Julia Liberati v Kresta Blinds Limited

[2015] FWC 5765

[2015] FWC 5765

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365—General protections

Julia Liberati
v
Kresta Blinds Limited
(C2015/2755)

COMMISSIONER LEWIN MELBOURNE, 20 AUGUST 2015

Application to deal with contraventions involving dismissal – effective date of termination – extension of time to file application – application filed within 21 days of effective date of termination – no extension of time required – if not filed accordingly exceptional circumstances existed – application accepted.

Introduction

[1] This decision concerns an application to the Fair Work Commission (Commission) pursuant to s.366(1)(b) of the Fair Work Act 2009 (Cth) (the Act) for an extension of time to file a general protections application. On 7 May 2015, Ms Julia Liberati filed a general protections application pursuant to s.365 of the Act. The Respondent in this matter is Kresta Blinds Limited (Kresta).

[2] I note from the outset that there is conflict between the parties as to the proper characterisation of the legal relationship between Ms Liberati and Kresta. Kresta claim that Ms Liberati was an independent contractor. Ms Liberati claims that she was in fact an employee of Kresta, and that the independent contractor arrangement was in fact a sham. For the purpose of this decision, I am not required to make a determination as to the proper characterisation of the relationship between Ms Liberati and Kresta.

[3] Ms Liberati claims that she was engaged by Kresta on 13 January 2015. In Ms Liberati’s application, it is claimed that she was dismissed on 14 April 2015. In response to the application, Kresta made a jurisdictional objection submitting that the application was made outside of the 21 day statutory time limit prescribed by s.366(1)(a) of the Act. On 23 June 2015, the Commission issued directions for the parties to file submissions in relation to Kresta’s jurisdictional objection (Directions).

[4] On 1 July 2015, Ms Liberati filed submissions pursuant to the Directions. Ms Liberati submits that the correct effective date of termination was in fact 24 April 2015, being within the 21 day statutory time limit prescribed by s.366(1)(a) of the Act. In the alternative, Ms Liberati submits that if the Commission finds that the effective date of termination was 14 April 2015, there are exceptional circumstances that should allow an extension of time for the application to be filed taking into consideration the matters prescribed by s.366(2)(a)-(e) of the Act.

[5] On 8 July 2015, Kresta filed submissions, a witness statement of Parul Mishra and a witness statement of Irene Gardiner pursuant to the Directions. Kresta submit that the effective date of termination was 14 April 2015, the application therefore is outside of the 21 day statutory time limit prescribed by s.366(1)(a) of the Act and that no exceptional circumstances exist for accepting the application out of time within the meaning of s.366(1)(b) of the Act.

Relevant statutory provisions

[6] Section 366 of the Act prescribes the time for making a general protections application pursuant to s.365 of the Act:

“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.”

Consideration

[7] In order to determine the jurisdictional objection, it is necessary to make a finding concerning the effective date of termination of the Commission Agents Agreement (Agreement) between Ms Liberati and Kresta. There is a factual controversy in relation to the circumstances in which the engagement between Ms Liberati and Kresta came to an end.

[8] The conflict concerns the circumstances surrounding, and the outcome of, a meeting held on 14 April 2015 between Ms Liberati, Ms Mishra, the Retail Area Manager for Kresta in Victoria, and Ms Gardiner, the Training Coordinator of Kresta in Victoria and New South Wales. Ms Liberati submits that a Ms Irene Banks was in attendance, and does not mention a Ms Irene Gardiner. For the purpose of this decision, I accept that Ms Banks and Ms Gardiner are either the same person, and/or Ms Liberati is mistaken as to Ms Gardiner’s surname, as Ms Liberati submitted that she had only met a Ms Banks for the first time on 14 April 2015.

[9] Both Ms Mishra and Ms Gardiner’s witness statements state that the purpose of the meeting on 14 April 2015 was to discuss performance and conduct issues arising from Ms Liberati’s provision of services to Kresta. These issues were put to Ms Liberati by Ms Mishra and Ms Gardiner, and Ms Liberati was given an opportunity to provide a response. Both Ms Mishra and Ms Gardiner’s witness statements state that in light of Ms Liberati’s responses, the following exchange occurred:

Ms Gardiner: “This may not be the job for you.”

Ms Liberati: “Your loss to lose me. What do you want me to do?”

Ms Gardiner: “We will be terminating the Contractor Agreement, effective immediately.”

[10] Both Ms Mishra and Ms Gardiner’s witness statements state that at this point it was acknowledged by Ms Liberati, Ms Mishra and Ms Gardiner that the Agreement would be terminated effective immediately. Ms Mishra states that she advised Ms Liberati to cease contacting Kresta customers and advised that another Kresta Sales Consultant would look after Ms Liberati’s customers. Ms Mishra’s witness statement notes that Ms Gardiner asked Ms Liberati to return the Kresta contracts and samples, and Ms Liberati complied. Ms Mishra’s witness statement provided that she confirmed with Ms Liberati that all outstanding orders to be processed, provided they complied with the requirements set out in the Contractor Agreement to enable commission payments to be forwarded to Ms Liberati, would be paid.

[11] In relation to the meeting held on 14 April 2015, Ms Liberati submits that upon conclusion of the meeting it had been understood that Kresta would move to terminate the Agreement, that Kresta would pay any unpaid commissions owed to Ms Liberati, and that Kresta would investigate other details Ms Liberati had requested in relation to entitlements and future commissions for sales which had not yet been finalised. Ms Liberati submits that, whilst she did not expect to receive any new leads following the meeting on 14 April 2015, it was never clarified what would happen with Ms Liberati’s existing jobs.

[12] On 17 April 2015, Ms Liberati wrote an email to Ms Mishra. This email was attached to Ms Liberati’s submissions. In this email, Ms Liberati states:

“Furthermore i also need a notice in writing as per clause 5.1.2 and 5.1.3 as i do not see any grounds on which Yourself & Irene had any right or reason to terminate my contract (sic).”

[13] Ms Liberati submits that the email she sent to Ms Mishra on 17 April 2015 was to clarify the situation following the 14 April 2015 meeting. However, Kresta submit and characterise the 17 April 2015 email as a request for a formal written termination letter.

[14] Ms Liberati submits that on 24 April 2015, she received a letter dated 14 April 2015 entitled “Termination of Contractor Agreement” (termination letter). The termination letter stated that “I confirm termination of your Contractor Agreement with Kresta Blinds effective 14 April 2015”. Ms Liberati submits that during the period following the meeting on 14 April 2015 and until receipt of the termination letter on 24 April 2015, she made enquires to Kresta, including the email of 17 April 2015, regarding the termination of the Agreement as well as continuing to work towards finalising sales. Ms Liberati submits that the “aim to wind up the relationship” had been expressed at the meeting on 14 April 2015, however the timeline and process for termination was not clear. It’s upon this basis that Ms Liberati submits that the effective date of termination is 24 April 2015, being the date of the transmission and receipt of the termination letter.

[15] Kresta submit that on the back of the 17 April 2015 email, which they characterise as a request for a formal written termination letter, the termination letter was backdated to 14 April to reflect the understood termination date of 14 April 2015.

[16] In summary, the conflict on the materials is the outcome of the meeting on 14 April 2015. Ms Liberati submits that an intention to terminate the Agreement had been created, but the mechanics of doing so had not yet been established. Conversely, Kresta submit that Ms Liberati, Ms Mishra and Ms Gardiner were ad idem following the meeting, in that there was mutual agreement that the Agreement that Ms Liberati and Kresta had been terminated and the termination was effective immediately. Kresta submit that there was no misunderstanding or confusion following the meeting. Ms Gardiner’s witness statement provides that at no point during the meeting meeting did Ms Liberati state that she wished to remain with Kresta, but rather, Ms Liberati acknowledged the termination of the Agreement and handed back her Kresta sample books which were used to showcase Kresta products.

The Agreement

[17] On 23 July 2015, the Commission requested, and was provided with by Kresta, a copy of the Agreement between Ms Liberati and Kresta. Clause 5 of the Agreement concerns termination of the Agreement. Clause 5 contains the following sub-clauses:

“5.0 TERMINATION

5.1 This Agreement may be terminated as follows:

5.1.1 By mutual agreement of the parties; or

5.1.2 By the Company by notice in writing to the Commission Agent immediately in the event that the Commission Agent fails to achieve any Sales Target set by the Company; or

5.1.3 By either party hereunto upon a material breach by the other party of its obligations hereunto PROVIDED THAT the non breaching party notifies the breaching party in writing of such breach and the breaching party has failed to rectify such breach within ten (10) days following the date of the said notice; or

5.1.4 By the Company whereby the Commission Agent has misappropriated funds belonging to the Company.

5.2 Upon termination of the Agreement, the Commission Agent and/or any employee of Sub-Commission Agent, shall immediately deliver to the Company all sales kits, quotation/invoice books, product samples, price lists, point of sale material, brochures, manuals, correspondence, documents, specifications, papers and other material relevant to the Commission Agent’s conduct of the obligations under this Agreement as the Company may demand, including all Products belonging to the Company which are in the Commission Agent’s possession or under its control. The Company will refund to the Commission Agent the cost of any purchased sales kit(s) returned in good order at the termination of this contract.”

Effective date of termination

[18] On the material before me, I find that the effective date of termination of the Agreement between Ms Liberati and Kresta was 24 April 2015, being the day that the termination letter was transmitted by Kresta and received by Ms Liberati. I do not accept Kresta’s submission that the termination was effected by mutual agreement following the meeting on 14 April 2015. Further, I do not accept Kresta’s characterisation of the email from Ms Liberati to Ms Mishra on 17 April 2015 as a request for a formal written termination letter which was backdated to reflect the mutually agreed effective date of termination by the parties. Even if Kresta purported to terminate the Agreement on the 14 April 2015, it was not legally capable of doing so, until such time as Kresta provided to Ms Liberati, in writing, a notice of termination, due to the operation of clause 5.1.2 of the Agreement. The events of 14 April 2015 may amount to a repudiation of the Agreement on the part of Kresta, with Ms Liberati electing to affirm the Agreement, demonstrated by Ms Liberati continuing to finalise sales, until transmission and receipt of the termination letter on 24 April 2015.  1

[19] Further, I consider that the 17 April 2015 email evidences that Ms Liberati did not mutually agree with the intended termination of the Agreement Ms Liberati had a reasonable expectation that Kresta could only terminate the Agreement in accordance with clause 5.1.2 of the Agreement. Further, the termination letter cites an “inability to comply with the expected performance standards” and “not achieving sales targets” as the reason for the termination. I consider that this further evidences a situation where Ms Liberati reasonably considered that termination of the Agreement could only be effected in accordance with the terms of clause 5.1.2.

[20] Furthermore, I consider that the 17 April 2015 email evidences that the termination was not mutually agreed, as Ms Liberati disputed the purported course of action and alerted Kresta that in the circumstances, and in accordance with the Agreement, Kresta could only terminate the Agreement in writing. However, I make no binding declaration of rights and responsibilities arising out of the terms of the Agreement, but merely form an opinion about the operation of the Agreement in the exercise of the powers conferred upon the Commission to make this decision.  2

[21] On the material before me and for the reasons above, I find that the effective date of termination of the Agreement between Ms Liberati and Kresta was 24 April 2015, being within the 21 days prescribed by s.366(1)(a) of the Act. Therefore, an application for an extension of time pursuant to s.366(1)(b) of the Act is not required.

Extension of time – exceptional circumstances

[22] However, if I am wrong and the effective date of termination is 14 April 2015, I consider that the material demonstrates exceptional circumstances which would allow the Commission to exercise a discretion to accept Ms Liberati’s application outside of the 21 days pursuant to s.366(1)(b) and taking into consideration the matters prescribed by s.366(2)(a)-(e) of the Act. Exceptional circumstances are circumstances that are out of the ordinary course, unusual, special or uncommon which are not regularly, routinely or normally encountered. 3 Ms Liberati submits that if the Commission takes the view that the effective date of termination is 14 April 2015, that exceptional circumstances exist which should allow an extension of time. However, Kresta submit that there are no exceptional circumstances warranting the granting of a further period for the making of an application under s.365 of the Act.

Reason for the delay

[23] Kresta submit that the Applicant has not provided a reason for any delay. Kresta submit that based on their view and characterisation of the events of and following the 14 April 2015 meeting, the 17 April 2015 email and the termination letter transmitted at received on 24 April 2015, that there was no uncertainty, confusion or mistake arising from the meeting on 14 April 2015. Therefore, Kresta submit, that there is nothing out of the ordinary course, unusual, special or uncommon about the reasons why Ms Liberati filed her application outside of the 21 days prescribed by s.366(1)(a) of the Act.

[24] I consider that if the effective date of termination is taken to be 14 April 2015, Ms Liberati’s reason for the delay was, that from her point-of-view, the outcome of the 14 April 2015 meeting was that an intention to terminate the Agreement was established, that the termination was not mutually agreed, and was not effected, on the reasonable and correct basis that Kresta could only terminate the Agreement in writing in accordance with clause 5.1.2 of the Agreement.

[25] On the material before me, and if the effective date of termination is 14 April 2015, I consider that Ms Liberati has an acceptable and credible reason for the short period of delay in filing of her application.  4

Action taken to dispute the dismissal

[26] Kresta submit that they are unaware of any actions taken by Ms Liberati to dispute the termination of the Agreement, aside from the filing of her application pursuant to s.365 of the Act. I do not accept this submission. I consider that it is clear from the 17 April 2015 email that Ms Liberati did in fact dispute the termination. I consider that Ms Liberati attempted to address matters of concern by way of direct communication with Kresta following the 14 April 2015 meeting, which demonstrates that despite the decision to terminate the Agreement, the issues in contest had not reached finality.  5 Further, Ms Liberati raised her concerns disputing the termination within the 21 day time limit. I consider that Ms Liberati’s 17 April 2015 email disputing the purported termination would favour granting an extension of time. 6

Prejudice to the employer

[27] Ms Liberati submits that it would not be prejudicial to Kresta to allow her application to be filed two days out of time. However, Kresta submit that they have incurred significant costs and expended significant time and effort defending Ms Liberati’s application.

[28] On the matieral before me, I do not consider that there is any prejudice to Kresta incurred by way of accepting an application two days out of time. I do not accept that Kresta would be prejudiced by the Commission accepting Ms Liberati’s application two days outside of the 21 day time limit over and above the usual prejudice that may accompany any grant of an extension of time.  7 I consider this consideration favours the granting of the extension of the application in these circumstances of this case, overall.

The merits of the application

[29] A highly meritorious claim may persuade the Commission to accept an explanation for delay that would otherwise have been insufficient.  8 However, the Commission cannot make any findings on contested matters without hearing evidence, which is rarely called for the purposes of determining an extension of time application. Therefore, the Commission should not embark on a detailed consideration of the substantive application. 9

[30] Kresta submit that Ms Liberati’s application lacks merit as no workplace rights, as set out in the Act, have been asserted by Ms Liberati as being exercised and no adverse action was taken by Kresta as the termination of the Agreement was linked to Ms Liberati’s unsatisfactory performance and conduct. Kresta submit that the Commission should not exercise its discretion to extend the time for filing of Ms Liebrati’s application on the basis that the substantive application is not reasonably arguable.  10

[31] On the material before me I cannot be satisfied that Ms Liberati’s application is without merit. As previously identified, there is conflict between the parties as to the proper characterisation of the legal relationship between Ms Liberati and Kresta. Despite Kresta’s submissions, Ms Liebrati may have been an employee of Kresta as a matter of law. There may be an issue with respect to Ms Liberati’s protection from the misrepresentation of employment as an independent contracting arrangement in contravention of s.357 of the Act. However, the Commission cannot make a finding on issues without hearing evidence in relation to it. Further, there is insufficient evidence before the Commission to consider whether Ms Liberati has been adversely affected by Kresta because of this particular workplace right, and is not required for the purposes of this decision. I consider the merits of the application to be a neutral consideration.

Fairness as between the person and other persons in a like position

[32] This consideration may relate to fairness in matters of a similar kind that are currently before the Commission or have been decided in the past.  11 The comparison should be limited to a comparison of persons who have had their employment terminated and are capable of lodging an application under s.365. 12 However, there is no evidence before the Commission that there is, or has been, any application by a person in a like-position to Ms Liberati. I consider this to be a be a neutral consideration.

Conclusion

[33] As previously stated, based on the materials before the Commission, I consider that the effective date of termination of the Agreement between Ms Liberati and Kresta was 24 April 2015. Therefore, an extension of time pursuant to s.366(1)(b) of the Act would not be required.

[34] However, if I were wrong, and the effective date of termination was 14 April 2015, I consider there are exceptional circumstances which give rise to the Commission’s discretionary power to allow a further period of two days for Mr Liberati to file her application pursuant to s.366(1)(b), taking into account the matters prescribed by s.366(2)(a)-(e).

[35] Taking all of the relevant considerations into account I have decided that it is appropriate to exercise the discretion to accept the application. For certainty, an Order accepting the application and dismissing Kresta’s jurisdictional objection will be issued with this decision.

COMMISSIONER

Final written submissions:

8 July 2015.

 1   Although Ms Liberati identified the 14 April 2015 as the date of termination in the application, this cannot alter the effect of the relevant terms of the Agreement and the effective date of termination of the Agreement between Ms Liberari and Kresta

 2   Re Cram; Ex parte The Newcastle Wallsend Coal Company Pty Ltd (1987) 163 CLR 140, 149

 3   Ho v Professional Services Review Committee No 295 [2007] FCA 388, [25]; Cheyne Leanne Nulty v Blue Star Group Pty Ltd (2011) 2003 IR 1, [13]

 4   Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299‒300; Cheval Properties Pty Ltd (t/as Penrith Hotel Motel) v Smithers (2010) 197 IR 403, 408‒409

 5   Wilson v Woolworths[2010] FWA 2480, [19]–[21]

 6   Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299‒300

 7   Bradbury v Interact Australia (Victoria) Ltd[2010] FWA 4829, [67]

 8   Haining v Deputy President Drake (1998) 87 FCR 248, 250

 9   Kyvelos v Champion Socks Pty Ltd (unreported, AIRCFB, Giudice J, Acton SDP, Gay C, 10 November 2000) Print T2421 [14]

 10   McPaul v CPC Engineering Pty Ltd [2013] FMCA 71, [41]

 11   Wilson v Woolworths[2010] FWA 2480, [24]-[29]

 12   Ballarat Truck Centre Pty Ltd v Kerr [2011] FWAFB 5645, [26]

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