Ms SW v S Pty Ltd
[2010] FWA 3944
•4 JUNE 2010
[2010] FWA 3944 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms SW
v
S Pty Ltd
(U2009/14891)
COMMISSIONER HAMPTON | ADELAIDE, 4 JUNE 2010 |
Application for unfair dismissal remedy – preliminary point - extension of time – whether exceptional circumstances – whether extension warranted and appropriate in the circumstances.
Introduction and Case Outline
[1] The matter arises in the context of an application as made by Ms SW (the applicant) pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal. The respondent employer is S Pty Ltd (the respondent).
[2] The dismissal of the applicant took effect on 14 August 2009 and this application was lodged with Fair Work Australia on 24 December 2009. The applicant has sought an extension of time to permit the application to be lodged beyond the 14-day period nominated by s.394(2) of the Act.
[3] The respondent opposes the extension of time and in light of an objection taken in that context, the scheduled conciliation of the matter did not proceed.
[4] Following a telephone directions conference, both parties filed materials in support of their respective positions in March 2010, however it became apparent that there were relevant critical factual disputes. In those circumstances, s.397 of the Act required that I conduct a conference or hold a hearing in this matter. Given the location of the respondent and the circumstances of the parties, I resolved that I would conduct a determinative conference by video link from Adelaide to Port Augusta. Given the confidential nature of the conference I have used only initials for the parties and witnesses in this decision. 1
[5] During the course of the determinative conference on 14 May 2010, a number of important documents were provided by the parties that had not been provided sufficiently in advance (or in the case of some of the applicant’s documents, not supplied before the conference at all) to enable them to be subject to proper scrutiny or consideration. Somewhat reluctantly, I reconvened the conference to deal with the issues arising from that additional documentation and to permit some additional evidence to be provided. That additional evidence included that given by an Inspector with the Fair Work Ombudsman (the FWO) who had dealt with earlier complaints by the applicant.
[6] The applicant represented herself and Mr PS and Ms AS (directors of the respondent) represented the employer. Evidence was provided by the following:
- Ms SW – the applicant;
- Mr PS – Director of the respondent; and
- Ms AS– Director of the respondent.
[7] The applicant, Mr PS and Ms AS 2 were sworn in at the commencement of proceedings and were subject to examination by all parties and myself at relevant points in the conference.
[8] As alluded to above, Mr JB, an inspector with the FWO, also gave evidence during the conference in response to a subpoena issued by Fair Work Australia at the request of the applicant.
[9] In general terms, I find the evidence provided by the applicant, Mr PS and Ms AS to be reliable, but significantly coloured by the intense personal and legal dispute between these parties. This meant that each party had a tendency to assume the worst in the alleged conduct of the other and accept it as a fact. I also found that the applicant had a tendency to put a gloss on her evidence in relation to matters that were not necessarily supportive of her application. As a result, I have treated much of the evidence before me with caution. I add however that I found the evidence of Mr JB to be considered and impartial and I accept it without hesitation.
[10] The applicant contends that she originally filed a complaint with the FWO on 12 August 2009, when informed of the dismissal, and considered that this was a formal application to contest her dismissal with Fair Work Australia. She also denied any knowledge of a time limit to make an application and contended that the advice from the FWO was that she could reactivate that complaint at any time.
[11] The applicant acknowledges that the FWO treated her original complaint as being withdrawn, however she argues that this was not the case and in any event, needed to be considered in the context of the earlier assurance that it could be reactivated. Further, the applicant contends that she attempted to have the unfair dismissal resolved as part of a commercial dispute between the parties arising from the original purchase of her earlier business by the respondent. In the absence of any likely progress in the commercial dispute, the applicant again approached the FWO and when advised to do so, lodged this application.
[12] The applicant argued that her unfair dismissal claim had merit, there was no prejudice to the respondent and that a reasonable explanation for the delay had been provided.
[13] The respondent contends that an extension of time for the lodgment of the application should not be granted. That position was adopted on the basis that the explanation for the delay as offered by the applicant was not reasonable or sufficient and that the applicant had in fact withdrawn her complaint with the FWO.
[14] The respondent also argued that the applicant also had access to legal advice and only filed this application when the merit of the commercial dispute between them became clear. In that light, it was contended that the employer was entitled to accept that the complaint lodged with the FWO had been withdrawn and in effect that any remaining issues between the parties should be resolved through commercial litigation.
The statutory context
[15] Section 394 of the Act in dealing with applications for a remedy in relation to dismissals provides relevantly as follows:
“….
(2) The application must be made:
(a) within 14 days after the dismissal took effect; or
(b) within such further period as FWA allows under subsection (3).
(3) FWA may allow a further period for the application to be made by a person under subsection (1) if FWA 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.”
[16] Section 396 of the Act provides in part, that I must determine whether the application was made within the period required by s.384(2), which includes the potential extension to the 14-day period, before dealing with the merits of the application.
The broad facts of the matter
[17] I have drawn the broad facts of this matter from the evidence provided by both parties including the extensive documentation ultimately submitted. I will leave the implications of these facts to the consideration of the matter. I should also make it clear that both parties sought to introduce material concerning the broader business circumstances and various elements of the substantive merit of the unfair dismissal matter. It is not necessary or appropriate to make findings on much of that material in the present context.
[18] The applicant and her husband conducted an apparently significant financial planning business and this was sold in May 2008 to the respondent. The sale involved certain transitional payments and arrangements which included the employment of the applicant (and her husband), commencing at that time.
[19] There is a dispute as to the precise terms of employment, including relevantly, the intended duration.
[20] During 2009, in the context of apparently declining business revenue, the applicant’s effective working hours and income were reduced by the respondent. A dispute as to the basis of that reduction including whether it was consistent with the terms of sale for the business was not resolved at that time, and remains unresolved.
[21] There are mutual allegations of bullying and improper conduct and it is clear that the difference of views as to the obligations under the business sale arrangements has contributed to a significant break down in the relationships.
[22] On 12 August 2009, the applicant was in effect dismissed and later advised by Mr PS that her “assistance in relation to the transition period from the date of our purchase of the business to the present date will no longer be required.” 3 The applicant was requested to hand over her keys and sign (release) documents on Friday 14 August 2009.
[23] It is also clear that part of the discussion leading to the applicant’s dismissal concerned her alleged lack of formal qualifications and the cost of professional indemnity insurance in that context. There is a dispute about the validity of this aspect. The respondent did however cancel the applicant’s “Proper Authority” to provide financial advice, which is necessary under the relevant financial services legislation in order to provide such advice to clients.
[24] Also on 12 August 2009, the applicant lodged a workplace complaint form with the FWO (the August complaint). 4 That form outlined the history of business and employment relationships as perceived by the applicant. The form did not specify the precise nature of the outcomes sought by the applicant and that part of the form concerning the ending of the employment (questions 4.18 to 4.22) were not completed. The applicant did (correctly) consider that she had been dismissed by the respondent but explained the failure to complete the form on the basis that she was still employed at that time, albeit without meaningful work.
[25] The August complaint and all subsequent dealings with the applicant were handled by Mr JB on behalf of the FWO.
[26] The FWO considered that the August complaint was not about an alleged unfair dismissal and was largely concerned with the parties’ commercial dispute, alleged changes in working conditions and payment arrangements and potential bullying. I add that given that substance of the complaints and the fact that the part of the form dealing with the cessation of employment was not completed by the applicant, that view was entirely reasonable.
[27] On 17 August 2009, the FWO wrote to the parties with a view to having at least part of the dispute subject to an Assisted Voluntary Resolution. That part being a suggestion that the respondent may have attempted to enforce unauthorised leave arrangements.
[28] On 19 August 2009, the applicant was contacted by the FWO and in the context of that discussion, withdrew the August complaint. On that day, the FWO wrote to both the applicant and the respondent and advised that the August complaint had been withdrawn. The applicant was also advised that “Should you wish for the matter to be investigated at a later date, you will be required to submit a new claim form” and that “Please be advised that the Fair Work Ombudsman will be taking no further action in relation to this matter at this time”. 5
[29] I interpose that the lack of any caveat regarding the issues associated with lodging an unfair dismissal application at a later time did not arise for Mr JB as he did not consider that the August complaint was about that matter. I also add that the true nature of the August complaint is reinforced by the fact that the question of a dismissal was apparently not raised by the applicant with Mr JB at any time in relation to that complaint.
[30] The applicant contended that her decision not to continue with the August complaint was done in the context of her emotional state at the time and her desire to have matters in dispute regarding the whole business and employment relationships involving herself, her husband and the respondent, resolved more broadly. I will return to this aspect when considering the overall merit of the extension of time application.
[31] During August 2009, the applicant sought advice from a legal firm in Melbourne that I understand had been involved in the earlier business sale arrangements. The firm of solicitors wrote to the respondent on 25 August 2009 6 and set out a series of alleged breaches of the business sales agreement. The letter also raised a number of alleged breaches of employment law concerning the changes to the applicant’s remuneration and employment arrangements and alleged breaches of the Corporations Act 2001. The alleged employment law breaches included that the applicant had been “unfairly dismissed” without “good reason or regard to proper process”.
[32] The solicitor’s letter sought a series of “entitlements” including underpaid salary and 12 months in lieu of reasonable notice (to both the applicant and her husband who was also employed following the sale of the business). A deadline of 27 August 2009 was set for the payments and an indication was given that in the absence of such payments, (legal) action would be commenced.
[33] It is common ground that the business sale agreement provides for mediation in the event that a dispute arose between the parties. That mediation has not been conducted and both parties in these proceedings have sought to cast the blame upon the other in that context. It is apparent that both parties wanted mediation of the commercial dispute but the scope of such could not be agreed.
[34] It became apparent to the applicant in October or early November 2009 that the commercial litigation would not be a quick or cheap means to advance her various claims and concerns. The applicant has not taken legal proceedings in relation to their commercial dispute but could still do so. The respondent has also threatened, and is apparently preparing to institute legal action in that same context, but has not yet done so.
[35] On 16 December 2009, the applicant filed a further complaint with the FWO (the December complaint). 7 That complaint was largely in the same terms of the August complaint however it also contained reference to the termination letter (received by the applicant after the August complaint was lodged but not before it was withdrawn) and made explicit and additional reference as to the alleged reasons for the applicant’s termination. The applicant also completed the questions in relation to the ending of her employment in the December complaint.
[36] On 23 December 2009, the FWO advised the applicant that her complaint was out of jurisdiction and seemed to more appropriately dealt with in the civil claims jurisdiction. 8 The applicant was advised by Mr JB about the unfair dismissal process and the 14-day time limit. The applicant contended to Mr JB that the August claim should have been seen as implying an unfair dismissal, which he did not accept. The applicant also denied any understanding of a time limit in relation to such matters and was then advised by Mr JB that any question of unfair dismissal should be taken up with Fair Work Australia.
[37] This application was lodged on 24 December 2009.
[38] The FWO also closed the December complaint on 24 December 2009.
Consideration
[39] The dismissal of the applicant was communicated on 12 August, confirmed on 13 August and took effect on 14 August 2009. The unfair dismissal application was lodged with Fair Work Australia some 119 days beyond the 14 day period provided by s.394(2) of the Act.
[40] Section 394(3) of the Act provides Fair Work Australia with discretion to extend the time for lodgment beyond the 14-day period where it is satisfied that exceptional circumstances warrant that action. In considering whether exceptional circumstances exist for this purpose, I am required to take account of the considerations outlined in paragraphs (a) to (f) of s.394(3) of the Act. I have done so in this matter.
[41] The onus rests with the applicant to convince Fair Work Australia to exercise the discretion to extend time. Although the length of the delay is not specifically mentioned as a factor in s.394(3) of the Act, I would agree with the approach recently taken by Cambridge C in Ms Helen Wemyss v Mission Australia Employment Services when he concluded in para 16: 9
“… it seems to me that the length of any delay might logically amplify the onus on any applicant seeking the exercise of the discretion to extend time. In my view the length of any delay might operate to amplify the onus on an applicant in exponential terms, such that the longer the delay is the greater the difficulty is in establishing proper basis for the exercise of the discretion.”
[42] Although the statutory discretion requires the considerations relating to the existence of exceptional circumstances to be assessed in an overall manner and these are interrelated, it is convenient to discuss the issues under the various factors raised by the respective subsections.
The reason for the delay
[43] There are a number of relevant aspects in terms of the reasons for the delay. These all arise from the conduct of the applicant in pursuing this matter. That is, the decision to lodge, discontinue and subsequently resubmit the FWO complaints prior to filing this application. The taking of legal advice and the issuing of correspondence from her lawyers in that context, is also relevant as part of that scenario.
[44] The applicant has contended that her “unfair dismissal” application was in effect lodged in time. That is, the August complaint filed with the FWO should be considered to represent her intention to initiate action to contest her dismissal.
[45] The FWO is broadly “marketed” under the umbrella of the Fair Work organisations, along with Fair Work Australia. Further, the FWO is administratively empowered to accept unfair dismissal applications, which are then forwarded to Fair Work Australia for formal filing. In that light, it was perhaps not unreasonable not to have filed a “complaint” with Fair Work Australia, as opposed to the FWO, at least at that point. The applicant was not informed of the need to do so and was apparently unaware that there was a time limit.
[46] The FWO did not consider that the August complaint concerned an unfair dismissal allegation and I have also come to the same conclusion. The issue of dismissal was not expressly raised in that complaint or in the subsequent discussions with the FWO prior to December 2009. The complaint was a set of broad allegations about the applicant’s treatment in terms of her employment and commercial arrangements with the respondent. As a result, the August complaint was not an unfair dismissal complaint, either in form or in substance.
[47] However, even if I were to accept the applicant considered that the unfair dismissal matter was impliedly embedded in the August complaint, the applicant made a deliberate decision not to proceed with her complaint at that point and to seek advice about instituting legal proceedings more broadly. I accept that there is logic in doing so, as I consider that the alleged unfair dismissal is but a small part of a major commercial dispute about the sale of the applicant’s business to the respondent, the employment and related obligations arising from that sale, and the obligation of the parties following the dismissal of the applicant and the conclusion of her husband’s relationship with the respondent. The decision to take that course of action is however the fundamental reason for the delay in making this application.
[48] I do not accept that the applicant’s emotional state at the time provides a satisfactory explanation for the decision to pursue the commercial litigation as an alternative to her “unfair dismissal”. Although the commercial litigation involved working through legal channels, the applicant was clearly in a position to decide upon a course of action and did so. Indeed, the applicant persisted in seeking to progress that matter until late October or early November. In that regard I note that both matters potentially involved the applicant in mediation/conciliation with the respondent, an outcome that the applicant claims to have wished to avoid by the withdrawal of the August complaint.
[49] The applicant could have sought specific legal advice on her specific concerns about her dismissal and taken action under the Act immediately after her dismissal. In that regard, I note that although the issue of “unfair dismissal” was raised in the context of the 25 August 2009 solicitor’s letter to the respondent, I accept the applicant’s apparent view that this was done so more as a matter of damages in the context of the broader dispute between the parties rather than in the context of a potential application to Fair Work Australia. 10
[50] The advice from the FWO about the capacity to re-lodge the August complaint is relevant to the delay but is not the reason that the original complaint was withdrawn or the justification for pursuing the alternative commercial litigation at that time.
[51] The applicant also did not immediately “renew” her complaint with the FWO following the evident breakdown in discussions to have the commercial litigation mediated.
Whether the person first became aware of the dismissal after it had taken effect
[52] The applicant was informed of her dismissal at the time, or immediately before, it took effect.
Any action taken by the person to dispute the dismissal
[53] I have dealt with this aspect largely under the consideration of the reason for the delay. The original and subsequent FWO complaint and the pursuit of legal advice and the subsequent contact with the respondent in that context, is at one level an indication that the applicant actively pursued her rights, at least to a point.
[54] The broader commercial dispute between the parties, and the applicant’s capacity to follow through on the threatened litigation in that context, is however also a relevant consideration in its own right.
[55] The cost and complexity of the commercial litigation, compared to an unfair dismissal application, are sound reasons as to why in other circumstances the decision to pursue this application might well be appropriate. However, the unfair dismissal application is in reality a subset of a much broader dispute between the parties and would require that the commercial affairs be assessed and resolved given that they form a substantial part of each parties’ case in any unfair dismissal matter.
[56] I will return to the implications of the above as part of my consideration of the merit of the unfair dismissal application.
Prejudice to the employer (including prejudice caused by the delay)
[57] The respondent has not raised matters of material prejudice in this context. The absence of such prejudice is not however in itself a reason to grant an extension. 11
The merits of the (unfair dismissal) application
[58] The merits of the substantive application are hotly contested. The applicant claims that the earlier changes to the remuneration and working conditions were not in accordance with the agreed employment arrangements and that the reasons given for the termination are invalid. The applicant now also contends that the real reason for her dismissal was the respondent’s concerns that she was not sufficiently promoting a particular financial investment product about which she has raised concerns.
[59] The respondent has raised a number of serious allegations about the applicant’s conduct, mainly in the context of the business agreement between them, but also to some degree in the context of her work performance. Some of these factors have been raised for the first time after the dismissal and as outlined earlier, it is clear that their employment and business arrangements (and their dispute in that context) are inexplicably entwined. The respondent has now clearly foreshadowed reliance upon the applicant’s alleged lack of formal qualifications and her alleged post dismissal conduct regarding (former) clients.
[60] The consideration of the merit of the application in this context is limited to the prima facie merits. It is not appropriate to canvass and attempt to resolve the substantive application as part of this exercise. 12
[61] It is sufficient to indicate that for present purposes the applicant has an arguable case in relation to the merit of the unfair dismissal application, including in relation to the manner in which the issues now relied upon by the respondent were raised with the applicant. The substance of the case is however in issue.
[62] I also note that the applicant seeks in part that Fair Work Australia award compensation for her alleged unfair dismissal but importantly, a fundamental element of the remedy sought is that the contract condition in relation to the provision of financial advice to (her) former clients within the business sales agreement be removed or modified. This only reinforces that the substance of the applicant’s claims are founded in large part upon the commercial dispute between the parties, as has always been the case.
[63] I add that the applicant has also raised a series of alleged underpayments in both her FWO complaints and in the letter sent by lawyers on her behalf. This aspect is beyond the present jurisdiction of Fair Work Australia and can be pursued independently of this application. As such, this aspect is not a relevant consideration in this matter.
Fairness as between the person and other persons in a similar position
[64] This consideration does not arise in this matter.
Conclusion
[65] In my view, after taking into account the factors cited in s.394(3) of the Act, exceptional circumstances within the meaning of the Act have not been established. That is, I am not satisfied that there are exceptional circumstances such as to enable or warrant the exercise of the discretion to allow an extension of the timeframe for the making of Ms SW’s unfair dismissal application.
[66] Without detracting from the earlier discussion, I accept that there are unusual elements arising in this matter and some of these do support the applicant’s case for an extension. However, the decision to withdraw the August complaint, and not to actively pursue what she considered to be her rights under the Act in favour of the commercial litigation, has directly led to the significant delay in filing this application. Although the applicant took some comfort (out of context) from the FWO advice, the overall circumstances here are such that exceptional circumstances do not exist to provide a basis to grant an extension of time to lodge this application.
[67] As a result, the unfair dismissal application is not properly before Fair Work Australia and is dismissed. An order [PR997737] to this effect has been issued in conjunction with this decision.
COMMISSIONER
Appearances:
Ms S W on her own behalf.
Mr PS with Ms AS for the respondent.
Hearing details:
2010.
Adelaide with video link to Port Augusta:
May 14, 31.
1 The conference was conducted in private as required by s.398(2) of the Act. I consider that the private nature of the conference should be reflected into the decision.
2 Ms AS participated in both the original and resumed conference but was sworn in only at the start of the resumed conference.
3 Confirmed in a letter received by the applicant on 13 August 2009 - Exhibit A1.
4 Exhibit A2.
5 Exhibit A3.
6 Exhibit R1.
7 Exhibit A4.
8 Statement of Mr JB – Exhibit A9 attachment JB9.
9 [2010] FWA 1798
10 Evidence in the form of a letter from the applicant’s solicitor was provided to FWA in that regard (Exhibit MFI A13)
11 Brodie-Hanns v MTV Publishing Ltd, (1995) 67 1R 298 at 300, 31 October 1995, per Marshall J.
12 Although also determined in a slightly different statutory context the decision in H Kyvelos V Champion Socks Pty Limited AIRC Print T2421, 10 November 2000, per Giudice J, Acton SDP, Gay C remains apposite.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR997424>
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