Malcolm Strickland v Newcastle Recycling Pty Ltd

[2014] FWC 6118

[2014] FWC 6118

The attached document replaces the document previously issued with the above code on 3 September 2014.

This document has been altered to correct an error in the appearance of the CFMEU on behalf of the applicant and the named CFMEU official responsible for lodging the applicant’s final written submissions.

Dale Ramsey

Associate to Commissioner Stanton

Dated 4 September 2014

[2014] FWC 6118

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Malcolm Strickland
v
Newcastle Recycling Pty Ltd
(U2014/7134)

COMMISSIONER STANTON NEWCASTLE, 3 SEPTEMBER 2014

Termination of employment - jurisdictional objections - out of time - whether dismissal a case of genuine redundancy - whether exceptional reasons exist to warrant an extension of time for filing of application - jurisdictional objections dismissed - dismissal not a genuine redundancy - extension of time to file application granted

[1] Mr Malcolm Strickland was dismissed by Newcastle Recycling Pty Ltd (Newcastle Recycling) on the grounds of redundancy based on an alleged shortage of work on 17 April 2014.

[2] Mr Strickland was a leading hand carpenter. Shortly after his dismissal, Mr Strickland approached the Construction, Forestry, Mining and Energy Union (the Union) to make an unfair dismissal application on his behalf. The Union failed to lodge his application within the required 21 day time frame prescribed by the Fair Work Act 2009 (the Act) due to an administrative error. The application was filed one day late. Mr Strickland considers exceptional circumstances exist to warrant the Commission allowing a further period for the application to be made.

[3] Mr Strickland asserts his dismissal was not a genuine redundancy because at the time of his dismissal, there was no shortage of work. He also asserts Newcastle Recycling did not consult with him about his pending redundancy as required by the Building and Construction General On-site Award 2010 (the Modern Award).

[4] Mr Strickland also considers he was targeted for dismissal because he had previously encouraged employees to vote down a proposed enterprise agreement.

[5] During the hearing on 17 June 2014,Newcastle Recycling objected to the application on jurisdictional grounds. It considered there were no exceptional circumstances to warrant an extension of time.

[6] Newcastle Recycling further contended Mr Strickland’s dismissal was a genuine redundancy. There was no requirement to consult with Mr Strickland prior to his dismissal because his employment was governed by the terms of the Milleen Constructions Employee Collective Agreement 2009 (the Collective Agreement) and not the Modern Award. The Collective Agreement remains in operation and is read in conjunction with the New South Wales Building and Construction Industry (State) Award NAPSA (the State Award). The State Award does not require an employer to consult with employees when contemplating redundancy or major change in the workplace.

[7] The position of Newcastle Recycling during the hearing was that while it employed Mr Strickland, there had been a transmission of business and the Collective Agreement applied to his employment. In response to a high degree of speculation and uncertainty concerning this particular issue, the parties were granted leave to file additional submissions concerning the nature of the industrial instruments that applied.

[8] Mr Strickland filed two witness statements and was subject to cross-examination. A further statement was filed by Ms Sherri Hayward, an Industrial Officer for the Union. She was not required for cross-examination. Ms Hayward’s statement sought to explain the administrative error that caused the application to be filed late.

[9] Newcastle Recycling relied upon witness statements filed by Mr Steven Gomboso and Mr Scott Pickering, employed by Milleen Constructions Pty Ltd as project managers. Both were required for cross-examination.

[10] Section 394 of the Act states that an application must be made within 21 days after the dismissal took place. Where the Commission is satisfied there are exceptional circumstances, taking into account the reason for the delay; whether the person first became aware of the dismissal after it had taken effect; any action taken by the person to dispute the dismissal; prejudice to the employer (including prejudice caused by the delay); the merits of the application and fairness as between the person and other persons in a similar position, it may extend the period for the application to be made.

[11] Section 396 of the Act requires that prior to considering the merits of an application, the Commission must decide if it has been made within the requisite 21 day time period; whether the person is protected from unfair dismissal; whether the dismissal is consistent with the Small Business Fair Dismissal Code; and whether the dismissal is a case of genuine redundancy.

[12] Mr Strickland is a person who is protected from unfair dismissal. Neither party raised whether the dismissal was consistent with the Small Business Fair Dismissal Code.

[13] Section 389 the Act provides a dismissal will be considered a genuine redundancy if the 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, the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy. A dismissal is not considered a genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

[14] Whether Mr Strickland’s dismissal was a genuine redundancy requires the Commission to consider the following matters:

• Was Mr Strickland’s job no longer required to be performed by anyone due to changes in the operational requirements of the business?



• Did the Modern Award or Collective Agreement apply to Mr Strickland’s employment?



• Has Newcastle Recycling has complied with its obligations under the Modern Award or if necessary, the Collective Agreement to consult about the redundancy?



• Would it have been reasonable for Mr Strickland to be redeployed within Newcastle Constructions or an associated entity such as Milleen Constructions?

Is Mr Strickland’s job no longer required to be performed by anyone due to changes in the operational requirements of the business?

[15] Newcastle Recycling submitted Mr Strickland’s job was a genuine redundancy and followed 7 employees being similarly dismissed over the past year. 1 Mr Gomboso explained Newcastle Recycling provides trades and non-trade employees to Milleen Constructions. Since Mr Strickland’s dismissal, a further two employees had been made redundant by both Newcastle Recycling and Milleen Constructions due to a downturn in work, bringing the total number of redundancies to 10 across the two companies.2

[16] In cross-examination, Mr Gomboso stated that shortly before Mr Strickland’s dismissal, a number of employees were inducted for a job at Killingworth. 3 Mr Strickland was not considered for the Killingworth job. Mr Gomboso also confirmed Mr Strickland had been employed for 12 years and some of those employees inducted for the Killingworth job had two months service.4 Mr Gomboso stated additional employees, including labour hire employees, were transferred to the BOC job he was engaged on shortly before Mr Strickland’s dismissal.5 Mr Gomboso also confirmed Mr Strickland was not given an explanation for his dismissal6 nor was he offered alternative work.7

[17] On the material before the Commission, Newcastle Recycling was undergoing a global downturn in work. However, at the time of Mr Strickland’s dismissal, there was limited ongoing work at the BOC site and at least one other project at Killingworth was inducting labour. On the evidence, some of Mr Strickland’s work was assigned to other employees. However, this does not alter the fact that his job as leading hand carpenter, as opposed to his work, was no longer required. It follows that Newcastle Recycling no longer required Mr Strickland’s leading hand supervisor role to be performed by anyone due to changes in the operational requirements of the business. No doubt, this question would receive greater attention if this matter was currently subject to substantive hearing.

Did the Modern Award or Collective Agreement apply to Mr Strickland’s employment?

[18] Newcastle Recycling asserts Mr Strickland’s employment was governed by the Collective Agreement. Newcastle Recycling further contends its employees, including Mr Strickland were represented and participated in the negotiations for this particular agreement alongside employees of Milleen Constructions. That group of employees, including Mr Strickland took part in the vote as part of the agreement making process. The Collective Agreement remains in force.

[19] In support of the proposition that Mr Strickland’s employment was covered by the Collective Agreement, Newcastle Recycling submitted:

• the respondent company is a subsidiary of Milleen Constructions Pty Ltd;



• the day-to-day operations of the two entities are not distinguished and Newcastle Recycling is no more than “the payer of wages and insurances”; 8



• the relevant application for employment form completed by Mr Strickland on 22 October 2001 was a Milleen Constructions document;



• personal information requests put to Mr Strickland on 10 February 2004, 29 May 2009 and July 2014 were set out on Milleen Constructions letterhead;



• a formal warning for inappropriate behaviour dated 23 May 2013 was set out on Milleen Constructions letterhead; and



• a site access card issued to Mr Strickland by Wambo Mining Corporation stated:




MAL STRICKLAND

MILLEEN CONSTRUCTIONS PTY LTD

[20] Newcastle Recycling considered the respondent and Milleen Constructions were related bodies corporate pursuant to s.50 of the Corporations Act 2001 (the Corporations Act). Newcastle Recycling further considered the Collective Agreement applied to Mr Strickland on the grounds that at the time of its making:

• employees of Newcastle Recycling and Milleen Constructions were represented and participated in the negotiations and voted in support or otherwise for the Collective Agreement in February 2009;



• Newcastle Recycling and Milleen Constructions are bodies corporate pursuant to the provisions of the Corporations Act.

[21] Newcastle Recycling argued that by virtue of s.57 of the Act, the Collective Agreement operates to the exclusion of the Modern Award and therefore had no application to Mr Strickland at the time of his dismissal. Newcastle Recycling further submitted that Clause 3.2 of the Collective Agreement provides that it incorporates and is to be read in conjunction with the State Award. There is no provision under the State Award that requires an employer to consult with employees when contemplating redundancy or major change in the workplace.

[22] Newcastle Recycling submitted it had complied with the requirements of s.389 of the Act and the dismissal was a genuine redundancy.

[23] Mr Strickland contended there were no negotiations for the Collective Agreement. The document was simply given to employees, including himself. Employees were asked to sign the document if they were in agreement. 9 That said, Mr Strickland considered the Collective Agreement did not apply to his employment as Newcastle Recycling was not a party to it.10 Mr Strickland relied upon s.52 of the Act to support his contention that the Collective Agreement did not apply to Newcastle Recycling or its employees because it did not seek to cover them. Further, an enterprise agreement has no application to an employee simply because he or she is employed by a “related body corporate.”11

[24] It is irrelevant that an intention of Newcastle Recycling and Milleen Constructions was that the Collective Agreement would apply to the employees of both companies. 12 In the event that was the case, the Collective Agreement may have been invalidly made because non Milleen Constructions employees were involved in the voting process. This proposition is contrary to s.182 of the Act which provides that an enterprise agreement is made when the majority of employees of the employer to be covered by the proposed agreement cast a valid vote to approve it. On the evidence before the Commission, this was clearly not the case.

[25] Section 53 of the Act states that an enterprise agreement covers an employee or employer if the agreement is expressed to cover the employee or employer. Clause 2 of the Collective Agreement states the parties to the Collective Agreement as follows:

...Milleen Constructions Pty Ltd... and employees of the Company engaged to perform work covered by the classifications set out in this Collective Agreement except employees engaged on work covered by the Milleen Constructions Pty Ltd Hydro Aluminium Amperage Increase Union Collective Agreement 2008-2010.

[26] Moreover, payslips annexed to Mr Strickland’s statement dated December 2013 show Newcastle Recycling as the employer. This is consistent with the evidence of Mr Gomboso 13 in cross-examination that all relevant workers other than foremen were employed by Newcastle Recycling and not Milleen Constructions.

[27] In my view, the Collective Agreement does not apply to Mr Strickland and if it was the intention at the time of its making that it was to apply, Newcastle Recycling should have been a named party. In the event that a non-employee of Milleen Constructions voted at the time of its making, it would appear that the Collective Agreement may have been invalidly made. On the material before the Commission, it can only be determined that the Modern Award applied to Mr Strickland.

Has Newcastle Recycling complied with its obligations under the Modern Award or if necessary, the Collective Agreement to consult about the redundancy?

[28] Clause 8 of the Modern Award sets out the obligations upon an employer to consult with employees in the event of the introduction of major change in the workplace. Given the nature and size of Newcastle Recycling, I consider Mr Strickland’s dismissal on the grounds of redundancy in response to a downturn in work can be considered a “major change” within the workplace.

[29] Given my determination that the Modern Award applied to Mr Strickland at the time of his dismissal, Newcastle Recycling was required to consult with him about the redundancy. It has not done so.

Would it have been reasonable for Mr Strickland to be redeployed within Newcastle Constructions or an associated entity such as Milleen Constructions?

[30] Newcastle Recycling’s case at all times during proceedings was that the dismissal was a genuine redundancy. Mr Strickland’s evidence was that he was not consulted prior to being dismissed. Consultation may have identified an alternative to dismissal and given Mr Strickland an opportunity to put a proposal to Newcastle Recycling to avoid or minimise the impact of dismissal, particularly given the length of his service and the evidence of Mr Gomboso that additional employees, including a number of labour hire employees, were engaged on the BOC job in or around the time of his dismissal. It must follow that on the balance of probability, it would have been reasonable at the time for Mr Strickland to be redeployed within Newcastle Recycling or Milleen Constructions for a period of time, albeit perhaps a short period in another classification of work for which he was competent pending a lift in economic activity.

[31] In consideration of the matters to be considered by the Commission when determining whether a particular dismissal is a genuine redundancy, I have considered all the material and evidence put by the parties and determined Mr Strickland’s dismissal was not a genuine redundancy as contemplated by s.389 of the Act.

[32] Newcastle Recycling has not satisfied the requirements concerning the obligation to consult nor has it satisfied the requirements dealing with redeployment. It follows that Mr Strickland’s dismissal was not a genuine redundancy as contemplated by s.389 of the Act.

[33] The remaining question for consideration concerns the late filing of Mr Strickland’s application. In determining whether exceptional circumstances exist to warrant an extension of time, the Commission is required to take into consideration the following matters:

• What was the reason for the delay?



• When did Mr Strickland first become aware of his dismissal?



• Action taken by Mr Strickland to dispute his dismissal;



• Would an extension prejudice Newcastle Recycling?



• Do the merits of the application warrant an extension of time?



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

Reason for the delay

[34] The evidence of Ms Sherri Hayward was that she sent the Union’s unfair dismissal form to Mr Strickland on 24 April 2014 by email. 14 Mr Strickland returned the completed form by email on 1 May 2014.15

[35] In or around that time, Ms Hayward deposed she was involved in the taking of statements in relation to a major industrial dispute and was working between the Union’s Sydney and Lidcombe offices. 16 On 9 May 2014, Ms Hayward noticed Mr Strickland’s application was on her desk at the Lidcombe office and shortly thereafter realised that it was due for filing the previous day. She proceeded to lodge the application one day late.17 The application had not been filed within time due to an administrative oversight whereby an incorrect date was inserted into the Union’s electronic calendar.

[36] Ms Hayward also deposed that in or around early May 2014, the Union had received 14 unfair dismissal complaints which was above the average number normally received. 18

[37] Newcastle Recycling argued that the administrative oversight relied upon by Mr Strickland was not an exceptional circumstance in support of the delay. 19

When did Mr Strickland first become aware of his dismissal?

[38] This question was not addressed by Newcastle Recycling. It is clear on the material before the Commission Mr Strickland was aware on 17 April 2014 that his dismissal took effect immediately.

Action taken by Mr Strickland to dispute his dismissal

[39] This question was not addressed by Newcastle Recycling. Mr Strickland took steps on 17 April 2014 to dispute his dismissal. 20 Mr Strickland challenged Mr Gomboso concerning the decision to dismiss him. On 24 April 2014, he contacted his Union21 and on 1 May 2014 returned the required completed form to the Union by email.22

Would an extension of time prejudice Newcastle Recycling?

[40] The position of Newcastle Recycling was that an extension of time would cause “financial harm” based on the additional costs “to be represented as well as time away from the workplace could be crippling to a business, which is already experiencing significant financial strain during a downturn in business....” 23

[41] Mr Strickland submitted he was blameless for the delay in lodging his application and there is no prejudice to Newcastle Recycling occasioned by a delay of one day. 24

[42] The cost issue pressed by Newcastle Recycling must be considered against the objective of s.381(2) of the Act to ensure a “fair go all round” is afforded to both the employer and employee concerned. Accordingly I consider the potential for prejudice to be a neutral consideration.

Do the merits of the application warrant an extension of time?

[43] Newcastle Recycling objected to the extension of time on grounds of merit. It asserts the dismissal was a genuine redundancy as a result of a downturn in business and followed seven positions being made redundant between July 2013 and Mr Strickland’s dismissal. 25

[44] It is clear that Mr Strickland proposes to contest the reasons relied upon by Newcastle Recycling that his dismissal was a genuine redundancy when this matter proceeds to a substantive hearing. However, on the material currently before the Commission there are factual disputes between the parties and in the absence of a substantive hearing, I am unable to conclude that the application is without merit as submitted by Newcastle Recycling.

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

[45] No submissions were made concerning the Commission’s consideration of this matter. However, representative error, as was the reason for Mr Strickland’s application being filed one day late, has been accepted as an exceptional circumstance to allow an extension of time where he is not to blame for the delay and has taken action to contest the decision.

[46] The Act stipulates an application seeking relief from unfair dismissal must be made within 21 days after the dismissal takes effect. Only in exceptional circumstances should the Commission consider allowing a further period. The length of the delay is not the critical determinant. What is determinative is whether pursuant to the criteria set out in s.394 of the Act, Mr Strickland can establish that exceptional circumstances exist to warrant the exercise of discretion to allow a further period for the application to be made.

[47] The delay in filing Mr Stickland’s application was due solely to an administrative error by the Union. On the evidence before the Commission, no blame can be apportioned to Mr Strickland for that error. It was clearly beyond his control.

[48] Having considered all of the matters the Commission is required to consider under s.394 of the Act, I have determined that exceptional circumstances exist to allow a further period of time for the making of the application.

Conclusion

[49] The jurisdictional objections pressed by Newcastle Recycling that the application was filed late and no exceptional circumstances exist to warrant an extension of time and that Mr Strickland’s dismissal was a genuine redundancy are dismissed. An order reflecting my decision to extend the time for filing of the unfair dismissal applicant to 9 May 2014 will be issued simultaneously with this decision. The application will be referred to the Unfair Dismissal Case Management Team for the issuing of further directions and case management.

COMMISSIONER

Appearances:

For Mr Strickland, Ms L Charlson, Construction, Forestry, Mining and Energy Union -Construction and General Division, New South Wales Divisional Branch.

For the respondent, Mr B Ziolkowski, Master Builders Association of New South Wales.

Hearing details:

2014

Newcastle

17 June

Final written submissions:

For Newcastle Recycling, Mr B Ziolkowski (MBA NSW), 1 July 2014

For Mr Strickland, Ms L Charlson (CFMEU - Construction and General Division), 10 July 2014

 1   Respondent’s written submissions - Exhibit 2

 2   Mr Steven Gomboso - witness statement - Exhibit 1

 3   Transcript at PN229

 4   Ibid at PN233-234

 5   Ibid at PN216-221

 6   Ibid at PN319

 7   Ibid at PN311

 8   Respondent’s written submissions - 15 July 2014

 9   Applicant’s written submissions - 10 July 2014 at para 2

 10   Ibid at para 13

 11   Ibid at para 14

 12   Ibid at para 15

 13   Transcript at PN176-177

 14   Witness Statement of Ms Sherri Hayward at para 4

 15   Ibid at para 5

 16   Ibid at paras 5 and 7

 17   Ibid at para 8

 18   Ibid at para 11

 19   Respondent’s written submissions dated 13 June 2014

 20   Ibid at para 7

 21   Ibid at para 16

 22   Ibid at para 18

 23   Respondent’s written submissions dated 13 June 2014

 24   Applicant’s outline of submissions dated 6 June 2014

 25   Respondent’s written submissions dated 13 June 2014 at page 1

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