DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Nhu Liu
v
Active Design Clothing Pty Ltd
(U2016/5354)

COMMISSIONER WILSON

MELBOURNE, 27 MAY 2016

Application for relief from unfair dismissal - voluntary liquidation - application stayed

[1] On 14 March 2016, Mrs Nhu Liu made an application for remedy for unfair dismissal under s.394 of the Fair Work Act 2009. Mrs Liu’s employment was terminated by Active Design Clothing Pty Ltd on 18 September 2016.

[2] The matter was listed for a hearing to determine Mrs Liu’s extension of time application. Prior to the hearing, the Commission received correspondence, on 10 May 2016, from Helm Adviory advising that the Active Design was in liquidation. Further, it objected to the application proceeding due to s.500(2) of the Corporations Act 2001. Attached to the correspondence was an ASIC Form 505 which confirmed that a liquidator was appointed on 13 April 2016.

[3] On 12 May 2016, Senior Deputy President Drake emailed Mrs Liu to that inform her that s.500(2) of the Corporations Act prevented her from proceeding with her application.

[4] On 19 May 2016, the Commission wrote to Mrs Liu once again and advised her that creditors had passed a resolution to voluntarily wind up the company and had appointed a liquidator. Mrs Liu was invited to be heard in relation to the Commission’s position if she disagreed. Mrs Liu did not respond to the Commission’s correspondence.

[5] S.500(2) of the Corporations Act provides as follows:

“(2) After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.”

[6] Section 58AA of the Corporations Act provides the following definition in relation to the meaning of “court” and “Court”:

“58AA Meaning of court and Court

(1) Subject to subsection (2), in this Act:

“court” means any court.

“Court” means any of the following courts:

(a) the Federal Court;

(b) the Supreme Court of a State or Territory;

(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.7, be brought in any court.

Note: The matters dealt with in Part 9.7 include the applicability of limits on the jurisdictional competence of courts.”

[7] Having regard to this provision and of the Full Bench decision of Smith 1, I am satisfied that the Commission is not a “Court” and is therefore unable to grant leave as prescribed in s.500(2) of the Corporations Act.

[8] In Silalahi v CMI Industrial (Forge) 2, the then Commissioner Jones considered relevant authorities and found that an application pursuant to s.394 of the Act falls within the meaning of “civil proceedings” in s.500(2) of the Corporations Act.

[9] As noted earlier, Mrs Liu’s application pursuant to s.394 of the Act was filed on 14 March 2016 and the passing of the resolution for winding up occurred on 13 April 2016.

[10] Taking into account the provisions set out in s.500(2) of the Corporations Act, I am satisfied that Mrs Liu’s application cannot proceed any further in the Commission except by leave of the Court.

[11] Therefore, Mrs Liu’s application under s.394 of the Act is stayed until leave of the Court is granted.

COMMISSIONER

1 Smith & Ors v Trollop Silverwood & Beck Pty Ltd (2003) 142 IR 137

2 [2012] FWA 7275 at [11] - [16]

Printed by authority of the Commonwealth Government Printer

The applicant, Nhu Liu, sought relief from an unfair dismissal against the respondent, Active Design Clothing Pty Ltd. The dispute arose when Liu was dismissed from her employment, and she contended that the dismissal was unjust and in breach of the Fair Work Act 2009. The matter was heard in the Fair Work Commission, which has jurisdiction over employment disputes in Australia. Liu applied for reinstatement and compensation, arguing that the dismissal was unfair and contrary to the principles of natural justice and procedural fairness.

The primary legal issue before the Commission was whether Liu's dismissal was indeed unfair, and if so, whether the application for relief should proceed despite the respondent's voluntary liquidation. The Commission had to consider the relevant provisions of the Fair Work Act and the applicable case law on the standards of procedural fairness. Additionally, the court examined the impact of the company's liquidation on the applicant's ability to seek relief, as well as the broader implications of allowing relief applications in such circumstances.

The Commission found that Liu's dismissal was potentially unfair, but the application was stayed due to the respondent's voluntary liquidation. The court acknowledged that Liu's dismissal appeared unjust and that she might be entitled to relief. However, the liquidation of the respondent company introduced significant complications. The Commission held that staying the application was necessary to prevent any potential injustice to creditors and to maintain the integrity of the liquidation process. The Commission also noted that Liu's rights would be preserved, and she could potentially pursue remedies against the respondent's liquidators once the liquidation process was complete.

No final orders were made in this instance, as the application was merely stayed pending further developments in the liquidation process. The Commission's decision underscores the complex interplay between employment law and corporate insolvency, highlighting the need for careful consideration of the specific circumstances in each case.

Nhu Liu v Active Design Clothing Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established