Mr Juan Camilo Varon Portela v Softmed Manufacturing Pty Limited
[2024] FWC 2277
•2 SEPTEMBER 2024
| [2024] FWC 2277 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Juan Camilo Varon Portela
v
Softmed Manufacturing Pty Limited
(U2024/8589)
| COMMISSIONER WILSON | MELBOURNE, 2 SEPTEMBER 2024 |
Application for an unfair dismissal remedy - Unfair dismissal application filed out of time – whether exceptional circumstances – exceptional circumstance not found – application dismissed.
This decision concerns an application by Mr Juan Camilo Varon Portela for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). Mr Portela’s employment with Softmed Manufacturing Pty Limited (Softmed) was terminated with effect from Tuesday 2 July 2024. The unfair dismissal application was filed in the Fair Work Commission on Wednesday, 24 July 2024.
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). The period of 21 days ended at midnight on Monday 31 October 2021. The application was therefore filed 1 day outside the 21-day period. Mr Varon Portela asks the Commission to grant a further period for the application to be made under s.394(3). Softmed opposes this request.
For the reasons set out below, I am satisfied on the material before me that there are not exceptional circumstances in Mr Portela’s case. It follows that I must dismiss his unfair dismissal application.
A hearing in respect of the application was held by me on Tuesday, 27 August 2024, at which Mr Portela appeared on his own behalf. The Respondent was represented by Ms Veronika Midor, one of the owners of the business. Each party provided written and oral submissions and gave oral evidence about their circumstances.
BACKGROUND
Mr Varon Portela was employed by Softmed Manufacturing from, or around 1 February 2021, until his termination took effect on 2 July 2024, which Softmed attributes to reason of redundancy. Mr Varon Portela was most recently employed by Softmed as its Supply Chain Manager. He and his partner are migrants to Australia, presently working under temporary visas.
The Respondent, Softmed, argues that Mr Varon Portela’s job is redundant because of a severe decline in its turnover, which has caused it to reduce its number of employees. Mr Varon Portela’s partner was also made redundant on the same day, 2 July 2024.
Material submitted to the Commission from Softmed’s accountants put forward that the business’s turnover in the most recent financial year was less than 10% of the financial year two years earlier. Its payroll however had not declined as much, with the most recent year’s payroll being 44% of the comparison period, two years earlier.[1]
Minutes of a meeting held by Softmed’s owners and its production manager on 24 June 2024, suggest the company, at that time, considered making redundant the positions held by between four and five people. The minutes discuss candidly the pros and cons of ending the employment of a number of different people, including both Mr Varon Portela and his partner. The minutes conclude with Mr Denis Midor, General Manager of the business, thanking those attending for sharing information with him and informing them that he would make a decision soon about job losses and announce it within a few days.[2]
On 28 June 2024, Softmed’s HR Assistant, met with Mr Varon Portela and informed him that he was being considered for redundancy. She then gave Mr Varon Portela a letter, signed by Mr Midor, which confirmed a discussion about “the company's decision to downsize following economic/financial impacts to its operation and therefore no longer require the role to be performed by anyone”.[3] The letter then sought Mr Varon Portela’s feedback and thoughts in relation to the proposed redundancy and any ideas he may have for avoiding redundancy. He was then told that there would be a further meeting on 1 July 2024 at 10 AM, at which he may have a support person present and then, following that conversation, a final decision will be made where he would be advised of the outcome of the company’s considerations.
Mr Varon Portela met with Softmed again on Monday, 1 July 2024, during which he was informed he would indeed be made redundant. A letter provided to him confirmed this decision, along with a number of other matters, with the correspondence setting out the following;
“We write to confirm our discussion of earlier today regarding your role at Softmed Manufacturing Pty Ltd. We have carefully considered all that was discussed however unfortunately due to that changing operational needs of the business no longer requiring the services of a Supply Chain Manager, we cannot foresee any reasonable mitigating opportunities. Therefore, it is with regret to advise that your position of Supply Chain Manager, will no longer be required leaving us with no other alternative except to make your role redundant effective July 02, 2024.
Wherever possible, Softmed Manufacturing Pty Ltd seeks to find suitable alternative employment rather than terminate the services of an employee. However, we regret to advise that we have been unable to identify any suitable redeployment positions that are immediately available.
We will not require you to work your notice period and will pay you three (3) weeks' notice in lieu and a redundancy payment of seven (7) weeks' pay”.[4]
With his employment having ended, Mr Varon Portela then experienced difficulties in getting Softmed to pay him his severance pay and other amounts due. On 7 July 2024 he had to write to his former employer, requesting payment for work performed in the week prior to his termination.[5] Further, on 26 July 2024, that is two days after the unfair dismissal application was commenced, he again needed to write to Softmed requesting processing of his final pay, which would include not only payment for the last week of work but also accrued annual leave, three weeks payment in lieu of notice and seven weeks of severance pay.[6]
Softmed did not process Mr Varon Portela’s final payments until 30 July 2024, when it paid him for accrued annual leave, pay in lieu of notice and severance pay. The total payment came to $15,587 gross.
Mr Varon Portela says that, by the time of the payments, he was experiencing significant financial distress. In addition to the usual exigencies of needing to pay day-to-day living costs without any income, the situation was exacerbated by the fact that his partner had also been made redundant on the same day. He and his partner were also required to pay his partner’s significant medical costs, incurred as a result of surgery in May 2024.
After being dismissed, Mr Varon Portela and his partner made a couple of calls to the Fair Work Ombudsman in which they explained their situation. Mr Varon Portela says he and his partner were told in those conversations that payment of redundancy payments could take seven days. In one of their calls to the Fair Work Ombudsman, Mr Varon Portela recalls the suggestion being made that it would be better for him to contact the Fair Work Commission, which he did. When this was done is unclear, however it was likely after the first full week following his dismissal, as Mr Varon Portela’s calls to the FWO commenced in the second week after dismissal. Near the end of the third week following dismissal, Mr Varon Portela considered the possibility of making an unfair dismissal application. He learned of the 21 day statutory time limit for such applications when the FWO representative told him that it might be better to lodge the application within 21 days.
Mr Varon Portela started filling out the unfair dismissal application on 23 July 2024, the day before the statutory time limit expired, however he was in two minds as to whether he should lodge the application. Holding him back were feelings of anxiety and concern about his severance payments, which still had not been paid. He was afraid that making a further claim against the company might imperil the payments.
MATTERS REQUIRING DETERMINATION AND RELEVANT LEGISLATION
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”. Exceptional circumstances have been defined as circumstances that are out of the ordinary course, unusual, special or uncommon, but the circumstances themselves do not need to be unique nor unprecedented, nor even very rare.[7] Exceptional circumstances may 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 can be considered exceptional.[8]
The requirement that there be exceptional circumstances before time can be extended under s.394(3) contrasts with the broad discretion conferred on the Commission under s.185(3) 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.
Relevant to the Commission’s consideration of this question are the provisions in s.394(3) of the FW Act:
“394 Application for unfair dismissal remedy
(1) ….
(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that 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.”
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. I now consider these matters in the context of the Application.
CONSIDERATION OF THE CRITERIA SET OUT IN SECTION 394(3) OF THE ACT
Reason for the delay
The Act does not specify whether a particular reason for the delay might tell in favour, or not in favour of granting an extension, however decisions of the Commission have referred to an acceptable or reasonable explanation. 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 the applicant’s favour, however, all the circumstances must be considered.[9]
Mr Varon Portela’s application was made on Wednesday, 24 July 2024 at 9:06 AM, the day after the statutory time limit expired. The reasons put forward by Mr Varon Portela in the making of his application were the feelings of anxiety and uncertainty he experienced about commencing the unfair dismissal application.
The evidence shows Mr Varon Portela was aware of the statutory time limit for the making of an unfair dismissal application, having been told by the FWO representative that it would be better to make an application within 21 days. He also researched the subject of making an unfair dismissal application on the Commission’s website.
I take into account that, while Mr Varon Portela is a recent migrant to Australia, arriving in 2020, and for whom English is not his first language, he nonetheless has a very good capacity for written and verbal English. I do not discern from this fact that he may have had difficulty in understanding the nature or import of the statutory time limit for the making of unfair dismissal applications.
The fact that Mr Varon Portela’s dismissal led him to experience a personal financial crisis of the kind he refers to, is not an uncommon circumstance for people who have been dismissed. However, the fact that Mr Varon Portela was still waiting, at the time of making his application, on the payment of more than $15,587, and that he was concerned about whether the making of an unfair dismissal application might put that payment at risk, is an unusual circumstance which warrants being taken into account in determining whether there is an acceptable explanation for the late lodgement. However, that subject is outweighed by Mr Varon Portela’s knowledge of the time limit and that his concern was just a supposition, not founded in fact.
In finality, I do not accept the explanation Mr Varon Portela has put forward for the late lodgement, as he was plainly aware of statutory time limit before he made the application. He could have commenced both the Commission application, in time, and then at the same time or later, legal proceedings to enforce his entitlements. The circumstances of the lodgement at 9:06 AM on the day after the time limit had expired would suggest that he endeavoured to remedy the problem as soon as possible, likely knowing that the situation was a problem for him.
These things together mean that my consideration of this criterion leans against an extension of time being granted to Mr Varon Portela for the making of his unfair dismissal application.
Whether the person first became aware of the dismissal after it had taken effect
Mr Varon Portela was notified of the dismissal on the same day that it took effect. This is therefore a neutral consideration in my determination of whether there are exceptional circumstances.
Action taken to dispute the dismissal
No steps were taken as such by Mr Varon Portela to dispute his dismissal after it had taken place. There were the two communications referred to above about when his severance payments would be made. The first of those was on 7 July 2024, a few days after the dismissal had taken effect on Monday, 2 July 2024. The correspondence associated with that first enquiry shows that it was a polite enquiry, only directed at an early payment of the money owed to him. The second correspondence was an email sent on 26 July 2024, being after the unfair dismissal application had been lodged and again being an enquiry into payment of the delayed severance payment.
My consideration of this criterion overall is that it is a neutral consideration in determining whether an extension of time should be granted for the making of Mr Varon Portela’s application.
Prejudice to the employer
Softmed does not claim any particular prejudice to it if the extension of time application is granted. The mere absence of prejudice is not, in my view, a factor that would point in favour of the grant of extension of time. However, if one were to consider the absence of prejudice as favouring of an extension, I would attribute it little weight in the consideration of whether there are exceptional circumstances in this particular case.
Merits of the application
The merits of the application to which I must have regard are formed upon a consideration of whether the limited evidence I have before me discloses a likely unfair dismissal.
At this stage of proceedings, the Commission does not require detailed evidence and usually does not make findings of fact as to the evidence which is brought forward on the merits of the application. In matters such as this, the Commission will consider whether an applicant has a sufficient case on the merits, accepting that, in the absence of evidence on the contested matters of merit, the Commission will usually not be in a position to make findings of fact on those matters.[10] Instead of a detailed consideration of the merits of a matter, the Commission will consider whether there is an arguable case on behalf of the applicant; or alternatively, whether it appears an applicant’s case either has very strong or very weak merits on its face. It has been said in previous matters that a highly meritorious claim may persuade a decision-maker to accept an explanation for delay that would otherwise have been insufficient.[11]
In this case, Mr Varon Portela argues that his dismissal was not a genuine redundancy within the meaning of the FW Act and that, in particular, it cannot be said that Softmed no longer required his job to be performed by anyone because of changes in the operational requirements of its enterprise.
The material before the Commission at this stage would suggest that it will be difficult for Mr Varon Portela to succeed on this contention, especially given the very dramatic reduction in Softmed’s earnings and payroll which suggest a collapse of the Respondent’s trading position. I am satisfied that if those claims of Softmed were to be accepted by the Commission after an extension of time had been granted, along with other evidence directly relevant to the statutory criteria in s.389 (Meaning of genuine redundancy), Mr Varon Portela would face a steep challenge in the Commission finding in his favour, first in persuading the Commission that his dismissal was not a genuine redundancy as defined; second that instead, it was an unfair dismissal; and third that an order of compensation was warranted, greater than the severance payments already paid to him.
My consideration in regard to this criterion is that it leans against an extension of time being granted to Mr Varon Portela.
Fairness as between the person and other persons in a similar position
In considering whether I should grant an extension of time, I need to have regard to whether it is fair to other unfair dismissal applicants, whose applications are either currently before the Commission, or have been decided in the past.[12] It would be unfair to other persons who have not been allowed a further period to make an unfair dismissal application in the absence of exceptional circumstances.[13]
Mr Varon Portela identified to the Commission another person who was dismissed on the same day as him and his partner and who has commenced a general protections application. That person’s application to the Commission was made within the 21 day statutory time limit provided for the making of a general protections application, the same period allowed for the making an unfair dismissal applications.
As a result of the circumstances of this person, consideration of the s.394(3)(f) criterion leans against granting an extension of time to Mr Varon Portela for the making of his unfair dismissal application. This is because it would be unfair to the other former employee, as well as the generality of dismissal applicants, that she was required to make an application within time, whereas Mr Varon Portela was not.
CONCLUSION
Having regard to the matters I am required to take into account under s 394(3), and all of the matters raised by Mr Varon Portela, I am not satisfied that there are exceptional circumstances that would warrant an extension of time for the making of his application for an unfair dismissal remedy.
Mr Varon Portela’s explanation for the late lodgement of his application itself leans against an extension of time, as do the criteria dealing with the merits of his application and the matter of fairness as between Mr Varon Portela and other people in a similar position.
As a result of this finding, Mr Varon Portela’s unfair dismissal application must be dismissed and an order to that effect is issued at the same time as this decision.[14]
COMMISSIONER
Appearances:
Mr J C Varon Portela, for the Applicant
Ms V Midor, for the Respondent
Hearing details:
Tuesday, 27 August.
2024.
[1] Respondent’s Documents; Digital Hearing Book, pp.214 – 215.
[2] Respondent’s Documents; Digital Hearing Book, p.209.
[3] Respondent’s Documents; Digital Hearing Book, p.212.
[4] Respondent’s Documents; Digital Hearing Book, p.213.
[5] Applicant’s submissions, Digital Hearing Book, p.96.
[6] Applicant’s submissions, Digital Hearing Book, p.95.
[7] Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975,[13].
[8] Ibid.
[9] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901 at [39].
[10] Kyvelos v Champion Socks Pty Limited (2000) Print T2421, [14].
[11] Haining v Deputy President Drake (1998) 87 FCR 248, [250].
[12] Wilson v Woolworths [2010] FWA 2480, [24]‒[29].
[13] Jalil v BMD Constructions Pty Ltd[2014] FWC 9357, [10].
[14] PR778832.
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