Mr Luke Sweres v D & H Servo Pty Ltd

[2012] FWA 4827

[2012] FWA 4827

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Luke Sweres
v
D & H Servo Pty Ltd
(U2011/10871)

COMMISSIONER ASBURY BRISBANE, 6 JUNE 2012

Application for unfair dismissal remedy - jurisdiction - extension of time.

Background

[1] On 17 August 2011, Mr Luke Charles Edward Sweres made an application for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) with respect to his dismissal on 27 July 2011. The application was made 7 days outside the time required in s.394(2) of the Act. This is an application for an extension of time in which to make that unfair dismissal application.

[2] The application for an extension of time is opposed by the Respondent, D & H Servo Pty Ltd. Directions were issued requiring the parties to file and serve statements from witnesses upon which they intended to rely in relation to the extension of time application.

[3] A hearing into the application for an extension of time was held on 25 January 2012. A further hearing was held on 14 February 2012 to give the parties the opportunity to make submissions and provide information about the impact of the voluntary deregistration of D & H Servo Pty Ltd by the Australian Securities and Investment Commission (ASIC) and the assertions of Mr Burgin to the effect that the Company was no longer operating.

[4] Mr Sweres was represented at the hearings in relation to the extension of time, by Mr Rivett of Counsel. Mr Rivett was granted leave to represent Mr Sweres on the basis that the exceptional circumstances upon which the application for an extension of time is based, include representative error on the part of Mr Rivett, and some involvement in the proceedings on his part was required. Leave was granted on the ground in s.596(2)(a) because in my view, it enabled the matter to be dealt with more efficiently. Leave is limited to the hearing in relation to the extension of time.

[5] A written submission was filed on behalf of Mr Sweres, together with an affidavit of Mr Sweres sworn 16 December 2011 and an affidavit of Terrence John Fitzgerald sworn 16 December 2011. That material was filed outside the time required in the Directions Order, and Mr Rivett sought an extension asserting that he had not received the email setting out the Directions. The extension sought by Mr Rivett was granted.

[6] At the hearing, Mr Rivett indicated that he was relying on the following documentation on the file: the application for an unfair dismissal remedy made on 17 August 2011; a letter accompanying that application from Mr Rivett to Fair Work Australia dated 17 August 2011 outlining grounds upon which an extension of time in which to make the application is sought; a similar letter to Fair Work Australia dated 17 August 2011 from Mr Sweres; an employment separation certificate dated 28 July 2011 appended to the unfair dismissal application; and an outline of submissions dated 19 December 2011. Mr Rivett also gave oral evidence.

[7] Mr Burgin appeared on behalf of D & H Servo Pty Ltd by telephone link to the United States where he now resides. Before and after the hearing, Mr Burgin corresponded with FWA on a number of occasions setting out his position in relation to the unfair dismissal application and the application for an extension of time in which to make that application. Notwithstanding that Mr Burgin’s correspondence did not conform with the Directions issued in relation to this matter, he was permitted to give oral evidence and make submissions, and where relevant, his correspondence has been considered. Mr Burgin also provided a witness statement from Ms Rosalie Anne Horwood, a former part time Administrator at D & H Servo Pty Ltd.

Legislation

[8] By virtue of s.394 (2) of the Act an application for an unfair dismissal remedy must be made within 14 days after the dismissal took effect, or within such further period as FWA allows under s.394(3). That sub-section provides as follows:

(3) FWA may allow a further period for the application to be made by a person under subsection (1) if FWA 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

[9] The use of the word “exceptional” demonstrates an intention that the hurdle for extensions under the Act is higher than was previously the case under the Workplace Relations Act 1996, 1 and that the legislature intended a significant narrowing of the discretion to extend time.2 This is also apparent in the distinction between the broad discretion in s.371(2) for the Federal Court or the Federal Magistrates Court to extend the time in which general protections court applications must be made and the narrower discretion in s.366(2) and s.394(3) in the case of applications relating to a contraventions dispute or unfair dismissal.

[10] Previously an applicant for an extension of time was required to establish that there was an acceptable explanation for the delay and was not required to establish special circumstances. This was one of the principles set down in Brodie-Hanns v MTV Publishing Ltd. 3This case is referenced in the note to s.371 and continues to be relevant for the purposes of the exercise of the broad discretion under that section. Brodie-Hanns is not referenced in s.166(2) or s.394(3) and it is not sufficient for an applicant for an extension of time under those sections to establish an acceptable explanation for delay, without also establishing that the reason is an exceptional circumstance or part of a number of factors, which viewed collectively constitute exceptional circumstances.

[11] In Parker v Department of Human Services 4Commissioner Whelan reviewed a number of decisions of the Full Court of the Federal Court dealing with the term “exceptional circumstances”, and noted that the following interpretation of the term had been endorsed as providing assistance:

“We must construe ‘exceptional’ as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is out of the ordinary course, or unusual or special, or uncommon. To be exceptional a circumstance need not be unique or unprecedented, or very rare; but it cannot be one that is regularly or routinely, or normally encountered.”  5

[12] Exceptional circumstances are not necessarily unexpected circumstances and can include a single matter or a combination of ordinary factors, which, although individually are of no particular significance, when taken together, are seen as exceptional. 6

[13] In Robinson v Interstate Transport Pty Ltd 7, a Full Bench of Fair Work Australia considered an application for an extension of time under s.366(2) of the Act, which is in identical terms to s.394(3). The Full Bench referred to decisions under the previous Act which have considered whether representative error constitutes an acceptable explanation for the delay in making an application and endorsed the following approach in Clark’s Case8as summarised in Davidson’s Case9:

“In Clark the Commission decided that the following general propositions should be taken into account in determining whether or not representative error constitutes an acceptable explanation for delay:

(i) Depending on the particular circumstances, representative error may be a sufficient reason to extend the time within which an application for relief is to be lodged.

(ii) A distinction should be drawn between delay properly apportioned to an applicant’s representative where the applicant is blameless and delay occasioned by the conduct of the applicant.

(iii) The conduct of the applicant is a central consideration in deciding whether representative error provides an acceptable explanation for the delay in filing the application. For example it would generally not be unfair to refuse to accept an application which is some months out of time in circumstances where the applicant left the matter in the hands of their representative and took no steps to inquire as to the status of their claim. A different situation exists where an applicant gives clear instructions to their representative to lodge an application and the representative fails to carry out those instructions, through no fault of the applicant and despite the applicant’s efforts to ensure that the claim is lodged.

(iv) Error by an applicant’s representatives is only one of a number of factors to be considered in deciding whether or not an out of time application should be accepted.”

[14] The Full Bench in Robinson v Interstate Transport Pty Ltd went on to hold that the approach in Clark’s Case provides appropriate guidance for consideration of representative error in the context of the exercise of the discretion within s.366(2) of the Act, and that representative error, in circumstances where the applicant was blameless, would constitute exceptional circumstances under s.366(2), subject to consideration of the statutory considerations in s.366(2) of the Act. As previously noted, s.366(2) is in identical terms to s.394(3) and the approach in Clark’s Case is equally applicable to the question of whether the discretion under that section to extend time should be exercised.

[15] A finding that there are exceptional circumstances, taking into account the statutory considerations is necessary before the discretion to extend time is exercised. The discretion should be exercised having regard to all of the circumstances, including the statutory considerations, and will come down to a consideration of whether, given the exceptional circumstances found, it is fair and equitable that time should be extended. 10

Evidence and other material before FWA in relation to the extension of time application

Evidence and submissions on behalf of Mr Sweres

[16] It is not in dispute that Mr Sweres was dismissed on 27 July 2011. The reason for the delay proffered on behalf of Mr Sweres is representative error. In relation to this matter, Mr Rivett said that he is a friend of Mr Sweres’ former employer. Mr Rivett was contacted by Mr Sweres on 8 August 2011 regarding his dismissal. Mr Rivett gave evidence that he was seriously ill with bronchitis from a couple of days before 8 August until 15 or 16 August, and was bedridden and had a very high temperature.

[17] Notwithstanding his illness, Mr Rivett agreed to see Mr Sweres on the afternoon of 8 August 2011. Mr Rivett took instructions at the meeting with Mr Sweres and advised him that he would look into the matter to ascertain whether an unfair dismissal application would be appropriate. Mr Rivett advised Mr Sweres that he was off work and unwell so this would take a few days. Around that same day Mr Rivett did an internet search and found what he thought was the correct legislation, which referred to a 21 day limit for making an application. He recalled that the site he looked at was not the ‘official’ site, but a solicitors’ site with an article on unfair dismissal. He was satisfied that the time limit was still 21 days. Mr Rivett also recalled that when he had previously studied unfair dismissal legislation, the time limit was 21 days. Mr Rivett calculated that 21 days would give Mr Sweres until 17 August 2011 to make the application.

[18] Mr Rivett stated that he remained very unwell until 16 August 2011. On that day he was able to take the matter up again and looked further into it. He discovered that the time limit was 14 days and maintained that he must have been looking at an out of date website when he formed the view that the time limit was 21 days.

[19] In cross-examination, the proposition was put to Mr Rivett that Mr Sweres could have engaged another legal representative within the time period for making an unfair dismissal application. Mr Rivett said that Mr Sweres did not do this because he could not afford to, and that he is representing Mr Sweres without charge on the basis of his friendship with his former employer.

[20] Mr Rivett also submitted that Mr Sweres was not given a reason for his dismissal until 2 August 2011 when he received a separation certificate stating that he had been dismissed for “misconduct” being “theft’ and “racism”. That employment separation certificate dated 28 July 2011, apparently signed by Mr Burgin, was appended to the application for an unfair dismissal remedy filed by Mr Sweres on 18 August 2011. In an Affidavit filed on 16 December 2011, Mr Sweres said that he took a separation certificate to Mr Burgin on 28 July 2011 and received the completed certificate in the mail on 2 August 2011.

[21] Mr Sweres said in his affidavit that the comments written on the separation certificate by Mr Burgin meant that he did not receive any Centrelink benefits until 2 September 2011, which caused him financial hardship, and that he was embarrassed, degraded and upset by the comments, and having to explain his situation to staff at Centrelink.

[22] In written submissions filed on behalf of Mr Sweres it is asserted that he was blameless in relation to the delay in making his unfair dismissal application, and has actively pursued his rights by seeking legal advice. The lateness in making the application was caused by the illness of Mr Sweres’ lawyer. Mr Sweres relies on the decision in Blythe v Moreton Bay Regional Practice Network (Limited) t/as Moreton Bay General Practice Inc. 11insofar as the present circumstances constitute legal representative error, which in that case was considered to provide exceptional circumstances. It is submitted that there is no prejudice to D & H Servo Pty Ltd as Mr Burgin was going to the United States anyway. In oral submissions at the hearing on 25 January 2012, Mr Rivett said that any rights Mr Sweres had in relation to making an unfair dismissal application arose at the time he received the separation certificate. Mr Rivett also submitted that whilst the date of the dismissal was not in dispute, it is an exceptional circumstance that Mr Sweres did not receive the separation certificate until 2 August 2011, some five or six days after his dismissal.

Evidence and submissions on behalf of D & H Servo Pty Ltd

[23] Mr Burgin filed an Employer’s Response to the Application for an Unfair Dismissal Remedy (Form F3) on 17 September 2011. The Response asserts that there is a Police Report on file with the Eumundi Police Department in relation to Mr Sweres taking money and other items from a storage area, and asserting that Mr Sweres’ statements are untrue. Appended to the Employer’s Response is a document from Jim and Lynda Burgin asserting that:

• As of 9 September they will no longer be living in Australia and will not have a contact number as they are going back to America.



• The business was for sale and all employees knew this was the case and that employment was temporary.



• Mr Sweres stole property and assisted a former lessee to steal property; took “nude and girlie” magazines off a shelf and read them in front of customers and female staff; and made racist comments.



• The theft was reported to the Police and a statement taken by an Officer from the Eumundi Police Station.



• Mr Burgin did not have Mr Sweres and the former lessee arrested as he felt sorry for them but they were told by the Police to stay away.



• Mr Sweres came to the service station and threw a separation certificate into Mr Burgin’s face demanding that he complete it.



• Mr Burgin completed the certificate “truthfully and without malice”.

[24] The Employer Response also states that at the earlier of the time when Mr Sweres was given notice of the dismissal or the time immediately before the dismissal, D & H Servo Pty Ltd had 7 employees. Mr Burgin has corresponded with FWA on a number of occasions since the Employer Response was filed, reiterating his allegations and that he would not be attending proceedings due to the fact that he had moved to the United States. Mr Burgin also provided a Statement from a Senior Constable of Police dated 8 November 2011, indicating that on or around 3 August 2011, Mr Burgin made a complaint about an incident involving Mr Sweres and the former lessee of the service station, but that Mr Burgin did not want to make a formal complaint of stealing as he was leaving the country. The Report makes it clear that Mr Sweres had already been dismissed at the time Mr Burgin made the complaint. The Report concludes by stating that Mr Sweres was told not to attend the Doonan Service Station any more, and that no further action was taken in relation to the matter.

[25] In response to the Directions Order in relation to provision of witness statements and submissions, Mr Burgin forwarded a witness statement from Ms Horwood indicating that she witnessed the discussion between Mr Burgin and Mr Sweres on the day Mr Sweres was dismissed and generally supporting the allegations made by Mr Burgin. Mr Burgin also forwarded a number of emails taking issue with factual matters in the material filed on behalf of Mr Sweres, and stating that the unfair dismissal application should be dismissed and/or that the extension of time application should be refused.

[26] In an email dated 1 December 2011, Mr Burgin points to prejudice if the extension is granted, on the following grounds:

• Mr Burgin and his wife currently reside in the United States and will have to travel back to Australia for the hearing of the unfair dismissal application resulting in significant cost and incovenenience.



• The circumstances of Mr Swere’s termination are still the subject of an ongoing police investigation.



• Ms Horwood who would be a witness in the proceedings now resides in Mackay.

[27] It is also asserted that Mr Sweres has no reasonable excuse for the delay in bringing his application and has deliberately waited until Mr Bergin left Australia to do so.

The status of D & H Servo Pty Ltd

[28] After adjourning the hearing on 25 January 2012, an issue emerged in relation to whether D & H Servo Pty Ltd had been deregistered and whether this would be an impediment to further proceedings. The matter was relisted for further hearing on 14 February 2012 to give both parties an opportunity to address this issue.

[29] Mr Burgin said that the Company had been deregistered. Mr Rivett said that the deregistration proceedings had been suspended as a result of Mr Sweres corresponding with the Australian Securities and Investment Commission (ASIC). A search of the ASIC database indicates that a Strike-Off Action is in progress with respect to the Company.

[30] Mr Rivett asserted that Mr Sweres had instituted a Supreme Court action and obtained a freezing order so there are sufficient funds in Mr Burgin’s Australian Solicitor’s trust fund account to cover these proceedings. Mr Rivett further asserted that the money had been paid into the Solicitor’s trust fund account for Mr Sweres’ benefit. Mr Rivett also referred to some other action involving both Mr Sweres and another person which is not relevant.

[31] Mr Burgin said that as far as he knew the Company had been deregistered and that he had been told this by his Accountant. Mr Burgin was given a further period of time in which to provide any information relevant to this matter, or to respond to the assertions made by Mr Rivett. No further information has been provided by Mr Burgin, other than an ASIC record indicating that a strike-off action is in progress.

Conclusions

Reasons for the delay

[32] This is clearly a case where a significant proportion of the blame for Mr Sweres’ delay in making the unfair dismissal application can properly be attributed to his representative. Mr Sweres sought legal advice 12 days after his dismissal and within the time in which his unfair dismissal application was required to be made. Mr Rivett, a Barrister, told Mr Sweres that he would look into the matter and advise Mr Sweres as to whether an unfair dismissal application would be appropriate. It was not unreasonable for Mr Sweres to await that advice.

[33] Mr Sweres is also blameless in respect of the circumstances which lead to Mr Rivett’s error regarding the time in which the application was required to be filed. On Mr Rivett’s evidence, the application was filed shortly after he discovered the error.

[34] I also accept Mr Sweres’ evidence about the date upon which he received the employment separation certificate and that this was the first time he had been told that the reasons for his dismissal included an allegation of theft. Mr Burgin does not assert that he gave Mr Sweres the completed certificate on the day that Mr Sweres took it to D & H Servo Pty Ltd.

[35] Ms Horwood said in her witness statement that she was present on the day that Mr Sweres was dismissed, and outlines the reasons given by Mr Burgin to Mr Sweres for the dismissal. Ms Horwood makes no mention that one of those reasons given to Mr Sweres was theft. On the evidence before me, it is probable that Mr Burgin did not make any mention of theft as a reason for Mr Sweres’ dismissal, at the point it was effected.

[36] It is not surprising that Mr Sweres was upset when he subsequently received a separation certificate labelling him a thief. It is also not surprising that Mr Sweres’ distress was compounded by the fact that he was required to take that certificate to Centrelink in order to make a claim for benefits. Further, it is not surprising that on being confronted with an allegation of theft set out in an official document, Mr Sweres decided to take steps to seek a remedy for his dismissal.

[37] I note that Mr Burgin continues to assert that there is an ongoing police investigation in relation to Mr Sweres’ dismissal, when this statement is at odds with the Police Report Mr Burgin tendered in these proceedings.

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

[38] It is not in dispute that Mr Sweres was aware of the dismissal at the point it took effect. I do not accept the submission that Mr Sweres’ rights arose at the point he received the separation certificate in those circumstances.

Action to dispute the dismissal

[39] Other than seeking advice from Mr Rivett, there is no evidence that Mr Sweres took action to dispute his dismissal before time in which to make an unfair dismissal application had expired. However, in my view, action to dispute a dismissal will be more critical in cases where there is a substantial delay in making an application. In the present case, the application was made only four days outside the required period.

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

[40] D & H Servo Pty Ltd and Mr Burgin will be prejudiced to the extent that they will be required to defend the unfair dismissal application if an extension of time is granted. Mr Burgin has moved with his family to the United States. Given that Mr Burgin is likely to be a critical witness, whose credit will be in issue in a hearing, it will be difficult for him to attend by telephone. It is also the case that the process of deregistering D & H Servo Pty Ltd is in train, and has in all probability been suspended because of these proceedings. Mr Burgin also points to the fact that a key witness for the employer has moved to Mackay.

[41] However, it is clear that Mr Burgin planned to sell the business and move to the United States before he decided to dismiss Mr Sweres. This is not a case where Mr Burgin has taken any steps in reliance on the fact that Mr Sweres has not made an unfair dismissal application or where Mr Sweres has emerged from left field after a significant period and made an unfair dismissal application.

The merits of the application

[42] D & H Servo Pty Ltd is a small business and the Small Business Fair Dismissal Code will be relevant. This may make it more difficult for Mr Sweres to establish that his dismissal was unfair, given that Mr Burgin will have to establish that he had reasonable grounds for believing that Mr Sweres’ conduct was sufficient to justify summary dismissal, rather than that Mr Sweres actually engaged in the conduct.

[43] However, this is a case involving disputed facts and I am unable to conclude that the application is without merit.

Fairness as between Mr Sweres and other persons in a similar position

[44] This is not a relevant consideration in the present case as there are no other employees affected. Further, this case involves representative error in circumstances where the applicant is blameless, and is a category of case which is generally accepted as constituting exceptional circumstances, subject to the consideration of the other factors in s.394(3). Such a case is not likely to give rise to concerns about fairness as between Mr Sweres and other persons in a similar position.

Exceptional circumstances

[45] In my view, the combination of the delay on the part of Mr Burgin in communicating the significant allegation of theft to Mr Sweres as a reason for his dismissal, combined with the error on the part of Mr Sweres’ legal representative, constitute exceptional circumstances, favouring the exercise of the discretion to extend the time for Mr Sweres to make his unfair dismissal application.

[46] Mr Sweres has been the subject of serious allegations and took steps to take legal advice as soon as he was aware that Mr Burgin had completed a separation certificate stating that he was dismissed for theft. The prejudice to D & H Servo Pty Ltd if the matter proceeds and consideration of the merits of the application, are not matters that outweigh the exceptional circumstances pertaining in this case. In all of the circumstances, it is fair and equitable that time is extended and I have decided to exercise the discretion in s.394(3) to do so.

[47] The application for an extension of time is granted. An Order extending the period for making the application in U2011/10871 until 17 August 2011, will issue with this Decision.

COMMISSIONER

Appearances:

Mr J. Rivett of Counsel on behalf of the Applicant.

Mr J. Burgin on behalf of the Respondent.

Hearing details:

2012.
Brisbane:
January 25;
February 14.

 1   Shields v Warringarri Aboriginal Corp [2009] FWA 860 at [4].

 2   Johnson v Joy Manufacturing Co Pty Ltd t/as Joy Mining Machinery [2010] FWA 1394.

 3 (1995) 67 IR 298 at 299.

 4   [2009] FWA 1638 per Whelan C, see also Johnson v Joy Manufacturing Co Pty Ltd t/as Joy Mining Machinery [2010] FWA 1394.

 5   R v Kelly, Edward [2000] 1 QB 198 at 208 per Lord Bingham Cornwall CJ in Mann v Minister for Immigration and Citizenship (2009) FCAFC 180.

 6   McConnell v A & PM Fornataro t/as Tony’s Plumbing Service (C2010/5355) per Lawler VP at [26] - [27].

 7   [2011] FWAFB 2728.

 8 (1997) 74 IR 413.

 9   Print Q0784.

 10   Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975.

 11   [2011] FWA 733.

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