Nicola Fazzolari v Davner Pty Ltd T/A Raine and Horne - Port Macquarie
[2010] FWA 2824
•21 MAY 2010
[2010] FWA 2824 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Nicola Fazzolari
v
Davner Pty Ltd T/A Raine & Horne - Port Macquarie
(U2010/6167)
COMMISSIONER MCKENNA | SYDNEY, 21 MAY 2010 |
Application for an unfair dismissal remedy – extension of time – genuine redundancy
[1] On 15 February 2010, Nicola Fazzolari made an application, pursuant to s.394 of the Fair Work Act 2009 (“the Act”), for an unfair dismissal remedy concerning his termination of employment by Davner Pty Ltd T/A Raine & Horne – Port Macquarie (“Davner”).
[2] The initial conciliation did not result in a resolution of the matter. Davner has since filed an objection to the application and seeks the dismissal of the application on two bases, first, that there was a genuine redundancy and, second, that the application was made out of time.
BACKGROUND
[3] On the hearing of the matter in Coffs Harbour, Mr Fazzolari appeared on his own behalf. Davner was represented by its former director, Mr D Lindsay. I begin by noting the parties advanced little by way of evidence and submissions in support of their respective cases and, against that background, the hearing itself was very brief.
[4] As best as I can ascertain on the limited information before me, the background to this application was as follows. Mr Fazzolari had been employed as a salesperson by Davner since 16 March 2006, but had worked for a predecessor company since 1998. Mr Lindsay explained that he traded with two companies in two offices and, in 2009, was the sole director of both companies. Apart from having been a director of Davner, Mr Lindsay was and remains a director of another company named David Ross Lindsay Pty Ltd. David Ross Lindsay Pty Ltd now trades as Harcourts of Greater Port Macquarie. During 2009 (or perhaps earlier), Mr Lindsay decided to sell Davner. Mr Lindsay’s evidence indicated he informed employees during the course of 2009 about developments concerning the impending sale. In particular, Mr Lindsay said he convened “a full staff meeting” on 28 October 2009 to advise employees about the sale of Davner and of the need to re-apply for positions in the new business. The reasons for the sale of Davner were explained in Mr Lindsay’s evidence; it unnecessary to repeat those reasons in this decision.
[5] On a date that was not specified in the evidence, Mr Fazzolari began a period of sick leave. Mr Fazzolari submitted a first medical certificate to Mr Lindsay/Davner concerning his absence on sick leave. He then submitted a second medical certificate, again on an indeterminate date. By letter dated 24 December 2009, Mr Lindsay wrote to Mr Fazzolari in the following terms:
“I acknowledge receipt of your 2nd medical certificate advising your doctor has recommended a further 14 days sick leave.
Please be advised that the business Raine & Horne Port Macquarie has been sold and as at 31st December 2009 all positions have been made redundant.
All positions will require job applications for continued employment with the new owner, terms of employment to be negotiated, employment agreements and tax file number declarations will be required by the new owner with successful applicants.
I want to thank you for your loyalty over the past 4 years.”
[6] As outlined in the initiating process, Mr Fazzolari considered he may have been the only employee to be “singled out” with a letter of this nature and he was shocked to receive the letter while on sick leave.
[7] By email dated 5 January 2010, Mr Fazzolari asked Mr Lindsay for details of the new owner and method of job application, indicating he was interested in applying. It is unclear from the evidence whether Mr Fazzolari was aware that David Ross Lindsay Pty Ltd was the company to which any job application should be made, but his evidence otherwise indicated he knew around this time that other employees had been re-employed by Mr Lindsay. Moreover, for his part, Mr Lindsay said that Mr Fazzolari had known for months who the new owner would be.
[8] By further email sent at 6.37pm on 7 January 2010, Mr Fazzolari reiterated his request to Mr Lindsay for information about making a job application, as he had not received a reply to his initial request for information made on 5 January 2010.
[9] Just a short time later, at 6.56pm on 7 January 2010, Mr Fazzolari sent another email to Mr Lindsay advising, with respect to the advice in the letter dated 24 December 2009 concerning redundancy, that he had checked his bank account and no entitlements had been paid. Mr Fazzolari asked Mr Lindsay to attend to the payment of his entitlements “instantly” by crediting his bank account.
[10] By email dated 14 January 2010, Mr Lindsay wrote to Mr Fazzolari in the following terms:
“I note your request for payment of entitlements into your designated bank account. I acknowledge your request and also acknowledge that in you requesting your entitlements be paid, you are taking redundancy.
Would you therefore please deliver all property in your possession to the office of Raine & Horne Port Macquarie, being any property or advertising material belonging to and referring to Raine & Horne Port Macquarie along with all keys to the complex that you hold. Please make a suitable appointment with me either this Friday or Monday 18th to collect your personal property.
I will also instruct [named individual] to calculate and pay your entitlements due on receipt of the above.
I want to thank you for your input to the success of the business over the period of my ownership and wish you all the success in you future endeavours.”
[11] On 18 January 2010, Mr Fazzolari commenced employment with a new employer.
[12] There was evidence of further emails dated 21 January, 22 January and 2 February 2010 between Mr Fazzolari and Mr Lindsay, concerning the settlement of termination monies, including as outstanding commissions.
[13] This application was then filed on 15 February 2010.
EVIDENCE
Genuine Redundancy
[14] Section 385 of the Act provides as follows in relation to the meaning of “unfairly dismissed”:
“385 What is an unfair dismissal
(1) A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[My underlining]
[15] As to the meaning of “genuine redundancy”, s.389 of the Act specifies:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
[16] The evidence established that Davner was sold on 31 December 2009. In this respect, Exhibit 2 noted the following:
“The Company Davner Pty Ltd previously trading as Raine & Horne Port Macquarie was sold to David Ross Lindsay Pty Ltd as at 31st December 2009.
The Company David Ross Lindsay Pty Ltd now trades as Harcourts of Greater Port Macquarie with branches in Port Macquarie & Wauchope and I enclose [a] copy of registration of business name reflecting the changes implemented.”
[17] As noted earlier, Mr Lindsay was a director of Davner and also of David Ross Lindsay Pty Ltd. Mr Lindsay’s evidence indicated that the sale of Davner was “a complete sale in normal terms from one company to another”. His evidence explained the circumstances of how the sale had come about. Mr Lindsay said he had held discussions with staff throughout the year to inform them about what was happening with the business and had informed the employees they would have to be re-employed. Mr Lindsay also said the letter dated 24 December 2009 was sent to Mr Fazzolari because he was absent on sick leave, but the letter essentially advised Mr Fazzolari of what already had been conveyed in previous discussions throughout 2009 and at the staff meeting on 28 October 2009.
[18] Mr Fazzolari did not advance anything to contest the proposition that such discussions had been held in the manner described in Mr Lindsay’s evidence. Rather, Mr Fazzolari’s case focussed on the fact he had received the letter dated 24 December 2009 while he was on sick leave and also on the fact Mr Lindsay had not responded to the emails seeking advice about the details of the new owner and method of making a job application.
[19] Although the termination of employment with Davner was effected on 31 December 2009 when the business was sold, Mr Fazzolari and Mr Lindsay (as a director of both Davner and David Ross Lindsay Pty Ltd) do not appear to have treated the relationship between them more generally as having been severed. Some amorphous form of a relationship, apparently involving - at least initially - an expectation of an on-going employment relationship between Mr Fazzolari and Mr Lindsay seems to have remained on foot after 31 December 2009. For example, Mr Lindsay’s request for the return of keys and property, and advice that the administrative arrangements would be put in place concerning the payment of money due on termination of employment, arose only after Mr Fazzolari had made a request for termination payments in the email dated 7 January 2010.
[20] The email exchange that took place appears to have led to the parties being at cross-purposes. While Mr Fazzolari’s first email indicated he was interested in applying for a position, he then, in a later email, asked for termination monies because he received no reply to the email dated 5 January 2010 and was aware that other former employees of Davner had been re-employed by Mr Lindsay. On the other hand, Mr Lindsay’s evidence indicated that he did not reply to Mr Fazzolari’s email request for particulars about making a job application because he thought the email was “impertinent” in circumstances where he considered that Mr Fazzolari knew, or should have known, that all he had to do was to contact him in person. In this respect, Mr Lindsay said Mr Fazzolari had known for six months who the new owner was. Further, Mr Lindsay appears to have taken the request for termination monies as an indication from Mr Fazzolari that he did not wish to be re-employed (and, to put this in a broader context, Mr Lindsay understood that Mr Fazzolari had arranged alternative employment with another business in late-2009; consistently with that understanding, Mr Fazzolari commenced employment with that business on 18 January 2010). Mr Lindsay said in his evidence it was remiss of him not to have responded to the email requesting particulars about making a job application, but he anticipated Mr Fazzolari would have discussed matters with him rather than correspond by email about a job application. In the proceedings, Mr Lindsay apologised for not having replied to the email; he noted, nonetheless, that although he had asked Mr Fazzolari to attend the office to meet with him personally on another occasion, no meeting had transpired. For his part, Mr Fazzolari indicated that he had not intended anything mischievous by emailing Mr Lindsay, and his emails had been sent in good faith.
[21] Irrespective of the amorphous situation I have described, it is clear Mr Fazzolari’s employment with Davner terminated by redundancy on 31 December 2009 due to the sale of the business. The sale was not a sham arrangement, given the evidence of Mr Lindsay explaining the circumstances that brought it about; and David Ross Lindsay Pty Ltd trades with a different business name. There is no evidence to indicate that Mr Fazzolari applied for, was offered, or accepted a position with, or a transfer to, David Ross Lindsay Pty Ltd – so the application relevantly concerns only Davner. Moreover, Mr Fazzolari’s case did not contend that the dismissal was not a genuine redundancy because it would have been reasonable in all the circumstances for him to be redeployed within the enterprise of an associated entity of the employer, such as David Ross Lindsay Pty Ltd.
[22] I consider the termination of Mr Fazzolari’s employment with Davner, arising from the sale of the business and the termination of all employees’ employment, amounted to a redundancy in its ordinarily-understood sense (see for example the Explanatory Memorandum to the Fair Work Bill 2008 and Ulan Coal Mines Limited v Henry John Howarth and Ors[2010] FWAFB 3488). Moreover, there was no evidence of any industrial instrument that applied to the employment requiring consultation about the redundancy. In any event, Mr Lindsay’s uncontested evidence was that he had conveyed information about the sale of the business during discussions at the staff meeting on 28 October 2009.
[23] A matter that is unresolved on the evidence and submissions was whether Mr Lindsay had informed employees of the actual date that the sale resulting in the terminations of employment would be occurring. On Mr Lindsay’s evidence (which was not contested), he had given the employees several weeks’ notice through the discussion at a staff meeting, whereas Mr Fazzolari’s evidence suggests that the advice in the letter dated 24 December 2009 came as a shock to him (this evidence was not contested either). Further, there was no evidence as to the industrial instrument or contract of employment (if any) that may have applied to Mr Fazzolari’s employment with Davner, such as to allow a consideration of matters such as notice requirements; and nor was there evidence as to the specific number of employees that Davner employed.
[24] Nonetheless, in the circumstances described in the evidence, I consider the termination of employment involved a genuine redundancy and the objection by Davner to the application for an unfair dismissal remedy on the basis that there was a genuine redundancy is to be accepted.
Late application
[25] In view of my conclusion that the application involved a genuine redundancy, I will refer only briefly to the lateness of the application. Section 394 of the Act is concerned with the standard time limit and extensions of time concerning unfair dismissal applications, relevantly reading:
“394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to FWA for an order under Division 4 granting a remedy.
…
(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.”
The reason for the delay
[26] Mr Fazzolari’s application to Fair Work Australia nominated 1 January 2010 as the date the dismissal took effect, but it appears to have been effected on 31 December 2009. The The application itself was filed on 15 February 2010, out of time. As to the lateness of the application, Mr Fazzolari contended that he had been sent into “turmoil” after receiving the letter dated 24 December 2009 while on sick leave due, he said, to work-related high blood pressure (although there was no evidence of any workers’ compensation claim); Mr Fazzolari referred also to other medical problems that had arisen in January 2010. He described his “bewilderment” at not having received any reply to the email request to Mr Lindsay for information about how to apply for a job when he had been Davner’s “top salesperson”. Upon learning that other employees had been re-employed by Mr Lindsay, he had emailed Mr Lindsay requesting termination payments (albeit I note that the request for payment of termination money was sent just a short time after Mr Fazzolari had sent the email reiterating the request for information about applying for a position).
[27] Mr Fazzolari said he then started “asking questions” about the “situation surrounding” him, including making various telephone inquiries to Fair Work Australia. Mr Fazzolari contended that time had been lost as a result of him waiting for a reply from Mr Lindsay about how to make a job application as he was not aware that he would not be re-employed. Mr Fazzolari also said he had made every effort to make the application to Fair Work Australia in the short time available to him once he had received the relevant paperwork.
Whether the person first became aware of the dismissal after it had taken effect
[28] Mr Fazzolari did not advance anything to contradict Mr Lindsay’s evidence that he had held discussions with employees throughout the year and relevantly at a staff meeting on 28 October 2009 about the sale of the business and related matters. Mr Fazzolari’s evidence was that he received the letter around the first business day after Boxing Day. Hence, Mr Fazzolari was aware of the specific date of the impending termination a few days before it took effect on 31 December 2009. It is unclear whether Mr Fazzolari was informed of the specific date at the staff meeting. Mr Fazzolari did not, within the meaning of s.394(3)(b) of the Act, first become aware of the dismissal “after it had taken effect”. The evidence leads to the view he was aware of the date of the dismissal before it took effect.
Any action taken by the person to dispute the dismissal
[29] There is no evidence that Mr Fazzolari took any action to dispute the termination of employment, other than by making this application.
Prejudice to the employer
[30] As to prejudice, Mr Lindsay indicated only that he was personally surprised that the application had been filed in circumstances where he was aware Mr Fazzolari had arranged alternative employment in October 2009 and, consistently with the advice he had received last year, Mr Fazzolari had commenced employment with another business on 18 January 2010.
The merits of the application
[31] As to the merits of the application, I have already concluded that the termination of employment was brought about by redundancy.
Fairness as between the person and other persons in a similar position
[32] The evidence indicated that the sale of Davner resulted in the termination of all employees’ employment with Davner on 31 December 2009. It appears employees who applied for a job with David Ross Lindsay Pty Ltd were re-employed. Certainly, Mr Fazzolari understood that the other employees of Davner had been re-employed by David Ross Lindsay Pty Ltd.However, there was no evidence to support a conclusion that Mr Fazzolari applied for a position with the new business. While it is clear that Mr Fazzolari sent an email to Mr Lindsay asking for details about where to direct a job application, and Mr Lindsay did not reply to that email, it appears Mr Fazzolari may have known that Mr Lindsay was the person to whom any such application should be made, given his evidence that he requested his termination monies after learning that Mr Lindsay had re-employed other employees in the new business.
Consideration – late application
[33] The reasons for the delay have been explained by Mr Fazzolari principally in terms of turmoil after receiving the letter concerning the redundancy while on sick leave and bewilderment at not having received a reply to the email about how to apply for a job, more particularly after learning that other employees had been re-employed; and that he had made every effort to promptly make the application to Fair Work Australia once he had received the paperwork. As to the merits of the matter, I have already concluded the termination of employment was a genuine redundancy. There was no evidence of any action taken by Mr Fazzolari to dispute the dismissal, other than by making this application. There was no evidence of prejudice to the employer (with the only matter relied on by Davner in evidence being that Mr Fazzolari has found another job). The evidence otherwise indicated that all employees’ employment was terminated on a uniform date in connection with the sale of Davner. On a consideration of the matters raised by the parties, I am not satisfied exceptional circumstances have been made out such as to support an order for an extension of time.
[34] Having regard to my conclusions concerning the twin objections raised by Davner, the application is dismissed. An order to that effect has been issued in conjunction with the publication of this decision.
COMMISSIONER
Appearances:
N. Fazzolari in person.
D. Lindsay for the respondent.
Hearing details:
2010
Coffs Harbour
April 27.
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