pay is already 2 days overdue and you’re saying that it will be longer.

The calculations are relatively easy.

I would appreciate if you would escalate the timeline.

Thanks
John”

  1. Mr Connory responded on 17 January:

“Hi John,

Our records indicate a difference from your calculations and as such we need to review all work records and communications. This takes time to do so accurately. 48 hours was us being proactive. In fact, it will probably take a week. At this stage, our records indicate you have been overpaid and as such we need to make sure our records are accurate and if not what it specifically means and what we need to do to rectify.

Appreciate your understanding and patience,

Thanks
Michael”

  1. On 20 January Mr MacKenzie sent Mr Connory a follow-up email:[17]

“Hi Michael,

Just following this up as it’s not past the 2 days indicated.

Do you have an update?

Regards
John Mackenzie”

  1. Mr Connory replied on 20 January:

“Hi John,

We do have everything – just putting together a written letter outlining everything. You
should receive this early next week.

Thanks
Michael”

  1. Mr MacKenzie then responded in frustration:

“Hi Michael,

In reality it’s not that hard a thing to assess. Why is it taking so long?

I am an employee (ex.), that hasn’t been paid their final pay and don’t know what is happening. This doesn’t feel good.

John”

  1. That evening (20 January 2023) Mr MacKenzie telephoned Mr Connory. Mr MacKenzie expressed his frustration at not having received a termination payment and demanded its payment. Mr MacKenzie asserted that his workplace rights had been breached by non-payment. Mr Connory considered the demand threatening and aggressive. In his evidence Mr MacKenzie did not deny that he became agitated during the call. The call ended in an unhappy stand-off.

  1. Unknown to Mr MacKenzie, Mr Connory was taking legal advice and drafting a cease and desist letter alleging breach of contract.

  1. No further contact was received by Mr MacKenzie from either Mr Connory or the respondent until Mr MacKenzie received an eleven page letter on 23 January 2023.

  1. The full text of the letter is in evidence.[18] Extracts relevant for current purposes are:

“Employment Contract – Termination and ongoing issues

Dear John,

I am writing to you about the termination of your employment with Security in Depth Pty Ltd and your duties and responsibilities after your employment was terminated.

On Wednesday 21st December 2022, you had a conversation with our Cyber Director, Nathan Kay, where he advised you that your services had been terminated without notice and on December 22nd you had been informed by written communication to your personal email that all access to Security in Depth Systems and data stores had been removed. John, you had also been advised that further discussion, if requested relating to your termination would be discussed in full once the CEO of Security in Depth, Michael Connory returned from annual leave.

John, as communicated on Wednesday 21st December 2022, you were terminated without notice. Your termination was based on the following breaches of your employment contract – as previously communicated this is to enable you to understand the significant areas of concern we had as well as being transparent about the specific reasons for termination without notice:

…

John, the following has been communicated to you previously.

1. You had been requested on numerous occasions to complete work assigned. Here is an example of communication sent and your acknowledgement:

…

As of 21st December 2022, you had failed to complete these as discussed and agreed. You also failed to:

·     Keep recordings of each review conducted – against previous written and verbal communication that this was mandatory. You had been warned about this three times in the previous three months

·     Submit review forms via the appropriate and agreed processes in appropriate time frames that enabled Security in Depth to successfully meet business service level agreement timeframes.

·     Save all appropriate corporate information on company systems – specifically OneDrive and SharePoint

·     Failed to complete a full background employment history check as required after four separate requests over a four-week period

John, you have also breached Section 3.2 What the Employee must not do of this agreement:

…

As you would know, you have publicly communicated last year, whilst under the employment of Security in Depth, and without the knowledge or consent of Security in Depth that you have developed your own business and that your business would provide Cyber Assurance and Governance auditing for small to medium businesses with the organisation you own CyberEQ.

…

Security in Depth recognises this as a serious and significant breach of your employment contract specifically relating to sections 3.1.2, 3.1.4, 3.1.5, 3.1.7, 3.2.1, 3.2.2. 3.2.3, 3.2.4, of your employment contract.

Your primary role at Security in Depth was to provide Cyber Assurance and Governance auditing for small to medium businesses.

In addition to the above, you provided false and dishonest information when you advised Michael Connory on the 16th December 2023, that there was no possibility of you either utilising the systems, processes and structures learnt at Security in Depth for your business and then create a competing product and services in your own company Cyber EQ. John, the fact that this was done during your working period at Security in Depth could be construed as fraud as you purposefully deceived Security in Depth management whilst a paid employee for your personal gain.

…

John, you also must return all company owned assets prior to the 31st January 2023. This needs to be sent to [redacted; redacted; redacted; redacted; redacted; redacted

This includes all written documentation that you have created which are company assets and are owned by Security in Depth. Please refer to your employment contract for further clarification:

I would like to remind you of the following specific clause in your employment contract:

…

As you have purposefully and wilfully deceived Security in Depth with relation to your
developing a competing business, products and services as well as not returning other assets that rightfully belong to Security in Depth, we reserve the right to charge you for recovery of our property. We reserve the right to forensically review and audit your personal computer and all digital products owned and operated by yourself and CyberEQ and as such all costs associated with such review will be borne by yourself.

…

John, if you still have failed to comply with all requests and once forensic review is completed, we will be commencing legal proceedings against you personally.

Please refer to your following interactions:

1. Not providing documentary proof that Security in Depth information and IP was removed from your personal computer as well as your smart phone.

2. Not handing back all handwritten notes and documents in your possession
Security in Depth still require you to provide proof that you have also removed and deleted all information relating to Security in Depth on your personal phone as well as your personal computer.

Security in Depth still require you to provide proof that you have also removed and deleted all information relating to Security in Depth on your personal phone as well as your personal computer.

Outstanding Pay

John, as also communicated, Security in Depth have overpaid you for the time spent at Security in Depth.

For your information this is based on the following:

…

John, at this time and as previously communicated to you, Security in Depth does not owe you any salary.

John, we also reserve the right to continue the following based on the past and continued
breaches of your employment contract:

·     Having you criminally investigated for potential fraud based on your work at Security in Depth. We believe that you have breached section 82 of the Crimes Act. We believe it would be easy to prove that you have dishonestly obtained financial advantage for yourself via your deception

·     To take further legal action against you and against Cyber EQ for your breach of Section 3.2 of your employment contract

·     Audit your personal IT systems to determine if any Security in Depth assets have been kept by yourself and used for developing competing products and services against Security in Depth.

·     Financially Recover all costs and debts owed by yourself, including salary overpayments, at your cost.

·     Seek all other legally available remedies including recovering all legal costs.

…

John, you also must return all company owned assets prior to the 31st January 2023.
This includes all written documentation that you have created which are company assets and are owned by Security in Depth. Please refer to your employment contract for further clarification:

You also must provide a statutory declaration, no later than COB 31st January 2023, that you have returned all company assets within your possession and have erased all company information and assets from all digital devices both personal and corporate you possess.

I would also like to remind you that based on the precious conversation we had, any attempt to continue to extort or threaten either myself or Security in Depth or any staff in the future will be handed over to the police and my lawyers for further action.

John, I would appreciate if you acknowledged your understanding of this letter and cease and desist all competitive activities by COB Friday 27th January 2023.

Yours sincerely,

Michael Connory - Chief Executive Officer”

  1. No termination payment was received by Mr MacKenzie as the employer had asserted that nothing was owed.

  1. The employer produced in evidence five monthly payment summaries for pay periods to 15 September 2022, 15 October 2022, 15 November 2022, 15 December 2022 and 15 January 2023.[19] Mr MacKenzie’s evidence was that he did not receive these payslips on those dates or at all. I accept that evidence. In particular Mr MacKenzie’s evidence was that although the payment summary of 15 January 2023 records “net pay” of $3,087.43 he did not receive a payment in January 2023 or thereafter for that or any sum. I accept that evidence.

Unfair dismissal application

  1. On 31 January 2023 Mr MacKenzie filed an unfair dismissal claim in the Commission under s 394 of the FW Act.

  1. On or about 8 February 2023 Mr MacKenzie was notified by a Commission administrative officer that he may not have met the minimum employment period to be eligible to make an unfair dismissal claim.

General protections application

  1. On 11 February 2023 Mr MacKenzie, under cover of an email sent at 3.12am,[20] discontinued the unfair dismissal application by formal notice (F50) and filed this general protections application (F8). Mr MacKenzie attached the 23 January 2023 letter (which he described as “fabricated”) and a spreadsheet of payments[21] he claims is owed.

  1. In the body of the email Mr MacKenzie stated:

“Given I have only been aware of this situation from the 23rd January 2023, I am within the 21 day period. I seek outcome as per the Form F8 document.”

  1. The employer filed a response a month later opposing the claim on multiple grounds.

Submissions

Mr MacKenzie

  1. Mr MacKenzie submits that he was not dismissed until 23 January 2023 when he says that he was first notified of having been dismissed.

  1. He says that he earlier resigned but was subsequently dismissed on 23 January 2023 and took this legal action because he was entitled to do so after what he says were threats of legal action against him by the employer.[22]

  1. Mr MacKenzie submits that a dismissal cannot take effect at law until it and its reasons are communicated in plain and clear terms to a dismissed employee.

  1. As Mr MacKenzie claims that he was not notified of either the dismissal nor its reasons until 23 January 2023, his application made on 11 February 2023 is not beyond the 21-day statutory period and is not out of time.

  1. In the alternative, Mr MacKenzie submits that if he was dismissed earlier than 23 January 2023 (for example, on 21 December 2022 as alleged by the employer), an extension should be granted because firstly the employer’s communication following his resignation was ambiguous such that he could not reasonably have understood that he had been dismissed prior to his resignation taking intended effect; and secondly, he put the owner of the business on specific notice on 20 January 2023 that he considered his general protections to have been infringed by the way he had been treated and on further notice when filing the unfair dismissal application on 31 January.

Security

  1. Security submit that Mr MacKenzie was dismissed without notice and for cause on 21 December 2022 when the dismissal was communicated by Mr Kay to Mr MacKenzie.

  1. Security submit that an oral communication of dismissal has legal force and effect. Security submit that the letter of 23 January 2023 confirmed in writing the fact of the earlier dismissal as part of a cease and desist letter alleging past and continuing contractual breaches.

  1. Security submit that the words said by Mr Kay to Mr MacKenzie on 21 December expressly notified him of dismissal.

  1. Security submit that in the alternative, Mr Kay’s follow-up email of 22 December 2022 advising that information technology permissions had been removed ought to have been reasonably understood by an employee such as Mr MacKenzie performing cyber security duties remotely that their employment had ceased.

  1. Security submit that a dismissal for cause inside a period of a resignation being worked out is lawful and of legal effect.

  1. Security submit that conduct by both the employer and by Mr MacKenzie in the wake of the events of 21 December 2022 support the conclusion that Mr MacKenzie was dismissed that day. The employer points to the fact that Mr MacKenzie had his IT permissions removed the next day and that Mr MacKenzie did no work for the business following that day.

  1. Security submit that as Mr MacKenzie was dismissed on 21 December 2022 his application (as well as the earlier unfair dismissal application) is out of time.

  1. Security also submit that if not dismissed on 21 or 22 December 2022, Mr MacKenzie resigned and that Mr MacKenzie’s application is out of time given that his resignation took effect on 13 January 2023.[23]

  1. Security submit that time should not be extended because Mr MacKenzie’s application is an abuse of process with no or low chances of success and that it was his error by which he filed an earlier unfair dismissal application he was ineligible to make.

Consideration

  1. Section 365 of the FW Act provides:

“365 Application for the FWC to deal with a dismissal dispute

If:

(a)   a person has been dismissed; and

(b)   the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;

the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.”

  1. Section 365 requires a dismissal to have occurred as a jurisdictional fact. A mere allegation that a person has been dismissed will not establish this as fact.[24] “Dismissal” for these purposes (and other purposes of the FW Act) is defined in s 386(1), which provides:

“386 Meaning of dismissed

(1)A person has been dismissed if:

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

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

  1. Section 366 provides a time limit for the filing of applications under s 365:

“366      Time for application

(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).

(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.”

Was there a dismissal?

  1. Mr MacKenzie submits that he was dismissed on and from 23 January 2023. He says he earlier resigned but was subsequently dismissed on that day.

  1. Security submit that Mr MacKenzie was summarily dismissed on and from 21 or 22 December 2022 and, if that was not so, then his employment ended when he resigned effective from 13 January 2023.

  1. It is readily apparent from the evidence, and I so find, that on or about 20 December 2022 Mr Connory, the owner of the respondent business, made a decision that Mr MacKenzie was to be summarily dismissed.

  1. Though there is no contemporaneous documentary evidence to support this finding, the evidence of Ms Kostoglou about what she identified on LinkedIn on the day prior, what she promptly advised Mr Connory and what Mr Connory then advised her about his intentions, as well as Mr Kay’s evidence about the verbal instructions given to him by Mr Connory, corroborate Mr Connory’s evidence in this regard.

  1. That Mr MacKenzie was serving out a period of notice of resignation at the time the employer made the decision to dismiss is no impediment to a finding of dismissal. In general terms, a dismissal by an employer for cause inside a period of notice being worked out by a resigning employee has legal force and effect because the employment relationship continues on foot during the period of that notice.

  1. I deal later in the body of this decision whether the employment relationship ended by a resignation taking effect on 13 January 2023.

  1. I now deal with when the intended dismissal decided on 20 December 2022 took effect.

When did the intended dismissal take effect?

  1. Neither an intention to dismiss nor an instruction to a manager to dismiss is sufficient for a dismissal to have taken effect. Section 386(1)(a) requires that a person “has been terminated” on the employer’s initiative. The use of the present perfect tense (“has been”) with the past participle of the verb terminate (“terminated”) means, on ordinary principles of construction, that termination of the employment relationship needs to have occurred as a matter of fact for there to be a “dismissal” within the meaning of the provision.

  1. A dismissal does not take effect until it is communicated to the person dismissed in plain and unambiguous terms[25] or where communication in those terms is reasonably accessible to the person dismissed.[26]

  1. Was the intended dismissal communicated in plan and unambiguous terms by Mr Kay on 21 December 2022?

  1. I think not.

  1. Mr MacKenzie’s evidence was that he was told by Mr Kay that his technology permissions were being terminated. Mr Kay’s evidence was somewhat confusing and inconsistent. In cross examination he conceded that he had only told Mr MacKenzie that his access to the information systems was terminated:[27]

·   MR MACKENZIE: “Mr Kay, Nathan, did you state to me that I had been terminated with cause?”

·   MR KAY: “No.”

  1. However, in re-examination, in answer to a leading question from Mr Connory, Mr Kay repeated what he said in his written statement that he had told Mr MacKenzie that his employment was terminated as well as telling him that his technology access was terminated.[28]

  1. The evidence of subsequent conduct does not generally support a finding that Mr MacKenzie was advised in clear and unambiguous terms on 21 December 2022 that his employment was terminated. In particular:

·   Mr Kay’s email sent the next day is prefaced “as per our discussion yesterday” yet makes no reference to termination of employment nor to it having summarily taken effect. That email refers only to the employer having “closed off access to our systems”. It states no reason for having done so. The email’s subject matter is similarly described as “Termination of account access – SID”, and not termination more generally;

·   Mr Kay’s email of 22 December 2022 states that “Michael has informed me that he will be in touch with you once he returns from holidays”. The inference from this is that there was future communication intended between Mr MacKenzie and the business owner. Whilst intended future communication is not exclusively the domain of a continuing employment relationship, it is suggestive of such. At the very least, this observation supports a conclusion that the employer’s communication was ambiguous; and

·   The employer, at some time on or after 15 January 2023, created a payment advice relevant to Mr MacKenzie’s employment dated 15 January 2023. That pay advice makes no reference to employment having been terminated or ceased. A payment advice for a wage and salary payment on a regular monthly payroll day is inconsistent with a finding that the employer had summarily dismissed the employee the month prior.

  1. I take into account that the employer (through Mr Freeman) removed Mr MacKenzie’s information technology access on 22 December 2022. The employer’s submission that this removal ought to have been reasonably understood by an employee such as Mr MacKenzie performing cyber security duties remotely that their employment had ceased has some force. However, the mere fact of IT system access being removed from an employee is not of itself necessarily clear and unambiguous communication of dismissal. There are multiple reasons why a business may remove access to information technology systems short of dismissing an employee. Absence on leave or a stand down are but two examples. That fact alone, without more, does not establish the fact of dismissal even though it may, depending on the circumstances, point in that direction. The particular circumstances of each case matter.

  1. I take fully into account that in this matter Mr MacKenzie was an employee whose duties required him to access the employer’s information technology system in order to remotely perform cyber security work. This points somewhat towards a finding that removal of his access was a dismissal.

  1. I also take into account that Mr MacKenzie did not in fact perform work after 21 December 2022. Whilst this in other circumstances may point towards a finding of a dismissal having occurred, it does not do so in this matter. The business was, over this period going into its Christmas / New Year close-down except for a skeleton staff. Mr MacKenzie did not intend to work over that period. There is no evidence that he was required to do so provided, in light of his resignation, that his outstanding files were left in a satisfactory state.

  1. I also take into account that Mr Kay’s email of 22 December 2022 wished Mr MacKenzie the “best of luck in your new found role”. However, this sentiment does not create an inference that employment had ended the day prior or that day by dismissal. Mr Kay was aware Mr MacKenzie had resigned earlier that month “to pursue a new opportunity” and that his resignation was yet to take effect.

  1. Mr MacKenzie’s evidence that he was on unpaid leave is to be treated with some caution. He had been told by Mr Connory on 16 December that he was not eligible for “paid Xmas leave”. Mr MacKenzie had not formally applied for leave through a recently created online employee portal for such purposes. There is no evidence that he applied for unpaid leave or was granted such permission. Whilst Mr MacKenzie had no intention to work after 21 December 2022 because of the Christmas / New Year close-down, the removal of system permissions by the employer on 22 December 2022 necessarily compromised his capacity to do so.

  1. Given the unsatisfactory state of Mr Kay’s evidence on this topic, and considering the circumstances overall, I do not find that Mr MacKenzie was dismissed in plain and unambiguous terms on 21 December 2022 when spoken to by Mr Kay or on 22 December 2022 when he was emailed by Mr Kay that his system access was removed.

  1. In making this finding I readily accept that Mr Connory had in good faith given an instruction on 20 December 2022 that Mr MacKenzie be summarily terminated and believed that this had occurred. I also accept that Mr Kay believed in good faith that advising Mr MacKenzie of the closure of technology access had had that effect. For example, Mr Kay forwarded to Mr Connory on 16 January 2023 a copy of his 22 December 2022 email to Mr MacKenzie. In the text of that 16 January email Mr Kay simply stated “Copy of communication to John on termination”.[29]

  1. However, a subjective belief, even one genuinely held, is not evidence of a fact. The fact of dismissal is to be objectively assessed against all relevant circumstances and not simply the subjective belief of a business owner or manager or the allegedly dismissed employee.

  1. I find that the communication by Mr Kay orally and in writing was such that it was not a plain and unambiguous notification of dismissal despite the intention that it be so.

  1. Given this, did the intended dismissal subsequently take effect and if so when?

  1. But for the following, it is open to find that the intended dismissal took effect when it was communicated to Mr MacKenzie in plain and unambiguous terms on 23 January 2023 when the fact of a dismissal decided on 20 December 2022 was first made known to Mr MacKenzie.

  1. However, a finding to this effect fails to deal with the fact that in the period intervening between the decision to dismiss (20 December 2022) and the date it was communicated (23 January 2023) Mr Mackenzie’s resignation of 16 December 2022 came into effect on its terms, that is, on 13 January 2023.

  1. Did this intervening fact have the effect that Mr MacKenzie’s employment terminated at his initiative on 13 January 2023 and prior to the communication of his dismissal by the employer on 23 January? In other words, can it be said that on 23 January 2023 there was no employment relationship from which Mr MacKenzie could be dismissed because it had ended on his own initiative ten days earlier?

  1. The force of this conclusion is compelling in the somewhat unusual circumstances of this matter where a resignation and a dismissal were operating in parallel and one took effect before the other was communicated.

  1. I take into account that both Mr MacKenzie and Security have contended in these proceedings that Mr MacKenzie was dismissed by Security. However, Security have done so on the basis that the employment relationship ended by dismissal on 21 or 22 December 2022 and advance the alternate proposition that his employment ended on 13 January 2023 when the resignation took effect.[30]

  1. Whether a dismissal did in fact take effect on 23 January 2023 requires an objective finding of fact based on applicable legal principles, and not a subjective finding based on the belief or contention of the parties or one of them.

  1. Mr Mackenzie’s resignation of 16 December 2022 was lawfully given and its date of effect was expressed to be four weeks hence (13 January 2023). That date was lawful and was compliant with Mr MacKenzie’s obligations.

  1. As noted, that an employer can lawfully dismiss an employee inside a period of notice is well established. However, for such a dismissal to have taken effect requires more than the making of a decision to dismiss. For a dismissal to take effect inside a notice period of resignation the dismissal decided upon needs to have been communicated in plain and unambiguous terms otherwise the employment relationship continues until the point in time that the resignation takes effect.

  1. This is what occurred in this matter. I conclude that Mr MacKenzie was employed by Security on 13 January 2023 even though Mr Connery had decided some weeks earlier that he should be summarily dismissed and had instructed Mr Kay to do so. I have found that Mr Kay did not in fact do so.

  1. Mr MacKenzie did not withdraw his resignation. Nor did he advise an altered date it was to take effect.

  1. Accordingly I find that the employment relationship came to an end on Mr MacKenzie’s initiative when his resignation took effect on 13 January 2023.

  1. Given this, Mr MacKenzie was not employed on the date that Security notified him of dismissal (23 January 2023). There being no continuing employment after 13 January 2023 from which he could have been dismissed, there was no dismissal that could have or did lawfully take effect on 23 January 2023.

  1. Nor can it be said that an intended dismissal notified on 23 January 2023 had retrospective effect to the date it was made or intended to be notified. The concept of a dismissal taking effect retrospectively has been rejected by the Commission.[31]

  1. In this context, the letter by the employer of 23 January 2023 is to be seen as a letter alleging breach of contract and to cease and desist. Whilst also purporting to be a letter confirming a summary dismissal (and would have been notification had there been a continuing employment relationship on that date) in fact it had no such effect.

  1. Further, the communication between Mr MacKenzie and Mr Connory between 15 and 20 January 2023 is best characterised as communication about monies allegedly due and payable upon the employment relationship having already ended. This was certainly Mr MacKenzie’s belief given that he described himself as an “ex” employee in his email to Mr Connory at 5.29pm on 20 January 2023.[32]

Conclusion

  1. As the employment relationship between Mr MacKenzie and Security ended by resignation and not dismissal, the issue whether the general protections dismissal dispute application under s 365 of the FW Act is within time or out of time does not arise.

  1. The application is not within jurisdiction.

  1. I note that there is no evidence before me to suggest that Mr MacKenzie’s resignation on 16 December 2022 was a forced resignation within the meaning of s 386(1)(b) of the FW Act. This was not the basis on which Mr MacKenzie prosecuted his case. He did so on the basis that he chose to resign on 16 December, wished to leave amicably and commenced these proceedings only when it became apparent that he was unable to secure entitlements he believed he was owed, was informed of (and alarmed by) an earlier decision to dismiss having been made (and its reasons) and was threatened with civil proceedings for alleged contractual breach.[33]

  1. I do not find that Mr MacKenzie was dismissed within the meaning of the FW Act.

  1. In making this decision I indicate that had I found that an employment relationship continued to exist until 23 January 2023 I would have found that Mr MacKenzie’s dismissal took effect that day and thus his application would have been within time. No extension would have been required.

  1. Further, had I alternatively found that Mr MacKenzie’s dismissal took effect on 21 or 22 December 2022 as had been intended by Mr Connory, the intended date of effect of the resignation of 13 January 2023 would have been of no consequence as the employment relationship would have ceased by then and the issue of whether time should be extended for the late lodgement of this application would then have arisen.

  1. Whilst not necessary to decide this point, I observe that having regard to the considerations in s 366(2) strong grounds would have (in that scenario) existed for time to have been extended. In particular my finding that the employer’s conduct and in particular Mr Kay’s communication on 21 and 22 December 2022 was at the very least ambiguous, as well as the fact that Mr MacKenzie had specifically told Mr Connory on 20 January 2023 that he believed his general protections had been infringed, and that Mr MacKenzie had then put the respondent on notice of his dissatisfaction with the dismissal by filing an unfair dismissal application on 31 January 2023 would have weighed heavily in favour of exercising a discretion to extend time. Those factors would have weighed more heavily than the fact that Mr MacKenzie made a mistake in first filing a claim he was ineligible to make.

  1. For the sake of completeness I also observe that Mr MacKenzie’s application does not fall foul of the prohibition on multiple applications in s 725 of the FW Act. This is because concurrently with the making of his general protections application Mr MacKenzie discontinued his unfair dismissal application. Had he not done so, a further jurisdictional impediment to this application would have existed.

Disposition

  1. As application C2023/721 is not within jurisdiction it must be dismissed.

  1. An order[34] giving effect to this decision is issued in conjunction with its publication.

DEPUTY PRESIDENT

Appearances

Mr J MacKenzie, on his own behalf

Mr M Connory, of and on behalf of Security In Depth Pty Ltd

Hearing

2023
Adelaide (by video)
26 April


[1] [2020] FCAFC 152

[2] A1 (Statement 16 April); A7 (Further Statement and Submission, undated); A14 (Further Statement and Submission 16 April)

[3] A12 (Statement 16 April)

[4] A13 (Statement 16 April)

[5] R2 (Statement 12 April); R4 (Further Statement and Submission (undated))

[6] R9 (Statement 12 April)

[7] R10 (Statement 12 April)

[8] R11 (Statement 8 April)

[9] R3

[10] R5

[11] ibid

[12] Recording of Hearing, 26 April 2023, 3:31:37 – 3:31:51

[13] R11 paragraph 6

[14] R6 pages 3 - 4

[15] A15

[16] Ibid

[17] A15

[18] A5

[19] R8

[20] A2

[21] A6

[22] A7 Statement and Submission pages 1 - 2

[23] R1 F8A Item 2.2 paragraph 2

[24] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 at [54]

[25] Mihajlovic v Lifeline Macarthur[2013] FWC 9804; Goodenough v CXN Transport Pty Ltd[2023] FWC 715, [32] and [34]

[26]Ayub v NSW Trains [2016] FWBFC 5500, [50]

[27] Recording of Hearing, 26 April 2023, 3:53:38 - 3:53:47

[28] Recording of Hearing, 26 April 2023, 3:54:00 - 3:54:27

[29] R6 page 3

[30] R1 F8A Item 2.2 paragraph 2

[31] Ayub v NSW Trains [2016] FWCFC 5500, [38]

[32] A15

[33] A7

[34] PR761606

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Mihajlovic v Lifeline Macarthur [2013] FWC 9804
Goodenough v CXN Transport Pty Ltd [2023] FWC 715