Mr Nicholas Macmillan v Sportservice T/A Sportime

[2011] FWA 3194

[2011] FWA 3194

FAIR WORK AUSTRALIA

DECISION

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

Mr Nicholas Macmillan
v
Sportservice T/A Sportime
(U2011/4848)

COMMISSIONER ROE MELBOURNE, 23 MAY 2011

Unfair dismissal - extension of time for lodging application.

[1] This is an application for an extension of time within which to file an application for an unfair dismissal remedy. The Application is made by Mr Nicolas Macmillan (the Applicant) in respect of dismissal by Sportservice Pty Ltd T/A Sportime (the Respondent). At the conclusion of the hearing of this matter I advised the parties that I had decided to grant the extension of time and was therefore allowing the Application for unfair dismissal remedy to proceed to be heard by a member of the Tribunal for reasons which I now publish.

[2] The Respondent was represented by Mr Gerard Nelson of Australian Workplace Strategies. The Applicant represented himself. I carefully considered the written submissions provided by both parties. The Applicant and Mr Devola, an accountant who attended a meeting with the employer as a support person for the Applicant gave evidence for the Applicant. Mr Woods, Managing Director of the Respondent, gave evidence for the Respondent.

[3] Section 394(2) of the Fair Work Act 2009 (FW Act) provides:

“(2) [Standard time limit] The application must be made:

(a) within 14 days after the dismissal took effect; or

(b) within such further period as FWA allows under subsection (3).”

[4] Subsection 394(3) provides:

“(3) [Extended time limit] 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.”

[5] The Applicant says he was employed in August 2006 and was notified that his employment was terminated on 24 January 2011. The Respondent employs more than 15 employees when associated entities are taken into account. The Applicant lodged his unfair dismissal Application on 8 February 2011 at 1:34pm. The Application was lodged 15 days after the dismissal took effect.

[6] The Applicant gave uncontested evidence that he was on annual leave until 27 January 2011 but was asked by Mr Woods, Managing Director for the Respondent, to come in to work to meet with him on 24 January 2011. The Applicant was not advised what the meeting was about.

[7] The Applicant contends that he believed that the reason for the dismissal was redundancy. The Applicant was advised of the dismissal during a discussion at the meeting on 24 January 2011. Nothing was put in writing. The Applicant says that he was told that the position was no longer available due to a downturn in the current financial situation of the Respondent. 1 Mr Woods says that he told the Applicant that “because his employer was a small business and economic circumstances were such the business could not afford to carry a nonperformer like him”.2

[8] Mr Woods says that he told the Applicant on 24 January that he would be paid 3 weeks in lieu of notice as per the award. Mr Woods says that the Applicant asked for the termination payment to be reviewed and Mr Woods agreed to do this. The Applicant agreed that this was the case.

[9] Mr Woods claims that there were performance issues raised with the Applicant prior to the meeting of 24 January 2011. The Applicant says that performance issues were raised in respect to the team he was a member of as a whole but that there were no specific warnings or performance concerns raised with him as an individual. Mr Woods says that at the meeting on 24 January 2011 the Applicant asked if it was possible to defer the ending of the employment for three months to see if performance improved. The Applicant agrees that he did raise this. The Applicant says he was referring to the team performance as well as the performance of himself. Mr Woods says that he made it clear in response that he was not confident that the Applicant’s performance would improve.

[10] I accept the Applicant’s evidence that he understood that his employment was ending because of economic problems of the company. The Applicant says that Mr Woods referred to the poor sales year for the company and that it was operating at a loss and that therefore his position was no longer available. I accept the Applicant’s evidence that he understood any performance matters raised as referring to the poor performance outcomes of the sales team of which he was a contributor and that those poor sales performance outcomes had led to the need to end his employment.

[11] A meeting was held on 27 January 2011 where the Applicant was represented by an accountant, Mr Devola, to discuss his payout and return of company property. Mr Devola provided a letter which stated that there was no mention of any performance issue during this meeting but there was discussion about whether or not the Respondent had more or less than 15 employees as this would affect entitlement to redundancy. I am satisfied taking into account all the evidence that Mr Woods said that he did not have to pay redundancy as he had less than 15 employees. Mr Woods’ evidence does not contradict the evidence of Mr Devola and the Applicant as to what occurred at the meeting on 27 January 2011. Mr Woods said that he would pay three weeks in lieu of notice.

[12] Mr Woods says that at this meeting the Applicant said that he had an entitlement to redundancy payment, which together with his notice period amounted to a total of 11 weeks pay or approximately $10,000 and that this would not be taxed as normal as it was a redundancy payment. Mr Woods said that the Applicant also suggested that he be paid in cash and that if the matter was settled he could ensure two contracts with sporting organisations with the Respondent were ongoing. Mr Woods said that he would consider increasing the payment and would get back to the Applicant.

[13] There was extensive email communication between the Applicant and the Respondent between 27 January 2011 and 2 February 2011 concerning the settlement of payments, return of property and other work related matters.

[14] On 2 February 2011 the Applicant sent an email to Mr Woods advising that he would pursue the matter with the Fair Work Ombudsman if he was not paid his redundancy entitlement. Mr Woods suggested that he thought that this email was threatening and amounted to a demand for tax avoidance. I am satisfied that the email was a totally reasonable statement that advised that since the company with associated entities employed more than 15 persons the Applicant believed that he was entitled to a redundancy payment and that if there was no payment he would “be lodging a complaint with the Fair Work Ombudsman for the matter to be investigated further.” 3

[15] On 4 February 2011, Mr Mike Woods for the Respondent sent a letter offering to pay 7 weeks pay subject to the signing of a Deed. In this letter he says that “if you refuse this offer, we will have to list in detail the reasons for your termination, due to lack of performance and failure to follow required reporting procedures, even after many months of requests.” 4 The letter was sent to an address the Applicant has not resided at since mid 2009. I am satisfied that the Applicant never received the letter prior to a copy appearing in the submissions in this matter.

[16] On 7 February 2011 at 4:39pm, pursuant to instructions from Mr Woods, Mr Nelson sent an email to the Applicant with a Deed of settlement reflecting the position in the letter dated 4 February except that the payment was 6 weeks not 7 weeks. 5

[17] The Applicant says that this was the first time that performance as the reason for dismissal was raised. The Applicant says that he immediately contacted Fair Work Australia the next morning and then lodged the unfair dismissal Application upon advice a few hours later.

[18] Both the evidence for the Applicant and the Respondent are supportive of the conclusion that there was no discussion that the Applicant had been dismissed due to poor performance as opposed to being dismissed due to financial issues of the company during the period 25 January to 7 February 2011.

[19] The Applicant says that the reasons why an extension of time of one day should be granted is that the Applicant acted swiftly to determine his rights once it became clear that the reason for termination was performance not redundancy. The Applicant had no reason or right to pursue unfair dismissal if the termination was a genuine redundancy due to the economic circumstances of the Respondent.

[20] The Respondent says that the Applicant should have known about the 14 day period and should have lodged the application in any case. Further, the Respondent says that the Applicant always knew that the termination was about performance and was never portrayed as a redundancy.

[21] I turn to consider the particular factors specified in s. 394(3) of the FW Act.

s. 394(3)(a)

[22] The reason for delay proffered by the Applicant is an acceptable explanation which makes it equitable to extend the time. The reason is one which is not normal or usual.

[23] The Applicant demonstrated that he was totally confused about the difference between the terms termination, redundancy and dismissal.

[24] Mr Woods gave evidence that he had moved his son from an associated company to replace the Applicant following the Applicant’s dismissal. The evidence was that there is frequent movement of personnel between the two associated companies and that the Applicant in fact did settle sales for the associated company during the time of his employment. The matter as to whether or not the Applicant was made redundant is clearly a matter open to contest.

[25] I am satisfied that the economic circumstances of the company was a key consideration in the termination. I am therefore satisfied that the Applicant reasonably thought that this was the reason for the termination not performance. What was in fact the reason for termination I do not make any judgment about.

[26] I am satisfied that the Applicant thought that he was being made redundant. It is possible that he thought that he was being selected as the person to go because Mr Woods thought that he had the worst sales record. I make no judgment as to whether or not this was true. However, even if this was the case it would not change the fact that the Applicant reasonably thought it was a redundancy situation even if neither the Applicant nor Mr Woods used that word to describe it.

[27] I am satisfied that the Applicant was correctly advised and understood that if it was a redundancy he could not pursue unfair dismissal but that he should instead seek to settle his redundancy entitlement. All the actions of the Applicant are consistent with this being his understanding.

[28] Within hours of being advised for the first time in a clear manner by the Respondent that he was dismissed due to poor performance when he received the letter of 7 February 2011 the Applicant lodged an unfair dismissal Application. This was the first communication in writing he had received from the Respondent. The Applicant did not delay. There is no time lapse that is not able to be explained.

[29] I take into account that the Application is only a short period of time late. It has clearly been established that an application being only one day late does not in itself constitute an exceptional circumstance. 6 However, in my view it is a relevant consideration.

s. 394(3)(b)

[30] The Applicant was clearly advised of the dismissal on the day of the dismissal which was 24 January 2011.

s. 394(3)(c)

[31] I am satisfied that the Applicant actively took steps to challenge the dismissal within a reasonable time frame. The Applicant did not idly let time slip by. The Applicant took a number of steps to seek what he saw as his entitlement to a redundancy payment pursuant to the Fair Work Act 2009. The Respondent argued that this was not a challenge to the dismissal. I do not accept this argument.

s. 394(3)(d)

[32] I am satisfied that the fact that the delay in making the Application was a single day is a relevant consideration in respect to the prejudice to the Respondent including the prejudice caused by delay. Witness recollections will not have faded. The notice to the Respondent that the Applicant was contesting the dismissal by an Application to Fair Work Australia was only one day later than would have otherwise occurred. I am not satisfied that there is any prejudice to the Respondent caused by the delay in this case. I am not satisfied that there is any other prejudice to the Respondent other than the usual prejudice that accompanies any grant of an extension of time.

s. 394(3)(e)

[33] Whether or not this was a genuine redundancy and whether or not there were other redeployment opportunities for the Applicant are matters which will be strongly contested should the matter proceed to be heard. If the matter was a dismissal due to performance there will be obvious issues raised on both sides. Neither side has been required to put forward its detailed case about the merits. It would be inappropriate for me to make any definitive findings about the merits of the case. However, I am satisfied that this is not one of those cases where I should be concerned that the substantive application lacks merit. I cannot conclude that the application is without merit.

s. 394(3)(f)

[34] I do not consider that the factor in s. 394(3)(f) is relevant in the present case. There are no other employees affected and the situation is sufficiently unusual as to not give rise to concerns about equitable treatment between cases.

Exceptional Circumstances

[35] I find that exceptional circumstances do exist in this case which are sufficient to justify the granting of an extension of time for the making of the Application of one day.

[36] The Application for an extension of time is granted. The Section 394 Application for unfair dismissal remedy will now proceed to be determined by a member of the Tribunal.

COMMISSIONER

Appearances:

Mr Nicholas Macmillan for himself.

Mr Gerard Nelson (Australian Workplace Strategies) for the Respondent.

Hearing details:

2011

Melbourne

20 May

 1   Exhibit M1.

 2   Exhibit S1.

 3   Attachment to Exhibit S1.

 4   Attachment to Exhibit S2.

 5   Ibid.

 6   Woods v Woolworths Limited T/A Woolworths Supermarkets[2010] FWA 9463 10 December 2010.

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