Mr Sebastian Masone v The Henley Group Pty Ltd
[2022] FWC 1775
•8 July 2022
| [2022] FWC 1775 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.773 - Application to deal with an unlawful termination dispute
Mr Sebastian Masone
v
The Henley Group Pty Ltd
(C2022/1951)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 8 July 2022 |
Application for the Commission to deal with a dispute under s 773 – application for an extension of time.
Mr Sebastian Masone made an application for the Commission to deal with a dispute under s 773 of the Fair Work Act 2009 (Cth) (Act) on 24 March 2022. Section 774 of the Act requires that an application under s 773 be made within 21 days after the employment was terminated or within such further period as the Commission allows under s 774(2). This decision concerns whether the Commission should allow further time for the application to be made.
For the reasons that follow, I am not satisfied that exceptional circumstances exist. Accordingly, there is no basis to allow an extension of time. Mr Masone’s application pursuant to s 773 of the Act is therefore dismissed.
Procedural context
Mr Masone’s employment with the respondent ended on 9 August 2016.[1]
The respondent company was deregistered on 1 October 2019, with liquidators having been appointed on 19 April 2017.
All attempts by the Commission to serve the application on the respondent, the person identified as the Director of the respondent, and its liquidators were unsuccessful. Mr Masone was contacted on several occasions to assist in this process. Upon being advised by the Commission that all attempts at service had been unsuccessful, Mr Masone responded as follows:
“I already provided all the contact details that I had for The Henley Group Pty Ltd and Jacob Robert Henley. It is unjust that my application should be dismissed because the respondent has not answered my calls and is avoiding both me and the Commission. There is not much I can do to find the respondent…”
Despite explaining the effect of deregistration of a company,[2] Mr Masone pressed for his application in the Commission to progress. It is noted the Mr Masone has expressed his intentions to pursue a Director of the respondent personally by way of an unlawful termination court application.
In the circumstances of this case, I have decided to determine whether to allow further time for the application to be made without having served the respondent, taking into account:
(a) Mr Masone accepts that the application was filed with the Commission outside the statutory timeframe for lodgement;
(b) Mr Masone was invited to provide written materials in support of the application to allow further time;
(c) the nature of the Commission’s jurisdiction in applications made under s 773 of the Act is preliminary and non-determinative;[3]
(d) the Commission is not empowered to dismiss applications made under s 773 on the basis that they are frivolous or vexatious, or have no reasonable prospect of success;
(e) there is no absolute jurisdictional bar to Mr Masone seeking a remedy in the court for a party not named on a s 776 certificate;[4] and
(f) Mr Masone is entitled to apply for the respondent’s company registration to be reinstated,[5] however that is a matter upon which the Commission cannot and need not decide before determining this application.
Statutory framework
The Commission has the power pursuant to s 774(2) of the Act to extend the time within which an application under s 773 can be made if it is satisfied that there are exceptional circumstances. The meaning of this term was considered by the Full Bench in Nulty v Blue Star Group Pty Ltd[6] in a relevantly analogous section to s 774(2). In order to be exceptional, the circumstances must be out of the ordinary course, or unusual, or special, or uncommon, although they need not be unique or unprecedented. 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 can be considered exceptional.
Under s 774(2) of the Act, the matters the Commission must take into account in order to determine whether exceptional circumstances exist are as follows:
(a) the reason for the delay; and
(b) any action taken by the employee to dispute the termination; 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.
I turn now to consider each of these matters.
Consideration
Reason for the delay: s 774(2)(a)
The Act does not specify what reason for delay might tell in favour of granting an extension. 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 of the circumstances must be considered.[7]
Mr Masone submits that he was dismissed from his position with the respondent on 9 August 2016.[8] It follows that the 21-day statutory timeframe for filing the application expired at midnight on 30 August 2016. The application pursuant to s 773 of the Act was received by the Commission on 24 March 2022. The application was therefore filed 2032 days outside of the statutory timeframe for lodgement.
The relevant period required to be considered under s 774(2)(a) is the period after the 21-day timeframe for lodging the application, being from 31 August 2016 to 24 March 2022.[9] However, the circumstances from the time of the dismissal must be considered in order to determine whether there is a reason for the delay beyond the 21-day period.[10]
In relation to the reason for the delay in lodging the application, Mr Masone submits as follows:
“In respect to the reasons for the delay in making the application were accounted to the fact that the company directors and liquidators stated that all employees and creditors had to keep waiting until the liquidators finished liquidating the company to be able to pay back any money owing. After a considerable time of waiting I began to contact the company directors and liquidators.”[11]
Mr Masone supplemented his submissions orally during the Hearing by explaining that he had not lodged his application with the Commission earlier because he had been “told by company owners to wait” to receive his outstanding payments. Mr Masone took steps to recover these sums from the respondent directly, including by:[12]
(a) emailing the company Directors asking for payment during the month of August 2016; and
(b) making inquiries with the Australian Tax Office regarding his superannuation entitlements on 30 August 2016.[13]
In November 2019, Mr Masone contacted legal aid about “the company debts.”[14] Mr Masone was advised to contact the liquidators which Mr Masone did, with a proof of debt, on 19 February 2020.[15] On 1 September 2020, Mr Masone commenced legal proceedings against a company Director to recover “outstanding money,”[16] which was unsuccessful on the basis that the respondent company had been wound up.
It is apparent from the material that Mr Masone took steps following the termination of his employment to recover outstanding payments from the respondent. These steps involved emailing the respondent and the Australian Taxation Office in August 2016. However, Mr Masone does not explain how these steps prevented him from lodging his s 773 application on an earlier date within the 21-day statutory timeframe.
Mr Masone does not provide any explanation for his lack of activity in the period between 30 August 2016 (being the last date for the filing of his s 773 application within the statutory timeframe) and November 2019 when he contacted legal aid. It is apparent from the material before the Commission that Mr Masone’s focus continued to be on debt recovery. There is no evidence that Mr Masone discussed with legal aid making an application under s 773, or indeed making any kind of application in the Commission to challenge the termination of his employment.
Notwithstanding the advice from legal aid, it took Mr Masone a further period of approximately three months to contact the liquidators with a proof of debt. More than six months after that, Mr Masone commenced proceedings in the Local Court of New South Wales. There is a further unexplained period of inactivity between the lodgement of the court proceedings on 1 September 2020 and the filing of his s 773 application in the Commission on 24 March 2022.
At its highest, Mr Masone’s submissions and evidence point to a series of intermittent steps over a period of five and a half years to recover outstanding wages, superannuation and payment for accrued but untaken leave from the respondent. There is no evidence of Mr Masone turning his mind to the possibility of making an application under s 773 of the Act prior to the application being made on 24 March 2022. Rather, the material before the Commission discloses that Mr Masone made a choice to focus his efforts on the recovery of outstanding debts in lieu of making an application to challenge his dismissal. I do not find that any of the matters relied upon by Mr Masone to explain the reasons for the delay in making his s 773 application individually or collectively prevented him from lodging the application within time. Nor does Mr Masone point to any other matter that establishes that he was prevented from or seriously impeded in lodging his s 773 application within time. This weighs heavily against a finding of exceptional circumstances.
Action taken by the person to dispute the dismissal: s 774(2)(b)
Where an applicant takes action to contest a termination of employment, it will put the respondent on notice that its decision to terminate the employment is actively contested and may, depending on all the circumstances, favour the grant of an extension of time.[17]
There is evidence of Mr Masone attempting to recover debts owed to him as outlined at [15]-[16] of this decision. However, there is no evidence of Mr Masone taking any action to dispute the dismissal until he made his application under s 773 in the Commission.
The absence of any action by Mr Masone to contest his dismissal before 24 March 2022 (as opposed to action which is focused on seeking recovery of outstanding debts) weighs against a finding of exceptional circumstances.
Prejudice to the employer: s 774(2)(c)
A long delay gives rise to a general presumption of prejudice.[18] However, the mere absence of prejudice is not a factor that would tell in favour of the grant of an extension of time.[19]
In relation to the question of prejudice, Mr Masone submits as follows:
“If there was any prejudice to the employer I say it was justified as the company owner
committed illegal phoenix activity and he was charged with fraud when he was sued by the creditors of the company. Jacob Henley was eventually imprisoned for his non-compliance with the law.If there was prejudice caused by the delay, I attempted to contact the directors and liquidators but there was neither a substantial answer nor any payment whatsoever.”[20]
The length of the delay, being 2032 days outside the statutory timeframe for lodgement, is substantial. Such an extensive delay would ordinarily give rise to a general presumption of prejudice to the respondent. However, in circumstances where the respondent company was wound up two years ago, I consider this to be a neutral consideration.
Merits of the application: s 774(2)(d)
For the consideration in s 774(2)(d) to weigh in favour of a finding of exceptional circumstances, it must be shown that there is some merit in the substantive application.[21] However, this proceeding is essentially interlocutory in nature and does not enable a fulsome examination of these matters. Nor should the Commission embark upon a detailed assessment of the merits of the substantive application in determining whether to grant an extension of time.[22]
On the material before the Commission, Mr Masone was dismissed from his employment with the respondent on the basis that he did not provide sufficient evidence of a medical condition to justify an extended period of personal leave. Mr Masone contends that the termination was unlawful as he was dismissed for misconduct while on personal leave. Mr Masone relies upon a medical certificate deeming him unfit for work in the period from 4 May 2016 and 15 June 2016.
Mr Masone submits that there is also evidence to support his case in the form of bank statements, payslips and emails which are said to contain a commitment from Directors of the respondent to pay any monies owing.[23] This material appears to be related to Mr Masone’s debt recovery claims, rather than the merits of the substantive application under s 773 of the Act. In any event, as this evidence cannot be tested at this stage, I regard the merits of the application as neutral in my consideration.
Fairness as between the person and other persons in a similar position: s 774(2)(e)
With respect to the factor at s 774(2)(e) of the Act, Mr Masone submits as follows:
“While the company was being liquidated some associates were paid back while some were not. I do not believe that was just or that the criteria used by the directors of the company and its liquidators in deciding who gets paid was applied with equality.”[24]
The focus of the inquiry under s 774(2)(e) is not on the fairness of the allocation of liquidated funds during the winding up of a company. Rather, the focus is on the issue of fairness as between Mr Masone and other persons in a similar position in relation to matters currently before, or previously decided by, the Commission.
In relation to this factor, I find that there is nothing for me to weigh in my assessment of whether there are exceptional circumstances. I therefore regard this as a neutral consideration.
Are there exceptional circumstances?
The test of exceptional circumstances in s 774(2) of the Act is a stringent one and Mr Masone’s application is significantly out of time. Having considered each of the statutory criteria in the context of the application before me, I am not satisfied that there are exceptional circumstances.
Order and disposition
As I am not satisfied that there are exceptional circumstances, there is no basis for me to allow a further period for the application to be made. Mr Masone’s application pursuant to s 773 of the Act is therefore dismissed.
DEPUTY PRESIDENT
Appearances:
Mr S Masone on his own behalf
No appearance for the respondent
Hearing details:
Hearing by video using Microsoft Teams on 14 June 2022
[1] Form F9 – Application for the Commission to deal with an unlawful termination dispute dated 24 March 2022 (Form F9) at [2] and Annexure E
[2] Corporations Act 2001 (Cth) s 601AD
[3] Shea v TruEnergy Services Pty Ltd (No 1) [2012] FCA 628; (2012) 204 FCR 456; (2012) 222 IR 156 at [81]-[91]
[4] Knight v Visionstream Australia Pty Ltd [2017] FCA 1513 at [32]-[33]; Fair Work Act 2009 (Cth) s 550
[5] Corporations Act 2001 (Cth) s 601AH
[6] [2011] 203 IR 1
[7] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901 at [39]
[8] Form F9 at [2]; Attachment 5 to the Applicant’s submissions in support of an extension of time dated 25 May 2022 (Applicant’s submissions)
[9] Mr Keith Long v Keolis Downer T/A Yarra Trams [2018] FWCFB 4109 at [40]
[10] Mitchell Shaw v Australia and New Zealand Banking Group Limited T/A ANZ Bank [2015] FWCFB 287 at [12]
[11] Applicant’s submissions at (a)
[12] Ibid at (b)
[13] Attachments 1-4 to the Applicant’s submissions
[14] Applicant’s submissions at (b) Attachment 8 to the Applicant’s submissions
[15] Attachment 9-10 to the Applicant’s submissions
[16] Applicant’s submissions at (b); Attachment 11 to the Applicant’s submissions
[17] Brodie-Hanns v MTV Publishing Limited (1995) 67 IR 298
[18] Brisbane South Regional Authority v Taylor (1996) 186 CLR 541 at p.556
[19] C Ozsoy v Monstamac Industries Pty Ltd[2014] FWCFB 2149 at [38]
[20] Applicant’s submissions at (c)
[21] Long v Keolis Downer (t/as Yarra Trams)[2018] FWCFB 4109 at [71]
[22] Kyvelos v Champion Socks Pty Ltd[2000] AIRC 540, Print T2421 at [14]
[23] Applicant’s submissions at (d)
[24] Ibid at (e)
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