Kristina Herold v The Natural Grocery Company Pty Limited (Administrator Appointed)

[2021] FWC 3279

[2021] FWC 3279

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kristina Herold
v
The Natural Grocery Company Pty Limited (Administrator Appointed)
(U2021/3124)

DEPUTY PRESIDENT EASTON SYDNEY, 7 JUNE 2021

Application for an unfair dismissal remedy – unfair dismissal application filed out of time – alleged threat made by employer at time of dismissal – circumstances not exceptional – application dismissed.

[1] On 22 March 2021 Ms Herold (“the Applicant”) was dismissed from her employment with the Natural Grocery Company (“the Respondent”). Twenty-two days after the dismissal took effect, Ms Herold made application for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Cth) (“the Act”).

[2] Ms Herold was dismissed because the Respondent formed the view that she had diverted business away from the Respondent to a competitor. Ms Herold alleges that the Respondent threatened to refer her to the police if she lodged an unfair dismissal claim. She says that this threat caused “extreme anxiety” and that she “did not have the capabilities to either a. assess any merit of further action by way of an unfair dismissal claim b. was extremely rattled by the threats made towards her at the meeting of the 22 March 2021.”

[3] Her anxiety caused by the alleged threat, and the fact that Ms Herold’s husband is “stranded in Europe due to Covid 19 travel restrictions” which has made her “alone as a single mother with 2 children”, amount to exceptional circumstance such that the Commission should allow a further period of time for Ms Herold to file her claim.

[4] For the reasons that follow, I am not satisfied that there are exceptional circumstances, and I must therefore decline to allow Ms Herold an extension of time.

Section 394 – Exceptional Circumstances

[5] An unfair dismissal remedy must be made within 21 days after the dismissal took effect (per s.394(2)), or within such further period as the Commission allows (per s.394(3)). The period of 21 days ended at midnight on 12 April 2021.

[6] The Commission may only allow a further period if it is satisfied that there are “exceptional circumstances” (per s.394(3)). The Full Bench in Nulty v Blue Star Group Pty Ltd (2011) 203 IR 1, [2011] FWAFB 975 described exceptional circumstances as follows:

“[13] in summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. to be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. it is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. the ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

…

[15] A finding that there are “exceptional circumstances”, taking into account the matters specified in paragraphs 366(2)(a) to (e), is necessary before the discretion to extend time is enlivened. That is, even when “exceptional circumstances” are established, there remains a discretion to grant or refuse an extension of time. That discretion should be exercised having regard to all the circumstances including, in particular, the matters specified in paragraphs 366(2)(a) to (e) and will come down to a consideration of whether, given the exceptional circumstances found, it is fair and equitable that time should be extended.”

[7] In considering whether there are exceptional circumstances, s.394(3) specifically requires the Commission to take into account the following:

“(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.”

[8] In Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters (2018) 273 IR 156, [2018] FWCFB 901 the Full Bench found that:

(a) generally the assessment of whether exceptional circumstances exist will require the consideration of all the relevant circumstances because even though no one factor may be exceptional, the factors considered in combination might support such a finding (at [17] and [38]);

(b) the obligation to “take into account” the matters set out in the statute means that each of those matters must be treated as a matter of significance in the decision-making process insofar as they are relevant (at [19]);

(c) no one factor need be exceptional in order to enliven the discretion to extend time (at [38]); and

(d) individual matters might not be particularly significant when viewed in isolation, but it is necessary to consider the matters collectively and to ask whether, collectively, the matters disclose exceptional circumstances (at [39]).

Reason for the delay

[9] When taking into account the reason for the delay (per s.394(3)(a)) the Commission invariably assesses whether the applicant has a credible or reasonable explanation for the delay. The Commission does so as part of the process of determining whether exceptional circumstances exist.

[10] A credible explanation for the whole of the period of the delay is not a condition precedent to finding exceptional circumstances exist - it is but one factor for the Commission to take into account. In other words, it is not essential that an applicant provide a credible explanation for the delay.¹ Generally if an applicant does not have a credible explanation for the some or all of the delay the Commission is less likely to find that exceptional circumstances apply. Conversely a credible explanation for the entirety of the delay will usually support a finding of exceptional circumstances.

[11] Ms Herold alleges that in the meeting in which she was dismissed Ms Canham, the Respondent’s HR Co-ordinator, stated clearly that the Respondent will aggressively pursue a theft allegation against Ms Herold if she makes an unfair dismissal claim.

[12] There is a factual contest about whether such a threat was made. Ultimately I do not need to definitively determine whether a threat was made. As will become apparent, I am not satisfied that the alleged threat and its alleged aftermath had made any material contribution to Ms Herold’s delay.

[13] I will nonetheless briefly canvass the evidence led by the parties in relation to the alleged threat, and in doing so I am mindful of the coercion provisions (s.343) and the intimidation provisions (s.676) in the Act, viz:

“343 Coercion

(1) A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to:

(a) exercise or not exercise, or propose to exercise or not exercise, a workplace right; or

(b) exercise, or propose to exercise, a workplace right in a particular way.

Note: This subsection is a civil remedy provision (see Part 4-1).

(2) Subsection (1) does not apply to protected industrial action.”

…

“676 Intimidation etc.

A person commits an offence if:

(a) the person threatens, intimidates, coerces or prejudices another person; and

(b) the person does so because the other person has given, or proposes to give, information or documents to the FWC.

Penalty: Imprisonment for 12 months.

Note: A person may also contravene a civil remedy provision by threatening etc. a person who has given, or proposes to give, information or documents to the FWC (see section 343).”

[14] Ms Herold does not squarely allege that the Respondent’s conduct contravenes the coercion or the intimidation provisions in the Act, but I am cognisant of the fact that if she was to rely on either of these provisions then the proceedings in a relevant Court would necessarily and appropriately have an entirely different character and, most relevantly, the rules of evidence would apply.

[15] Ms Herold was dismissed from her employment at a meeting held on 22 March 2021. Four people were present at the meeting: Ms Herold, her support person Ms Carolyn Robertson, the Respondent’s HR Co-ordinator Ms Vicki Canham, and the store manager Ms Dee Clarke.

[16] After the meeting Ms Herold and Ms Canham separately wrote an account of the meeting for their own purposes. All four people provided an account of the meeting to the Commission. Ms Herold, Ms Canham and Ms Clarke each gave evidence under oath or affirmation attesting to the accuracy of their recollection of the meeting. Ms Robertson wrote an account of the meeting that was admitted into evidence despite Ms Herold not making Ms Robertson available for cross examination. Ms Herold also provided by way of evidence and annotated version of Ms Canham’s account, marking in red the points at which she disagreed with Ms Canham’s account. Ms Herold affirmed in evidence the truthfulness of her written accounts of the meeting.

[17] It is common across each person’s recollection that towards the end of the meeting Ms Canham announced that she would confirm the dismissal with the Respondent’s CEO and “I’ll email it to you later today”. It is also agreed that Ms Robertson then replied “this is disgraceful. This is for Fairwork”. It is agreed that Ms Canham then said “you sure can, we knew you would do that”.

[18] In her evidence Ms Canham explained why she said these words: she expected Ms Herold to make an unfair dismissal claim because Ms Herold had previously made some enquiries to “Fair Work” about rosters and other matters.

[19] Ms Herold and Ms Robertson say that Ms Canham also told Ms Herold that Mr Collins (the Respondent’s CEO) and Mr Parsonage (a cofounder of the Respondent) had already decided that if Ms Herold lodged an unfair dismissal claim then they would take legal action against Ms Herold for theft. Ms Canham allegedly then said that the Respondent’s lawyers have already used the past days to prepare for legal action and that Ms Canham said that “we are way ahead of ya.”

[20] Ms Canham denies saying these additional things and denies making any threats at all. Ms Clarke’s evidence supported Ms Canham’s account.

[21] The Respondent also relied upon Statutory Declarations made by Mr Collins and Mr Parsonage stating that they have not ever contemplated legal action against Ms Herold and that they did not give any instructions to Ms Canham to say anything at all about legal proceedings against her.

[22] During the same meeting there was some discussion about notice of termination and whether or not Ms Herold had engaged in misconduct. At this point in the conversation Ms Canham did in fact say, “taking business away from [the Respondent] and getting a personal benefit for doing so could be considered the same as stealing.”

[23] I accept at least the theoretical possibility that an employer making explicit and material threats to an employee upon their dismissal could form the basis of a finding of exceptional circumstance for the purposes of s.394 of the Act.

[24] On the material before me I cannot be satisfied that Ms Canham made a threat to Ms Herold on 22 March 2021. Given the potentially serious nature of Ms Canham’s alleged conduct, I cannot make a positive finding on anything but the surest evidentiary foundation.

[25] It is possible that Ms Canham’s reference to Ms Herold’s conduct being considered “the same as stealing” is the genesis of Ms Herold’s and Ms Robertson’s belief that Ms Canham issued a threat in relation to theft or conduct that “constituted theft”.

[26] None of the witnesses were particularly tested about their account of the meeting. Of each of the different accounts I place the most weight on Ms Clarke’s recollection. Ms Clarke was described by Ms Herold and Ms Robertson as “supportive of us” in the meeting and they hugged her at the end. Ms Clarke attended the meeting on 22 March 2021 as a management representative and attended the Commission to give evidence endorsing Ms Canham’s account of the meeting. Ms Clarke gave evidence that she did not witness any kind of threat made at the meeting and given the position she was in, and the warm regard in which Ms Herold held Ms Clarke, I would be inclined to accept her version of events if I had to definitively determine the matter.

[27] Whatever was said at the meeting on 22 March 2021, Ms Herold says that she was suffering “extreme anxiety” after being dismissed. Ms Herold provided no medical evidence at all to support this assertion. To the contrary, Ms Herold gave evidence that she throughout the period between her dismissal and the commencement of these proceedings she spent a large amount of time researching her legal position. She said that she spent “the whole three weeks trying to read up anything and to find places to give [me] legal advice”.

[28] On any view of the evidence before me, Ms Herold resolved by Sunday 11 April 2021 to commence an application for an unfair dismissal remedy. On 11 April 2021 there were still two days left for Ms Herold to finalise and file her application. I accept that but for the “extreme anxiety” Ms Herold says she suffered she might have resolved earlier to commence her application. But the effect of any such delay in reaching her decision to commence the proceedings is relatively minor when, by the time she made the decision, she had ample opportunity to complete and lodge her application within the time limit.

[29] Mr Beard gave evidence of his involvement in the preparation of Ms Herold’s claim. He was a cooperative and forthright witness and I have no difficulties accepting the truthfulness of his account.

[30] Over the course of Sunday, Monday and Tuesday Ms Herold took steps to prepare and file her claim and there was evidence about the assistance she received from Mr Beard regarding the preparation of her application:

(a) Towards the end of the third week after the dismissal Ms Herold had lunch with an ex-colleague Ms Samantha Beard and discussed her dismissal. Ms Beard then discussed Ms Herold’s situation with her husband, Mr Paul Beard, and he offered to help her prepare her unfair dismissal claim;

(b) Mr Beard contacted Ms Herold on Sunday, 11 April 2021, which was the twentieth day after Ms Herold was dismissed;

(c) By the time he spoke to Ms Herold on this day she had resolved to lodge an unfair dismissal claim and he helped her collate materials in preparation for filing. He was firmly (and correctly) of the view that the 21-day time limit expired on Monday, 12 April 2021 and he was certain that Ms Herold understood that the deadline was that day;

(d) Mr Beard recalls telling Ms Herold on the Sunday “we will be cutting it fine”;

(e) Ms Herold took some time to collect her materials and provide them to Mr Beard and the application was eventually made on Tuesday, 13 April 2021; and

(f) Ms Herold said she was not sure whether the 21st day was the Monday or the Tuesday and but after speaking to Mr Beard thought that even if her claim was due on the Monday she had a good reason for her delay “so it would be fine”.

[31] Unfortunately for Ms Herold she made the wrong decision. Taking one extra day to improve the form of her application is not an exceptional circumstance. Ms Herold decided to file her claim on the Tuesday, knowing that the claim might, perhaps even will, be late.

[32] Taking one extra day to improve the form of her application is not an exceptional circumstance. Even if it was an exceptional circumstance, it is not an explanation that would support an extension of time.

[33] Of course, hindsight is 20:20 but it would have been far better for Ms Herold to have lodged her claim within the time limit, even if her application was not in the best possible form rather than to wait the extra day. Even though she had assistance from Mr Beard, whom I regard as the good Samaritan in this story, Ms Herold must accept responsibility for the application not being lodged in time on Monday, 12 April 2021.

[34] Ms Herold also relies upon the fact that her husband was “stranded overseas” because of COVID. She led no evidence about how her husband remains “stranded” and there are several reasons for not accepting this argument. Firstly, without more the absence of spouse overseas is not a relevant exceptional circumstance, even a protracted absence. Secondly, without more, the fact that Ms Herold was in Sydney raising two children on her own is not exceptional circumstances. Thirdly, by Ms Herold’s own evidence, she spoke with her husband about her dismissal and it was in fact her husband that suggested that she write a detailed account of the meeting of 22 March 2021. I accept that the prolonged absence of a spouse is likely to exacerbate any “extreme anxiety” suffered by Ms Herold, but Ms Herold provided no medical evidence of any such exacerbation.

[35] In taking into account Ms Herold’s reason for delay as part of the process of considering whether there are exceptional circumstances, unfortunately the only available conclusion is that Ms Herold’s reasons for delay weigh against a finding that there were exceptional circumstances.

Whether the person first became aware of the dismissal after it had taken effect

[36] Having been unambiguously dismissed in the meeting on 22 March 2021, Ms Herold was immediately aware of her dismissal. This matters points against there being exceptional circumstances.

Action taken to dispute the dismissal

[37] Ms Herold took no relevant steps to dispute the dismissal prior to lodging her unfair dismissal remedy application. This factor points against there being exceptional circumstances.

Prejudice to the employer

[38] The Respondent properly submits that it has not suffered any prejudice because of the delay, and also submits that the absence of prejudice does not support the existence of exceptional circumstances. I consider this factor to be neutral.

Merits of the application

[39] The Act requires me to take into account the merits of the application in considering whether there are exceptional circumstances. It is not possible or appropriate to make any firm or detailed assessment of the merits that at this juncture.

[40] Section 387 requires consideration at final hearing of a number of factors including whether there was a valid reason for the dismissal related to the person’s capacity, whether the person was given an opportunity to respond, whether the person had been warned about that unsatisfactory performance before the dismissal and so on.

[41] The allegation against Ms Herold is that she referred customers of the Respondent away from the Respondent’s business to a “competitor” from whom she derived a personal benefit. If the necessary elements of this conduct can be proven by the Respondent then Ms Herold’s case, at least superficially, is weak.

[42] However, Ms Herold maintains that (1) the customer had a particular need for a product that the Respondent had not stocked for at least six months prior to the incident and that (2) the referral of the customer to this alternate supplier did not result in a material benefit to Ms Herold save for some loyalty points of little value, nor did it result in a lost sale for the Respondent, and (3) Ms Herold and other employees were allowed by their manager to refer customers to their own private naturopath businesses “as long as there is no conflict of interest”. If each of these elements can be established then Ms Herold’s case is significantly stronger.

[43] From my preliminary review of each party’s case, I can only conclude that Ms Herold’s case is at least arguable. In this matter the merits of the application can only be regarded as a neutral factor.

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

[44] 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 of an employer responding to an unfair dismissal application. However, cases of this kind will generally turn on their own facts. I am not aware of any persons or cases that are relevant to the question of fairness as between Ms Herold and other persons in a similar position. I consider this to be a neutral consideration in the present matter.

Conclusion

[45] Having regard to the above matters I am not satisfied that there are exceptional circumstances for the purposes of s.394(3) of the Act. Because I am not satisfied that there are exceptional circumstances, there is no basis for me to allow an extension of time. I must therefore decline to allow a further period for Ms Herold’s application to be made and dismiss her application for an unfair dismissal remedy.

DEPUTY PRESIDENT

Appearances:

Mr P Beard, for the Applicant.
Mr G Watson, for the Respondent.

Hearing details:

2021.
Sydney:
2 June 2021

Printed by authority of the Commonwealth Government Printer

<PR730532>

1 Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd (2018) 273 IR 156, [2018] FWCFB 901 at [30]-[40].