Linda Mounsey v Matrix Developments Pty Ltd
[2011] FWA 6392
•16 SEPTEMBER 2011
[2011] FWA 6392 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Linda Mounsey
v
Matrix Developments Pty Ltd
(U2011/4740)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | ADELAIDE, 16 SEPTEMBER 2011 |
Termination of employment - employer identity - receiver and manager appointed - matter determined on papers - harsh unjust or unreasonable.
[1] On 4 February 2011 Ms Mounsey lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act), through which she sought relief with respect to the termination of her employment with the Matrix Building Group Pty Ltd.
[2] The application was not resolved through the Fair Work Australia (FWA) telephone conciliation process.
[3] The application was initially listed for arbitration in June 2011. That listing was cancelled and the matter was relisted initially for September and then for July. I will refer shortly to the directions I issued to the parties regarding that hearing.
[4] The matter of the identity and corporate standing of the employer has been significant over this time.
[5] On 15 February 2011 Matrix Developments Pty Limited lodged a response to this application as Ms Mounsey’s employer. Matrix Developments Pty Ltd (Matrix Developments) asserted that Ms Mounsey had not been dismissed.
[6] In March 2011, Ms Mounsey’s representative, Mr John, of counsel wrote to FWA to the effect that Matrix Building Group Pty Ltd was in administration but that Ms Mounsey’s employer, Matrix Developments, was not under administration.
[7] I note that in May 2011 Mr Taliangis, a registered agent, filed a notice of ceasing to act for Matrix Developments and that the issue of identification of unauthorised spokesperson for that business has been difficult to discern since that time.
[8] I also note that in May 2011 Mr John provided FWA and Matrix Developments with an amended outline of submission and a witness statement made out by Ms Mounsey.
[9] Also in May 2010 Mr John made an application for directions on procedure through which he sought that the respondent’s name in the matter be changed to Matrix Developments, that the matter be determined on the papers and/or the June 2011 scheduled hearing be adjourned. The adjournment request was initially refused but was subsequently granted following the provision of medical advice.
[10] The application for directions on procedure was referred to me for determination in July 2011.
[11] On 4 July 2011 I provided the following advice to the parties:
“[1] Ms Mounsey’s s 394 application has been referred to me for determination.
[2] The application remains listed for hearing on 14 July 2011.
[3] This hearing will address the request for a change to the name of the employer and it may continue to address the merits of the application.
[4] I note that Ms Mounsey seeks to amend the application to specify Matrix Developments Pty Ltd as the employer. The Australian Securities and Investments Commission web site lists that company as under external administration and records that a Receiver and Manager has been appointed.
[5] If this is the case I should be advised as soon as possible.”
[12] My directions were provided to both Matrix Building Group Pty Ltd and to Matrix Developments Pty Ltd.
[13] On 5 July 2011 Mr John provided the following advice:
“We refer to the directions issued by you on 4 July 2011 in relation to this matter.
Our searches of the Australian Securities and Investments Commission website appear to confirm what you have noted in those directions, namely that Matrix Developments Pty Ltd is under external administration. However, it may be appropriate for Matrix Developments to confirm that this is in fact the case.
We understand that if this is the case, the proceedings against Matrix Developments Pty Ltd would need to be stayed in accordance with s.440D of the Corporations Act 2001. However, we believe that it is important that the proceedings be stayed against the correct respondent and believe that it is therefore still necessary to deal with issue surrounding the change of the named respondent.
As recently as last week, we had discussions with Mr Peter Scragg, the lawyer who has been representing Matrix Developments Pty Ltd. Mr Scragg informed us that he had instructions from his client to consent to changing the name of the respondent in these proceedings.
Although it appears that Matrix Developments Pty Ltd would have already been under administration at this time, Mr Scragg did not inform us of that fact, nor has the company or Mr Scragg informed us of that fact since.
On 28 June 2011, we sent the attached document to Mr Scragg for him to sign on behalf of his client. We have not heard anything back from Mr Scragg and are currently in the process of following him up.
Our intention was to also get the document signed by Mr Hugh Martin, administrator for Matrix Building Group Pty Ltd, file the document with Fair Work Australia and have the change of name issue resolved by consent.
We are still hopeful that we can do this, although we accept that once the name has been changed, the proceedings will need to be stayed. If we are unable to resolve the issue by consent, we would like to continue with the change of name hearing that is listed for 14 July 2011.”
[14] At the hearing on 14 July 2011 Mr John attended for Ms Mounsey but there was no one present from Matrix Building Pty Ltd or Matrix Developments. Mr John provided a written agreement in which he, and a Mr Scragg of Matrix Developments, and Mr Martin, the External Administrator for Matrix Building Group Pty Ltd all consented to the change of the named respondent to Matrix Developments. I was also provided with advice from a Mr Macks in the following terms:
“I, Peter Ivan Macks, as joint and several Receiver and Manager of Matrix Developments Pty Ltd (Receiver and Manager Appointed), hereby consent to the named respondent in this matter being changed from Matrix Building Group Pty Ltd (Subject to Deed of Company Arrangement) (Receiver and Manager Appointed) to Matrix Developments Pty Ltd (Receiver and Manager Appointed).
Peter Macks
Receiver and Manager of Matrix Developments Pty Ltd (Receiver and Manager Appointed)”
[15] I amended the application accordingly.
[16] Mr Johns reiterated his earlier request that the matter be determined on the material already before FWA. At the hearing I confirmed that I would invite advice as to the future conduct of the proceedings given the corporate status of Matrix Developments. I directed the attention of the parties to ss.440D and 58AA of the Corporations Act 2001 and noted that FWA did not appear to be nominated as a Court for those purposes.
[17] Those sections state:
“SECT 58AA
Meaning of court and Court
(1) Subject to subsection (2), in this Act:
“court” means any court.
“Court” means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Family Court of Australia;
(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.
(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court.
Note: The matters dealt with in Part 9.6A include the applicability of limits on the jurisdictional competence of courts.”
....
“SECT 440D
Stay of proceedings
(1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding.”
[18] Mr Johns responded on 21 July 2011, to the effect that:
“Based on our understanding of the Respondent’s corporate status and the law in this area, it is our opinion that, at present, there is no bar to continuing with the proceedings.
As at the date of this letter, our understanding is that the Respondent is in receivership and a receiver and manager has been appointed. However, the Respondent is not under voluntary administration, nor has it been put into a process of voluntary or compulsory liquidation.
Our understanding of this position is based on ASIC searches that we performed on 6 July 2011 and a conversation with Mr Simon Miller of PPB Advisory, a colleague of Mr Peter Macks, the receiver and manager for the Respondent. We have attached copies of the ASIC searches for your information. We also set up a company alert for the Respondent through ASIC on 11 July 2011 so that we will be informed if any further documents are lodged in relation to the company. So far, no further documents have been lodged.
Whether proceedings against a company under external administration must be stayed depends upon the type of external administration that the company is under.
Where a company is in receivership only, and not under any other form of external administration, there is no automatic stay of proceedings under the Corporations Act 2011 (Cth) (“Corporations Act”). For other forms of external administration there are specific provisions which cause a stay of proceedings against the company, but there is no equivalent provision for receivership.”
[19] He continued:
“Even if administrator is appointed at a later stage, this will not necessarily mean that the unfair dismissal proceedings before Fair Work Australia must be stayed. Although s.440D will be activated by the appointment of an administrator, there is case law to support the argument that a proceeding before Fair Work Australia is not “a proceeding in a court” and therefore s.440D does not apply to these types of proceedings.”
[20] Finally, he concluded:
“As the Respondent in this case is not currently under voluntary administration, winding up in insolvency or by the Court, or voluntary winding up, then none of ss.440D, 471B or 500(2) apply to the present proceedings. Since there is not equivalent section of the Corporations Act providing for a stay of proceedings of any sort when a company is in receivership only, as the Respondent company is, then there is no reason why these proceedings cannot proceed.”
[21] A copy of this advice was sent to the Receiver/Manager of Matrix Developments.
[22] No further advice was received from Matrix Developments. On 10 August 2011 I issued further directions in which I invited the employer to provide submissions and/or witness statements in support of its position by 25 August 2011. I advised that, in the absence of any information from the employer, my decision would be made on the material before me.
[23] Nothing further has been received from Matrix Developments. Accordingly, I have decided this matter on the basis of the outline of submissions and Ms Mounsey’s witness statement.
[24] There is nothing to indicate that the corporate standing of Matrix Developments has changed and I have commenced from the premise that, consistent with the information provided to me on 14 July 2011, Mr Macks is the appointed receiver and manager and Matrix Developments operates subject to a Deed of Company Arrangement.
[25] I have concluded that the Corporations Act 2001 does not prescribe an automatic or mandatory stay of proceedings of this nature for Matrix Developments, and that, until an administrator is appointed, s.440 of the Corporations Act 2011 does not preclude the matter from proceeding.
[26] In any event, I do not consider that Fair Work Australia can be regarded as a Court for the purposes of the Corporations Act 2011 1.
[27] In the event that there was any advice before me to the effect that Matrix Development was in the process of being wound up, I may have arrived at a different conclusion.
The application
[28] On the material before me Ms Mounsey commenced working for Matrix Developments as a full-time employee on 1 January 2008 at an annual salary of $70,000.
[29] In early August 2010 Ms Mounsey became aware that she was pregnant. On 11 August 2010 she advised Matrix Developments that she would not be attending work as a result of mental health issues. Shortly after, she was admitted to hospital on that basis. Matrix Developments was provided with a doctor’s certificate current to 30 September 2010 and with ongoing telephone confirmation of Ms Mounsey’s position. On 14 September 2010 Ms Mounsey advised Matrix Developments that she was being medically reviewed on 29 September 2010. On that day she advised Matrix Developments that she was ready to resume full-time work on 1 October 2010.
[30] On 29 September 2010 Matrix Developments informed Ms Mounsey that the Matrix Developments office was being relocated such that she could not resume work on 1 October 2010. On 4 October 2010 Ms Mounsey was advised that the office was not yet ready and she would be contacted on 6 October 2010. She was subsequently told she would be contacted on 8 October 2010 but this did not happen.
[31] Ms Mounsey met with Mr Kalyvas of Matrix Developments on 11 October 2010 and was advised that there was no work available for her. She advised that:
“17. When I attended at Matrix’s offices at 4:30 pm on Monday 11 October 2010, one of the first questions Mr Kalyvas asked me was, “Are you still pregnant?” and “How are you feeling?” During the meeting Mr Kalyvas informed me that there were jobs on hold and there was therefore no work for me at that time. He said that the office was still not ready and that a partition needed to be built. He said that it would be at least 2-3 weeks before the office was ready and might be as long as 5-6 weeks. He asked whether I could “cope” with this. We did not discuss the issue of my pay and Mr Kalyvas never mentioned anything about me taking leave without pay, nor did I agree to do so. I asked him whether my job was secure and was reassured that I still had a job with Matrix. At the end of the meeting, he told me that he would keep me informed of the progress with the office.” 2
[32] Ms Mounsey subsequently attempted to contact Mr Kalyvas on numerous occasions. She spoke with him on 3 November 2010 but her employment arrangements were not clarified in that discussion.
[33] Acting on advice from the office of the Fair Work Ombudsman, Ms Mounsey wrote to Matrix Developments on 8 November 2010. On 15 November 2010 Matrix Developments advised her that the office was not yet ready and that there was a lack of new work. She was asked to take leave without pay until work was available. Ms Mounsey lodged a complaint with the Fair Work Ombudsman later that day.
[34] Despite endeavouring to follow up her complaint with the Fair Work Ombudsman on a number of occasions, it does not appear that any action was taken by the Fair Work Ombudsman’s office. On 19 January 2011 the Ombudsman’s office advised Ms Mounsey that her complaint could not be located.
[35] Ms Mounsey enlisted the assistance of Mr John on 20 January 2011. On 24 January 2011 Mr John wrote to Matrix Developments setting out his assessment of Ms Mounsey’s legal entitlements and requesting confirmation of her employment standing. This letter advised that if no response was received by 28 January 2011 he, and Ms Mounsey would take it that her employment had been terminated.
[36] No response was received.
[37] Ms Mounsey asserts that she was dismissed on 28 January 2011, or, in the alternative on 15 November 2010. I have concluded that the termination of Ms Mounsey took effect on 28 January 2011 when Matrix Developments failed to respond to Mr Johns’ explicit advice about her employment standing. I am satisfied that Ms Mounsey did not terminate her employment of her own initiative and that the termination of that employment was at the initiative of Matrix Developments.
[38] Section 396 requires that, before considering the merits of Ms Mounsey’s application I must reach conclusions about four nominated initial matters. I have considered these matters.
[39] On the basis that the termination of Ms Mounsey’s employment took effect on 28 January 2011 the application was made within the requisite 14 day period. On the information before me, I have decided that Ms Mounsey was protected from unfair dismissal. No information with respect to the number of employees engaged by Matrix Developments is available to me. Whilst I consider it quite possible that Matrix Developments was, at that time, a small business for the purposes of s.388, there is nothing before me that establishes that the Small Business Fair Dismissal Code was followed. As a consequence, the factors specified in s.387 must be considered. Finally, while the termination of Ms Mounsey’s employment may have reflected a redundancy situation, there is an obligation on Matrix Developments to establish this. Section 389 relevantly states:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
....”
[40] Neither circumstance has been made out to me in this matter.
[41] Section 387 sets out the criteria to which I must have regard in considering whether the termination of Ms Mounsey’s employment was harsh, unjust or unreasonable. This section states:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[42] No valid reason for the termination of Ms Mounsey’s employment has been proposed to me. There is no indication that Ms Mounsey was advised of the reason for the termination of her employment or that she was given an opportunity to respond to any termination of employment proposal. The issue of access to a support person simply does not arise in these circumstances. There are no performance indications relating to the dismissal. I have noted that, while there is no evidence on this issue, Matrix Developments may be a relatively small employer with minimal employment procedures and limited access to dedicated human resource management expertise.
[43] Finally, I have recognised the obvious financial difficulties confronting Matrix Developments. Nevertheless, information which enables me to take this into account in an assessment of the fairness of that dismissal is simply not available.
[44] Having considered these criteria, I have concluded that the termination of Ms Mounsey’s employment was harsh, unjust and unreasonable and that this dismissal was unfair. No proper foundation for the termination that has been made out and the manner in which Ms Mounsey has been treated is inherently unfair.
Remedy
[45] Section 390 provides for reinstatement as the primary remedy consequent upon such a finding. Notwithstanding this, I do not consider that a reinstatement is appropriate given the position put by Ms Mounsey and the absence of any information from Matrix developments.
[46] Section 390 provides the capacity for FWA to make an order for compensation in these circumstances. Section 392 sets out the criteria for deciding amounts of compensation and the limitations on any order to that effect. I consider that an order for compensation is appropriate in these circumstances.
[47] There is some likelihood that the amount I consider appropriate could affect the ongoing viability of the Matrix Developments business given its current corporate standing. However, despite the opportunities to do so, evidence of any impact of that nature has not been provided. Ms Mounsey had been employed for over two years. This is not a long period of time but there is nothing that indicates that she would not have continued as an employee for a substantial period of time after a period of parental leave. Had Ms Mounsey been able to return to work after that leave I have noted that the financial position of Matrix Developments may have limited her future employment duration. I have noted that Ms Mounsey’s baby was due in March and that this is likely to have limited her capacity to mitigate her income loss. I do not consider s 392(2)(f) to be a significant or quantifiable factor. In terms of other matters that may be relevant, I have noted that, depending on the financial position of Matrix Developments, there may be some uncertainty about any payments to Ms Mounsey. Finally, I have noted that Ms Mounsey was not paid between 1 October 2010 and 28 January 2011. This is an issue separate from the considerations I am required to address in s 392 and a matter beyond the FWA jurisdiction.
[48] I have concluded that three months pay, less tax, is an appropriate amount of compensation. I am satisfied that this amount is consistent with the application of the principles in Sprigg v Pauls Licensed Festival Supermarkets 3.
[49] An order [PR514705] to this effect will be issued.
SENIOR DEPUTY PRESIDENT
Appearances:
N John appearing for Ms Mounsey.
Hearing details:
2011.
Adelaide:
July 14.
1 Smith v Trollope Silverwood & Beck Pty Ltd (2003) 142 IR 137 and Agius v Allstates Automotive Transmissions Pty Ltd [2011] FWA 26
2 Witness Statement dated 5 March 2011
3 (1998) 88 IR 21
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