Mrs Brigitte Arnold v Cyberclean Pty Ltd

[2014] FWC 2504

[2014] FWC 2504

FAIR WORK COMMISSION

DECISION

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

Mrs Brigitte Arnold
v
Cyberclean Pty Ltd
(C2013/2569)

Mr Dirk Arnold
v
Cyberclean Pty Ltd
(C2013/5399)

COMMISSIONER BOOTH BRISBANE, 14 APRIL 2014

Application to deal with contraventions involving dismissal - extension of time - application to State jurisdiction - no exceptional circumstances - not employees and high income threshold.

[1] Dirk Arnold and Brigitte Arnold, who are husband and wife, each brought separate applications to the Fair Work Commission (the Commission) seeking general protections relief under s.365 of the Fair Work Act 2009, alleging they were each employees dismissed by Cyberclean Pty Ltd (Cyberclean). The two applications were dealt with together.

[2] Cyberclean was represented by Bridge Brideaux Solicitors. Mr and Mrs Arnold represented themselves. Cyberclean raises jurisdictional objections to the applications, including that the applications were made out of time, and this decision relates to those objections.

[3] The parties in submissions appear to proceed on the basis that the applications were also for unfair dismissal. Both types of applications cannot run concurrently: s725 and Du v University of Ballarat. 1 Mr and Mrs Arnold did not explicitly seek to amend their applications to be for unfair dismissal rather than general protections nor elect for unfair dismissal remedy, but they refer to their detailed submissions as an amended application.

[4] It follows that the applications are for general protections under s.365 and not for unfair dismissal under s.394. However nothing turns on this point in this jurisdictional decision for reasons given below.

Background

[5] The business commenced operation in 1994 with Mr Arnold and a Mr Chewter as shareholders of the operating entity. Mrs Arnold performed duties as Mr Arnold’s personal assistant. The Applications assert in identical terms that:

● Mr Harald Rolf purchased a 50% interest in Cyberclean on 31 January 2012 from a retiring partner (presumably Mr Chewter);

● in consideration of financial investment in the business, Mr and Mrs Arnold agreed to granting Mr Rolf 51% of the shares;

● Mr and Mrs Arnold become contractors from March 2012. They claim this was a sham arrangement initiated at Mr Rolf’s request to avoid tax liabilities.

[6] Mr Arnold’s application states he was dismissed at a date unknown. He was refused access to the office on 27 March 2013 and removed as a director on 12 June 2013. Mrs Arnold also states she was dismissed at a date unknown and denied access to the Cyberclean’s office on 27 March 2013. Both applications state that “wages payments stopped end Oct 2012”.

[7] The general protections applications were lodged 1 August 2013, and appear to assert that the directors of Cyberclean at that date were Mr Rolf and his wife, Mrs Monika Rolf.

[8] Mr and Mrs Arnold submit they:-

“were not dismissed in the conventional way this term is generally used. Rather we were prevented from working by Mr and Mrs Rolf, excluding us from access to the company IT systems … effective on Monday 25 March 2013.”

[9] They later submit that this “constitutes a dismissal” but assert dismissal took place at a later date as they continued to provide services from their home address possibly until 12 June 2013.

[10] The Applications assert that Mr Arnold fell into dispute with the Rolfs on 25 March 2013 when he refused to sign company tax returns for the 2011-2012 tax year “due to a tax avoidance fraud discovered by Mr Arnold two days before”. It is asserted Mr Arnold was subjected to verbal abuse and harassment that day, and was removed as a director on 12 June 2013 consequent on the dispute.

[11] They say they lodged claims with the Queensland Industrial Relations Commission (QIRC), erroneously believing this was a proper forum for their dispute. Mr Arnold submits two dates for lodgement in different documents, being 3 or 4 July 2013.

[12] Mr and Mrs Arnold provided to the Commission copies in Form 15 of the QIRC seeking relief for recovery of unpaid wages, superannuation contributions etc. 2 The QIRC has no jurisdiction over such a matter arising from the private sector. At some point, said to be about 4 weeks after lodgement, QIRC registry staff referred Mr and Mrs Arnold to the Fair Work Ombudsman (FWO). Mr and Mrs Arnold say they contacted the FWO on 22 July 2013. FWO has jurisdiction for unpaid wages but not for dismissal. They cite a case number, and say it was not until 29 July 2013 that the FWO referred them to the Commission for dismissal remedy.

[13] Mr and Mrs Arnold submit that the QIRC registry told them the original forms lodged by them would have been destroyed. In the ordinary course of events they should have received two copies of a sealed directions order, one for their records, the other for service. 3 They provide no evidence of service on Cyberclean or of correspondence with the QIRC registry confirming any practice of destroying documents.

[14] Cyberclean resists the application on numerous grounds. These are summarised below:

● the applications do not specify a workplace right that was protected nor any adverse action taken because of the exercise of such a right;

● Mr Arnold was paid dividends as a shareholder, not wages as an employee;

● Mr and Mrs Arnold were not employees of, or subcontractors to Cyberclean after February 2012;

● Mr and Mrs Arnold were not employees of Cyberclean at all;

● if they were employees they were not dismissed;

● if they were dismissed the applications are out of time; and

● their remuneration exceeded the high income threshold.

[15] Cyberclean submits that Mr Arnold was the sole shareholder and director of Cyberclean until November 2012 and that various payments were made to the benefit of Mr and Mrs Arnold by the Cyberclean during the period February to November 2012.

[16] As to the QIRC applications, Cyberclean notes the evidence is unsigned and unsworn and the forms provided by Mr and Mrs Arnold are unsigned and not sealed.

Discussion

[17] The parties present a tangled web of alleged facts including details of sham arrangements designed to avoid taxation liabilities, contested dates for change of directorships and the identity of directors at relevant times, and varying interpretation of the terms of engagement and the identity of who was engaged by Cyberclean at what time. It is apparent from the materials that Mr and Mrs Arnold and the Rolfs had a significant falling-out and that appears to colour the evidence and submissions of both parties. The evidence of both parties as to their competing versions of the facts is poor, and in many instances, mere assertions. However, I am satisfied there is sufficient reliable evidence for me to proceed to determine the threshold questions of whether this Commission has jurisdiction to entertain the applications, especially in terms of allowing extra time.

[18] An application for a general protections dismissal dispute must be lodged with the Commission within 21 days after the dismissal takes effect: Fair Work Act 2009 s.366(1)(a). The same time limit applies to unfair dismissal: s.394(2)(a). A further period may be allowed by the Commission in exceptional circumstances described in s.366(2) for general protections and s.394(3) for unfair dismissal remedy.

[19] Mr and Mrs Arnold’s material offers various key dates relevant to changes in their relationship with Cyberclean including:

● some date in March 2012 when they became contractors under a “sham arrangement”;

● 25 March 2013 when the Rolfs are alleged to have told Mr Arnold he was no longer a director;

● 27 March 2013 when they were excluded from the Cyberclean’s IT systems but continued to operate from home;

● an unspecified date in June 2013 after which the Arnold’s trust ceased receiving moneys from Cyberclean;

● 12 June 2013 when Mr Arnold was removed as a director at a company meeting.

[20] Ultimately, Mr and Mrs Arnold nominated, and Cyberclean adopted (without conceding dismissal), the following as the dates the dismissals took effect (the “agreed dates”):

a) Mrs Arnold — 25 March 2013; and

b) Mr Arnold — 12 June 2013.

[21] I proceed on the basis that the agreed dates are the relevant dates as they are logical and that no date after 12 June 2013 makes sense.

[22] Both dates place the applications to this Commission significantly out of the 21 day time limit for either general protections or unfair dismissal.

[23] One nominated date of lodgement at the QIRC, 4 July, is also more than 21 days after the agreed dates for both Mr and Mrs Arnold. The other lodgement date, 3 July 2013, is precisely 21 days after 12 June 2013.

[24] The Commission can only give additional time under s.366(2) or s.394(3) in exceptional circumstances. The sections are not identically worded but the principles applying to each are common.

[25] The term “exceptional circumstances” has a legal meaning: 4

a) they are circumstances not regularly, routinely or normally encountered;

b) they may be a single exceptional event or a series of events that together are exceptional; and

c) are not constituted by ignorance of the time frame for lodgement.

[26] Both sections require the Commission to consider certain factors in determining if there are exceptional circumstances. The parties have not explicitly addressed these factors in their submissions. However I am satisfied there is sufficient, reliable material for me to make a determination.

S366(2)(a) and 394(3)(a): the reason for the delay

[27] The reasons for delay must relate to the delay in lodging to this Commission. The applicant carries the onus of satisfying the Commission of exceptional circumstances explaining the delay.

[28] The principal reason put forward by Mr and Mrs Arnold is their incorrect choice of forum, seeking on either 3 or 4 July recovery of unpaid wages in the QIRC and then later being referred to the FWO. They say they were first directed to this Commission on about 29 July 2013. They also submit that even at the date of lodgement they were unsure when dismissal took effect. So much is stated in the applications.

[29] Mr and Mrs Arnold’s evidence that they sought a QIRC remedy is itself weak, and in this jurisdictional stage, not tested by cross-examination. Even taken at face value, the remedy sought was for recovery of unpaid wages, not an unfair dismissal claim which is available for employees covered by the QIRC: see s.74 of the Industrial Relations Act 1999 (Qld). The FWO’s jurisdiction runs to unpaid wages, not dismissal. Applying to the wrong forum for wage recovery relief cannot explain the delay in seeking dismissal relief in this forum.

[30] The QIRC claim was lodged well after 21 days for Mrs Arnold’s agreed date and 21 or 22 days after Mr Arnold’s agreed date. Lodgement in the wrong forum, even within 21 days, is not sufficient explanation on its own, and exceptional circumstances must still be made out for the purposes of this Commission.

[31] There is ample authority that late lodgement in this Commission by just one day is still late lodgement: exceptional circumstances must be established. Mr and Mrs Arnold’s obligation is to satisfy this Commission of exceptional circumstances that explain their delay in lodging these applications.

[32] This is not a case of error by a legal or industrial representative on whom Mr and Mrs Arnold relied. They choose to act for themselves and are responsible for the conduct of their proceedings.

[33] Nulty and Rose each dealt with out of time applications, finding that exceptional circumstances could not be constituted by ignorance of the requirements of the law, being the time limits in those cases. These circumstances are analogous, and there are authorities closer to the point. 5

[34] For the reasons above, even taking Mr and Mrs Arnold’s evidence at face value, their stated reasons do not satisfactorily explain why they failed to make application for dismissal relief to this Commission in a timely way. This factor weighs against Mr and Mrs Arnold.

S.394(3)(b): became aware of the dismissal after it had taken effect

[35] Although this is a general protections application, the parties also made submissions on the basis of unfair dismissal. The evidence, including acceptance of the agreed dates, is tangled. Any of the dates in paragraph [19] above could be relevant to their awareness. It may be that the realisation only came to Mrs Arnold once her husband was removed as a director on 12 June 2013. However, her present application was brought 50 days after that date. This factor weighs against both Mr and Mrs Arnold.

S.366(2)(b) and 394(3)(c): action taken to dispute the dismissal

[36] No evidence was adduced expressly as to this factor. However both Mr and Mrs Arnold were clearly in dispute with Cyberclean and Mr and Mrs Rolf. Those disputes were about payments under contracts, unpaid wages and superannuation, use and return of equipment and so on. The first evidence of disputation of dismissal appears to be some time late in July once Mr and Mrs Arnold were in contact with the FWO and lodged here shortly after. Given the odd circumstances of the applications, I treat this factor as neutral rather than weighing against Mr and Mrs Arnold.

S.366(2)(c) and 394(3)(d): prejudice to the employer

[37] No submissions were made as to prejudice, and this factor is neutral.

S.366(2)(d) and 394(3)(e): the merits of the application

[38] Cyberclean raises a large number of arguments as to merits. It is sufficient to say that in a full hearing Mr and Mrs Arnold would have to adduce far better evidence in order to succeed. In particular, it is not sufficiently established at this point what workplace right was relevantly exercised by either Applicant, or that they were in employment relationships with Cyberclean, and there are evidentiary inconsistencies of dates and other key facts. However, at this jurisdictional stage, I am prepared to treat this factor as neutral.

S.366(2)(e): fairness as between the person and other persons in a like position

[39] Mr and Mrs Arnold submitted generally that they were treated unfairly, but no clear evidence was adduced relevant to this factor, and it is neutral.

Conclusion

[40] The evidence before me does not establish exceptional circumstances warranting consideration of the exercise of my discretion to allow a further period within which Mr and Mrs Arnold may lodge their applications. Accordingly this Commission does not have jurisdiction and the applications must be dismissed.

[41] It is unnecessary for me to consider the raft of other objections raised by Cyberclean.

Orders

[42] The applications brought by Mr Dirk Arnold and Mrs Brigitte Arnold are dismissed.

[43] Orders will issue accordingly

COMMISSIONER

 1   [2011] FWAFB 5225

 2   Industrial Relations Act 1999 (Qld) s278; Industrial Relations (Tribunals) Rules 2011 (Qld) r76

 3   http:\qirc.qld.gov.au/prod_form_leg/factsheets/fs_applications1.htm

 4   See Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975; Ho v Professional Services Review Committee No 295 [2007] FCA 388, [25]-[26]; Rose v BMD Constructions Pty Ltd[2011] FWA 673

 5   In Reihana v Mastercare Cleaning Services [2013] FWC 3216 SDP Richards found that the applicant lodged in error at the QIRC for the correct relief and was advised to lodge instead at this Commission but failed to do so immediately. That sequence of events did not constitute exceptional circumstances. Upheld [2013] FWCFB 4960; affirmed [2014] FCA 353. See also Wright v Master Builders Association of South Australia Incorporated [2013] FWC 1675 (first filed in the Industrial Relations Commission of South Australia); Feebrey v JMTI Pty Ltd [2011] FWA 3857 (FWO); Cheval Properties Pty Ltd v Smithers[2010] FWAFB 7251 (NSW Industrial Relations Commission)

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