Sandro David Franca Drummond v Niccolo Pty Ltd
[2023] FWC 3036
•20 NOVEMBER 2023
| [2023] FWC 3036 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Sandro David Franca Drummond
v
Niccolo Pty Ltd
(U2023/8252)
| COMMISSIONER WILSON | MELBOURNE, 20 NOVEMBER 2023 |
Application for an unfair dismissal remedy – whether application filed out of time – application found to be within time. Objection dismissed.
This decision concerns an application made by Mr Sandro David Franca Drummond alleging unfair dismissal against Niccolo Pty Ltd (Niccolo or the Respondent). Mr Drummond claims he was dismissed on Friday, 11 August 2023, whereas Niccolo argue he was dismissed on Saturday, 5 August 2023.
Mr Drummond’s application for unfair dismissal remedy was lodged in the Fair Work Commission (the Commission) on Thursday, 31 August 2023.
In its Form F3 Employer Response Niccolo objected to the continuation of Mr Drummond’s application on numerous grounds including that it is out of time, submitting that Mr Drummond’s employment ended on 5 August 2023. The other objections made by Niccolo are that Mr Drummond earned more than the high-income threshold; that it complied with the Small Business Fair Dismissal Code; and that Mr Drummond was not a national system employee with his place of work being “solely and full time in the United States”.
This decision concerns only the questions of the date of Mr Drummond’s dismissal and whether, in view of the determined date, he requires an extension of time in order to make his application for an unfair dismissal remedy.
Section 394(2) of the Fair Work Act 2009 (Cth) (the FW Act) requires an unfair dismissal application to be made within 21 days after the dismissal took effect or within such further period as the Commission allows under s.394(3). If the date referred to in the employer response form is correct, Mr Drummond’s application was made outside of the statutory time limit, which would have ended on Monday, 28 August 2023. If Mr Drummond was dismissed on Saturday, 5 August 2023 the conclusion of the statutory period is determined as the Monday after the 21st day after reference to the Acts Interpretation Act 1901 (Cth) as in force on 25 June 2009[1] with s.36(1) of that Act providing:
“(2) If:
(a) an Act requires or allows a thing to be done; and
(b) the last day for doing the thing is a Saturday, a Sunday or a holiday;
then the thing may be done on the next day that is not a Saturday, a Sunday or a holiday.
Example: If a person has until 31 March to make an application and 31 March is a Saturday, the application may be made on Monday 2 April.”
Consistent with the Commission’s usual practice on these matters, with the application said to have been made out of time, the matter was referred to me for hearing and determination of the date of dismissal and if so required whether an additional period of time should be allowed for the making of Mr Drummond’s application.
A hearing was held on the subject on Thursday, 2 November 2023 at which Mr Drummond appeared and gave evidence on his own behalf. Niccolo was represented by Mr Nicholas Bolton who also provided evidence.
BACKGROUND
The Respondent is a coffee business based in Melbourne. Mr Drummond says that he co-founded the company in August 2009. The Respondent says Mr Drummond began working for the company on 1 October 2011. Mr Drummond worked in Australia for a decade until he relocated to New York in 2019 as Managing Director to lead the company’s United States expansion, although his status with the company toward the end of his employment is contested.
There appears to be a longstanding friendship between Mr Drummond and Mr Bolton which deteriorated sharply in 2023. Each make serious accusations about the other’s conduct including criminal conduct.
Mr Bolton’s status with Niccolo is unclear. He is neither a Director or employee of Niccolo, but is on his evidence a person authorised by Niccolo’s General Manager to do things in relation to Niccolo’s management. Those things include, on his evidence, that the General Manager instructed him to dismiss Mr Drummond.[2]
There was an exchange of emails between Mr Drummond and Mr Bolton on 5 August 2023 and in the few days earlier and in June 2023. The details of the correspondence are not essentially relevant to the matter save to say there was a dispute between the two about a number of matters, including Mr Drummond’s performance in New York with an associated business named Ground Support; whether he was adequately supported in his role; and whether Mr Drummond would be required to repay loans issued to him from Niccolo. For his part in his correspondence Mr Drummond queried a series of questionable transactions he thought Mr Bolton had undertaken.
In one of the emails, on 21 June 2023, Mr Bolton said to Mr Drummond, with copies to three others:
“The controlling shareholder has moved for your removal at Niccolo Pty Ltd, so you no longer have office there. If there are formal resolutions required (by you), you are merely there in caretaker mode until that occurs later today.”[3]
There is no other evidence before me, proximate to the date of the email, that confirms the controlling shareholder’s concerns.
The dispute was continuing in August and, on 5 August 2023 at 9:11 PM AEST Mr Bolton wrote to Mr Drummond in these terms:
“Hi Davide,
I think it’s US$14.9k plus A$8k taken the other day. So total $31k.
As a director, you have an obligation to the creditors of the company, in particular our Amex payment plan that is agreed. So you can’t take funds out that prejudice that.
I’ll address separately the claimed entitlement to the funds. In short, I don’t agree. As you know, overtime is not approved - you seem to be have unilaterally changed your salary to be plus super rather than including super and the increases are based on prevailing Wages CPI not a fixed increase (but I can agree to do this, even though I’m not sure that deal followed the material wage increase that was granted - as it was part of an earlier deal). We also have about US$45k in Uber fees, $70k+ of frequent flyer points and various other expenses to balance out.
Niccolo needs to immediately terminate your employment and involvement in the company. We will wrap what is owed as part of the termination arrangements. With this, the share loan becomes due, but we can negotiate that in the mix.
Regards,
Nicholas Bolton
(From mobile device)”.[4] (underlining added)
Niccolo rely upon this communication as being the date of notification to Mr Bolton of his dismissal and the date of effect of his dismissal. Mr Drummond disagrees that this was the date on which he was dismissed, submitting:
“• Prior to August 11th 177 2023 there was no official documentation indicating my oppressive removal.
• I disputed my suggested dismissal by the Respondent in the August 5th email by reminding him that he is neither an employee nor a registered shareholder of the company and lacked authority to dismiss me.
• I highlighted my role as the sole Director of the company and demanded the Respondent refrain from company matters.
• I emailed the Respondent, the company shareholders and the company members, Niccolo Pty Ltd’s ASIC company extract proving he is not a registered shareholder or an employee on August 6th highlighting he had no authority to dismiss me.
• I sent the Respondent numerous emails requesting professional/legal mediation for guidance and for a legal resolution to the entire situation.
• On August 11, 2023, the Respondent convened a meeting with the company’s shareholders and members, during which a document formalizing my dismissal was drafted.
• I only received an email indicating my oppressive removal was passed as a resolution at a company’s shareholders and members meeting on August 11th resolution at a company’s shareholders and members meeting on August 11th.
• I also disputed the resolutions passed at the August 11th meeting as a crucial non-compliance issue was identified with the scheduling of the proposed meeting. It did not adhere to statutory obligations, particulary (sic) section 294H of the Corporations Act. The aforementioned section mandates that shareholders should be accorded a minimum of 21 days’ prior notice before convening a meeting, unless a reduced notice period is mutually agreed upon by members holding at least 95% of the issued shares. It was pertinent to note that I did not provide consent for a reduced notice period, thereby rendering the exception for short notice unavailable and the proposed meeting invalid. Furthermore, I explicitly expressed my intent to be integrally involved in any meeting that deliberated upon my position as Managing Director. It was my anticipation to utilize such an occasion to comprehensively present my case, showcase pertinent evidence, and vehemently counteract the accusations put forth by Mr Nick Bolton.”[5]
The foregoing submissions refer to correspondence from Mr Drummond on 6 August 2023, with the correspondence being in evidence before the Commission. Amongst other matters the email states to Mr Bolton:
“You're not an employee or a shareholder so you have no authority to terminate my employment with the coffee company.”
and
“As always, happy to put this in the hands of professionals and happy to pay my 10% share of the final cost. It's common sense.
Until then, as the sole Director of Niccolo Pty Ltd I will ask you again to step away from the company's administration until we have this mess resolved.”[6]
A Notice of General Meeting of Members of Niccolo dated 10 August 2023 was distributed to members of the company, including Mr Drummond. The notice was sent to Mr Drummond in an email from Mr Bolton sent on 10 August 2023 at 4:32 PM. The meeting was notified to take place on 11 August 2023 at 2:00 PM and the content of the notice provided:
“The purpose of the meeting is to consider and if thought fit to pass the following as ordinary resolutions:
1. To appoint Alexandra Hamilton Boulton as a director of the Company with effect from the date of passing the resolution
2. To remove Sandro David Franca Drummond as a director of the Company, together with any other offices held by him in the Company, with effect from the date of passing the resolution; and
This meeting has been called by Australian Style Group Pty Ltd pursuant to s.249F of
the Corporations Act 2001.”[7]
On 11 August 2023 at 2:55 PM, Mr Bolton sent an email notifying “All resolutions passed”.[8]
The Respondent submits that Mr Drummond was removed from the company by a shareholder resolution and terminated due to blackmail, embezzlement, and fraud.[9]
The following dates and events are relevant to determination of whether Mr Drummond was “dismissed” within the meaning of the Act:
Mr Drummond recognises 11 August 2023 as the date of dismissal as prior to this date he says there was no official documentation of his dismissal.
Mr Drummond submits that the Respondent’s email of 5 August 2023 suggested his dismissal but he does not view Mr Bolton as having authority to dismiss him as Mr Bolton is not an employee or a shareholder.
LEGISLATION
Relevant to the Commission’s consideration of this question are the provisions in s.386(1) of the FW Act:
“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.”
CONSIDERATION
There were plainly tensions between Mr Drummond and Mr Bolton in August and those tensions had been building for some time.
Niccolo submits in its Form F3 Employer Response Form that at the time of Mr Drummond’s dismissal (that is, the date it prefers) it employed 10 people. I do not have evidence as to who those people may be, their duties or location. The only evidence I do have related to these subjects is that Mr Drummond was the Managing Director and Mr Danny Agocs was the General Manager. According to Mr Bolton the General Manager was more senior in the management hierarchy than the Managing Director.[10]
Mr Drummond’s evidence is that he has been the sole director of Niccolo since 2019 or before and that he and others started the company in 2009. First his role in the business was as its General Manager and then as Managing Director from close to 4 years ago. He does not have a written contract of employment.[11]
Mr Drummond confirmed he received notice of the company resolution on 11 August 2023, after which he ceased work for Niccolo.[12] He regards the company meeting as not having been properly convened with him arguing he was provided with insufficient notice of the meeting. He submits that he responded to advice about the resolution passed at the meeting by stating to those with whom he communicated that what had been passed at the meeting was not valid.
Mr Bolton’s evidence is that he is the founder of the company and engaged by the General Manager to “assist the company from time to time” and that he takes instruction from the General Manager.[13]
Mr Bolton says the following about his role to assist Niccolo and Mr Drummond’s termination:
“THE COMMISSIONER: All right. Are there limits or an outline of what that advisory capacity is?
MR BOLTON: There is not but I take instruction from the general manager.
THE COMMISSIONER: Did he instruct you to terminate Mr Drummond's services?
MR BOLTON: Yes, he did.
THE COMMISSIONER: And when was that?
MR BOLTON: It was in the immediate lead up to 5 August. I'd have to go through my records to find the exact date, but in the lead up to that. I can confirm that it was before the termination.
THE COMMISSIONER: How far before?
MR BOLTON: Twenty-four, 48 hours of (sic) that.”[14]
After further questioning Mr Bolton put forward that Mr Agocs is personally intimidated by Mr Drummond but that there was no reason Mr Agocs could not have given evidence in these proceedings.[15] Mr Bolton also said that Mr Agocs’ position was more senior than Mr Drummond’s and that this came about because the latter had been seconded to Ground Support, a café operation in New York in which Niccolo had a 50% interest.[16]
As part of his documentary evidence Mr Drummond filed certain ASIC company search extracts, the contents of which were not contested by Mr Bolton. Those extracts show the following:
There are three members of Niccolo Pty Ltd at the date of the extract, 30 August 2023, Australian Style Group Pty Ltd, Stephen Rowley and Sandro David Franca Drummond; and
The Director of Niccolo Pty Ltd at 30 August 2023 is Alexandra Hamilton Bolton and the Secretary is Daniel Agocs.[17]
The Director of Australian Style Group Pty Ltd is Richard Michael Dukes and the company has one member, Australian Style Holdings Pty Ltd.[18]
Company extracts for Australian Style Holdings Pty Ltd are not before the Commission.
It may be drawn from the evidence that Mr Bolton is neither a Manager or Director of the company. While he “assists” the General Manager on unspecified matters and asserts that he was instructed by Mr Agocs to dismiss Mr Drummond on 5 August 2023 there is no corroborative evidence of his assertion. Mr Agocs did not but could have given evidence to the Commission about what he did or did not instruct Mr Bolton to do.
It is apparent from the evidence that at its highest Mr Bolton is a person engaged to “assist” Niccolo and not a Manager or Director of the company but is someone who has the capacity to do things for and perhaps on behalf of Niccolo. The totality of the evidence before me leads me to not accept that Mr Bolton had the requisite authority to terminate Mr Drummond’s employment. There is no documentary evidence before me that would corroborate the contention that the General Manager instructed him to terminate the Managing Director’s employment or that he had the authority to do so. The person who could have given evidence on the subject and was available to do so was not called to give evidence. No question of intimidation on the part of Mr Agocs legitimately arises, with the proceedings conducted by Microsoft Teams rather than in a Commission hearing room and with the Applicant in New York City. The inference may be drawn from this circumstance that Mr Agocs’ evidence on the subject, if given, would not have assisted the Respondent’s case.[19] The proposition that an assistant of some kind to a small business who is neither a Director or shareholder has the requisite authority to dismiss its Managing Director is dubious and in the absence of cogent evidence, implausible.
There is also no evidence before the Commission that Niccolo acted on the purported termination of employment on 5 August 2023 by doing such things as locking him out of its IT systems or bank accounts or by telling staff, customers, or suppliers that Mr Drummond was no longer employed by it.
To the contrary the evidence which is before me is that Mr Drummond challenged the purported termination as ineffective, making reference to his role as Director in comparison to that of Mr Bolton who was neither a shareholder nor Director.
After he disputed Mr Bolton’s 5 August 2023 termination Niccolo did nothing until it circulated on 10 August 2023 a Notice of General Meeting to take place on 11 August 2023. That Notice foreshadowed a resolution to “remove Sandro David Franca Drummond as a director of the Company, together with any other offices held by him in the Company”. These steps together suggest that Niccolo accepted what Mr Drummond submitted: that the purported 5 August 2023 dismissal was ineffective and if the company wanted to terminate his services it needed to do so formally.
Critically the proposed resolution, subsequently passed by the Company proposed removal of Mr Drummond not only from the position of Director, but also “any other offices held by him in the Company”. Had Niccolo maintained that it had already dismissed Mr Drummond there would be no need for a resolution that Mr Drummond be terminated from “any other offices held by him in the Company”.
The combination of these matters leads me to find that Niccolo accepted Mr Drummond’s rejection of the purported 5 August 2023 termination of employment. Having put forward that it was ineffective, and that Mr Bolton carried no authority to issue the termination Niccolo then chose to give notice for and carry a resolution of the Company terminating his employment. While I acknowledge Mr Drummond’s challenge to the legitimacy of the meeting that is not a matter for this decision.
I find from the foregoing that Mr Drummond’s employment was terminated on 11 August 2023.
CONCLUSION
It follows that the unfair dismissal application made by him on 31 August 2023 is within time, with the statutory filing period ending the day after, 1 September 2023.
As a result, Niccolo’s objection is dismissed and the matter will now be programmed for determination of the merits of Mr Drummond’s application as well as the remaining objections (namely that Mr Drummond earned more than the high income threshold, that the Respondent complied with the Small Business Fair Dismissal Code and that Mr Drummond was not a national system employee with his place of work being “solely and full time in the United States”). I consider it appropriate to deal with the merits of the matter as the subject of each objection will require detailed evidence with the likelihood that there will be such overlaps between the evidence required for the different elements that it is likely the most efficient way forward will be to hear and determine all remaining issues in tandem.
Directions will shortly be issued from my Chambers for the next stage of these proceedings.
COMMISSIONER
Appearances:
Mr. S Drummond for himself
Mr N. Bolton for the Respondent
Hearing details:
2023.
Melbourne (via video conference);
2 November.
[1] Fair Work Act 2009 (Cth), s.40A.
[2] Transcript, PN 144 – 145.
[3] Respondent Documents relating to date of termination, filed 18 October 2023, appearing at Digital Court Book, p.479.
[4] Ibid, appearing at Digital Court Book, p.472.
[5] Amended Applicant Outline of Argument: Extension of Time, filed 24 October 2023, appearing at Digital Court Book, pp.347 – 348.
[6] Amended Applicant Witness Statement, filed 24 October 2023, appearing at Digital Court Book, p.365.
[7] Ibid, appearing at Digital Court Book, p.371.
[8] Ibid.
[9] Form F3 Employer Response Form, 27 September 2023, item 2.2.
[10] Transcript, PN 213.
[11] Ibid, PN 49 – 54.
[12] Ibid, PN 61.
[13] Ibid, PN 135 – 143.
[14] Ibid, PN 142 – 149.
[15] Ibid, PN 158 – 163.
[16] Ibid, PN 186, 191.
[17] Applicant Documents submitted with Form F2, filed 31 August 2023, appearing at Digital Court Book, p.234.
[18] Ibid, appearing at Digital Court Book, pp.231 – 232.
[19] Tamayo v Alsco Linen Service Pty Ltd, Print P1859, 4 November 1997 per Ross VP, Drake DP and Cargill C.
Printed by authority of the Commonwealth Government Printer
<PR768427>
0
0
0