Ms Monique McCloskey v Norgrove Training Pty Ltd T/A Norgrove Training

[2018] FWC 5760

[2018] FWC 5760

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy

Ms Monique McCloskey
v
Norgrove Training Pty Ltd T/A Norgrove Training
(U2018/6215)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 13 SEPTEMBER 2018

Application for an unfair dismissal remedy – procedural issue – whether application should be stayed pending Supreme Court proceedings – material overlap of fact and issues – statutory scheme of FW Act – stay ordered for limited period only

[1] This decision concerns whether an unfair dismissal application should be stayed or listed for hearing having regard to related proceedings involving the parties before the Supreme Court of South Australia.

[2] Ms Monique McCloskey has applied to the Fair Work Commission (the Commission) under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in relation to an alleged dismissal by Norgrove Training Pty Ltd (Norgrove or ‘the employer’). She claims to have been dismissed on 28 May 2018 and that her dismissal took effect that day. She issued proceedings in the Commission on 18 June 2018.

[3] Norgrove filed a response to the application on 3 July 2018. It claims that Ms McCloskey’s dismissal was not harsh, unjust or unreasonable. It claims that it is a small business within the meaning of the FW Act and that its decision to dismiss was consistent with the Small Business Fair Dismissal Code.

[4] The matter came before a Commission-appointed conciliator on 16 July 2018 but did not resolve.

[5] By consent, I granted permission to the respondent employer to be legally represented at interlocutory hearings on this matter, including the proceedings giving rise to this decision. To date, I have made no determination on permission to be represented at the substantive hearing of this matter. Ms McCloskey is self-represented in these proceedings.

[6] At a directions hearing on 8 August 2018 Norgrove made a stay application. The employer applied for an order that Ms McCloskey’s unfair dismissal application be stayed in its entirety (that is, not be listed for hearing or be subject to further directions for the filing of materials) until an allegedly related matter between the parties in the Supreme Court of South Australia has been determined.

[7] In the alternative, Norgrove submit that the unfair dismissal application not be listed for further directions until after 8 October 2018 when the status of an interlocutory Supreme Court order currently in operation may be clearer.

[8] Ms McCloskey opposes the stay application.

[9] I issued directions on 8 August requiring both Norgrove and Ms McCloskey to file materials in relation to the stay application.

[10] On 17 August 2018 I received materials from the employer in the form of a written submission and an affidavit of a director of the company, Ms Joyce Southern. The statement attached affidavits filed in the Supreme Court by Ms Southern and voluminous documents attached thereto.

[11] On 24 August 2018 I received a statement from Ms McCloskey. It attached Ms McCloskey’s responding affidavit and voluminous attachments that had been filed in the Supreme Court. Ms McCloskey also filed a Supreme Court affidavit of Christine Ledwidge of 5 June 2018 and unsigned and undated statements of four other persons, Kristy Castle, Luceille Outhred, Louisa Bignell and Melissa Oxford.

[12] Norgrove filed a written submission in reply on 5 September 2018.

[13] On 7 September 2018 I conducted a hearing by telephone of the employer’s application for a stay. Norgrove made oral submissions in support of its written submissions and evidence. Ms McCloskey made oral submissions in support of the materials she had filed. No party sought to adduce oral evidence. Beyond the oral submissions made, it was agreed that I determine the stay application on the written materials before me. I reserved my decision.

The Facts

[14] The respondent employer is a registered training provider. It provides vocational training and education qualifications including in the heath and aged care industry.

[15] Ms McCloskey first worked for Norgrove as a contractor in June 2015. In March 2017 she came to be employed by Norgrove as a Lead Trainer (described by Ms McCloskey as ‘Training Manager’ in her witness statement).

[16] On or about 23 May 2018 Norgrove formed a view that Ms McCloskey and another employee Business Manager Emily Melgar had misused confidential information belonging to the business and were developing plans to compete with the business (allegedly) contrary to their duties as an employee.

[17] On 24 May 2018, through its solicitors, Norgrove made certain demands of Ms McCloskey (and Ms Melgar) and sought undertakings concerning restraint of trade and reserved its right to take legal proceedings concerning those matters.

[18] On 28 May 2018 Norgrove instantly dismissed Ms McCloskey for serious misconduct.

[19] Through her solicitor, on 31 May 2018 Ms McCloskey asserted that “the purported termination is without any basis and our client disputes the purported grounds of the termination.” Ms McCloskey also asserted that she was owed monies for past work as a sub-contractor and as an employee.

[20] On 6 June 2018 Norgrove filed proceedings in the Supreme Court of South Australia claiming damages for misuse of confidential information and breach of employment obligations (‘the Supreme Court proceedings’). Ms Melgar is also a defendant in these proceedings.

[21] On 7 June 2018 the Supreme Court issued interim orders restraining Ms McCloskey (and Ms Melgar) from setting up in competition with Norgrove, to return the employer’s confidential information and intellectual property and related orders.

[22] The interim order of the Supreme Court of 7 June 2018 remains current. Directions hearings in the Court on 17 July and 27 July have led to a hearing being scheduled for 8 October 2018 to determine the status of the order.

[23] Negotiations on a without prejudice basis are occurring between Norgrove and Ms McCloskey concerning the matters in hand in advance of the Supreme Court proceedings on 8 October 2018.

[24] On 18 June 2018 Ms McCloskey filed these unfair dismissal proceedings in the Commission.

Consideration

[25] In the ordinary course, Ms McCloskey’s application is at a stage where it would be set down for hearing and determination and directions would be issued for the filing of materials (witness statements, documents and submissions) by the applicant and the respondent in advance of the hearing. Other interlocutory matters would also be attended to (for example, whether determination by conference or hearing, permission to appear at the hearing etc).

[26] The employer says that this ordinary and natural sequence of events should be stayed as it would not be an efficient use of resources or in the interests of justice to have the Commission application determined in advance of the Supreme Court proceedings or in parallel with them. The employer says that it would be prejudiced in having to prosecute one proceeding and defend another. It says that both proceedings concern overlapping facts and issues, with the risk of different findings on the same facts by different bodies. It says that the Supreme Court proceedings concern similar but broader issues and wholly encompass the factual matters relevant to the Commission proceedings.

[27] Ms McCloskey says that she has offered to accept “the current orders (of the Court) until December 2018”. She says that she has a real and pressing grievance against the employer believing that her grounds of dismissal were wrongly premised in fact and law. She is concerned that a delay may prejudice her case in that it will distort memories of witnesses and other witnesses may become unavailable. She disputes many of the assertions in the affidavits of Ms Southern.

[28] Whether to stay these proceedings and, if so, on what terms is a discretionary decision but a discretion that must be exercised within the statutory framework including that applying to Part 3-2 (Unfair Dismissal) of the FW Act.

[29] Section 589(1) of the FW Act provides that the Commission “may make decisions as to how, when and where a matter is to be dealt with.” The general principles to be applied were summarised by Gostencnik DP in Bowker and Others v DP World Melbourne Ltd 1 in the context of an application for an order to stop bullying:

“[5] In considering whether to exercise the discretion to make a decision with the effect that the applications would not be dealt with until after judgement is delivered in the Federal Court proceeding, it seems to me appropriate that I have regard to the relevant considerations that are taken into account by the courts in considering applications of this kind. Conveniently, in Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited 2, a case concerning an application to stay a proceeding because another proceeding involving related entities operating with a degree a common management and control, were involved in earlier commenced proceeding in New Zealand, Lockhart J set out a number of considerations His Honour said were relevant to the question whether a stay ought be granted:

“In my opinion relevant consideration is to be taken into account in the present case includes the following:

•  Which proceeding was commenced first.

•  Whether the termination of one proceeding is likely to have a material effect on the other.

•  The public interest.

•  The undesirability of two courts competing to see which of them determines common facts first.

•  Consideration of circumstances relating to witnesses.

•  Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

•  The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

•  How far advanced the proceedings are in each court.

•  The law should strive against permitting multiplicity of proceedings in relation to similar issues.

•  Generally balancing the advantages and disadvantages to each party”.

[6] The approach in Sterling Pharmaceuticals has been adopted in a number of subsequent decisions but it is to be noted that the list of considerations set out in Sterling Pharmaceuticals is not exhaustive and is not intended to be applied as a strictly prescriptive checklist of preconditions. Furthermore, considerations of case management are also relevant, as is the fact that decisions considering whether to grant a stay are often enmeshed in the facts and circumstances of the case the subject of decision and ultimately each case must be addressed having regard to its own circumstances.”

[30] Part 3-2 (Unfair Dismissal) of the FW Act places significant emphasis on proceedings being dealt with quickly and efficiently. Section 381(b) refers to the procedures of that Part being “quick, flexible and informal”. Section 394(2) provides that applications are statutorily barred if not filed within 21 days of a dismissal taking effect, unless exceptional circumstances exist.

[31] Should the application not be stayed, it is likely that it would be at least two months before the date of hearing, having regard to Commission availability and the need for materials to be prepared and put on file by both the applicant and respondent. It is also noted that one party (the employer) has foreshadowed that the hearing may occupy seven to ten days. Whether I agree such a course is necessary or appropriate remains to be seen; but it would appear that at least on the material before me the case would be voluminous and time consuming. It may not be completed by year’s end resulting in a decision not being delivered until some six to nine months after dismissal, even on the ordinary timeframe (without a stay).

[32] These factors, together with the issues raised by Ms McCloskey, weigh significantly towards not granting a stay.

[33] There are however a number of factors that support a grant of a stay, or a stay for a defined period. These include:

● An apparent substantial factual overlap between the Supreme Court proceedings and the Commission proceedings 3;

● Material commonality between the Supreme Court cause of action (breach of contract) and the position advanced by the employer in its response to Ms McCloskey’s application; and

● The cost and expense of dual proceedings in different jurisdictions being prosecuted and defended in relation to common or similar issues involving the same parties, and the fact that the costs of Commission proceedings cannot be generally recovered unless sections 400A, 401 or 611 of the FW Act are made out. 4

[34] I also take into account that the Supreme Court proceedings scheduled for 8 October 2018 are dealing with the interlocutory issue concerning the interim order only. Should the court matter proceed to trial that would be many months away, and a judgment may be even further distant. That said, the matter may not proceed to trial in the court. Settlement discussions are occurring.

[35] However, the practical difficulty in having the two proceedings running in parallel is apparent from the very correspondence Ms McCloskey sent the Commission on 31 August 2018. Having extended the time for her to file materials on the stay, Ms McCloskey wrote to me in the following terms: 5

“I have received legal advice regarding further submissions prepared for the application to stay. The respondent have (sic) not listed their intention to file for damages within the Supreme Court, but should they choose to, I have been advised that these documents would be required for the trial. I have been advised that it would be in my best interest to submit these documents during the Supreme Court proceedings, and that submitting them now would not be wise.”

[36] It is apparent from this email that prejudice to the applicant may arise should the Commission application proceed in the ordinary manner. The filing of such materials by the applicant would, in the ordinary course, be the next step.

[37] In these circumstances I consider that a case has been made out, on balance, for a stay of Ms McCloskey’s application but for a limited period only. I will not grant the respondent employer’s application for a stay until the court application is determined. That would be an excessive period and be indeterminate. The Commission would lose control of the application in which I am vested, and that outcome would not be consistent with the FW Act’s scheme or discharging my statutory responsibility.

[38] On the facts as they are currently before me, I consider there to be reasonable grounds to stay the application for a month, to enable the proceedings before the Supreme Court scheduled for 8 October 2018 to take place, for the status of the interim order to be brought before the Court and for any related settlement discussions to take place. That would permit both parties to prepare for the interlocutory court proceeding without being further required to prepare and submit materials for the Commission proceedings. That may eliminate some duplicate cost and some actual or perceived prejudice.

[39] I will relist the matter for directions at 4.15pm (ACDT) Thursday 11 October 2018.

[40] However, subject to hearing further from the parties at that time, my preliminary intention is to then list the Commission proceedings for a future date or dates on which the application will be determined, and issue directions for the preparation of the matter in advance of that determination, if Ms McCloskey’s application is still proceeding.

DEPUTY PRESIDENT

Appearances:

Ms Monique McCloskey

Mr Ganesh Krishnan, with permission,for the respondent

Hearing details:

7 September 2018, in Chambers

Printed by authority of the Commonwealth Government Printer

<PR700351>

 1 [2014] FWC 2036

 2 (1992) 34 FCR 287

 3   De Pledge v Moulding Industries Pty Ltd [2004] WAIRComm 1157 at 2

 4   Parella v FBM Corporation Pty Ltd [2012] WAIRComm 903 at 10 - 11

 5   Email Monique McCloskey to Chambers – Anderson DP, Friday 31 August 2018 10.06am