Natalie Thomas v Jason Van Straalen Licensee / Director of Milestone Realty Dalkeith Nedlands
[2023] FWC 751
•28 MARCH 2023
| [2023] FWC 751 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Natalie Thomas
v
Jason Van Straalen Licensee / Director of Milestone Realty Dalkeith Nedlands
(C2022/7980)
| COMMISSIONER YILMAZ | MELBOURNE, 28 MARCH 2023 |
Application to deal with contraventions involving dismissal - jurisdictional objection - whether Applicant dismissed - if dismissed application made outside the prescribed 21 days - application dismissed.
On 2 December 2022, Ms Natalie Thomas lodged an application pursuant to s.365 of the Fair Work Act 2009 (the Act) against Jason van Straalen Licensee/ Director of Milestone Realty Dalkeith Nedlands (Milestone Realty). In her application, Ms Thomas cites a breach of her workplace rights and her dismissal to engage her as an independent contractor.
Milestone Realty objects to the application stating that Ms Thomas was a business partner for the period 10 August 2021 to 28 September 2022. It submits the business relationship came to an end by agreement and Ms Thomas advised various people that she quit. It further objects on the basis that even if Ms Thomas was an employee she was not dismissed and her application is outside the statutory time period.
Ms Thomas submits that the business/ work relationship ended abruptly and she is still owed commissions for monthly property management fees and for the sale of a property. In addition, Ms Thomas submits that the parties are in dispute over the split of the property portfolio. She further submits that the loss of her position with Milestone Realty ended her access to the New Business Program Allowance. In relation to whether she was an employee or business partner, Ms Thomas submits that she performed the work of a level 2 real estate employee under the modern award and the agreement entered between her and Mr van Straalen on 10 August 2021 was invalid because it was not signed nor registered with the Fair Work Commission.
Both parties were self-represented.
Section 366(1) of the Act requires that an application under s.365 be made within 21 days after the dismissal took effect, or in such further time as the Commission may allow.
The Respondent’s objection concerns the question whether Ms Thomas was dismissed. The second objection, if I find Ms Thomas was dismissed, is whether Ms Thomas should be granted an extension of time. If dismissed, Ms Thomas’ application is 44 days over the 21-day statutory time limit.
Was the Applicant Dismissed?
Applicant’s submissions
In her Form F8, Ms Thomas described her position as Property Manager- Partner and submits that the work that she performed was covered by the real estate modern award. She did not provide any further detail other than her work was covered by Level 2. The relevant modern award is the Real Estate Industry Award 2020 (‘The Award’) and Level 2 covers real estate representatives.
Ms Thomas contends that she was employed under two “employments”, as an employee and an independent contractor / paid worker. Ms Thomas describes the features of her employment arrangements as follows:
Worked under the license of Milestone Realty;
Complied with the requirements of the Residential Tenancies Act 1987 (WA);
She was registered with the relevant authorities: Department of Mines, Industry Regulation and Safety (DMIRS) and Real Estate Institute of Western Australia (REIWA);
She had the responsibilities of a full-time employee but worked flexible hours and worked from home;
She was paid on performance and not according to the award minimum rates and did not receive superannuation contributions;
She was paid commissions after she sent through an invoice. The invoice contained an ABN number, the property income less property and agency expenses and no personal deductions were made including no tax deductions; and
Except for the use of the company car, all expenses relating to the properties under her control were borne by Ms Thomas as shown in the invoices.[1]
Ms Thomas submits that Milestone Realty misled her that her status was a sub-contractor and not an employee. She states that on 9 August 2021 she was texted an offer to start a business partnership with Milestone Realty and on the following day she received an offer that set out the details for payment.[2]
The relevance of the New Business Program Allowance was not explained.
Ms Thomas submits that her dismissal is a contravention of her workplace rights in terms of:
· s.340 Protection of Workplace Rights;
· s.344 Undue influence or pressure; and
· s.358 Dismissing to engage as an independent contractor.
Respondent’s submissions
Milestone Realty submits that Ms Thomas was engaged as a business partner on a profit share arrangement. It is contended that it was understood that her clients would transfer with her, that she would build the property management business and her income was based on a profit share arrangement.
Milestone Realty submit that the performance and attitude of Ms Thomas was poor, that she disregarded her responsibilities and on several occasions she was told by Mr van Straalen that he had, had “enough”. Milestone Realty submits that “it was a mutual agreement that she discontinued work with us and she told several people that she had quit.”[3]
The relevant statutory provisions
Ms Thomas lodged a General protections application involving dismissal dispute with the Commission pursuant to s.365 of the Act. Section 365 applications concern dismissal disputes. Relevantly, the provision provides:
Application for the FWC to deal with a dismissal dispute
If:
(a) a person has been dismissed; and
(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.
Section 365 requires that the person that alleges the dismissal is a contravention of the Act must be “dismissed”. The Act further defines dismissed. The relevant provision is s.386:
Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.
Section 365 requires that should an application be made, it must be by a person that is dismissed and the person alleges the dismissal is in contravention of the Act.
Consideration and conclusion
Ms Thomas describes the arrangement with Milestone Realty as one of sub-contractor and employment, however her materials reference a business partnership and not a sub-contractor relationship. To be dismissed requires an employment relationship and not the relationship of a subcontractor or business partnership. Further there is no evidence of a dismissal followed by an engagement as a contractor.
Ms Thomas contends that she was an employee and was misled that she was a sub-contractor. Milestone Realty does not contend that Ms Thomas was engaged as a sub-contractor, rather they state that she came on board as a business partner on a profit share arrangement. Ms Thomas tendered in evidence two invoices dated 26 October 2022. Both of these invoices covered a period after she left Milestone Realty and concerned outstanding commissions and work that she performed associated with court orders. Ms Thomas submits that tax was never deducted from her earnings and Milestone Realty did not contest this submission. Documentation relating to the “arrangement” does not detail any particulars other than how the income and costs would be shared between Ms Thomas and Milestone Realty and how ownership of the rent roll is split between the parties. The email of 10 August 2022 confirms the arrangements agreed for the business relationship:
“Hi Natalie,
From our discussions so far, it seems that we are in agreement that:
Rental income after outgoings goes to Natalie
Sales Income goes to Jason except where it’s one of Natalie’s properties that she brought in, in which case it’s a 50/50 split if the work is divided equally on the sale (opens, follow-ups etc) and 70/30 just one does the work (Jason will still
always be available to assist in appraisals, negotiations and advice when needed).50/50 ownership in the value of the rent roll
50/50 In the event of separation whether by internal or external sale or division of portfolio.
Non compete agreement for 3 years on the divided properties in the unlikely event of splitting up
If a rent roll is to be purchased in the future, we negotiate together how that fits in beforehand.
Rent roll income to cover all outgoings-
(Initially, Jason has approx $1500 PCM coming in)
Current Monthly Expenses:
$134.20 Vault RE- CRM
$275 Sauna Communications Monthly Email
$220 REA Account Fee
$395.31 REIWA Account Fee
$132 Property Tree
$219.98. RP Data
$52 Xero Accounting Software
$99 iiNet Internet Connection
Domain, Homes, Property View are all free membership
Corporate Renewal of Licenses (Jason and Corporate)
Rent and Outgoings TBAMarketing Costs when not VPA:
50% each payable of Agency Banding marketing where the one side is property management ad and the other side is selling ad.Funds Disbursed to Natalie and Jason as earned on Sales and Mid-month and End of the month for Natalie with property management at the same time as owner disbursements.
We review this quarterly and make adjustments if necessary by mutual consent.
In principle, if you agree to this via email we can get started straight away. Then we can print it out and sign it once we get the exact rent and outgoings from Robert.”[4]
The above email demonstrates a business relationship rather than an employment relationship or that Ms Thomas was a sub-contractor.
A business partnership is where income and losses are distributed between the partners. The evidence shows that Ms Thomas had an ABN and her income from the business partnership was untaxed. There was no income tax deducted and no superannuation payable to her. I observe that in Western Australia, the Partnership Act 1895(WA) would apply to the business relationship. There is no evidence that the parties intended any other relationship other than a business partnership. There is furthermore no evidence of a sub-contractor arrangement.
Ms Thomas submits that the end to her relationship cost her access to the New Business Program Allowance. No further details were submitted, however, the Commonwealth Government allowance is a self-employment assistance program for new or existing businesses. The fact that Ms Thomas raised her loss of the allowance following the termination of the relationship between the parties further weighs against her argument that she was employed and dismissed.
Having considered the evidence I am satisfied that the parties entered a business partnership relationship which encountered difficulties and it was subsequently agreed to split their business interests resulting in Ms Thomas exiting the business. The overwhelming evidence from both parties supports the view that they entered into a business relationship.
The dispute that motivated this application appears to concern final payments of commissions and other amounts including how the rental roll is to be split on exit. Resolution of the dispute as enunciated by Ms Thomas is not within the jurisdiction of this Commission.
Ms Thomas submits that the agreement of 10 August 2021 was invalid because it was not signed and not registered with the Fair Work Commission. I do not agree, the email expressed the private business arrangement between the parties, such arrangements are not registered with this Commission.[5] It appears Ms Thomas may have confused processes for enterprise agreements. This private arrangement is clearly not an enterprise agreement.
It is evident from the email material tendered that the parties had disagreements about their working partnership and while Ms Thomas states that she was dismissed abruptly with no notice, her own materials show that she ended the business arrangement by agreement. The below is taken from her email of 28 September 2022.
“I am in agreeance with discontinuance or break up of the business agreement between us but I do not accept the split of properties as mentioned by you below.
As per our last agreement was to pay you 30% of my total commissions and I manage my portfolio myself. Should there be a breakup then I take my portfolio and leave. This was spoken several times by you.
Besides that you have 2 listed for sale out of which 1 is under offer. You have
made no mention of that.
I am in discussion with another agency to take over my portfolio and once I finalise it, properly this time, I will inform you immediately for a proper handover.”[6]
In addition, an email of 3 October 2022 does not support the contention that Ms Thomas was dismissed, but rather the two parties agreed to end their business partnership:
“Hello Jason
Due to the sudden decision we made, giving no Notice Period to discontinue the agreement of our Business partnership / Association and being very unwell last week till yesterday, the communication between us has not been the best.
I am now able to decide properly about us ending the business relationship and finalising the split share portfolio. Besides that I wish to end on better terms as I always have done in my previous work places. I am holding you to the same.”[7]
From this evidence, I can only conclude that Ms Thomas was not dismissed, but that she was in a business partnership with Milestone Realty and after a difficult business relationship, Ms Thomas with Mr van Straalen agreed that the business relationship would end. Negotiations followed to finalise business dealings between them with no resolution over the split of the property portfolio and payment of commissions. I am satisfied that Ms Thomas was not dismissed within the meaning of s.368 of the Act and her application does not properly fall within the jurisdiction of s.365 of the Act.
Extension of time
Should I be wrong on characterising the relationship as a business partnership, and for completeness I now turn to Ms Thomas’ arguments for an extension of time in relation to each of the considerations of s.366(2).
General protections applications involving dismissal must be made within 21 days.
However, s.366(2) permits the Commission to consider an extension to the period for filing an application if there are exceptional circumstances, taking into account the following considerations:
“(a) the reason for the delay; and
(b) any action taken by the person to dispute the dismissal; and
(c) prejudice to the employer (including prejudice caused by the delay); and
(d) the merits of the application; and
(e) fairness as between the person and other persons in a like position.”
The meaning of ‘exceptional circumstances’ was considered in Nulty v Blue Star Group Pty Ltd (Nulty)[8] where it was held that:
“To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a regular occurrence, even though it can be a on off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.”[9]
I now turn to Ms Thomas’ arguments for an extension of time in relation to each of the considerations of s.366(2).
The reason for the delay
The General protections application involving dismissal was lodged with the Commission on 2 December 2022, 44 days late. Ms Thomas was aware of the date of the termination of the business relationship. She submits the reason for the delay of her application was that she “tried to reconcile with Jason van Straalen twice through the Fair Work Ombudsman and then on 20th January 2023 at the conference hearing in your office and several attempts before, but obviously Jason van Straalen has no intentions to end this matter in a civil and amicable way. Ending this in a simple way by payment of my dues and finalising the other matters, would have been easier and faster.”[10]
Ms Thomas then proceeds to identify a number of reasons or statements such as being misrepresented as a sub-contractor, promises regarding various payments and alleged threats of legal action and consultation with her lawyer.
There must be a credible reason for the delay.[11] None of the explanations provided by Ms Thomas are exceptional, the circumstances concerning her reasons are not out of the ordinary, unusual, special or uncommon to meet the threshold of exceptional circumstances. There is no evidence of misrepresentation as a contractor and efforts to resolve the dispute did not hinder an application in the Commission within the statutory time frame. There was no valid reason for the delay.
Steps taken to dispute the termination
While Ms Thomas submits that she challenged the termination, the evidence shows the parties were in dispute not about the termination of the relationship but the payment of commissions and splitting of the property portfolio. For this reason, this consideration does not weigh in her favour.
Prejudice to the employer
Neither party address this consideration in the context intended. I do not find prejudice to be applicable in this matter, nevertheless, an absence of prejudice is insufficient to grant an extension. This consideration therefore is neutral.
Merits of the application
Ms Thomas does not address the merits of the application other than stating that Milestone Realty do not agree that she was dismissed. Ms Thomas further describes the working relationship ending abruptly with no notice, threats of legal action against her and bad mouthing add name calling.[12]
There is no evidence or submissions in support of contravention of ss.344 or 358 of the Act and in relation to s.340, Ms Thomas did not articulate how a right to payment was contravened resulting in her “dismissal”.
Submissions on merit were insufficient to reach any conclusion. While I do not consider that Ms Thomas was dismissed, if she was dismissed, no conclusion can be made regarding merit. At best this consideration is considered neutral.
Fairness between the person and other persons in a like position
Ms Thomas referred to other employees of Milestone Realty but did not address the question of fairness between herself and others in a like position.
Milestone Realty did not address this consideration.
Consequently, I find this consideration neutral.
Conclusion
In this instance, I need to be satisfied that there are exceptional circumstances warranting an extension of time.
It is on the balance of the considerations that I have decided not to grant an extension of time.
Having considered all of the evidence and submissions against each of the factors set out in s.366(2), I am not satisfied that there are exceptional circumstances warranting the granting of a further period for the making of an application under s.366(2). Accordingly, the matter is dismissed.
An order[13] to that effect will be issued with this decision.
COMMISSIONER
Appearances:
Ms N. Thomas on her own behalf.
Mr J. van Straalen for the Respondent
Hearing details:
24 February 2023
Melbourne (By Video using Microsoft Teams)
[1] Applicant’s Form F8, 3.3.
[2] Email of 10 August 2021 from Jason van Straaalen to Natalie Thomas at 6:02pm.
[3] Respondent’s Form F8, 2.4.
[4] Email of 10 August 2022, from Jason van Straalen to Natalie Thomas at 6:02pm.
[5] Ibid.
[6] Email of 28 September 2022, from Natalie Thomas to Jason van Straalen at 18:59 in response to earlier email from Jason van Straalen at 15:31 confirming terms of discontinuation of business arrangement.
[7] Email of 3 October 2022, from Natalie Thomas to Jason van Straalen at 16:44.
[8] [2011] FWAFB 975.
[9] Ibid, [13].
[10] Applicant’s Outline of Argument: Extension of time, 1d.
[11] Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299-300.
[12] Applicant’s Outline of Argument: Extension of time, 1h.
[13] PR760676.
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