Mr Shaun Fehily and Mr David Fehily v Hallbuild Pty Ltd T/A Hallbury Homes

[2019] FWC 6229

[2019] FWC 6229

FAIR WORK COMMISSION

DECISION

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

Mr Shaun Fehily and Mr David Fehily
v
Hallbuild Pty Ltd T/A Hallbury Homes
(C2019/2274 and C2019/2279)

DEPUTY PRESIDENT CROSS SYDNEY, 9 SEPTEMBER 2019

Applications to deal with general protections disputes involving dismissal - Applications alleged to be made outside of the time prescribed - Whether applications in fact out of time - Whether discretion to allow a further period within which application may be made would nonetheless be exercised - Applications found to be filed within time.

[1] On 5 April, 2019, Mr David Fehily and Mr Shaun Fehily (“the Applicants”) lodged applications (“the Applications”) pursuant to s.365 of the Fair Work Act 2009 (“the Act”). The Applicants claimed they had both commenced employment with Hallbuild Pty Ltd t/a Hallbury Homes (“the Respondent”) on 5 September, 2015, and their employment had been terminated by the Respondent on 15 March, 2015. 

[2] The Respondent disputed the termination dates recorded in the Applications, and asserted that the Applicants had resigned from their employment on 12 or 13 March, 2019. If the Respondent’s assertions were correct, the Applications would have been two to three days late respectively. General protections applications involving dismissal must be made within 21 days after a dismissal took effect or in such further time as the Fair Work Commission (“the Commission”) may allow. If, however, the termination occurred on 15 March, 2019, the parties agreed that the Applications would not be out of time.

[3] On 3 June, 2019, I convened a Directions Hearing to outline the manner in which the issues of whether the Applications were out of time and, if so, whether a further period would be allowed to make the Applications, would be determined. By consent, the Applicant and the Respondent agreed to a timetable for the filing of Outlines of Submission addressing the Applications, together with any witness statements and other documentary material upon which each party intended to rely (“the Directions”).

[4] The Directions were as follows:

1. The Applicants (Mr David Fehily and Mr Shaun Fehily) are directed to file with the Fair Work Commission, and serve on the Respondent, an outline of submissions addressing their out of time applications, together with any witness statements and other documentary material the Applicants intend to rely on in support of their application in this matter by no later than 4.00pm on 17 June 2019.

2. The Respondent (Hallbuild Pty Ltd T/A Hallbury Homes) is directed to file with the Fair Work Commission, and serve on the Applicants, an outline of submissions, together with any witness statements and other documentary material the Respondent intends to rely on in opposition to the application in this matter by no later than 4.00pm on 1 July 2019.

3. The Applicants (Mr David Fehily and Mr Shaun Fehily) are directed to file with the Fair Work Commission, and serve on the Respondent, an outline of submissions in reply, together with any witness statements and other documentary material in reply to the Respondent's materials by no later than 4.00pm on 8 July 2019.

THE EVIDENCE

[5] On 17 June, 2019, pursuant to the Directions,the Applicants filed Outlines of Submissions for the Applicants, together with four annexures each, but with no witness statements. The Solicitors for the Respondent raised the failure to file any witness statements with the Solicitor for the Applicants, and received in reply an email at 10.13am on 20 June, 2019, that stated:

“Thanks for your email.

At this stage, our client intends to rely on the submission filed with the FWC.

They reserve the right to file any witness statements and other materials by 8 July 2019 in response to any materials filed on behalf of your client, pursuant to the Directions of 28 May 2019.”

[6] On 1 July, 2019, the Respondent filed, pursuant to the Directions:

(a) An Outline of Submissions (The Respondent’s Submissions”);

(b) A statement of Mr Glen Smith, dated 1 July, 2019, with annexures;

(c) A statement of Mr Brett Trebilcock, dated 1 July, 2019, with annexures; and

(d) A statement of Mr Ryan Fehily, dated 1 July, 2019.

[7] On 8 July, 2019, the Applicants filed materials in reply, pursuant to the Directions:

(a) The Applicants’ Reply to the Respondent’s Submissions (The Applicants’

Reply Submissions”);

(b) A statement of Mr David Fehily, dated 8 July, 2019;

(c) A statement of Mr Shaun Fehily, dated 8 July, 2019; and

(d) A statement of Ms Makedonka Atanasov, dated 8 July, 2019.

[8] At the commencement of the Hearing of the matter, when the Applicants’ statements in reply were sought to be read, issues of relevance and whether the statements were truly reply statements were raised. The Applicants’ Statements contained material that did not reply to the evidence of the Respondent, and which was clearly evidence in chief.

[9] The Directions in the matter were clear. If the Applicants intended to rely on materials in support of their case, as opposed to replying to the materials of the Respondent, those materials were to be filed by 17 June, 2019. The Applicants made a clear forensic choice not to file statements in their case, as confirmed in their Solicitor’s email outlined in paragraph [5] above. Consequently, I indicated that I was not inclined to admit any evidence that was not truly in reply. Thankfully, Counsel were able to agree on the disposition of the vast majority of objections to evidence, with a small number left for determination.

[10] There were no great differences between the parties as to the relevant facts. There were no contested conversations. The issues stood to be determined on what could be drawn from that factual background, which was the following:

(a) Each Applicant received an employment contract at the commencement of their employment dated 8 September, 2015, which provided that each Applicant was to be paid a minimum amount per annum in pre-paid commission gross of tax of $80,000.00 per annum, plus commission, to be calculated at the rate provided in the “Sales Commission Agreement”;

(b) The Applicants worked together as a ‘two-man’ sales team. The Applicants alleged that they would have sole responsibility within the Respondent for sales enquiries and referrals. The Respondent disputed that contention;

(c) In October, 2018, each Applicant was advised that Brett Trebilcock was to be their new sales and marketing manager. Each Applicant advised Mr Trebilcock of alleged discrepancies in relation to their commission payments as well as alleged continuous and ongoing breaches of their employment agreements by the Respondent;

(d) Glenn Smith, Director, together with Brett Trebilcock, held meetings with David Fehily on 26 November, 2018, and Shaun Fehily on 29 November, 2019, to discuss a new business strategy. Later, in December, 2018, each of the Applicants found that sales enquiries were being sent to persons other than the Applicants;

(e) In January, 2019, each of the Applicants discovered significant alleged anomalies and discrepancies in their commission payments. They claimed Brett Trebilcock refused to discuss their concerns;

(f) On 21 January, 2019, the Applicants’ Solicitors sent a letter to the directors of the Respondent in relation to unpaid commissions. The Respondent subsequently offered to do a full reconciliation of the Applicants’ outstanding commissions;

(g) On 11 February, 2019, Shaun Fehily was certified by a Dr. Huda at Broad Oak Medical Clinic as unfit for work. Through two medical certificates he was certified unfit from 11 February, 2019, to 27 March, 2019, inclusive;

(h) On 12 February, 2019, David Fehily was certified by Dr. Huda as unfit for work. Through two medical certificates he was certified unfit from 12 February, 2019, to 11 March, 2019, inclusive;

(i) On about 13 February, 2019, Ryan Fehily, respectively the son and brother of David and Shaun Fehily, and also the Marketing Manager and Senior Designer of the Respondent, told Glen Smith that he had spoken to the Applicants and formed the view that they would not be “coming back”. He made similar comments to Brett Trebilcock;

(j) In late February, 2019, the Applicants’ work computers and work phones were returned to the Respondent. That appeared to have occurred after it was proposed by David Fehily;

(k) On Tuesday, 12 March, 2019, David Fehily returned to work at the display centre in Cranbourne North, which was his normal place of work. He noted that his desk had been cleaned out and all files were removed. His computer and phone were not returned. The Respondent’s witnesses explained that the files were removed as they had to be attended to in the Applicants’ absence;

(l) On Wednesday, 13 March, 2019, David Fehily returned again to the display centre in Cranbourne North, this time with Shaun Fehily. Shaun Fehily took photos of his desk as it was that day. Shaun Fehily stated that he suffered a stress related panic attack at that time;

(m) The Respondent did not know that either Applicant had attended the display centre on either 12 or 13 March, 2019;

(n) Thursdays and Fridays were not working days for the Applicants, and neither was in attendance at the Cranbourne North display centre on those days;

(o) Glenn Smith gave unchallenged evidence that he did not decide to terminate either Applicant at any stage. He wanted them to come back to work. Each Applicant agreed that they had been informed by correspondence from the Respondent a week before their return to work that they would be welcome back to work; and

(p) On Friday, 15 March, 2019, the Applicants sought legal advice and it was decided to send a repudiation of contract termination notice through the Applicants’ Solicitors. That notice was in the following terms:

“We act for David & Shaun Fehily in the above matter.

We refer to your letter dated 4 March 2019.

As your clients would be aware, our clients have been on sick leave from 11 February 2019 until 13 March 2019 and 12 February to 11 March 2019 respectively.

Upon returning to work on Tuesday 12 March 2019 and Wednesday 13 March 2019 respectively, our clients have entered their workspace at Hallbury Display Homes in Cranbourne North to find that their client files, computers, telephones and business cards had been removed. This follows from other conduct over a period of time targeted at our clients.

Upon this basis, our clients have not had the opportunity to carry out their daily tasks in accordance with their employment contracts. This is contrary that which is outlined in your letter dated 4 March 2019.

Repudiation of Contract

On the basis of your client’s conduct, our clients have been unable to render substantial performance of their contracts, resulting in a repudiation of their contracts. Our clients instruct that they elect to accept this repudiation and terminate their contracts with Hallbury Homes effective immediately.

We hold instructions to file proceedings in the Supreme Court of Victoria to obtain our clients accrued rights and entitlements, as well as damages for, inter alia, loss of opportunity.”

SUBMISSIONS

(a) The Applicants’ Submission

[11] The Applicants submitted that the Respondent performed a series of acts that repudiated their employment contract with the Applicants.  Those acts fell into three separate categories:

(a) Unilaterally reducing the Applicants’ remuneration. This was done by acts that include paying the Applicants incorrect, lesser and late amounts of commission than that to which they were entitled;

(b) Unilaterally changing the terms of their employment by diminishing their role. This was said to be done by redirecting sales inquiries to other staff instead of to the Applicants and by reneging on what the Applicants said was a term of the employment, that they were the only sales people exclusively doing sales for the Respondent; and

(c) Cleaning out the Applicants’ desks while they were on sick leave. 

[12] It was submitted that repudiation of the contract does not bring the contract to an automatic end but gives the affected party the right to terminate the contract. The issue before the Commission was therefore “What was the act of acceptance and when did it occur?”, and the answer was by the letter of 15 March, 2019, accepting the repudiation.

[13] The Applicants submitted that the act of acceptance of repudiation must be clear.  It must be unequivocal and it usually must be communicated.  In some limited circumstances, an act of acceptance can be inferred from an employee’s conduct.  But the authorities state that it will not be lightly inferred 1. The difficulty of establishing a termination, inferred by conduct, could be seen in The State of New South Wales v Shaw2.

[14] The Applicants noted that Shaun Fehily testified that he went back to work a day early because he wanted to get a head start and set up a display, in preparation for what he anticipated would be a busy weekend ahead. When he saw that his workstation had been cleaned out and his client files had been removed, he had a stress induced panic attack and he had to leave to calm himself down. 

[15] Shaun Fehily leaving work on 13 March, 2019, could not be inferred as an unequivocal acceptance of the Respondent’s repudiation or any clear intention to no longer be bound by is contract of employment.  He had no obligation to be there as he was still on sick leave.  He did not communicate anything to the Respondent about leaving, let along leaving for good.  He had a pressing medical need as to why he needed to leave.

[16] The Applicants submitted that while David Fehily was due to return to work from his sick leave on Tuesday 12 March, 2019, and he did so, he also returned to work the next day, on Wednesday, 13 March, 2019. On both of those days he stated there was no communication from head office in any form.  He was given no instructions and his computer and phone were not returned in order to enable him to do his job.

[17] The Respondent’s suggestion that the fact that David Fehily did not come to work on Thursday, 14 March, 2019, and Friday, 15 March, 2019, was his acceptance of the repudiation was submitted to be unsustainable.  Neither of the Applicants worked on Thursdays or Fridays. An inference could not be drawn from the conduct of an employee not showing up to work when there was no obligation on that employee to show up to work.

[18] Finally, the Applicants submitted that if the Commission were to find the Applications out of time, the Commission should find exceptional circumstances because the delay was solely attributable to the Applicants’ representative 3.

(b) The Respondent’s Submission

[19] The Respondent submitted that by 12 March, 2019, the Applicants had been told of various restructuring within the Respondent. They knew that the laptops and mobiles that they used for their work had been taken, and they knew that other people would have been working on their client files. 

[20] The evidence of any purported repudiation was described by the Respondent in their submissions as “very thin”, and “wafer thin” 4, consisting of some things being missing from the display home, and that the Applicants were not called by senior members of staff to check in on them.  Further, rather than there being a diminution of the Applicants’ opportunities for sales, there were in fact, the Respondent submitted, significantly more opportunities for sales.

[21] The Respondent submitted that the evidence of Shaun Fehily was that on 13 March, 2019, he had determined that, in order for him to live, he had to leave employment (though I think it is more correct to say that evidence was to leave the workplace, not employment) 5.  So on that date, the decision was made that his employment with the Respondent had ended.

[22] David Fehily’s evidence was submitted to be not as clear as Shaun Fehily’s. However, by 13 March, 2019, both David and Shaun Fehily had clearly decided to leave their employment. The Respondent submitted in proceedings 6:

“Then on that day, after taking photos and Shaun determining that he was done with Hallbury, they leave the office.  They don’t advise their employer, they don't advise any other member of staff, that's the end of their engagement with Hallbury.”

[23] The Respondent agreed that, in all but rare circumstances, there is a requirement that there be acceptance of the repudiation.  The Respondent put that the doctrine of automatic termination “has been buried” 7. It submitted that there was insufficient basis upon which the Applicants could have claimed to accept repudiation. What was occurring in the lead up to, and on 13 March, 2019, was a building of a case for repudiation. The Respondent concluded:8

“…what should be inferred from that conduct is that on the 13th, viewed objectively, the applicants had decided to quit and that, viewed objectively, they'd evinced an intention to no longer be bound by the terms of the contract.  We say that took place on the 13th.”

[24] It was put by the Respondent that, as a matter of reality and of common sense, both Applicants had decided to terminate their employment on 13 March, 2019.  On that date, having returned to work, both of the Applicants left the display home, left their place of work and, in doing so, evinced a clear intention to no longer be bound by their contract of employment.  It was submitted to be their choice, and it was made, clearly, on the 13 March, 2019.

[25] On the ‘out of time’ application, the Respondent noted that while a statement was received from Ms Makedonka Atanasov, the legal representative of the Applicants at the time of the cessation of their employment and the commencement of these proceedings, she was not called to give evidence and her statement was not otherwise sought to be relied upon. As such, there was a limited basis on which representative error could be inferred. Further, as the applicants decided to leave their employment, their underlying general protections claim was very weak. 

CONSIDERATION

(a) Termination Date

[26] Serious breach or repudiation does not ordinarily automatically terminate an employment contract. An election to terminate communicated by the innocent party is almost always necessary 9.

[27] The same is so for resignation. As Mark Irving so eloquently observed in his text, ‘The Contract of Employment’:

“Tendering a resignation

The right to give notice is one of the features that distinguish employment from slavery. An employee engaged on a contract of indefinite duration without a right to resign ‘would be enslaved, with hope only in either death or manumission’. Sometimes the giving of notice by an employee is colloquially referred to as ‘tendering’ a resignation that the employer may choose to ‘accept’. The usage harks back to the original meaning of ‘resignation’ in law which related to the surrender of offices held under the Crown, in bishoprics and in some corporations. Such surrender usually required the assent of the Crown, the bishop or the corporation.

Nowadays, ‘expressions such as the tendering and acceptance of a resignation, although commonly used, are merely linguistic courtesies’. However, some statutes governing public sector employment (and conceivably some contracts) require that the employer accept the resignation for the notice to be effective. The traditional position is that, unless altered by statute, the right of Crown servants to unilaterally resign is quite limited, a position that has been altered by most public sector statutes and, perhaps, by an implied constitutional prohibition on slavery.” (Footnotes omitted).

[28] The case advanced by the Respondent, specifically denying as it does any basis for repudiation, is more akin to an allegation of resignation, though it is not so clearly delineated. The Respondent claims that both Applicants had decided to terminate their employment on 13 March, 2019, and clearly indicated their intention to no longer be bound by their contracts by leaving the workplace. That decision to be no longer bound was expressed in the Form F8A (with a different date) as follows:

“If the Applicant was dismissed (which is denied), the dismissal would have taken effect on 12 March 2019, being the date on which the Applicant decided to no longer be bound by the Employment contract and attend his usual place of employment without any other reason. As such, the Applicant’s application is made outside the 21-day time limit. (see Part 6 below).”

[29] The essential flaws in the case advanced by the Respondent, however, are:

(a) The Respondent did not know that either Applicant had attended the display

centre on either 12 or 13 March, 2019, what occurred when they did so attend, or that they left at any particular time;

(b) Thursday 14 March and Friday 15 March, 2019, were not working days for the

Applicants; and

(c) Mr Trebilcock stated, “I first became aware of David and Shaun’s intention not to return to work on 18 March 2019, when provided with [the letter accepting repudiation from the Applicants’ Solicitor dated 15 March, 2019]” 10.

[30] Nothing was “clearly indicated” on 12, 13 or even 14 March, 2019. The Respondent had no idea on any of those dates that either Applicant had done anything. Further, when the 15 March, 2019, letter was received from the Applicants, the Respondents did not take issue with the repudiation characterisation until 6 May, 2019, when the Respondent’s Form F8A responses to the Applications were filed. In that circumstance, how were the Applicants to know that any other termination dates were to be suggested?

[31] To be effective, a notice of termination must be received by the recipient. As Keely J observed in Transport Workers Union v National Dairies Limited 11in a matter involving a notice of termination posted by an employer to an employee:

“In my opinion the mere posting of a letter of termination does not in itself amount to a termination of the employment of the employee concerned until its contents are communicated to the employee.”

[32] The only notice given by the Applicants was that communicated on 15 March, 2019, in the letter accepting repudiation from the Applicants’ Solicitor. That is the date of cessation of employment. The Applications are therefore not be out of time.

(b) Out of Time

[33] If I am incorrect in my conclusion as to the date of cessation of employment, and such event actually occurred on either 12 or 13 March, 2019, I would still have exercised the discretion to allow the Applications to be made out of time.

[34] While the only circumstance from s.366(2) of the Act addressed by the either party was the reason for delay, I accept that delay was solely attributable to the Applicants’ legal representative, who was understandably confused as to termination date. That such confusion could exist has been borne out by the evidence and submissions in these proceedings.

CONCLUSION

[35] As the employment of the Applicants ceased on 15 March, 2019, the Applications are not out of time.

DEPUTY PRESIDENT

Appearances:

Ms M Isobel of Counsel, for the Applicants.

Mr J Tierney of Counsel, for the Respondent.

Hearing details:

2019.

1 August.

Sydney and Melbourne (via video conferencing).

Final written submissions:

For the Applicants: 8 July 2019.

For the Respondent: 1 July 2019.

Printed by authority of the Commonwealth Government Printer

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 1   Vittol SA v Norelf Ltd [1996] AC 800 at [811].

 2   [2015] NSWSCA 97.

 3   Dean-Villalobos v QGC Limited[2013] FWC 1537.

 4   PN628 and PN 630.

 5   See PN PN257 to PN 265.

 6   PN635.

 7   PN641.

 8   PN643.

 9   Visscher v Guidice (2009) 239 CLR 361, at [53].

 10 Statement of Brett Trebilcock dated 1 July, 2019, at [41].

 11 (1994) 57 IR 183, at pp. 184 to 185.