Mr Keaton Andre Wheeler v Power Research and Development Pty Ltd

[2021] FWC 2577

[2021] FWC 2577

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal

Mr Keaton Andre Wheeler
v
Power Research and Development Pty Ltd
(C2020/8414)

DEPUTY PRESIDENT LAKE BRISBANE, 6 MAY 2021

Application to deal with contravention involving dismissal – application made outside of statutory timeframe – application for extension of time dismissed.

[1] On 17 November 2020, Keaton Andre Wheeler (the Applicant) lodged an application with the Fair Work Commission (the Commission) pursuant to s. 365 of the Fair Work Act 2009 (the Act) for the Commission to deal with a general protections dispute in relation to the termination of his employment by Power Research and Development Pty Ltd (the Respondent).

[2] The Applicant worked as an engineer for the Respondent. There is some debate about whether the Applicant was properly characterised as an independent contractor or an employee. I do not need to determine that for the purposes of this application. Both parties seemed to accept that the contract between them, to which they refer to as the “Contractor Agreement” (the Agreement), governs their relationship.

[3] There were two questions before me today. First, when the Applicant’s engagement with the Respondent ended. Second, whether the Applicant filed his application within time and, if he did not, whether there are exceptional circumstances that warrant an extension of time.

Date of the dismissal

[4] The dismissal was communicated via a series of emails between the parties. I have sought to set out the relevant sections of that correspondence below.

[5] On 5 October 2020, the Respondent sent to the Applicant a letter which stated:

“Dear Keaton,

TERMINATION OF CONTRACTOR AGREEMENT

This notification one month ahead of time that the Contractor Agreement made on 15 July 2020 is terminated by the Company at the commencement of the day on 5 November 2020 in accordance with clause 13.1.

Access to the Company IT system will be withdrawn During the notice period but we will maintain communication using the business contact details provided…

You won’t be required to undertake any further professional activities but may be required to perform administrative activities in order to closeout the Contract. Please package and arrange for the Company’s ETAP materials, software and software key to be posted to…”

[6] Clause 13.1 provides:

“Either party may terminate this Agreement at any time by providing notice one month ahead of the time in writing to the other party.”

[7] The Applicant responded to that email on 6 October 2020:

“Hi Colin,

I am extremely disappointed with this outcome, particularly as I was not previously made aware as to the areas of my work that you felt that I had not met expectations…”

[8] The remainder of the email sets out other matters the Applicant wished to raise in terms of finalising payment of all monies owing to him.

[9] Later that day, escalating the matter, the Respondent sent a further email alleging that the Applicant had breached their agreement. Accordingly, the Respondent sought to terminate immediately. That email reads:

“Hello Keaton

The normal payment process is to continue monthly invoicing up to the date of termination.

Your invoice is not compliant with the Contractor Agreement clause 6.2 in that, as per my earlier email, the detail is insufficient in recording the Services. The level of detail recorded in the timesheet does not enable the invoice to be evaluated against the requirements of clause 6.1 and clause 3.1, so these clauses are also not complied with, and the level of information that I requested to support the invoice is both reasonable and typical. You have now declined to provide the requested record of the Services performed, as evidenced by item 1) in the email below that has demanded payment without the required records, which is a breach of the Contractor Agreement. This email is written notification of this breach, and that the Contractor Agreement is terminated immediately today 6 October 2020, subject to 14 days for the breach to be remedied.

If you wish you may request any data from the Company’s IT system that would reasonably assist you and we will seek to provide it. The detail required to remedy the breach will need to support both the performance of the Services and the Services meeting the required service standards.

We will look into mail options for the return of materials and revert separately.”

[10] The statement, that the breach of the contract warranted termination subject to the Applicant having 14 days to remedy the breach, relies on clause 13.2 of the Agreement. That clause provides that:

“Either party may immediately terminate this Agreement if the other party breaches any term of this Agreement and such breach is not remedied within 14 days of the other party receiving written notice of such breach.”

[11] The Applicant later responded through his legal representatives, by way of an emailed letter dated 7 October 2020. That letter indicated that, “no performance feedback was provided to Dr Wheeler during the term of the Contractor Agreement”. Further, it alleged that “the Contractor Agreement is deemed at an end as of November 5, 2020 pursuant to section 13.1”.

[12] There were then several discussions between the parties about the provision of further information from the Respondent to the Applicant and the return of material from the Applicant to the Respondent.

Applicant’s submissions

[13] The Applicant submits that when he received the email on 5 October 2020, he understood that his engagement would terminate on 5 November 2020, pursuant to clause 13.1 of the Agreement.

[14] The Applicant accepts that he received the Respondent’s email dated 6 October 2020. However, he states that he remedied the breaches alleged and confirmed having done so by email dated 7 October 2020. As I quoted above, the letter also suggested that the date of termination would be 5 November 2020. The letter went on to say that if the invoice was still insufficient, the Applicant would require access to further items. He states that these matters were never addressed by the Respondent and, on that basis, he considered that the Respondent had accepted that the Applicant had remedied the breach and the 5 November 2020 termination date remained in place.

[15] Further, the Applicant stated that he was of the view that the Respondent’s request that he return his belongings was separate to the question of termination. On that basis, he argues that notwithstanding the Respondent’s request that he return of his equipment prior to 5 November 2020, he was still engaged by the Respondent until that date.

[16] In particular, the Applicant believed that he was still obligated to be available to speak with the Respondent regarding the work he had previously been engaged in until 5 November 2020.

Respondent’s submissions

[17] The Respondent accepts that initially the Applicant was given four weeks’ notice of termination by the letter sent to the Applicant dated 5 October 2020 pursuant to clause 13.1 of the Agreement. However, the Respondent states that the subsequent notice of breach that was sent on 6 October 2020 superseded that notice. The latter communication relied on clause 13.2 of the Agreement.

[18] The Respondent alleged that the Applicant had not provided sufficient information in respect of the invoices for the previous period. That is, the Applicant did not describe activities performed on each date in sufficient detail to validate the performance and standard of the work. The Respondent submits that this is a level of detail that is entirely customary in the engineering industry and was not an unreasonable request thrust upon the Applicant.

[19] The Respondent further submitted that response provided to the 6 October 2020 letter was not satisfactory and therefore the breach was never remedied. The Respondent alleged that the Applicant had not provided the required information that had been requested. He alleged that the Applicant was attempting to present a simple, basic request for work performed on the monthly invoice as onerous and complex. The request was for an account of work performed on projects during the invoice period.

[20] The Respondent did not take the view that it needed to respond the various assertions made in the Applicant’s email of 13 October 2020 on the basis there was no ambiguity in respect of what day termination was to occur.

Consideration

[21] It is uncontroversial that the Respondent’s letter of 5 October 2020 clearly indicated that it sought to terminate its relationship with the Applicant and was giving 4 weeks’ notice pursuant to clause 13.1 of the Contract.

[22] The question before me is what effect the correspondence of 6 October 2020 had upon the termination date. It does seem curious that the second correspondence was sent so soon in time after the first. However, having consideration of the oral evidence given before me and the correspondence provided by the parties, I am satisfied that the email of 6 October 2020 superseded the Respondent’s initial letter.

[23] It is unfortunate that the Respondent did not respond to the Applicant’s letter of 7 October 2020 to confirm that they disputed the date of dismissal. However, on the Respondent’s evidence, they did not do so because the Respondent did not think there was any ambiguity in their communication.

[24] I find that the correspondence of 6 October 2020, in which the Respondent gave the Applicant 14 days within which to remedy the breach or else the Agreement be terminated, was clear.

[25] To determine the date of dismissal it is therefore to consider clause 13.2 of the Contract. That clauses purports to terminate the Contract immediately if the other party breaches any term of the Contract. However, given the party in breach is also afforded 14 days within which to remedy the breach, it seems the proper reading of that section would be that termination of the Agreement would occur 14 days after the notice was given of the breach.

[26] I prefer the Respondent’s evidence in respect of whether the breach was remedied. It seems that the Applicant either did not understand or was unwilling to conduct the exercise of analysis and provide the information requested by the Respondent. The Respondent claimed the Applicant was obfuscating a standard reporting requirement contained within the contract is an industry standard in the consulting environment in which the Applicant had considerable experience.

[27] The letter of 6 October was drafted by legal representatives for the Applicant and the Respondent says that it did not address the simple requirement of accounting for work performed in the previous period. It was an attempt to cloud and complicate a standard requirement for any contractor performing work.

[28] Having considered the evidence provided, I conclude that the breach was not remedied.

[29] It then follows that the termination date occurred 14 days after the Respondent gave notice of the breach. If one accepts that notice of the breach occurred on 6 October 2020, the date of termination was 20 October 2020.

Was the application lodged within time?

[30] Section 366(1) of the Act requires that an application under s. 365 of the Act must be made within 21 days after a dismissal took effect, or in such further time as the Commission may allow under s. 366(2) of the Act.

[31] By my calculations, 21 days from the date of dismissal (which in this case I have found to have occurred on 20 October 2020) was 9 November 2020.

[32] The application was filed on 17 November 2020 and was therefore out of time.

[33] The Respondent opposes the granting of an extension of time. It is therefore necessary to determine whether a further period should be allowed under s. 366(2) of the Act for the application to be made.

Consideration of whether a further period should be granted

[34] As noted above, s. 366 of the Act requires that a general protections application under s. 365 of the Act must be made within 21 days after the dismissal took effect or within such further period as the Commission allows under s. 3662(2) of the Act.

[35] Section 366(2) of the Act sets out the circumstances in which the Commission may allow a further period for a general protections application involving dismissal be made:

“(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.”

[36] The test of ‘exceptional circumstances’ establishes a high hurdle for an applicant. 1 In Nulty v Blue Star Group Pty Ltd (later cited with approval by the Full Bench of the Commission in Tamu v Australia for UNHCR),2 the Full Bench of Fair Work Australiaconsidered the meaning of ‘exceptional circumstances’, concluding:

“[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.”

[37] For the Applicant, the general protection application to proceed, it is necessary for him to obtain an extension of time under s. 366(2) of the Act. In considering an application for an extension of time, I must be satisfied there are “exceptional circumstances” taking into account each of the matters in s. 366(2) of the Act. I now turn to address the particular matters to which regard must be had.

Evidence

[38] I heard both parties in respect of whether exceptional circumstances exist in this case.

[39] The Applicant’s submissions may be summarised as follows:

(a) The delay was caused by a number of matters, namely the Applicant was unaware of his rights under the Fair Work Act 2009 (Cth) until he had an opportunity to receive legal advice. This did not occur for several weeks, given the difficulty caused by the time difference between Canada and Australia;

(b) The Applicant thinks he is an employee of the Respondent and that the agreement between the parties (which states that the Applicant is a independent contractor) is a sham contract. The Applicant alleges that the nature of their relationship involved technical and complex legal analysis and he wanted to seek advice on that point;

(c) The date from which calculation should start, should be when final payment is made to the employee and that has not yet occurred. (The Applicant seemed to abandon this remark);

(d) The returning of the equipment by the Applicant should be considered separately to the question of when employment was terminated. Even if he was expected to return the equipment at an earlier time, the Applicant believed that he had to be available to the Respondent to answer any questions until 5 November 2020;

(e) The Applicant initially disputed the breach warranting the dismissal, but then tried to resolve the dispute without having to engage any other bodies, including the Fair Work Commission. Further, the Applicant was of the view that if he had lodged an application, it would have impeded the negotiations that he hoped to engage in with the Respondent;

(f) There would be no prejudice to the Respondent if the extension of time is allowed. By contrast, if the extension of time is not granted, the Applicant could suffer great losses, both financial and reputational; and

(g) There are merits to the application. In particular, the Applicant should have the opportunity be heard in respect of the allegations of sham contracting.

[40] The Respondent claims that there are no exceptional circumstances in this case. In short, the Respondent’s submissions were that:

(a) The Applicant has not evidenced any exceptional circumstances explaining the delay. The Applicant could have looked at the Fair Work Commission website and thus, been informed of the 21 days’ time limit and lodged an application, without substantial legal advice to preserve his purported rights;

(b) The Respondent does not think any of their conduct has contributed to the delay. They responded within one or two days of each correspondence;

(c) The Respondent accepts that the Applicant clearly disputed aspects of the termination. None of those matters related to the Applicant’s claims of being an employee. All the disputed matters were in relation to the contractor Agreement; and

(d) The Respondent does not think this is the kind of matter that fails within the jurisdiction of the Fair Work Act 2009 (Cth). More to the point, the Applicant has other rights under the Agreement that fall outside this jurisdiction which in respect of payment for work performed by the Applicant. The Respondent is, and has indicated that it always has been, open to resolving those matters.

Consideration

Section 366(2)(a) – The reason for the delay

[41] The Act does not specify what reasons for delay might suggest allowing for a further period of time, however decisions of the Commission have referred to an acceptable 3 or a reasonable explanation.4 In Stogiannidis v Victorian Frozen Food Distributors Pty Ltd,5 the Full Bench noted at [39]:

“The absence of any explanation for any part of the delay, will usually weigh against an applicant in such an assessment. Similarly a credible explanation for the entirety of the delay, will usually weigh in the applicant’s favour, though, as we mention later, it is a question of degree and insight. However the ultimate conclusion as to the existence of exceptional circumstances will turn on a consideration of all of the reliant matters and the assignment of appropriate weight to each.”

[42] It is important to recognise that the period of the delay that requires explanation is the period commencing immediately after the time for lodging an application had expired, and ending on the day on which an application is ultimately lodged. That said, it is also important to have regard to any circumstances from the date the dismissal took effect when assessing whether the explanation proffered for the delay is an acceptable or credible explanation. 6

[43] As I have found above, the Applicant was dismissed on 20 October 2020. The Applicant’s application was made on 17 November. Therefore, the application was lodged 8 days out of time.

[44] I do not find that any of the reasons put forward by the Applicant qualify as “exceptional”.

Section 366(2)(b) - Action taken to dispute the dismissal

[45] The Applicant disputed aspects of the correspondence on 6 October 2020 in respect of the alleged breach. However, the Applicant did not challenge the dismissal itself. I appreciate that the Applicant was hoping to resolve the matter without the formal lodgement of proceedings in the Commission, however, I do not think that justifies the delay or indicates the existence of exceptional circumstances.

Section 366(2)(c) - Prejudice to the employer

[46] The Respondent made no submission in relation to this factor and presented no evidence of any prejudice. That said, the mere absence of prejudice to the Respondent is an insufficient basis to grant an extension of time. 7 I consider this factor to be neutral.

Section 366(2)(d) - Merits of the Application

[47] In Kornicki v Telstra-Network Technology Group, 8 the Commission considered the

principles applicable to the exercise of the discretion to extend time under s.170CE(8) of the

Workplace Relations Act 1996 (Cth). In that case the Commission said:

“If the application has no merit then it would not be unfair to refuse to extend the time period for lodgement. However we wish to emphasise that a consideration of the merits of the substantive application for relief in the context of an extension of time application does not require a detailed analysis of the substantive merits. It would be sufficient for the applicant to establish that the substantive application was not without merit.”

[48] However, when considering the merits of a case, the Commission cannot make any findings on contested matters without hearing evidence. Evidence on the merits is rarely called at an extension of time hearing and as a result of this the Commission ‘should not embark on a detailed consideration of the substantive case.’ 9

[49] Without a proper hearing and assessment of all the evidence in this matter, this is a neutral determination.

Section 366(2)(e) - Fairness as between the Applicant and other persons in a like position

[50] The Commission may have consideration to fairness in matters of a similar kind that are currently before the Commission or have been decided in the past. 10

[51] The parties did not draw to my attention to any relevant persons or cases that would be relevant in relation to the question of fairness as between the Applicant and other persons in a similar position. This is ultimately a neutral factor in my determination.

Conclusion

[52] Having regard to all of the matters that I am required to take into account under s.366(2) of the Act, I am not satisfied that the requisite exceptional circumstances exist in this matter.

[53] Pursuant to section 366(2) of the Act, the extension of time is denied, and the section 365 application is dismissed. I Order accordingly.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR729619>

 1   Stogiannidis v Victorian Frozen Food Distributors Pty Ltd [2018] FWCF 901 at [14].

 2   [2019] FWC 25.

 3   Blake v Menzies Aviation (Ground Services) Pty Ltd [2016] FWC 1975, per Gostencnik DP at [9].

 4   Roberts v Greystances Disability Services; Community Living [2018] FWC 64, per Hatcher VP at [16].

 5   [2018] FWCFB 901.

 6   See: Shaw v Australia and New Zealand Banking Group Limited[2015] FWCFB 287 at [12] and Ozsoy v Monstamac Industries Pty Ltd[2014] FWCFB 2149 at [31] – [33]. See also Perry v Rio Tinto Shipping Pty Ltd T/A Rio Tinto Marine[2016] FWCFB 6963.

 7   Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299‒300.

 8   Print P3168, 22 July 1997 per Ross VP, Watson SDP and Gay C.

 9   Kyvelos v Champion Socks Pty Ltd Print T2421 (AIRCFB, Giudice J, Acton SDP, Gay C, 10 November 2000) at [14].

 10   Andrew Green v Bilco Group Pty Ltd[2018] FWC 6818 at [31].