Samuel Thomson v KPMG Australian Services Pty Ltd t/as KPMG
[2015] FWC 1212
•10 MARCH 2015
| [2015] FWC 1212 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Samuel Thomson
v
KPMG Australian Services Pty Ltd t/as KPMG
(U2015/204)
DEPUTY PRESIDENT SAMS | SYDNEY, 10 MARCH 2015 |
Application for relief from unfair dismissal - application lodged ‘out of time’- consideration of ‘exceptional circumstances’ - genuine redundancy - alleged discrimination on grounds of sexual orientation - delay due to request for further information from employer - applicant’s depression - exceptional circumstances’ not made out - application dismissed.
[1] This decision arises from an application to the Fair Work Commission (the ‘Commission’) for an extension of time for the lodgement of an application for an unfair dismissal remedy, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’). Mr Samuel Thomson (the ‘applicant’) was dismissed by KPMG Australian Services Pty Ltd t/as KPMG on 16 December 2014, effective 19 December 2014 on the grounds of redundancy. The applicant disputes the genuineness of his redundancy and lodged his application for a remedy for unfair dismissal on 15 January 2015. The Act mandates a 21 day time limit for initiating an application for unfair dismissal. The application was therefore lodged six days outside of the statutory time limit set out in s 394(2)(a) of the Act.
[2] In determining this application, the Commission has had regard to the Form F2 Application for an Unfair Dismissal Remedy and the Form F3 Employer’s Response filed on 23 January 2015. On 23 January 2015, the Commission wrote to the applicant outlining the matters I am obliged to consider under s 394(3) of the Act and asking him to provide a statement addressing those matters within 14 days. The applicant provided, by way of email, a detailed three page written statement on 5 February 2015. Having considered this material, I issued an order refusing an extension of time and dismissing the application on 11 February 2015. What follows are my reasons for doing so.
STATUTORY PROVISIONS AND PRINCIPLES
[3] The relevant legislative framework, governing the exercise of the Commission’s discretion in relation to applications of this kind, is set out as follows:
‘394 Application for unfair dismissal 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.’
[4] The meaning of ‘exceptional circumstances’ was considered in Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975 (‘Nulty’). While Nulty was decided under the General Protections provisions of the Act, the definition of ‘exceptional circumstances’ has been held to have the same meaning where it appears in other sections of the Act, most notably in s 394(3). In Nulty, a Full Bench of the Commission said:
‘[10] It is convenient to deal first with the meaning of the expression “exceptional circumstances” in s.366(2). In Cheval Properties Pty Ltd v Smithers a Full Bench of FWA considered the meaning of the expression “exceptional circumstances” in s.394(3) and held:
“[5] The word “exceptional” is relevantly defined in The Macquarie Dictionary as “forming an exception or unusual instance; unusual; extraordinary.” We can apprehend no reason for giving the word a meaning other than its ordinary meaning for the purposes of s.394(3) of the FW Act.”
[11] Given that s.366(2) is in relevantly identical terms to s.394(3), this statement of principle is equally applicable to s.366(2).
[12] The ordinary meaning of the expression “exceptional circumstances” was considered by Rares J in Ho v Professional Services Review Committee No 295 a case involving in s.106KA of the Health Insurance Act 1973 (Cth). His Honour observed:
“23. I am of opinion that the expression ‘exceptional circumstances’ requires consideration of all the circumstances. In Griffiths v The Queen (1989) 167 CLR 372 at 379 Brennan and Dawson JJ considered a statutory provision which entitled either a parole board or a court to specify a shorter non-parole period than that required under another section only if it determined that the circumstances justified that course. They said of the appellant’s circumstances:
‘Although no one of these factors was exceptional, in combination they may reasonably be regarded as amounting to exceptional circumstances.’
24. Brennan and Dawson JJ held that the failure in that case to evaluate the relevant circumstances in combination was a failure to consider matters which were relevant to the exercise of the discretion under the section (167 CLR at 379). Deane J, (with whom Gaudron and McHugh JJ expressed their concurrence on this point, albeit that they were dissenting) explained that the power under consideration allowed departure from the norm only in the exceptional or special case where the circumstances justified it (167 CLR at 383, 397).
25. And, in Baker v The Queen (2004) 223 CLR 513 at 573 [173] Callinan J referred with approval to what Lord Bingham of Cornhill CJ had said in R v Kelly (Edward) [2000] QB 198 at 208, namely:
‘We must construe "exceptional" as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, 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.’
26. Exceptional circumstances within the meaning of s 106KA(2) 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. Thus, the sun and moon appear in the sky everyday and there is nothing exceptional about seeing them both simultaneously during day time. But an eclipse, whether lunar or solar, is exceptional, even though it can be predicted, because it is outside the usual course of events.
27. 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 singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of ‘exceptional circumstances’ in s 106KA(2) 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. And, the section is directed to the circumstances of the actual practitioner, not a hypothetical being, when he or she initiates or renders the services.”
[13] In summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. 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 singular occurrence, even though it can be a one 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.
[14] Mere ignorance of the statutory time limit in s.366(1)(a) is not an exceptional circumstance. Indeed, unfortunately, it would seem to be all too common for dismissed employees to be unaware of the time limits imposed in relation to making an application for an unfair dismissal remedy or a general protections FWA application. The parliament has chosen to condition the discretion to extend time for making such applications on the existence of “exceptional circumstances”. In doing so the parliament must be presumed to have proceeded on the basis that an employee who is aggrieved at being dismissed ordinarily ought be expected to seek out information on any remedy they may have in a timely fashion such that delay on account of ignorance of the statutory time limit is not, of itself, an exceptional circumstance.
[15] A finding that there are “exceptional circumstances”, taking into account the matters specified in paragraphs 366(2)(a) to (e), is necessary before the discretion to extend time is enlivened. That is, even when “exceptional circumstances” are established, there remains a discretion to grant or refuse an extension of time. That discretion should be exercised having regard to all the circumstances including, in particular, the matters specified in paragraphs 366(2)(a) to (e) and will come down to a consideration of whether, given the exceptional circumstances found, it is fair and equitable that time should be extended [Endnotes not reproduced].’
[5] It is plain from the above extract from Nulty that all of the factors outlined in s 394(3) above, must be considered when deciding whether or not ‘exceptional circumstances’ have been established. Even if ‘exceptional circumstances’ are established, this is merely the jurisdictional gateway for the exercise of the Commission’s discretion to extend the time for filing an unfair dismissal application. In other words, ‘exceptional circumstances’ may be found to have existed, but the Commission may still refuse to exercise a discretion to accept the application ‘out of time’; See: Nulty at para [15]. A recent Full Bench of the Commission in Lombardo v Commonwealth of Australia [2014] FWCFB 2288 succinctly described the Commission’s decision making process under s 394(3) of the Act as: ‘The test for granting an extension of time involves both a broad discretion and a high hurdle of ‘exceptional circumstances.’ I turn now to each of the criteria set out under s 394(3) of the Act.
CONSIDERATION
Reasons for the delay (s 394(3)(a))
[6] In his written statement, the applicant explained that his application had been delayed because he had been trying to resolve the dispute over his termination of employment, directly with the respondent. Specifically, he had sought clarification on how his position was redundant, through emails to the respondent on 22 and 23 December 2014. He was not satisfied with the responses and at 1:01pm on 23 December 2014, he sent an email in the following terms:
‘I would like to take up your offer on not returning the deed of release today, and instead wait until there has been more time to discuss it.
Sorry for the barrage of emails. Due to the redundancy happening in the week before Christmas, the availability of employment lawyers was limited and have just met with mine today.
Regardless of when the new graduates were recruited or when the discussions of the restructure happened, KPMG is replacing like-for-like. A grad is a grad and we move between projects within HAHS (and Management Consulting) freely.
As such, it is therefore not making a role redundant, and is instead termination of employment.
If KPMG was following the correct course of action, they would have rescinded or postponed the offer of employment for the two new graduates, as opposed to terminating the current graduate’s employment.
We see the current severance payment, albeit not required by law, as insufficient considering that this is termination and not genuine redundancy, something which could pose large reputational risks for KPMG. Therefore we see the appropriate solution to be a higher severance payment.
I assume that we will need to wait until KPMG’s offices open on 12 January 2015 before we can hold this meeting, but am willing to meet earlier if need-be.
Please let me know when you would like to meet.’
[7] As will be seen from the above emails, the applicant was aware the respondent closed over the Christmas period, and he was not expecting a response until it resumed business in the New Year on 12 January 2015. The applicant delayed taking any legal action in disputing his alleged unfair dismissal until it became apparent to him, after 12 January 2015 that the respondent was not intending to reply to his request for further information and a higher severance payment in relation to his redundancy. The applicant’s submissions on this point are extracted below:
‘I knew that KPMG returned from their office closure 12 January 2015 and I waited with anticipation for their response. When the 12th arrived, I figured they would have many emails they to work through when they returned so I gave them one day to respond, which they didn’t. On the following days (both the 13th and 14th) I sent a follow-up emails, as I started to doubt they had received my initial one. As soon as I realized they were not going to respond, I immediately lodged my unfair dismissal claim. I later learned in KPMG’s response to my application that they had in fact received the emails but chose not to reply.’
[8] I am not satisfied that the applicant’s reason for the delay in lodging his unfair dismissal application, constitutes an ‘exceptional circumstance’, within the meaning of the Act. The applicant acknowledges that he became aware of his dismissal taking effect from 19 December 2014. The 21 day time limit for filing his unfair dismissal application commenced from that date. While it is understandable that the applicant attempted to initially resolve the dispute with the respondent, without resorting to legal avenues (and costs), these actions do not constitute an ‘exceptional circumstance’ for a delay in filing his application. The 21 day time period for filing an unfair dismissal application does not commence from the time at which a dismissed employee has exhausted alternative measures to resolving their dispute or obtained further information relating to their alleged unfair dismissal. Considering the nature of the applicant’s dispute with the respondent, it was incumbent on him to ensure his access to an unfair dismissal remedy was not lost, by failing to at least, file his application as an ‘insurance policy’. After all, an application could have been discontinued very easily at any time, if his negotiations with the respondent had been successful.
[9] In any event, the applicant’s submissions demonstrate that he first engaged in a ‘fact finding’ quest in an attempt to establish the merits of his unfair dismissal claim. In respect of his request for further information from the respondent, the applicant’s stated:
‘... their responses had not provided me with sufficient evidence that my ‘redundant’ role was not being directly replaced.’
Of course, the information sought by the applicant regarding the genuineness of his redundancy, would have inevitably been produced, had legal proceedings been initiated. Knowing the respondent’s office would be closed for the Christmas period, the applicant chose to do nothing about his alleged unfair dismissal until mid January 2015. These circumstances do not constitute an ‘exceptional circumstance’, within the meaning of the Act.
[10] The applicant further submitted that since his dismissal he had been suffering from depression. The applicant provided a medical certificate which disclosed that he suffered from depression. He believed that this may have ‘impaired’ his judgment in lodging his unfair dismissal application. The medical certificate is short on detail and offers no conclusion as to the applicant’s unfitness, to otherwise function normally. While I am sympathetic to the applicant’s medical condition, his depression does not positively demonstrate that he was incapable of lodging his application, or conducting ordinary day to day activities, within the 21 day timeframe. Indeed, many dismissed employees suffer from elevated levels of stress and anxiety following termination of their employment. On one view, this is unexceptional, rather than exceptional. In Shaw v Australia and New Zealand Banking Group Limited t/as ANZ Bank[2015] FWCFB 287, the Full Bench, by majority (WatsonVP and Smith DP) said at para [15]:
‘[15]After taking into account the factors in s.366(2) the Deputy President needed to be satisfied that there were exceptional circumstances. The Deputy President noted, correctly in our view, that stress, shock and confusion, in and of themselves, are not exceptional. The loss of employment is a serious event in a person’s life, and such effects are unfortunately not unusual.’
[11] I would add one further observation. It is difficult to reconcile the applicant’s alleged ‘impaired’ judgement with his capacity to seek to engage with the respondent by the numerous emails he sent, shortly after his dismissal. These emails are clear, well-crafted and argumentative. While I am obviously not medically qualified, these communications seem to me to disclose the applicant was acting in a decisive and determined manner, seemingly unhindered by any psychological ‘impairment’.
[12] For these reasons, I am not satisfied that the applicant’s medical condition as constituted an ‘exceptional circumstance’, contributing to his delay in filing his unfair dismissal application.
When the person first became aware of the dismissal after it had taken effect (s 394(3)(b))
[13] The submissions lodged by the applicant, acknowledges he was aware of his dismissal on 16 December 2014 and that his dismissal took effect from 19 December 2014. This is a neutral factor in this case.
Any action taken by the person to dispute the dismissal (s 394(3)(c))
[14] As mentioned above, the applicant had attempted to resolve his dispute ‘internally’, before filing his unfair dismissal application on 15 January 2015. It is his central contention that the delay in filing his application was due to the alternative action he took in disputing his alleged unfair dismissal through correspondence with the respondent. I have already addressed this issue. An assessment of this criterion weighs against the grant of an extension of time.
Prejudice to the employer (s 394(3)(d))
[15] The applicant dealt with this criterion in the following way:
‘KPMG is a large firm employing 6,082 people with revenue of $1.12 billion in FY 2014. Given my junior level and the additional three months compensation I am seeking being approximately 0.0011 per cent of their annual revenue, I do not see the application for unfair dismissal (or the delay) causing harm to KPMG in any way.’
Given that the application was lodged six days outside of the statutory time limit, I do not consider there is any significant prejudice to the employer, save for the usual prejudice of costs and time expended in defending the claim. However, while this factor is a neutral one in this case, I do not consider the revenue or ‘capacity to pay’ of the employer is a relevant consideration under this subsection.
The merits of the application (s 394(3)(e))
[16] It is important for applicants to understand that a consideration of the merits of an application, at such an early stage in the proceedings and without the benefit of tested evidence, will only ever be on a prima facie basis; See: Kyvelos v Champion Socks Pty Limited Print T2421, 10 November 2000. The applicant contended that his redundancy was not genuine as the respondent had engaged other employees that were ‘directly replacing’ his role within the Company. The applicant attributed his dismissal to discrimination on the grounds of his sexual orientation. I outline the applicant’s submissions in respect to the merits of his application below:
‘I believe my redundancy is not genuine. My role was declared redundant after 19 December 2014. However, KPMG has employed two people to fill my role, both of whom start on 23 February 2015. While 10 people from my business unit were made redundant, I was the only one who had people directly replacing my role. My understanding of redundancy is that it is not genuine if an employer hires someone else to do the job, which KPMG has done in this instance.
In my redundancy meeting, KPMG said I was being made redundant because my skills were not aligned to the business’ sector plan requirements, which they claimed was about “contestability.” I asked KPMG how the people replacing my role have skills which are more closely aligned to the plan, and they did not provide me with a response. Considering one of the incoming applicants has a Bachelor of Music, and the other has a Bachelor of Laws, I struggle to see how they are more aligned to contestability than I am.
Later, when I questioned KPMG again about the people replacing my role, they said their roles are “separate and distinct from your position which is no longer required due to the operational requirements.” I believe this is false information, as when I asked KPMG to provide me with the specifics on how their roles were separate and distinct from mine, they were unable to do so. The new hires’ role descriptions are the same as mine. They have the same job title, will work in the same office, in the same team, doing the same variety of tasks which is expected from a junior consultant. Therefore, I do not know how their roles could be separate and distinct.
In KPMG’s response to my application to FWC, they said I was also made redundant because I “had poor interpersonal skills.” Despite having frequent scheduled performance meetings with my Performance Manager, these alleged poor interpersonal skills they speak of were never raised. Perhaps they were referring to my Performance Development Plan, where I was tasked to work on my professionalism. Nevertheless, I am unsure if this is what they are referring to because at the end of the Plan I was told that I have improved dramatically and they were impressed with how I have demonstrated my professionalism. No issues were raised to my attention since. I think if this was still a real issue it would have been raised earlier. KPMG also said I was made redundant because I “had indicated a desire to move out of the business unit and/or KPMG.” Many, many months earlier I had asked a friend what the process was to move out of my business unit, but I had since decided that I wanted to stay. Consequently, I don’t know why that is been used against me especially considering there was no consultation during the redundancy process.
When reflecting on why I feel like KPMG made me redundant and then replaced my role, I believe it may be a result of discrimination due to my sexual orientation. During my initial days at KPMG the lady who was thought to be my performance manager talked to me about how I need to “tone down my gayness.” When I enquired further, she said, “Do you know David in the office? He’s gay, but you would never know. He even has pierced nipples. You need to be more like David.” When I went to discuss this with our HR partner, Kerry McGough, she said that I do need to tone it down and said I would be better suited in marketing or advertising. When I question the moral fibre of her statements, she provided an example of when she was sexually harassed and had to change her behaviour so she didn’t provoke sexual harassment. In later months, during my Performance Development Plan, she raised the fact that I hadn’t tone it down as earlier requested. I feel like my sexual orientation should not be something which I need to “town down” and I worry that this would have feed into KPMG evaluating me as having “poor interpersonal skills.”’
[17] In response to these claims, the respondent maintained that it was restructuring a part of its business that was underperforming and had considered redeployment options for the applicant. The respondent argued that other positions within the Company were deemed unsuitable for the applicant. The respondent further asserted that the applicant was ‘identified for redundancy because his skills were not aligned to the business sector plan requirement, he had poor interpersonal skills and had indicated a desire to move out of the business unit and/or KPMG’. It appears that the respondent had engaged in a genuine process of redundancy and had genuinely considered redeployment options for the applicant, but none were available. It also seems that the respondent had engaged in a neutral, criteria-based selection process when determining the eligibility of the applicant for redundancy. It could hardly be said to be an undisclosed plan to get rid of the applicant when ten other employees were made redundant at the same time. The applicant’s concern regarding the respondent’s hiring of new employees was answered by the respondent when it said that the persons the applicant had identified were hired 5-6 months before any consideration of his redundancy. Given that the applicant did not contest this timing, it is difficult to see how his concern is of any relevance. While I make no conclusive finding on the issue of a genuine redundancy, a prima facie assessment of the material filed suggests that the applicant’s prospects of success are limited.
Fairness as between the applicant and other persons in a similar position (s 394(3)(f))
[18] The applicant addressed this criterion by referring to case law; See: Gao v Department of Human Services [2011] FWAFB 5605. For present purposes, I need not repeat the principles flowing from the authorities on this question. The evidence from both the applicant and the respondent discloses that ten other employees were made redundant at the same time as the applicant. The was no evidence that the applicant was treated differently from the other ten persons who were in a similar position. Therefore, a consideration of this factor must weigh against a grant of an extension of time.
CONCLUSION
[19] Having considered all of the matters which the Commission is required to take into account under s 394(3) of the Act, I am not satisfied that there are ‘exceptional circumstances’ which would warrant my granting an exception to the statutory time limit for the lodgement of this unfair dismissal application. The circumstances, as disclosed by the material submitted by the applicant, are not ‘out of the ordinary course, unusual, special or uncommon’. These factors are not outweighed by any prima facie merit in the applicant’s case. Furthermore, there is no evidence to any suggest the applicant was afforded differential treatment to that of other employees who were made redundant at the same time. The application for an unfair dismissal remedy must be dismissed. I confirm my order of 11 February 2015.
DEPUTY PRESIDENT
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