Marilyn Cruz v Scott's Transport Industries Pty Ltd

[2014] FWC 7178

[2014] FWC 7178

The attached document replaces the document previously issued with the above code on 9 December 2014.

The reference to ‘April’ in paragraph [2] is amended to say ‘August’.

Associate to Commissioner Gregory

Dated 9 December 2014

[2014] FWC 7178

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Marilyn Cruz
v
Scott’s Transport Industries Pty Ltd
(U2014/12109)

COMMISSIONER GREGORY MELBOURNE, 9 DECEMBER 2014

Application for extension of time.

Introduction

[1] Ms Marilyn Cruz was employed by Scott’s Transport Industries Pty Ltd (“Scott’s”) as an Administrative Assistant from 2 April 2013 until August this year. She was employed on a casual basis and worked primarily as a receptionist, but was also required to perform other administrative tasks from time to time.

[2] On 29 August 2014 Ms Cruz lodged an unfair dismissal application under s.394 of the Fair Work Act 2009 (Cth) (“the Act”) naming Scott’s Transport Pty Ltd T/A Scott Group of Companies as the Respondent. On 15 September Scott’s responded by making a jurisdictional objection to the application claiming it was lodged more than 21 days after the date of dismissal. Scott’s also noted that the correct name of the company is Scott’s Transport Industries Pty Ltd. Accordingly, an Order has been issued amending the named Respondent in this matter to reflect the name provided by Scott’s.

[3] However, Ms Cruz was given a termination notice stating her “employment will be terminated on 9 August 2014.” She therefore submits her application was lodged within the 21 day period. However, she also submits in the alternative that even if it was lodged outside of this time period the Commission should grant an extension of time under s.394(3) in which to make her application.

The Evidence and Submissions

[4] Ms Cruz was assisted in this matter by pro bono advice. A detailed written submission was provided two days prior to the hearing in support of her application for an extension of time, but she subsequently appeared on her own behalf. Those submissions, firstly, make reference to s.386(1) of the Act which states:

“(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

[5] Her submission continue to state (references omitted):

“Section 386(1)(a) clearly has application in this matter. The decided cases in this area establish that an employee’s employment with his or her employer is terminated at the employer’s initiative at the time the employment relationship comes to an end. Where an employee is dismissed on notice, the termination of the employment relationship and, therefore, the termination at the initiative of the employer occurs when the notice period ends. For reasons that are articulated in greater detail below, the position is less clear when payment is made to an employee in lieu of notice.” 2

[6] Ms Cruz next refers to the termination notice provided to her and dated 29 July 2014. It states:

“[Y]ou have been advised your casual employment will come to an end. The company is required to provide you with a two (2) week notice period and therefore your employment will be terminated on 9 August 2014. We do not require you to work out this notice period and payment will be made in lieu of working.” 3

[7] She then submits the relevant authorities have made a distinction between the circumstances involved in a lump sum payment provided in conjunction with summary dismissal, and a payment in lieu of notice in circumstances where the employee is advised they are no longer required to attend at work during the notice period. She submits that in the first instance employment terminates on the date of payment of the lump sum, whereas in the latter situation employment extends until the expiry of the notice period for which the payment was made.

[8] Ms Cruz therefore submits Scott’s did not bring the employment relationship to an end on the date of the termination notice, or at any other time prior to 9 August 2014. She also submits this is supported by the fact she received a letter confirming her final termination payment on 14 August 2014. She also received a payslip dated 6 August in respect of what was described as her “normal pay” for the period 30 July to 6 August 2014, even though she last worked on 29 July.

[9] Her submissions on this point concluded by indicating:

“Therefore, in view of the decided cases, the effect of the Termination Notice was to bring to an end the employment relationship at the conclusion of the notice period specified in the Notice. Accordingly, the Applicant’s employment was terminated on 9 August 2014. By lodging her Application on 29 August 2014, the Applicant submits that she was within the required timeframe provided for at section 394(2)(a) of the FW Act to lodge the Application.” 4

[10] Scott’s submits in response it gave Ms Cruz notice of termination because, even though she was engaged as a casual employee, she was employed on a regular and systematic basis. However, it submits it did more than it was required to do in providing her with a period of 2 weeks notice. It continues to submit that, in any case, the employment contract came to an end when her services were no longer required.

[11] Scott’s initially submitted that after being given notice of termination Ms Cruz was then asked to stay on for some further days. It suggested she last worked on 5 August, but then “services were no longer required and therefore her employment contract comes to an end as of the close of business for that night.” 5

[12] However, Mr Kuczmarski also indicated that at the time he drafted the termination notice for Ms Cruz he was not aware she was going to be asked to work on further occasions. Scott’s continued to submit:

“It is our submission that if a payment is made in lieu the contract is concluded at the time of the payment and that the services are no longer required. Because if it was to be accepted, as per the submissions by the applicant, that the employment relationship continues after the services are withdrawn that in fact the applicant or the employee could actually work for two different type – or three different employers during the notice period. And we would say that that would not be good industrial relations under the Act.

...

So we contend that the actual date of termination is the date that the employment contract ceased, which was 5 August. And therefore we would say that the application is being lodged out of time.” 6

[13] The Commission sought further clarification from Scott’s about the circumstances, given the apparent confusion about the dates and the fact Ms Cruz’s pay records appeared to indicate she continued to be paid on a weekly basis after the day on which she last worked, with payments being received on 23 July, 30 July and 6 August. A final payment was also made to her on 14 August. During the course of the proceedings Scott’s indicated in response that the last payslip Ms Cruz received on 6 August was for the period 30 July to 5 August, which was the last occasion on which she worked. She was then provided with a final payment after her termination notice had been processed.

[14] However, the Commission then asked Ms Cruz whether she worked for Scott’s after 29 July 2014. She indicated in response she did not, but said she continued to get paid on a weekly basis during the period of notice. She confirmed she received pay slips dated 23 July, 30 July, 6 August, and then a final payment on 14 August, and on each of these dates money was transferred into her bank account. She also said that when she received a payment on 6 August she made contact with Scott’s because she understood she was to be paid up until 9 August. Scott’s responded by indicating she would be paid up until that date.

[15] Given the disparity that existed between the parties about when Ms Cruz last worked for Scott’s the Commission asked the Company to clarify, within seven days from the conclusion of the hearing, what was its understanding of the correct position. It also requested Scott’s provide the Commission with an extract from her employment contract relating to termination of employment.

[16] The Commission subsequently received an additional submission from Scott’s. It indicated the submissions it provided previously had been based upon incorrect information. It now submits that the following occurred:

“6. The respondent gave the applicant a notice of termination the following day, 29 July 2014, which stated that payment would be made in lieu of working the 2 week notice period.

7. The applicant’s employment was terminated for genuine redundancy reasons with the last day of employment being 29 July 2014.

8. The applicant lodged the application for unfair dismissal remedy on 29 August 2014, which is out of time by 10 days.” 7

[17] Scott’s also provided an extract from Ms Cruz’s employment contract to do with termination of employment. It stated:

“Termination of employment: Should the need arise for the employer to terminate your employment a notice period as identified in the site Enterprise Agreement or the Award will apply except in the circumstances of misconduct or neglect of duties where termination of employment will be without a notice period. Payment in lieu of notice will be made if the required notice period is not required to be worked.” 8

[18] The submissions and evidence provided in this matter have created a degree of confusion and uncertainty. However, I am satisfied an accurate picture of what occurred in regard to Ms Cruz’s termination of employment can be established.

[19] On 25 July 2014 Ms Cruz was told she was going to be terminated. Despite her subsequent protestations and attempts to remain in ongoing employment this was confirmed when she received the letter of termination dated 29 July. That letter from Mr Ron Kuczmarski, Group Human Resource Manager, indicated in part:

“Thank you for your recent correspondence regarding the advice you received on the termination of your employment and your request for a review of the decision. The company CEO, Mr Peter Anderson, has asked me to respond on his behalf.

The decision to end your employment contract has come about due to a recent review of the organisational needs of the business and we have identified a number of positions that will not be required in the current structure. Your position is one that has been identified as surplus to the business needs and will become redundant. We unfortunately cannot transfer you to another position within the business.

As a result you have been advised your casual employment will come to an end. The company is required to provide you with a two (2) week notice period and therefore your employment will be terminated on 9 August 2014. We do not require you to work out this notice period and payment will be made in lieu of working.” 9

[20] It is also now clear that despite indicating she wanted to continue working for Scott’s Ms Cruz’s last day at work was 29 July. However, she subsequently received a payslip dated 6 August 2014, which indicated it was issued in respect of the pay period 30 July to 5 August, and made reference to her current weekly pay rate of $746, as it was at that time. She then received a final payment on 14 August. She was asked to confirm by return mail that this was in full and final settlement of all monies owing to her, which she apparently did.

[21] Ms Cruz submits that by specifying the date of 9 August 2014 as the date of termination Scott’s was effectively directing her not to attend for work in the period from 29 July until 9 August, however, the employment relationship did not actually come to an end until that later date. She also makes reference to the fact she received a further payslip after 29 July, and did not receive a final termination payment until 14 August 2014. She also relies on the decision in Siagian v Sanel Pty Ltd 10(“Siagian”) to submit that a distinction can be drawn between circumstances in which a payment in lieu of notice terminates the employment on the date of payment of that lump sum, and a situation in which the employment extends until the expiration of the period for which the payment was made.

[22] Scott’s submits in response that Ms Cruz was aware on 29 July that her employment was terminated from that date, and this was the clear intention of both parties. It acknowledges she received an additional payslip one week later, and then received a final termination payment on 14 August. However, it submits this occurred as a result of incorrect information being provided to the pay office, and its consequent understanding that her employment continued until 5 August.

[23] The decision of Wilcox CJ in Siagian makes reference to the decision of Waite J in Leech v Preston Borough Council 11 (“Leech”) which involved circumstances in which pay in lieu of notice was provided to an employee. His Honour determined that this can, on the one hand, be a situation in which the intention is to terminate the employment relationship from when the payment is made. However, an employee can also be given the full period of notice they are entitled to but then be excused from being required to attend the workplace during the notice period.

[24] After referring to this distinction Wilcox CJ concluded,

“Although Waite J did not spell out the result that flowed from each meaning, it is clear from other decisions that, in the first case, the employee’s employment terminates upon the date of payment of the lump sum. In the second case, the employment extends until the expiration of the period for which the payment was made.

The question whether a payment in lieu of notice immediately terminates the employment is always one of fact.” 12

[25] He continued to indicate at 355,

“It seems to me that, in the absence of evidence of a contrary intention, it should usually be inferred that the employer intended the termination to take effect immediately. This conclusion not only reflects the more accurate meaning of the phrase ‘payment in lieu of notice’; it accords with common sense. An employer who wishes to terminate an employee’s services, and is prepared to pay out a period of notice without requiring the employee to work, will surely usually wish to in the relationship immediately. If the employee is not to work, there is no advantage to the employer in keeping the relationship alive during the period for which payment is made; and there is the disadvantage that the employer will be burdened with employment related costs, such as workers compensation insurance, payroll tax, liability for leave payments etc. The employer also incurs the risk that some new burden will be imposed in respect of the employment during the period.

I see nothing in the present case to suggest that Sanel intended that its employment relationship with Mr Siagian should continue until 15 April. The statement of account given by Mr Bryant to Mr Siagian was headed ‘Statement of Earnings on Termination’. His key was taken from him. Mr Bryant had no thought that Mr Siagian might be called back to work before the expiration of the period of notice. Mr Bryant supplied a separation certificate on 31 March, an action that would have been premature if the employment had not then terminated.” 13

[26] It is also noted that this decision was considered by a Full Bench of the then Australian Industrial Relations Commission in the matter of Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company Pty 14. The Full Bench noted at [35]:

“In Siagian v Sanel Pty Ltd Wilcox CJ discussed the effect of payment in lieu of notice and concluded that where such payment was made the date of termination was, in the absence of evidence of a contrary intention, the date on which the notice was given, not the date on which the period of notice for which payment was made expired.” 15

[27] I have considered the relevant authorities and the particular circumstances involved in this matter. The evidence indicates that the administration of Ms Cruz’s termination was poorly handled in that the circumstances were not properly communicated to the pay office. As a result Ms Cruz received two employment related payments after her last day at work. There was also some confusion in the submissions made in the proceedings by Scott’s about when, in fact, she last worked, with a suggestion it was the later date of 5 August. If this was, in fact, the case I might well have come to a different conclusion about the determination of this aspect of her application.

[28] However, it was later clarified by Scott’s and, indeed, confirmed by the evidence of Ms Cruz that her last day at work was 29 July. Ms Cruz also indicated she was told to “just take your stuff” on that day, and appeared to understand she was no longer required to attend at work after this time. 16

[29] As Wilcox CJ held in Siagian the question of whether a payment in lieu of notice immediately terminates employment “is always one of fact.” 17 Despite the seemingly sloppy administration of Ms Cruz termination I am satisfied the notice of termination she received on 29 July acted to terminate her employment from that date, even if she did not understand this to be the case, and there is no evidence of a contrary intention from the Company. Having come to the conclusion that Ms Cruz was terminated with effect from 29 July 2014 it follows that her application for unfair dismissal was lodged outside of the 21 day period provided for in the Act.

[30] However, s.394(3) provides that the Commission may allow a further period for an application to be made if it is “satisfied 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.” 18

[31] I now turn to consider whether there are “exceptional circumstances” involved in this matter, taking into account the matters referred to above, to justify an exercise of the Commission’s discretion to grant additional time to Ms Cruz to make her unfair dismissal application.

The reason for the delay

[32] Ms Cruz’s submissions acknowledge that ignorance of the law is not normally a sufficient ground to warrant granting an extension of time. However, she submits the present matter can be differentiated and she was entitled to assume, in all the circumstances, that 9 August 2014 was the date on which her employment terminated. In this context she refers particularly to the wording in the termination notice, and submits she cannot have been expected to have a level of legal awareness to understand that when the notice referred to her employment being “terminated on 9 August 2014” this was not the correct position at law. 19 Her submissions on this point conclude by indicating:

“Accordingly, the Applicant submits that any ignorance of the law on her part arose as a direct result of the conduct of the Respondent, such that it cannot be categorised as 'mere ignorance', and accordingly, that it should be treated as an exceptional circumstance that warrants the Commission granting an extension of time to allow the Application to be heard.” 20

[33] Scott’s submitted in response that a lack of understanding of the law does not constitute exceptional circumstances and that, in any case, the intent of making “payment in lieu” should not be ignored. 21

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

[34] Ms Cruz acknowledges she first learned on or around 28 July that her employment might be terminated, and this was confirmed by the notice she received the following day. However, she submits this does not alter the fact she believed the employment relationship continued until 9 August and was terminated on that date.

[35] Scott’s submits it was clear from at least 25 July that Ms Cruz could be terminated and she was involved in discussions about this possibility. It also submits she was clearly aware of what was occurring because she wrote to the CEO at the time asking him to reconsider.

Any action taken by the person to dispute the dismissal

[36] Ms Cruz submits she took action to dispute her dismissal within 21 days, based on her understanding of the termination notice she received. She submits it provides reasonable grounds for her decision to lodge her application on 29 August, rather than at an earlier time. However, Scott’s submits Ms Cruz only disputes her dismissal on the basis it had employed somebody else to perform her job, which was not the case.

Prejudice to the employer (including prejudice caused by the delay)

[37] Ms Cruz submits Scott’s is a large employer with the resources to deal with an application of this kind. She also submits that even if the application is found to have been lodged out of time, it was lodged within a month of her termination. Accordingly, there will be little prejudice for Scott’s if she is allowed to pursue her application. Scott’s also acknowledges this factor is not a significant consideration.

The merits of the application

[38] Ms Cruz submits her application has merit for the following reasons.

• Her dismissal was unfair as it was harsh unjust and/or unreasonable under s.385 of the Act. In addition, it did not meet the criteria for a “genuine redundancy” under s.389.



• It was not a case of genuine redundancy because Scott’s:



• failed to comply with the consultation provisions in the relevant Award,



• failed to consider whether it would have been reasonable in all the circumstances for her to be redeployed, and



• has not established it no longer requires her job to be performed by anyone.

[39] Ms Cruz submits her application has “a high prospect of success,” and the merits should weigh in favour of the Commission granting an extension of time. Scott’s rejects these submissions. It submits the circumstances of her termination involve a case of genuine redundancy, and there was a process of consultation with Ms Cruz before she was finally given notice of her termination.

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

[40] Neither party suggested this consideration is relevant in the context of the present application.

Conclusion

[41] I have taken into account each of the considerations in s.394(3) in coming to a decision in this matter. I am also satisfied two of these are of particular relevance in all the circumstances of this matter.

[42] The first concerns the reasons for the delay. These circumstances have been set out in some detail in dealing with the issue of when Ms Cruz’s termination took effect, and are not restated at length now. However, I am satisfied that it is not surprising that a person like Ms Cruz, who does not have a detailed knowledge or understanding of employment law and related matters, assumed the date of her termination to be 9 August 2014.

[43] Several things lead to this conclusion. Firstly, the notice of termination plainly indicated “...your employment will be terminated on 9 August 2014.” 22 Secondly, Ms Cruz did not receive her pay in lieu of notice and any other amounts due to her at the time when she received the notice of termination on her last day at work. This would normally be the case when an employer provides a payment in lieu of notice with the intention of terminating the employment relationship immediately. Ms Cruz instead received a payslip dated 30 July in respect of the pay period 23 July to 30 July. She then received another payslip and payment for the period 30 July to 5 August, before receiving a final payment on 14 August. This series of ongoing payments likely seemed to her to be entirely consistent with the termination notice which indicated her employment was to end on 9 August.

[44] Ms Cruz also indicated she was in contact with the Depot Manager to query some payment details after her last day at work, and was told in response payments would be made up to 9 August. Ms Cruz also indicated that when she subsequently sought legal advice after her last day at work she was told she had until 29 August to lodge an unfair dismissal application. While this advice was obviously not provided by her former employer this almost certainly acted to reinforce her view that her termination date was 9 August 2014. Each of these circumstances provide an explanation as to why Ms Cruz had a reasonable belief her final date of termination was 9 August 2014, even if that belief was ultimately wrong at law.

[45] The second matter that I consider significant concerns the merits of the application. It is clearly established that in dealing with an application for an extension of time the Commission is not required to give detailed consideration to the evidence and submissions going to merit, or indeed come to a concluded view about the merits of the matter. However, it is still required to give consideration to whether the application has merit.

[46] There is clearly a dispute about what occurred. Ms Cruz submits Scott’s failed to properly consult or consider possible redeployment options in arguing “genuine redundancy.” She also submits the job is still required to be performed. Scott’s takes issue with each of these matters and submits it has met its obligations in maintaining her termination was a case of “genuine redundancy.”

[47] It is also acknowledged in this context that Ms Cruz was employed as a casual employee. However, the submissions provided by Mr Kuczmarski indicate she had been employed “for a fair amount of time” in a “systematic and regular” way, so clearly she was a person to whom Division 2 of Part 3 of the Act applied. 23 Therefore, I am satisfied her application has merit, particularly in regard to whether the procedural requirements associated with “genuine redundancy” in s.389 have been met.

[48] The question of what is required to constitute “exceptional circumstances” has been considered in a number of decisions of the Tribunal. The Full Bench in the matter of Nulty v Blue Star Group Pty Ltd 24 came to the following conclusion:

“[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.

[14]Mere ignorance of the statutory time limit in s.366(1)(a) is not an exceptional circumstance. Indeed, unfortunately, it would seem to be all too common for dismissed employees to be unaware of the time limits imposed in relation to making an application for an unfair dismissal remedy or a general protections FWA application. The parliament has chosen to condition the discretion to extend time for making such applications on the existence of “exceptional circumstances”. In doing so the parliament must be presumed to have proceeded on the basis that an employee who is aggrieved at being dismissed ordinarily ought be expected to seek out information on any remedy they may have in a timely fashion such that delay on account of ignorance of the statutory time limit is not, of itself, an exceptional circumstance.” 25

[49] I am satisfied there are exceptional circumstances existing in this matter to warrant an extension of time being granted to Ms Cruz to make her application. For all the reasons indicated I am satisfied Scott’s carried out her termination in a way that can be considered to be out of the ordinary course and unusual, and so gave Ms Cruz reasonable grounds to believe the date of termination of her employment was 9 August. I am also satisfied, without by any means forming a concluded view, that her application has merit.

[50] I am accordingly satisfied Ms Cruz should be allowed additional time in which to make her application. The matter will now be relisted to enable her substantive application to be dealt with.

COMMISSIONER

Appearances:

Ms. Marilyn Cruz appeared on her own behalf.

Mr. Ron Kuczmarski appeared on behalf of the Respondent.

Hearing details:

2014

Melbourne:

10 October.

 1   Fair Work Act 2009 (Cth) at s.386(1)

 2   Exhibit C2 at para 10

 3   Ibid at para 11

 4   Ibid at para 17

 5   Transcript at PN46

 6   Ibid PN56-PN58

 7   Correcting submissions filed on behalf of the Respondent, 17 October 2014 at para 3

 8   Ibid as attached document

 9   Above n.ii at Attachment 1

 10 (1994) 122 ALR 333

 11 [1985] ICR 192

 12   Above n.x at 352

 13   Ibid at 355

 14   Print R0234

 15   Ibid at [35]

 16   Transcript at PN106

 17   Above n.xii

 18 Above n.i at s.394(3)

 19   Above n.ii at Attachment 1

 20   Ibid at para 28

 21   Transcript at PN39

 22   Above n.ii at Attachment 1

 23   Transcript at PN40 and PN44

 24   [2011] FWAFB 975

 25   Ibid at [13]-[14]

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