Ms Paula Ruchotzke andMr Jared Austin Gilbert andMr Michael Hayward-Smith v Vancal Pty Ltd T/A GMT (Groves Manufacturing & Tooling)

[2015] FWC 7

[2015] FWC 7

FAIR WORK COMMISSION

DECISION

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

Ms Paula Ruchotzke

and

Mr Jared Austin Gilbert

and

Mr Michael Hayward-Smith
v
Vancal Pty Ltd T/A GMT (Groves Manufacturing & Tooling)
(U2014/12539; U2014/12540; U2014/12541)

COMMISSIONER CLOGHAN PERTH, 8 JANUARY 2015

Applications for relief from unfair dismissal - jurisdictional objection - out of time.

[1] On 16 September 2014, Ms Paula Ruchotzke (Ms Ruchotzke), Mr Jared Gilbert (Mr Gilbert) and Mr Michael Hayward-Smith (Mr Hayward-Smith) (or collectively the Applicants) made applications to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from their former employer, Vancal Pty Ltd T/A GMT (Groves Manufacturing and Tooling) (GMT or Employer).

[2] The Applicants state in their applications that they were dismissed on 5 July 2014.

[3] The applications were made pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[4] For the Commission to have jurisdiction to hear and determine the matters, it is necessary for the applications to be made within 21 days after the dismissals took effect, pursuant to paragraph 394(2)(b) of the FW Act.

[5] The Applicants have not made their applications within 21 days after the dismissal took effect. However, the Commission can allow for a further period for the application to be made (that is, 16 September 2014), if it is satisfied that there are exceptional circumstances.

RELEVANT LEGISLATIVE FRAMEWORK

[6] The relevant legislative provisions are as follows:

“394 Application for unfair dismissal remedy

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (3).

(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC 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.”

[7] To resolve the question of whether there were exceptional circumstances to allow the applications to be filed on 16 September 2014, I issued procedural directions to the parties on 20 October 2014 advising that the matter would be determined by written submissions.

[8] This is my decision and reasons for decision as to whether exceptional circumstances existed to allow the Applicants to file their applications on 16 September 2014.

RELEVANT BACKGROUND

[9] Mr Stephen Groves is the founder and Managing Director of GMT.

[10] Ms Ruchotzke is the daughter of Mr Groves, a shareholder and director of GMT. Ms Ruchotzke was GMT’s Office Administrator.

[11] Mr Hayward-Smith is described by Mr Groves as his future son-in-law. Mr Hayward-Smith is described by Ms Ruchotzke as her fiancé.

[12] Mr Hayward-Smith states that “Ms Stephanie Groves, sister of Ms Ruchotzke, resigned in February and the managing director Steve Groves, retired 19/3/2014 due to ongoing health issues advising me to run the business (04/04/2014) with my partner Paula Ruchotzke (nee Groves) also a Director”.

[13] Mr Jared Gilbert is Ms Ruchotzke’s son and Mr Groves’ grandson. Mr Gilbert states that he was employed as a Trades Assistant.

[14] On 4 July 2014, two employees of Kounis Metal Industries (KMI) visited the Employer’s premises. As a result of what they observed, the senior employee telephoned Mr Groves and reported their observations.

[15] The Applicants state in their submissions that on 5 July 2014, Mr Groves attended the Employer’s premises and advised that the business was “shutting down effective immediately and to remove all our personal belongings”. Mr Hayward-Smith submits that he was told similar information by Mr Groves at the premises of KMI shortly before the discussion at GMT.

[16] Ms Ruchotzke states that she has a transcript of most of the discussions between Mr Groves and the parties, as she recorded it on her mobile telephone. I was not provided with a copy of the transcript of the recording.

[17] All parties made submissions regarding the background to the applications. The background contains “colourful” language, allegations of fraud, investigations by the police, acquisition of shares, applications for Violence Restraining Orders, extraordinary Board meetings, performance assessment of the business before and after Mr Groves’ retirement, allegations of lies, allegations of illegal business practices, mistrust, malicious information, solvency arguments and tampering with financial documents.

[18] While it may be impolite, I cannot help but make the observation that the circumstances leading to these applications were not a situation in which you would write a “wish you were here” postcard.

CONSIDERATION

[19] I have previously adopted, and do so on this occasion, the meaning of exceptional circumstances as:

“... a circumstance which is such as to form an exception, which is out of the ordinary, or unusually, or special, or uncommon. To be exceptional a circumstance need not be unique or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered.” R v Kelly (Edward) [2000] 1 QB 198 at 208.

[20] The Australian Concise Oxford Dictionary defines “exceptional” as “forming an exception, unusual”. Further, “exception” is defined as “something that does not follow the rule”. The term “exceptional” requires a qualitative examination of the existence of something against the norm.

[21] The majority of employees who make application to the Commission alleging unfair dismissal, do so within 21 days after the dismissal has taken effect. However, the Parliament has provided the Commission with the discretion to extend the 21 days where there are “exceptional circumstances”.

[22] The burden lies with the Applicants to make out their case that exceptional circumstances existed to satisfy the Commission that the time for filing the application should be extended. I shall now consider those circumstances as set out by the Applicants within the legislative provisions.

Paragraph 394(3)(a) - what was the reason for the delay in lodging the application?

[23] On or around 8 August 2014, the Applicants made application to the Western Australian Industrial Relations Commission (WAIRC) alleging that they were unfairly dismissed. The application form states:

“NOTE: It is important to correctly state the full name of the employer. If the employer in this matter is a trading, financial or foreign corporation the Commission may not have jurisdiction to deal with the matter. If known, please indicate whether the employer is one of the following: Company; Incorporated Association; Trust; Unincorporated (eg. Sole trader, partnership or other); State Government Agency; Other”.

[24] The Applicants stated that their employer was a “Company”.

[25] In the applications to the WAIRC, all the Applicants state that the date of their termination of employment was 29 July 2014. All the Applicants were not seeking reinstatement for various reasons including “irreconcilable differences in the family”.

[26] Mr Groves, Ms Ruchotzke’s father, is named as the employer and was served with the WAIRC applications.

[27] It is notable at the Applicants also made similar applications relating to denial of contractual benefits.

[28] On 16 September 2014, at a hearing in the WAIRC into the three alleged unfair dismissal claims, all three applicants agreed that they were employed by the Employer. Subject to receiving documentary evidence, the WAIRC indicated that it appeared the State Commission did not have the jurisdiction to deal with the alleged unfair dismissal applications.

[29] On the same day, the Applicants filed these applications in this Commission.

[30] Shortly put, the Applicants made a mistake in filing the applications in the WAIRC and this is the reason for the delay.

[31] Making a wrong choice is not out of the ordinary, exceptional, unique, unusual, rare or uncommon. Making the wrong choice is a familiar everyday occurrence.

[32] When filing applications in the WAIRC, the State Commission sets out a note of caution to applicants making applications in stating “If the employer in this matter is a trading, financial or foreign corporation, it may not have jurisdiction to deal with the matter”.

[33] Each of the Applicants, in their applications to the WAIRC, stated that “Vancal Pty Ltd”, or its trading name, was the name of the employer and indicated that it was a “company”. While this may be of lesser significance to Messrs Hayward-Smith and Gilbert, Ms Ruchotzke was in a more informed position as a director and shareholder of the Employer. As a director, Ms Ruchotzke should have been aware that Vancal Pty Ltd was incorporated and registered pursuant to the Commonwealth Corporations Act 2001. Further, the Corporations Act 2001 includes provisions on how a director is to diligently exercise their powers in managing or directing the company.

[34] Ms Ruchotzke states:

“As GMT [the Employer] traded solely in WA, all directors resided in WA and also as U108/2014 was being heard through the WAIRC it was my belief my case fell under the same jurisdiction and so was lodged at the WAIRC.” (my emphasis)

[35] The reference to U108/2014 was a separate application in the WAIRC in which Mr/Ms Velunsamu, also an employee of GMT, alleged “unfair dismissal, lack of required notice and denied contractual benefits by the Employer”.

[36] It is not without some irony that Ms Ruchotzke was the Employer’s representative who provided an answer and counterproposal to Velunsamu’s application in the WAIRC.

[37] Ms Ruchotzke and Mr Hayward-Smith both raise in their submissions that Velunsamu had pursued a similar application in the WAIRC. While that is the case, Ms Ruchotzke, as GMT director and representative, could have raised a jurisdictional objection in the WAIRC that Velunsamu’s application had been filed in the wrong jurisdiction. Ms Ruchotzke did not do so, and consequently, this mistake was compounded when the Applicants repeated the same actions as Velunsamu; an action which has led to these applications being lodged beyond the statutory timeline.

[38] In summary, for the reasons above, I am not satisfied that the reasons for the delay were exceptional. The circumstances indicate that the Applicants made a wrong choice of jurisdiction. In the case of Ms Ruchotzke, it should have been apparent that the correct jurisdiction was a Commonwealth authority - this Commission. In the case of Mr Hayward-Smith and Mr Gilbert, it appears they followed the lead of Ms Ruchotzke. A mistake is common and not exceptional circumstances; if it was, the statutory provision would become meaningless.

Paragraph 394(3)(b) - the date upon which the Applicant became aware of the dismissal

[39] From the submissions and the originating applications, the Applicants became aware of their dismissals on 5 July 2014.

Paragraph 394(3)(c) - any action by the person to dispute the dismissal

[40] I have detailed the actions taken by the Applicants to dispute the dismissals in paragraphs [23] to [37], it is not necessary to repeat the details.

Paragraph 394(3)(d) - prejudice to the employer caused by the delay in filing the application

[41] The parties have not addressed this criterion. The lack of prejudice suffered by an employer is not a satisfier of exceptional circumstances. Rather it does not dissatisfy exceptional circumstances. I have adopted a neutral position regarding this criterion.

Paragraph 394(3)(e) - the merits of the application

[42] From the submissions, I am satisfied that the facts of these applications would be the subject of detailed and extensive cross examination. It is not matter which can be given adequate consideration by way of written submissions. I have adopted a neutral position with respect to this criterion.

Paragraph 394(3)(f) - fairness between the applicant and other persons in a similar position

[43] To the extent that this criterion is relevant, I have also adopted a neutral position with respect to this criterion.

CONCLUSION

[44] In conclusion, for the reasons set out above, I am satisfied that exceptional circumstances did not exist which led to the delay in the Applicants filing their applications beyond the statutory time of 21 days after the dismissal to effect. Orders to this effect will be issued jointly with this Decision.

COMMISSIONER

Final written submissions:

Ms Ruchotzke: 29 October and 20 November 2014.

Mr Gilbert: 3 November 2014.

Mr Hayward-Smith: 3 and 20 November 2014.

Employer: 18 November 2014.

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<Price code C, PR559637>