Mark Nichols v Ross and Joelie Lochhead
[2016] FWC 7764
•9 NOVEMBER 2016
| [2016] FWC 7764 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.365—General protections
Mark Nichols
v
Ross and Joelie Lochhead
(C2016/4781)
DEPUTY PRESIDENT DEAN | SYDNEY, 9 NOVEMBER 2016 |
Application to deal with contraventions involving dismissal – effective date of termination - extension of time – no exceptional circumstances – application dismissed.
[1] On 4 August 2016 Mr Mark Nichols (the Applicant) made an application pursuant to s.365 of the Fair Work Act 2009 (the Act) alleging that he had been dismissed by Ross and Joelie Lochhead (the Respondents) in contravention of the general protections provisions in the Act.
[2] The Respondents operate a dairy farm in Victoria.
[3] There is a conflict between the parties as to the proper characterisation of the legal relationship between them. The Applicant claims it was one of employment, and the Respondents claim it was one of principal and contractor. There is also disagreement as to the date the relationship between the parties ended.
[4] For the purposes of this decision, I am not required to make a determination as to the proper characterisation of the relationship between the parties, however I do need to determine the date their relationship ended.
[5] The Applicant contends that the relevant date to be used to determine whether this application has been made within time is 15 July 2016. This is the date the Applicant vacated the residential premises provided to him by the Respondents. If this date is correct, then the application was filed within the 21 day period prescribed by the Act, and no extension of time is necessary.
[6] The Respondents maintain that the relevant date is 19 June 2016. This is the date of a second ‘mediation’ meeting between the parties. If I accept the Respondent’s submission, then the application was lodged some 25 days outside the statutory time limit.
[7] The matter was listed for hearing by telephone on 27 October 2016. Both parties, who were granted permission to be represented by lawyers, filed written submissions and other evidentiary material.
[8] For the reasons set out below, I have formed a view that the relationship between the parties ended on 19 June 2016. I have also concluded that there are no exceptional circumstances warranting the granting of a further period for the making of an application under s.365 of the Act. Accordingly, the application will be dismissed.
Agreed matters and findings of fact
[9] The factual circumstances are, for the most part, not contested, and I make the following findings of fact based on the evidence.
[10] The Applicant was initially employed by the Respondents to carry out dairy farming work in mid-2013.
[11] At the Applicant’s request, the parties entered into a ‘contract for services on the dairy farm’ agreement around 5 December 2013.
[12] The Applicant, his partner (Ms Chantelle Broad) and the Respondents subsequently entered into a ‘Share Dairy Farming Agreement’ (the Sharefarming Agreement) in mid-2014 1.
[13] The Sharefarming Agreement deals with all major aspects of the sharefarming arrangement. In particular, it:
a) provides that the relationship between the parties is that of principal and independent contractor, and the parties acknowledged that it was not one of employment;
b) details how the Sharefarming Agreement may be terminated;
c) provides a procedure for dealing with disputes which includes use of a mediator, and names Mr Ken Jones, a Director of Murray Goulburn Co-Operative Co. Ltd (Murray Goulburn), as a person able to be called upon to assist with the resolution of disputes.
d) states that it evidences the ‘entire agreement’ between the parties;
e) includes detailed schedules which set out the obligations of the parties in relation to a range of matters such as water supply, livestock, milking plant, use of vehicles and machinery, provision of labour, property maintenance, property income and operating costs (including a detailed schedule of the proportion of costs attributable to each party), animal health, weed control and pasture management.
[14] As a part of the Sharefarming Agreement, the Respondents agreed to sell a certain number of calves to the Applicant each year to assist him in establishing his own herd.
[15] The Respondents purchased premises in March 2014 (borrowing $300,000 to do so) which adjoined the sharefarming land for the purpose of providing accommodation to the Applicant and his family.
[16] The Applicant was paid directly by Murray Goulburn for the supply of milk to it. He was not paid by the Respondent. A copy of the agreement between the Applicant, Ms Broad and Murray Goulburn was tendered by the Respondents as part of a bundle of documents 2.
[17] In around April 2016 the Applicant advised Mr Lochhead (one of the Respondents) that his relationship with Ms Broad had broken down completely and that he needed time off work. He also stated that the farming arrangement ‘wasn’t working’ because of his personal problems.
[18] Mr Lochhead undertook the milking of the cows for the Applicant over the next few days (and was not paid for this) notwithstanding that the responsibility for labour under the Sharefarming Agreement was the Applicant’s.
[19] Towards the end of April 2016, the Applicant spoke with Mr Lochhead and subsequently Mr Jones regarding the Applicant undertaking other work ‘off-farm’.
[20] A meeting was arranged between Mr Jones (to assist in his capacity as a person named in the disputes clause of the Sharefarming Agreement), the Applicant and the Respondents to take place on 17 May 2016 (the First Meeting). The purpose of the First Meeting was primarily to discuss the Applicant supplementing his income by undertaking other work (ie. off the farm). However the notes made by Mr Jones 3 during the First Meeting confirm that there were various issues discussed, including concerns held by the Respondents as to the Applicants’ fulfilment of his obligations under the Sharefarming Agreement.
[21] The mediation notes and the evidence of Mr Lochhead in relation to the First Meeting, which I accept, is that there was also a discussion that the Sharefarming Agreement would end by 30 June 2016.
[22] On Friday 27 May 2016 Mr Lochhead received a telephone call from the Applicant’s father (David Nichol) who told Mr Lochhead that the Applicant had been admitted into hospital and asked Mr Lochhead to milk the cows.
[23] The parties agreed that the Applicant did not milk the cows again after that date (which was one of the Applicant’s key responsibilities under the Sharefarming Agreement) 4, nor did he undertake any other duties in accordance with the Sharefarming Agreement.
[24] I also accept Mr Lochhead’s uncontested evidence that after the telephone discussion with David Nichol on 27 May, he went to the farm and found it to be in a rundown state, with animals suffering severe neglect and machinery in a shocking state. This included dead calves and cows that had to be destroyed.
[25] The Applicant returned to the farm on Saturday 4 June and had a short discussion with Mr Lochhead. They agreed to talk the following day.
[26] During the conversation between the Applicant and Mr Lochhead on Sunday 5 June the Applicant asked whether he ‘still had a job’. The Applicant’s evidence was that Mr Lochhead responded saying ‘I don’t think you can do the job’ 5. Mr Lochhead gave evidence that he said words to the effect of ‘no, you don’t’.
[27] On or around 1 or 2 June, the Applicant’s father arrived at the farm and collected some of the Applicant’s tools and other belongings.
[28] The Applicant gave evidence that on or around 10 June he had a conversation with Mr Lochhead who said words to the effect of:
“I’m going to send you a letter to say the Agreement is terminated.” 6
[29] Mr Lochhead (with the assistance of his wife) prepared a letter (the Termination letter) dated 13 June 2016 in the following terms:
Dear Mark
After the Mediation Meeting with Ken Jones and ourselves on 17th May 2016, and subsequent events our Share Farming Agreement has been terminated on Sunday 5 June 2016.
Milk payments have been made up to 15th June 2016, and calf payment refund will be paid on 15th July 2016 when the residence is required to be vacated in a neat and tidy condition.
Yours sincerely
Ross Lochhead
[30] The Applicant stated that he received this letter in his letter box on 15 June 2016. 7
[31] At the Applicant’s request, a further mediation was scheduled for 19 June 2016 (the Second Meeting). The Applicant gave evidence that he did not remember much of this meeting 8.
[32] Mr Lochhead gave evidence that there was a discussion with the Applicant during the Second Meeting about the date the Applicant would vacate the premises. The Applicant agreed in cross examination that this could have been discussed. I accept Mr Lochhead’s evidence given his recollection of this part of the discussion was clear.
[33] The mediation notes taken by Mr Jones also confirm that the majority of the Second Meeting discussed the termination of the Sharefarming Agreement.
[34] It is clear that the Applicant knew the relationship between the parties had come to an end by 19 June 2016 9. In cross-examination, in response to a question about whether the termination of the Sharefarming Agreement was discussed on 19 June 2016, the Applicant said:
“On 19 June? We’d already received a letter on 13 June to say that we were finished” 10
[35] The date the Applicant vacated the premises provided by the Respondents was unclear, however this was due to occur on 15 July 2016.
Termination of Employment Relationship
[36] The Applicant’s case is that he was an employee, not a contractor. For the purposes of my consideration of the date the relationship between the parties ended, I have assumed this is correct. I have done so because, taking the Applicant’s case at its highest, I still find that the relationship ended on 19 June 2016. This means the application is out of time and an extension is necessary.
[37] The submissions on behalf of both parties focussed on the date on which the contractual relationship ended. The proper test, however, is the date the employment relationship ended.
[38] The term ‘dismissed’ for the purposes of both the unfair dismissal jurisdiction and general protections claims is defined in s386 of the Act. Section 386 provides that a person is dismissed if the person’s employment with his or her employer has been terminated on the employer’s initiative, or 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 11.
[39] In J Searle and Moly Mines Limited 12, a full bench considered the meaning of termination at the initiative of the employer, and stated:
[22] Before turning to the facts of this case there is another issue which arose in the course of the submissions with which we should deal. That matter concerns the relevance of the principles governing the termination of a contract of employment. It is clear that the statutory test relates to termination of the employment relationship, not termination of the contract of employment. The difference is well illustrated by the following passage from the joint judgment of Brennan CJ and Dawson and Toohey JJ in Byrne and Frew v Australian Airlines Ltd 13:
“It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson [(1946) 72 CLR 435 at 471]. As Latham CJ said (at 454):
“An employer terminates the employment of a servant when he dismisses him, though, as I say hereafter, such a dismissal does not put an end to the contract between the parties. An argument that a dismissal because wrongful was a nullity was raised and rejected in both Williamson's Case [Williamson v The Commonwealth, (1907) 5 CLR 174 at 185] and Lucy's Case [Lucy v The Commonwealth, (1923) 33 CLR 229 at 237, 238, 249, 252, 253].”
And as Dixon J said [Automatic Fire Sprinklers Pty Lt v Watson at 545]:
“there is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve.” ”
[23] In the case of wrongful dismissal, as the passage shows, the employment is terminated by the employer even though the contract continues until the employee accepts the repudiation, thereby bringing the contract to an end. In applying the statutory test it is the termination of the employment relationship which is important.
[40] As a result, the extensive submissions made by the parties about breach of contract are irrelevant to the issue I need to decide.
When did the dismissal take effect?
[41] A dismissal takes effect when it is communicated to the employee who is being dismissed 14, and can be communicated orally15.
[42] A termination at the initiative of the employer involves some action of the employer that is intended to bring the employment relationship to an end, or had that probable result 16.
[43] On the evidence it is clear that the parties discussed ending their relationship during the First Meeting on 17 May 2016, with the Respondents stating that they wanted the relationship to end by 30 June 2016.
[44] The evidence is also clear that there was a discussion about whether the Applicant ‘had a job’ or not on 5 June 2016. Given that there were a number of matters that the Applicant stated he did not have a clear recollection of, I prefer the evidence of Mr Lochhead that his answer to the question of the Applicant was “no, you don’t”.
[45] The Applicant’s evidence is that he was advised by Mr Lochhead on 10 June that Mr Lochhead would be sending the Applicant a letter to say that the Agreement was ‘over’.
[46] The Applicant accepts that he received the Termination letter on 15 June 2016.
[47] The Applicant in cross-examination was also asked whether he believed that the Sharefarming Agreement had been terminated on 19 June 2016. His answer was:
“I believe it was at the point where I wasn’t – well, Ross and Joelie made it clear that I could never get my job back so whether that means it was terminated or not, I don’t know” 17.
[48] The Applicant’s qualification around whether ‘it was terminated or not’ arose because of legal advice he had received around whether the termination clause of the Sharefarming Agreement had been complied with 18. He gave evidence about his legal advice orally and in his statutory declaration (Exhibit A1).
[49] The Applicant contends that the Termination letter is invalid because it purports to be retrospective in its operation, in breach of section 117 of the Act. I disagree. In my view, the Termination letter is written confirmation of the discussion that occurred between the parties on 5 June 2016 and of the discussion during the First Meeting on 17 May 2016, and is therefore not retrospective in nature.
[50] I find that the Second Meeting that took place with Mr Jones on 19 June also discussed and confirmed the termination of the relationship between the parties, and sought to clarify some other issues (such as vacating the Respondents premises) that needed to be finalised. In cross examination of Mr Lochhead about the Second Meeting, he gave evidence that the Applicant was asked whether he wanted to keep milking cows, and his answer was “no, I don’t want to” 19. This is supported by the notes made by Mr Jones. I accept that the Applicant did say words to this effect.
[51] I am satisfied that the actions of the Respondent were clearly intended to bring the relationship to an end, and that both parties were clear by the Second Meeting, being 19 June 2016, that their relationship had indeed ended.
[52] The date the Applicant vacated the residential premises provided to him by the Respondents is an irrelevant consideration in my determination as to the date their relationship ended. The Sharefarming Agreement confirms that the provision of residential premises for the Applicant would be governed by the state tenancy laws. I also accept the evidence of Mr Lochhead that while he considered their relationship to be over, he wanted to provide the Applicant with a reasonable period of time to find somewhere else to live 20.
[53] Having considered all of the evidence, I am satisfied that the relationship ended on 19 June 2016.
Whether to allow a further period for the application to be made
[54] The Commission may allow a further period for a general protection application to be made if it is satisfied that there are exceptional circumstances. In assessing whether there are exceptional circumstances the Commission must have regard to the matters set out in s.366(2) of the Act. Only if it is satisfied that there are exceptional circumstances can it then exercise its discretion to extend time.
[55] Section 366 of the Act provides:
366 Time for application
(1) An application under section 365 must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (2).
(2) The FWC may allow a further period if the FWC is satisfied that there are exceptional circumstances, taking into account:
(a) the reason for the delay; and
(b) any action taken by the person to dispute the dismissal; and
(c) prejudice to the employer (including prejudice caused by the delay); and
(d) the merits of the application; and
(e) fairness as between the person and other persons in a like position.
[56] The meaning of ‘exceptional circumstances’ was considered in Nulty v Blue Star Group Pty Ltd 21 where the Full Bench said:
“[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.”
[57] I now deal with each of the provisions of s.366(2) of the Act.
Reason for the delay
[58] The Applicants case was heavily reliant on a finding that his application was not made out of time. There was limited evidence or submissions made regarding the provisions of s366(2), despite my invitation to do so.
[59] The Applicant gave evidence that he sought legal advice on 2 August 2016, and his application was lodged on 4 August 2016.
[60] The Applicant made short submissions that the reasons for the delay were because of health issues experienced by the Applicant, and the time involved in moving out of the residence supplied to him by the Respondents.
[61] I find that these are not matters which could be considered ‘exceptional’. This weighs against the granting of an extension of time.
Any action taken by the person to dispute the dismissal
[62] There is no evidence that the Applicant took any steps to contest the termination until the filing of this application. This weighs against the granting of an extension of time.
Prejudice to the employer (including prejudice caused by the delay)
[63] There is no evidence of prejudice to the Respondents if I were to grant an extension of time.
[64] I am not persuaded that the Respondent would suffer prejudice if the extension of time were granted. While a lack of prejudice is an insufficient basis to grant an extension of time, a lack of prejudice weighs in favour of a finding of exceptional circumstances.
The merits of the application
[65] As indicated earlier, there is a factual dispute as to the nature of the relationship between the parties.
[66] As a result, I am not able to make a final determination of the merits in this matter. I therefore consider the merits to be a neutral consideration.
Fairness as between the person and other persons in a similar position
[67] Deputy President Gostencnik in Morphett v Pearcedale Egg Farm 22 considered this criterion and said ‘cases of this kind will generally turn on their own facts. However, this consideration is concerned with the importance of an application of consistent principles in cases of this kind, thus ensuring fairness as between the Applicant and other persons in a similar position, and that consideration may relate to matters currently before the Commission or matters which had been previously decided by the Commission.’23
[68] Ms Broad, the Applicant’s partner, filed a general protections claim under s372, a copy of which was included in the Respondent’s bundle of documents tendered during the hearing. There was no evidence of whether that claim has been pursued.
[69] Accordingly I find this to be a neutral consideration.
Conclusion
[70] Having considered all of the matters to which my attention is directed by the Act, I am not satisfied that there are exceptional circumstances as to warrant my granting an exception to the statutory time limit for the lodgement of this application. The circumstances are not ‘out of the ordinary course, unusual, special or uncommon’. Accordingly, this application is dismissed.
[71] An order to that effect will issue with this decision.
DEPUTY PRESIDENT
Appearances:
S Lee for the Applicant.
C Morgan for the Respondents.
Hearing details:
2016.
Sydney (by telephone):
October 27.
1 While the Sharefarming Agreement applied to Ms Broad as well as the Applicant, I refer to the Applicant in the singular.
2 Exhibit R3 pages 43-45.
3 Exhibit R3 pages 47-48.
4 Transcript PNs139-140
5 Transcript PN141.
6 Exhibit A1 paragraph 21.
7 Transcript PN150.
8 Transcript PN158.
9 Transcript PN188.
10 Transcript PN138.
11 Section 386 of the Act.
12 [2008] AIRCFB 1088.
13 (1995) 185 CLR 410 at 427.
14 Burns v Aboriginal Legal Service of Western Australia (Inc) (unreported, AIRCFB, 21 November 2000) print T3496.
15 Plaksa v Rail Corporation NSW[2007] AIRC 333.
16 Searle v Moly Mines Limited [2008] AIRCFB 1088 at para 2.
17 Transcript PN188.
18 Transcript PN188 and Exhibit A1 paragraphs 30-33.
19 Transcript PN346.
20 Transcript PN322.
21 [2011] FWAFB 975.
22 [2015] FWC 8885.
23 Ibid at [29].
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