Mehregan Mahdavi v Australia Advance Education Group Pty Ltd T/A Sydney International School of Technology and Commerce (SISTC)
[2022] FWC 2401
•23 SEPTEMBER 2022
| [2022] FWC 2401 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Mehregan Mahdavi
v
Australia Advance Education Group Pty Ltd T/A Sydney International School of Technology and Commerce (SISTC)
(U2022/6919)
| COMMISSIONER HAMPTON | ADELAIDE, 23 SEPTEMBER 2022 |
Application for an unfair dismissal remedy – extension of time required for lodgement – whether exceptional circumstances exist justifying an extension of time – findings made – no exceptional circumstances – no basis to grant extension of time – application dismissed.
What this decision is about
This decision concerns an application by Professor Mehregan Mahdavi (Applicant) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (Cth) (Act).
Professor Mahdavi’s employment with Australia Advance Education Group Pty Ltd T/A Sydney International School of Technology and Commerce (SISTC or Respondent) concluded by way of termination letter on 2 June 2022 citing redundancy as the reason for the end of the employment relationship.
The s.394 application in this matter was lodged with the Fair Work Commission (the Commission) on 6 July 2022.
Section 394(2) of the Act states that an application for an unfair dismissal remedy must be made ‘within 21 days after the dismissal took effect’, or within such further period as the Commission allows pursuant to s.394(3). Adopting 2 June 2022 as the reference date for the dismissal, the period of 21 days in this case ended at midnight on 24 June 2022.[1] The application was therefore filed 13 days after the 21-day limit. The Applicant requests the Commission grant a further period for the application to be made under s.394(3). Amongst other matters, this request is based upon the contention that Professor Mahdavi was delayed in making the application as he was awaiting payment of outstanding entitlements by the Respondent. In particular, Professor Mahdavi contends that there were delays to his payments, and he was intentionally or inadvertently misled by the employer into believing he would be paid all his entitlements without the need to lodge an unfair dismissal; however, as soon as the 21-day period for filing of an application expired, the respondent then avoided any further communication.
The Respondent opposes the extension of time request, principally on the basis that all matters relating to the outstanding entitlements dispute were resolved by 22 June 2022, and in any event, there was nothing preventing Professor Mahdavi making this application in time.
The Act allows the Commission to extend the time period within which an unfair dismissal application can be made where it is satisfied that there are exceptional circumstances.[2]
The Commission conducted an MS Teams Video Hearing to enable the extension of time matter to be determined. Professor Mahdavi appeared on his own behalf. Professor Milgate, the Chief Executive Officer of the Respondent, appeared for the SISTC.
As will become clear, having assessed all the circumstances of this matter and the relevant statutory considerations I have determined that there are no relevant exceptional circumstances. The considerations leading to, and consequences of that finding are outlined below.
Observations on the evidence
Professor Mahdavi provided a witness statement[3] and gave sworn evidence in support of his application.
I found Professor Mahdavi’s evidence about those matters directly pertaining to the explanation for the delay to have been given openly and honestly. It is not necessary, or appropriate, for the Commission to make findings about the broader circumstances of Professor Mahdavi’s employment arrangements and the ground for the dismissal, which remain very much in dispute. Further, given the factors to be assessed by the Commission in determining this matter, I have treated as submissions Professor Mahdavi’s evidence about the reasonableness of his explanation for the delay.
The Respondent did not lead evidence. I draw no negative inference from this given the nature of the present proceedings. I am however required to deal with the application based upon the relevant material that is before the Commission.
The events relevant to the explanation for the delay in lodging the application
Professor Mahdavi commenced employment with the Respondent in January 2021 in the role of Academic Dean - IT. This role apparently included leadership of the academic staff and some limited teaching. There is a dispute about whether 2 Assistant Deans formally reported to Professor Mahdavi.
The Respondent conducts an education institution offering bachelor’s degree and diploma courses in information technology and related disciplines. It was also recently approved to offer master’s degree courses; however, this was not being done at the time of the Applicant’s dismissal.
There is a dispute about certain alleged job security assurances provided to the Applicant in the lead up to the dismissal.
The Respondent provided the following letter by email on 2 June 2022:
“… …
Dear Professor Mahdavi,
Termination of your employment by reason of redundancy
The purpose of this letter is to confirm the outcome of a recent review by Australia Advanced Education Group Pty Ltd (AAEG) (the employer) of its operational requirements, and what this means for you.
As a result of changes resulting from the due diligence review as part of the acquisition of AAEG, the forensic accounting review post change of ownership of AAEG, and the need to change our organisational structure to support the future direction of AAEG, the position of Academic Dean - IT is no longer needed. Regrettably this means your employment will terminate on Thursday 2 June 2022. This decision is not a reflection on your performance.
Based on Section 12.3 of your employment contract dated 07 December 2020, your notice period is eight (8) weeks. Therefore, your employment will end on Thursday 02 June 2022 with the notice period being paid out.
Due to your employment ending because of redundancy, you will be paid redundancy pay equal to four (4) weeks of normal pay in accordance with the Educational Services (PostSecondary Education) Award 2010, National Employment Standards, and contract of employment. This amount of four (4) weeks' pay is based on your years of service being less than 2 full calendar years (NES s.119(2)).
You will be paid your accrued entitlements and any outstanding pay up to and including your last day of employment and superannuation.
If you have been paid annual leave in advance, any amount of annual leave still owing will be deducted from your final pay.
You may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them, you can call 13 13 94 or visit their website at and leave payments will usually give rise to waiting periods for Centrelink payments.
You should contact Centrelink to find out how long you have to wait to receive any applicable benefits. The best way to do this is to lodge a claim for payment.
We thank you for your valuable contribution during your employment with us.
Yours sincerely
Professor Michael Milgate”
Chief Executive Officer
The Applicant was advised that this letter had been sent immediately prior to the commencement of a meeting with the CEO and one of the shareholders of the business. There was no prior explicit discussion of any impending redundancy involving Professor Mahdavi or a restructure directly impacting upon his position.
Professor Mahdavi asserts that at the time of his dismissal he was promised all entitlements would be paid promptly, however it took several email communications for the payments to be paid one by one and only after following it up with the SISTC.
On 4 June 2022, Professor Mahdavi emailed the Respondent in the following terms:
“… …
From: Mehregan Mahdavi
Subject: Pay-out after Termination of Employment
Hi all,
For my planning purposes, I would like to know when and how my pay-out will be calculated and paid along with any other outstanding payments.
I would appreciate any information you can provide at this stage in terms of timeline and total amount for my planning purposes.
I would also like to mention that I had submitted a leave application for the period of 8/6/2022 till end of June 2022, which included a combination of sick and annual leave.
I would like to withdraw this leave application as it falls outside my employment period with SISTC, and I would like the leave hours in this application to be included in my accrued leave balance for payment.
FYI, the leave application included 75 hours of annual leave and 52.5 hours of sick leave.
As a courtesy, I will await your response before contacting any external bodies for advice such as fair work or any other regulatory bodies.
Kind Regards,
Mehregan”[4]
On 6 June 2022, Professor Mahdavi was provided a table of his final pay out and advised that the Respondent was “proposing to pay normal wages, additional hours and redundancy pay this week and leave the remaining annual leave to be paid on 22nd June due to cashflow consideration (sic).”[5]
At some stage approximately up to 5 days after his dismissal, Professor Mahdavi visited the Commission’s website and explored the unfair dismissal information. He became aware of the 21-day time limit but decided to seek to resolve his claimed outstanding entitlements with the Respondent first, based upon what he understood to be encouragement to do so from the website.
On 10 June 2022, Professor Mahdavi emailed the Respondent in the following terms:
“… …
Hi Michael,
I haven't yet received any confirmation about this claim.
In general, I believe the way that my "dismissal" was handled was "unfair" and did not follow the right process of informing me of this important decision.
I did receive a meeting invite with a "misleading" subject line "Meeting as requested", but I was told that I have been sent a letter of dismissal, and my access to email and OneDrive was cut off before the meeting was even started!
At the very least, I believe the way it was handled lacked professional courtesy and decency and for that reason I am not happy at all.
I also believe that my efforts in the past were not recognised and acknowledged appropriately, and in a sense, I was a victim of my own success. The very successful MIT application is one good example.
… ...”[6]
On 24 June 2022, Professor Mahdavi advised the Respondent as follows in relation to what he contends was some outstanding entitlements arising from some additional work:
“… …
Hi Michael,
I believe an approval process has been followed for this and a contract has been drawn and signed.
These payments were also confirmed in a table as you can see in the trail.
I believe we are passed the stage to discuss its rationale at this stage.
I also would like to know when the 22.5 hours of annual leave that were deducted without my knowledge, will be paid along with other items.
If there is any dispute regarding any of the items, I just need to know.
I am not happy to drag this on and on and we need to wrap it up and move on.
We need to decide whatever decision you or myself might make as the next and final step.
I look forward to hearing from you regarding your final position.
I need to know ASAP in order to make a final decision about the next/final step that I will be taking.
Kind Regards,
Mehregan”[7]
The Respondent replied on that day and indicated that that it would get back to him with a final decision on the annual leave payments by the “end of next week”.
I observe for context that the conclusion of the initial 21-day period fell on 24 June 2022.
On 27 June 2022, there was a further exchange between the parties about clarification of the basis of some payments that had been made. It became apparent to the Applicant at or around that time that not all of his expected payments would be made by the Respondent.
This application was lodged on 6 July 2022.
It is fundamentally this delay in payments that Professor Mahdavi relies upon in seeking an extension be granted. It is also apparent to me that, although the claimed unfairness of the dismissal was raised, the issues being pursued during the period of the delay were about the claimed entitlements and not fundamentally about the substance of the dismissal itself. Indeed, it is clear to me that if Professor Mahdavi received all his claimed entitlements, he would not have lodged this application. This is also reflected in the remedy sought by the Applicant in the application itself.[8]
Should an extension of time be granted?
The Act allows the Commission to extend the period within which an unfair dismissal application must be made only if it is satisfied that there are ‘exceptional circumstances’. Briefly stated, exceptional circumstances are circumstances that are out of the ordinary course, unusual, special or uncommon. The circumstances themselves do not need to be unique nor unprecedented, nor even very rare.[9] Exceptional circumstances may include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually are of no particular significance, when taken together can be considered exceptional.[10]
The requirement that there be exceptional circumstances before the time to apply can be extended under s.394(3) of the Act is a high hurdle.[11] This contrasts with the broad discretion conferred on the Commission under s.185(3) of the Act to extend the 14 day period within which an enterprise agreement must be lodged, which is exercisable simply if in all the circumstances the Commission considers that it is ‘fair’ to do so.
Section 394(3) of the Act requires that, in considering whether there are exceptional circumstances so as to grant an extension of time, the Commission must take into account the following:
(a)the reason for the delay;
(b)whether the person first became aware of the dismissal after it had taken effect;
(c)any action taken by the person to dispute the dismissal;
(d)prejudice to the employer (including prejudice caused by the delay);
(e)the merits of the application; and
(f)fairness as between the person and other persons in a similar position.
The requirement that these matters be taken into account means that each matter must be considered and given appropriate weight in assessing whether there are exceptional circumstances. That is, the ultimate conclusion as to the existence of exceptional circumstances will turn on a consideration of all of the relevant matters (including but not limited to the reason for delay) and the assignment of appropriate weight to each.[12] I now consider these matters in the context of the application currently before the Commission.
Reason for the delay
The Act does not specify what reason for delay might tell in favour of granting an extension; however, decisions of the Commission have referred to an acceptable or reasonable explanation for the delay. The absence of any explanation for any part of the delay will usually weigh against an applicant in the assessment of whether there are exceptional circumstances, and a credible explanation for the entirety of the delay will usually weigh in an applicant’s favour; however, all of the circumstances must be considered on their own merits.[13]
It is also the case that a credible explanation for the whole of the delay is not required to make a finding of exceptional circumstances. That is, it is relevant to have regard to whether the Applicant has provided an explanation for the entirety or any part of the delay.[14] The delay in this matter is 13 days and this is the focus of the present consideration.
I have earlier made detailed findings bearing upon this consideration.
The explanation for the delay given by the Professor Mahdavi was in essence that he was awaiting payment of outstanding entitlements by SISTC. Having taken some steps to ascertain his rights to make an unfair dismissal application and being aware that there was a 21-day time limit, Professor Mahdavi elected to pursue the substance of his concerns (the entitlements) directly with the employer. Despite being aware, relatively soon after the dismissal, that the payments were not being made promptly, and later may be in dispute, he elected not to make the application until 6 July 2020.
I observe that this is not an exceptional circumstance. More relevantly, I do not consider this to be a satisfactory or reasonable explanation for the delay in lodging the application.
This weighs against of a finding of exceptional circumstances.
Whether the person first became aware of the dismissal after it had taken effect
Professor Mahdavi was aware of his dismissal on the day that it took effect. He therefore had the full 21 days to make the application within the initial time limit.
This consideration does not support a finding of exceptional circumstances.
Action taken to dispute the dismissal
Professor Mahdavi wrote on 4 June to SISTC to express his discontent with the dismissal and to follow up his outstanding payments and put the Respondent on notice that he may contact “Fair Work” or other regulatory bodies. He also visited the Commission’s website relatively soon after his dismissal but did not lodge the application despite his awareness of the capacity to do so.
The subsequent delay in taking any action to contest the actual dismissal before ultimately making the application would also not support a finding of exceptional circumstances.
Prejudice to the employer (including prejudice caused by the delay)
The Respondent has not relied upon prejudice. This is relevant[15] and I have taken this into account in my assessment of exceptional circumstances noting that the absence of prejudice to the employer is not of itself a sufficient basis to warrant an extension of time.[16]
Merits of the application
The merits of the application are relevant; however, the assessment of the merits for present purposes is limited to, in effect, a preliminary consideration.[17] Further, the primary consideration is whether the applicant has an arguable case.[18]
The Respondent in this case has also raised 2 other jurisdictional challenges and I will also have regard to these in making the present assessment of merit. Namely, the high-income threshold provided by s.382(b) associated with whether an applicant is protected from unfair dismissal; and whether the dismissal was a genuine redundancy as defined by s.389 of the FW Act. If either of these objections were ultimately upheld, there would be no jurisdiction to hear and determine this unfair dismissal application.[19]
The Respondent contends that due to a change in ownership and subsequent change of organisational structure, the Applicant’s position was no longer needed resulting in Professor Mahdavi being made redundant on 2 June 2022. That is, SISTC contends that the termination of Professor Mahdavi was a case of genuine redundancy due to the sale of the Respondent which prompted a complete restructure of the organisation from the Board of Directors to the Higher and Middle Management levels of the college. The Respondent contends that this restructure was critical due to a deteriorating financial situation and repetitive poor earnings. The situation unfolded rapidly and discussions surrounding the changes were kept to higher managerial levels until it was commercially appropriate to discuss. The position previously undertaken by the Applicant has not been filled or re-advertised and has been absorbed by the CEO of the organisation. For reasons outlined earlier, there is presently no evidence before the Commission that enables findings to be made about these contentions.
Professor Mahdavi asserts that his dismissal is not a case of genuine redundancy. Amongst other matters he contends that there was no consultation or relevant information provided to him prior to the restructure taking place. Consultation may have provided an opportunity for redeployment options to be discussed. He further contends that his dismissal was triggered by a work-related disagreement that occurred shortly before the termination and that the Respondent could not operate without the position of Dean. He also disputes the financial context referenced by the Respondent and contends that he should have been considered for other positions.
Professor Mahdavi has an arguable case on merit associated with the manner in which the dismissal was handled, and potentially more generally. Any more substantive findings would require evidence that is not presently before the Commission. The consideration of that merit would also only follow the rejection of the 2 jurisdictional objections being advanced by the Respondent.
The meaning of a genuine redundancy is defined in s.389 in the following terms:
“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.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
The first element, s.389(1)(a), is directly in dispute and would require comprehensive findings to be made based upon evidence that is not presently before the Commission.
There appears to have been little or no prior explicit consultation concerning the alleged redundancy and no written advice or notification of such was provided prior to the dismissal itself. There is however a dispute about whether a relevant modern award covered Professor Mahdavi’s employment and this would be required to establish a relevant consultation obligation.[20] The applicant’s contract and his termination referenced the Educational Services (Post-Secondary Education) Award 2020 (Educational Services Award). The legal coverage of that modern award is determined by reference to its stated coverage in clause 4.1. The Applicant contends that his employment was covered by the Higher Education Industry – Academic Staff – Award 2020 (Higher Education Award). Coverage for that modern award is provided by clause 4 of the instrument.
Both potential modern awards rely upon coverage defined by reference to the industry of the employer and the classifications in each. Given the nature of these proceedings it is sufficient to indicate that it is unlikely that the Applicant would fall within the scope of coverage of the Educational Services Award because of his position as Dean. It is conceivable that the Higher Education Award may have applied given its scope and classifications. This would also require findings to be made about whether the Respondent was in the “higher education industry” as defined in clause 4.2 of that modern award. Further, given the dispute about the precise role of the Applicant and the limited submissions made by the parties about this aspect, it is not reasonable or necessary for me to determine that aspect for present purposes.
It is sufficient to indicate that both modern awards concerned contained potentially relevant consultation obligations which included the requirement for written information associated with the redundancy to be provided as part of that process,[21] and there appears to have been the absence of consultation with the Applicant that would meet those particular requirements. Accordingly, if either of these awards covered the Applicant’s employment, this element of the genuine redundancy objection (s.389(1)(b)) is unlikely to be sustained, and the objection more generally would probably fail.
There is also a dispute about the third element of the definition (redeployment - s.389(2)), and this would require comprehensive findings to be made based upon evidence that is not presently before the Commission.
The high-income threshold issue arises from s.382 of the FW Act as follows:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a)the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
The high-income threshold at the relevant time was $158,500[22].
There is no dispute that Professor Mahdavi was paid a salary in excess of the limit. However, the issue of award coverage would also need to be resolved to determine this aspect.
The dispute about the fundamental reasons for the dismissal and its fairness would require findings to be made by the Commission based upon evidence that is not presently before the Commission.
The Respondent appears to have an arguable case on the high-income threshold; however, as with the genuine redundancy objection, this would require informed findings being made about the coverage of a modern award, amongst other matters. Accordingly, it is not possible to make a definitive assessment of the merits of the unfair dismissal application, including the jurisdictional objections, without hearing robust evidence about the facts of the matter, including from the Respondent.
I have taken the competing positions about merit and the findings concerning the existence of an arguable case into consideration in my assessment of whether exceptional circumstances exist in this matter.
I would also observe that the matters that have substantially, but not completely, motivated Professor Mahdavi to bring this application, the claimed outstanding entitlements, can be pursued by making an appropriate application to a Court of competent jurisdiction and are not dependent upon this application.
Fairness as between the person and other persons in a similar position
Nothing of relevance has been raised in this regard.
The application of consistent principles and approaches to a request for an extension of time is relevant and appropriate, and I have adopted that approach in this case. I therefore consider that this aspect weighs mutually between the parties as a consideration of exceptional circumstances in this matter.
Conclusion
I have found that the considerations in s.394(3) of the Act applied to this matter do not generally favour a finding of exceptional circumstances, or in some cases are, in effect, of neutral significance in this matter. However, Professor Mahdavi has an arguable case on merits. All factors must be taken into account and given appropriate weight.
Having considered all the circumstances of this matter and the considerations provided by s.394(3) of the Act and weighed them accordingly, I am not satisfied that there are exceptional circumstances. Accordingly, there is no basis to provide an extension of time for the lodgement of this application.
As the unfair dismissal application was lodged beyond the initial 21-day period provided by s.394(2)(a) of the Act, and an extension of time has not been granted, there is not a valid application before the Commission.
On that basis it is appropriate to dismiss the application and an Order[23]to that end is being issued in conjunction with this Decision.
COMMISSIONER
Appearances:
M Mahdavi, the Applicant on his own behalf.
M Milgate on behalf of Australia Advance Education Group Pty Ltd T/A Sydney International School of Technology and Commerce, the Respondent.
Hearing details:
2022
September 13
Video Hearing.
[1] The 21-day time limit does not include the day of the dismissal itself, consistent with Acts Interpretation Act 1901 (Cth) s.36(1).
[2] Section 394(3) of the Act.
[3] Exhibit A1.
[4] Digital Court Book page 14.
[5] Witness statement of the Applicant.
[6] Digital Court Book page 15.
[7] Digital Court Book page 13.
[8] Form F2 application – question 2.1 – “outstanding payments and entitlements”. This does not limit the remedy but is indicative of the motivation for the matter.
[9] Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975 at [13].
[10] Ibid.
[11] Mooney v Mega Industries Pty Ltd[2021] FWCFB 2489 at [16].
[12] Minister for Aboriginal Affairs v Peko-WallsendLtd (1986) 162 CLR 24; Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901 at [10] to [19] and [38].
[13] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901 at [39].
[14] Ibid.
[15] Brisbane South Regional Authority v Taylor (1996) 186 CLR 541 as considered in Jervis v Coffey Engineering Group Pty Ltd AIRCFB PR927201, 3 February 2003 at [16].
[16] Brodie-Hanns v MTV Publishing Pty Ltd (1995) 67 IR 298 at [300].
[17] Kyvelos v Champion Socks Pty Ltd, AIRCFB Print T2421, 10 November 2000 at para. 14.
[18] See Craig Thomson v Linx Cargo Care Pty Ltd T/A Linx Port Services[2022] FWCFB 40 at [32] to [34].
[19] Sections 382, 385 and 396 of the FW Act.
[20] There is no suggestion that an Enterprise Agreement applied to the employment.
[21] Clause 29.2 of the Hight Education Award as an example.
[22] Regulation 2.13 of the Fair Work Regulations 2009 – from 1 July 2021.
[23] PR 745791.
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