T De Silva-McKay v Eq Life Pty Ltd
[2013] FWC 7482
•10 OCTOBER 2013
[2013] FWC 7482 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
T De Silva-McKay
v
EQ Life Pty Ltd
(U2013/8357)
SENIOR DEPUTY PRESIDENT WATSON | MELBOURNE, 10 OCTOBER 2013 |
Application for relief from unfair dismissal.
[1] On 9 April 2013 Ms T De Silva-McKay made an application, pursuant to s.394 of the Fair Work Act 2009 (the Act), for relief in respect of the termination of her employment by EQ Life Pty Ltd (EQL).
[2] On 5 June 2013, EQL raised two jurisdictional objections to the application in its response to the application:
1. The applicant did not complete the minimum employment period in accordance within s.383 of the Act; and
2. The dismissal was a case of genuine redundancy in accordance with s.389 of the Act.
[3] The second objection, in relation to genuine redundancy, was not pressed by EQL in its written outline of submissions, 1 or in the course of the hearing of this matter on 13 September 2013. This decision deals with only the first jurisdictional objection, in relation to the minimum employment period.
Brief Background
[4] From the time of Ms De Silva-McKay’s employment with EQL and prior to that time, EQL produced the Equestrian Life Magazine (the Magazine). Over the period 25 October 2011 to 31 December 2102, Mr J Newman was Managing Director of EQL. 2 Ms J O’Connor was Senior Editor of EQL from 1 February 2012 to 31 December 2012.3
[5] Ms De Silva-McKay undertook some freelance work for EQL in November 2011, invoiced for a period of 17.5 hours. 4 Mr Newman offered Ms De Silva-McKay a contract to produce the full Magazine which she declined in light of her full-time employment with another company.5 He then offered her full-time employment, which she accepted.6 Ms De Silva-McKay commenced her full-time position with EQL on 30 January 2012.7
[6] In or around October 2012, Mr Newman put a proposal to Mr R McKay, a Director of EQL to outsource the production of the Magazine to a business he had started up, Equal Media Pty Ltd (Equal Media) with effect from 1 January 2013, directed at reducing production costs of the Magazine. 8 In or around late October or early November 2012, the proposed outsourcing arrangement was accepted by the Directors of EQL.9 Mr Newman had floated the prospect of the outsourcing arrangement and a change in employer from EQL to Equal Media with Ms De Silva-McKay and Ms O’Connor in September 2012.10
[7] Shortly after, Mr Newman advised Ms De Silva-McKay and Ms O’Connor of the outsourcing arrangement and discussed with them the impact upon their employment with EQL and Equal Media. 11 He proposed that they would cease their employment with EQL on 31 December 2012 and commence employment with Equal Media on 1 January 2013.12 The nature and effect of those discussions is a matter in contention and is considered later in this decision.
[8] On 31 December 2012 Mr Newman ceased his employment as Managing Director of EQL 13 and Ms O’Connor ceased her employment as Senior Editor of EQL.14 Mr Newman commenced employment as Managing Director of Equal Media on 1 January 210315 and Ms O’Connor commenced employment as Editorial Director of Equal Media on 1 January 2103.16 The employment status of Ms De Silva-McKay is a central matter in contention and is considered later in this decision.
The question for determination
[9] An application for relief in respect of termination of employment under s.394 of the Act is only available to a person who is protected from unfair dismissal under s.382 of the Act.
Section 382 of the Act provides:
“A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
[10] EQL concedes that Ms De Silva-McKay’s annual rate of earnings is less than the high income threshold. 17
[11] As a result, whether Ms De Silva-McKay is protected from unfair dismissal rests on whether or not she completed a period of employment with EQL of at least the minimum employment period.
[12] The reference to the completion of the minimum employment period “at that time” in s.382 is dealt with in s.383 of the Act, which sets out the meaning of minimum employment period in respect of an employer which is not a small business employer (s.383(a)) and an employer which is a small business employer (s.383(b)). In s.383, the completion of the minimum employment period references a period ending at the earlier of the time of notice of the dismissal or immediately before the dismissal. Ms De Silva-McKay did not contest evidence brought by EQL that it was a small business employer. 18 That evidence, based on EQL payroll records,19 establishes that EQL was a small business employer at the relevant time. Accordingly, the question for determination arises under s.383(b) of the Act: did Ms De Silva-McKay complete a minimum period of employment with EQL of one year ending at the earlier of the time when she was given notice of the dismissal or immediately before the dismissal.
[13] This is a matter which must be considered before the merits of Ms De Silva-McKay’s application (s.396(b) of the Act).
The competing contentions
[14] The parties agree that, for the purposes of determining whether Ms De Silva-McKay completed a minimum period of employment with EQL of one year ending at the earlier of the time when she was given notice of the dismissal or immediately before the dismissal, she commenced her employment with EQL on 30 January 2012.
[15] EQL contends that whether the employment was terminated on 31 December 2012, when EQL ceased the production of Equestrian Life and outsourced its production to Equal Media or at an earlier time when notice of the outsourcing and cessation of employment with EQL was given to Ms De Silva-McKay, her employment with EQL was for a period of less than one year.
[16] Ms De Silva-McKay contends that her employment with EQL continued until 20 March 2013, at which time it was terminated by a letter from Mr Newman, 20 such that her period of employment with EQL exceeded the one year minimum period of employment.
The evidence
[17] Relevant evidence was given by Ms De Silva-McKay, Mr Newman and Ms O’Connor. The evidence of Ms De Silva-McKay and Mr Newman is of greatest relevance, with Ms O’Connor’s evidence going largely to her own employment arrangements and shedding limited light on the employment status of Ms De Silva-McKay. In addition, relevant documentary evidence was identified by the witnesses.
[18] The documentary evidence included:
1. The employment contract between Ms De Silva-McKay and EQL. 21
Clause 6—Termination of Employment–provides:
“After successful completion of your probationary period, your employment may be terminated by either EQ Life Pty Ltd or you giving to the other four weeks written notice, or such shorter period as is mutually agreed . . .
If EQ Life Pty Ltd terminates your employment, EQ Life Pty Ltd may, at its entire discretion, pay you in lieu of all or some of the notice period you otherwise would worked.” [Emphasis added]
2. Correspondence 22 between Ms De Silva-McKay and Mr Newman, Mr McKay and Ms R Shaw (Live TV Executive of the Magazine) concerning the proposed terms of an Employment Agreement offered by Equal Media to her23 but not accepted or executed by her.
3. A letter from Mr Newman, under the letterhead of Equal Media and signed by him as Managing Director, to Ms De Silva-McKay. 24 It stated:
“As per our recent discussion this letter documents your employment status with Equestrian Life Pty Ltd and Equal Media Pty Ltd.
As of the 31st December 2012 your employment with Equestrian Life Pty Ltd ceased along with the Publishers and Editors employment. Equestrian Life Pty Ltd elected to outsource these roles under a Custom Publishing agreement with Equal Media Pty Ltd. You were offered employment with Equal Media Pty Ltd under the same terms and conditions as your previous employment with Equestrian Life Pty Ltd. After conversations with you, you elected to not take up employment with Equal Media Pty Ltd. However you continued to work for Equal Media Pty Ltd as Art Director with a view to completing the 12th edition of Equestrian Life on a casual basis. You were remunerated at the same rate of $70,000 per annum plus 9% superannuation up until the 31st March 2013.
Your position with Equestrian Life Pty Ltd was made redundant. Your employment with Equestrian Life Pty Ltd commenced on the 30th January 2012 and ceased on the 31st December 2012. Therefore the period of employment was less than 12 months and under the Fair Work Act this means that you receive no entitlement to a redundancy pay out.
There is also no annual leave owed to you as you have worked for Equal Media Pty Ltd on a casual basis, not under a contracted agreement. As you have been paid up until the 31st of March and your casual work arrangement with Equal Media Pty Ltd has ceased as of today the 20th March 2013 you have been paid an additional $2,961.52 gross, $2,645.53 net pay for your casual work with Equal Media Pty Ltd. I will not seek to recover this and consider this a good-will payment which concludes your work with Equal Media Pty Ltd.
I ask that you return all property in your possession, including your office keys immediately. Please place these in an envelope and deposit these in Equal Media’s mailbox at 726 High Street Armadale, Victoria.”
4. Payroll records showing that Ms De Silva-McKay was paid monthly by Equal Media on 14 or 15 January, February and March 2013. 25
The Evidence of Mr Newman
[19] In or around October 2012, Mr Newman, then Managing Director of EQL met with EQL Director and proposed that EQL could outsource the production of the Magazine to a business (Equal Media), which had been started by Mr Newman. Mr Newman proposed that the outsourcing arrangement commence on 1 January 2013 and that he and Ms O’Connor would cease their roles and employment with EQL on 31 December 2012. 26
[20] The Directors of EQL accepted the outsourcing arrangement proposed by Mr Newman in or around October 2012. Shortly after, Mr Newman met with Ms De Silva-McKay and Ms O’Connor to discuss the outsourcing arrangement, explaining the arrangement and the reasons for it. Mr Newman told Ms De Silva-McKay that, due to the outsourcing, her employment would cease and offered her a full-time position with Equal Media from 1 January 2013. Ms De Silva-McKay requested time to consider the offer of employment with Equal Media. 27
[21] Subsequently but prior to 25 December 2012, Mr Newman had several discussions with Ms De Silva-McKay at EQL’s offices and in front of other employees, where he made it clear to her that her employment with EQL would cease on 31 December 2012. 28 During one such discussion, Ms De Silva-McKay asked Mr Newman “what could be done regarding maternity leave payments as she was aware that she had not completed the required time frame necessary to qualify for the Federal Government paid maternity leave scheme”.29
[22] Mr Newman, Ms O’Connor and Ms De Silva-McKay talked about the outsourcing arrangement constantly, that a new business would operate and that they would all be finishing on 31 December 2012. Mr Newman took the 31 December 2012 finish date with EQL as being understood. 30 Mr Newman believed that given Ms De Silva-McKay’s role “producing collateral at the time for the new business” and “setting up emails for the new business”, there was a very clear understanding that EQL was ceasing for him, Ms O’Connor and Ms De Silva-McKay on 31 December 2012 and that they were all moving to Equal Media.31 It was made very clear that the three positions at EQL would cease to exist as of 31 December 2012.32
[23] Ms De Silva-McKay was very keen to secure some maternity leave payment, asking Mr Newman what could be done. Mr Newman advised Ms De Silva-McKay that nothing could be done because it was very clear when Equal Media was formed and because Equal Media was a new entity there was no 12 months continuous employment. 33
[24] Ms De Silva-McKay ceased her employment with EQL on 31 December 2012. From 1 January 2013 all work performed by her was performed for Equal Media at the EQL premises until late January 2013 and thereafter at the new Equal Media premises. 34
[25] Ms De Silva-McKay “was first paid by Equal Media on 14 January 2013. This was part in arrears and part in advance.” 35
[26] On 7 January 2013, Mr Newman provided Ms De Silva-McKay “with a written contract of employment with Equal Media, commencing 1 January 2013” and asked her to consider it, sign it and return it to him. 36 In subsequent conversations with Mr Newman, Ms De Silva-McKay “raised concerns over signing the Contract due to her lack of maternity leave benefits”.37 Ms De Silva-McKay never accepted the proposed employment agreement with Equal Media provided to her on 7 January 2013.38
[27] In the discussions between Ms De Silva-McKay and Mr Newman about the proposed employment contract with Equal Media, Ms De Silva-McKay raised concerns about maternity leave, 39 the bonus,40 pay, conditions and responsibilities41 “[A]nd also the type of work that she would be performing”.42
[28] On 17 January 2013, prior to Ms De Silva-McKay commencing leave, she informed Mr Newman that she was still undecided about signing the contract. They agreed to discuss the contract upon her return from leave. 43
[29] There were no contractual arrangements entered into between EQL and Equal Media in respect of recognition of Ms De Silva-McKay’s service with EQL and accrued entitlements. 44 As at the end of 31 December 2012 Ms De Silva-McKay “had expended her annual leave entitlements with EQL”. When Ms De Silva-McKay “commenced with Equal Media, she had already planned a trip to Europe”. Mr Newman “made arrangements for a freelancer to fill in for her while she was overseas and she was remunerated by Equal Media in that period” of leave.45
[30] On 13 March 2013, Mr Newman had a telephone conversation with Ms De Silva-McKay. As Ms De Silva-McKay had left the office without reason or notice, he told her that he would find a freelancer to complete her work on the production of the next edition of the Magazine. A few days later Mr Newman sent Ms De Silva-McKay a letter, 46 “documenting her position with Equal Media.”47
[31] At no time did EQL ever exercise the termination provisions in clause 6 of the January 2012 employment contract between EQL and Ms De Silva-McKay to terminate the employment. 48
[32] Ms De Silva-McKay “hadn’t actually formally signed the employment agreement” with Equal Media because “she was basically taking that under her own consideration, but she continued to work, therefore, on a casual basis for Equal Media.” 49
[33] Mr Newman is shown in Australian Securities and Investment Commission records extracted on 5 April 2013 50 to be a Director of EQL but “was meant to be removed on 31 December” when he ceased being the Managing Director of EQL.51
[34] Ms De Silva-McKay often worked from home. 52
The Evidence of Ms O’Connor
[35] Ms O’Connor’s evidence went to her own employment with EQL, from 1 February 2012 to 31 December 2012, and her employment with Equal Media, from 1 January 2013. 53 She came to work for Equal Media following the outsourcing of the Magazine by EQL to Equal Media, an arrangement Mr Newman appraised her of in or around early November 2012.54 It was made clear to Ms O’Connor that her role with EQL would no longer be available from 31 December 2012 and she “was being offered employment with Equal Media from 1 January 2013.”55 Ms O’Connor had several discussions with Ms De Silva-McKay about the effect of the restructuring on her maternity leave entitlements56—“They were the sort of discussions that you would have with a colleague over coffee or lunch or in the office.”57 Ms O’Connor heard Ms De Silva-McKay ask Mr Newman if he could “modify her starting date . . . so she could apply for government maternity leave payments” and that Mr Newman rejected the suggestion.58 No issue concerning any confusion regarding the cessation of Ms O’Connor’s employment with EQL and commencement of employment with Equal Media arose during her discussions with Ms De Silva-McKay.59
The Evidence of Ms De Silva-McKay
[36] Ms De Silva-McKay commenced working for EQL on 30 January 2012, 60 subject to a written employment contract.61 Ms De Silva-McKay’s employment was subject to an incentive bonus, payable after 12 months employment.62
[37] In September 2012, Ms De Silva-McKay met with Mr Newman and Ms O’Connor where they discussed with Ms De Silva-McKay the prospect of her changing her employment so that she would become an employee of Equal Media. “No firm proposal was put to her,” although Mr Newman said that if Ms De Silva-McKay agreed to the transition, there would be no change in her work conditions and proposed a “profit share as an additional incentive.” 63 Mr Newman raised a prospect of Ms De Silva-McKay changing her employment, so that she would become an employee of Equal Media.64 Ms De Silva-McKay believed that her service with EQL would be recognised by Equal Media.65
[38] Ms De Silva-McKay undertook some work for Equal Media from July 2012 onwards as directed by Mr Newman. 66
[39] In September 2012, Ms De Silva-McKay requested leave in early 2013, which Mr Newman approved. 67
[40] Ms De Silva-McKay “became aware that she was pregnant on 4 October 2012”. On 11 October 2012, she met with Mr Newman and advised him of the pregnancy, due in June 2013. Mr Newman advised her that she was “eligible for six weeks maternity leave” which she understood to be paid leave. 68
[41] Ms De Silva-McKay became aware of the prospect of the outsourcing in September 2012 and it becoming an actual proposal in October 2012. 69 Mr Newman advised Ms De Silva-McKay “that there would be a position for you in the new business” Equal Media, in October 2012,70 but not that her “employment with EQL would cease upon Equal Media taking over the Magazine.”71
[42] The final payment that Ms De Silva-McKay received from EQL was made on 15 December 2012. 72 She was paid, monthly, by Equal Media in the middle of January, February and March 2013.73
[43] Equal Media moved to new premises in January 2013, just up the same road from the EQL premises. 74 Ms De Silva-McKay also moved to the new premises at that time.75 Ms De Silva-McKay used an Equal Media email address from January 2013, and did not use her EQL email after 31 December 2012 because access to the EQL email was cut off. 76
[44] On 7 January 2013, Mr Newman supplied Ms De Silva-McKay “with a proposed employment agreement” in relation to her transfer to Equal Media. Ms De Silva-McKay “never accepted” the agreement. 77 Ms De Silva-McKay enquired about her maternity leave entitlement and Mr Newman advised that whilst EQL provided maternity leave, Equal Media could not but that she would get 18 weeks from the Government. (This was denied by Mr Newman.)78 She also enquired about her bonus and Mr Newman said “you should be entitled to it because it was part of your package when you came over - we will talk about it later.”79
[45] On 8 January 2013, Ms De Silva-McKay initiated discussion with Mr Newman raising concerns about additional responsibilities without additional pay in her proposed employment agreement. Mr Newman replied that she was “getting paid enough” already and said she was “going on maternity leave anyway”. 80 Mr Newman expressed disappointment at the questions raised by Ms De Silva-McKay. She asked whether her service with EQL would be recognised for unpaid maternity leave purposes. Mr Newman said he could not guarantee it.81 Ms De Silva-McKay asked Mr Newman what would happen if she did not sign the employment agreement. He responded that she “would get four weeks redundancy pay.” (Mr Newman does not recall saying this.)82 Mr Newman asked what Ms De Silva-McKay wanted to do and she replied that “I want my maternity leave”. Mr Newman responded that he would ask Mr P Horsburgh–a shareholder for EQL and Equal Media.83
[46] Ms De Silva-McKay’s impression from the discussion on 8 January 2013 was that Mr Newman was going to outsource her role since he had begun engaging another designer to assist with her duties whilst she was on leave. 84
[47] Ms De Silva-McKay took leave from 17 January 2013 to 11 February 2013. 85 On 17 January 2013, prior to Ms De Silva-McKay leaving the office to commence her leave, Mr Newman asked her for her decision in relation to signing the employment contract. She asked about maternity leave and Mr Newman responded that “there are no provisions for maternity leave”. Ms De Silva-McKay said that she could not sign anything then and would see Mr Newman when she returned from leave. 86
[48] Prior to going on leave, Ms De Silva-McKay sent an email to Mr Newman requesting “further confirmation about the proposed agreement and the bonus”. 87 She received no response.88
[49] On 12 February 2013, Ms De Silva-McKay continued work normally, returning briefly to the office to retrieve files and equipment needed for her work. 89
[50] On 15 February 2013, Ms De Silva-McKay rang Mr Newman, declining the offer to work for Equal Media on the basis of the employment agreement proposed, opting for redundancy and enquiring about the bonus in her original agreement. Mr Newman said he would need to talk to Mr McKay about the bonus. She received no response. 90
[51] Ms De Silva-McKay emailed Mr McKay on 15 February 2013 but “never received a response”. 91
[52] Ms De Silva-McKay received no further advice about her employment until 13 March 2013, when she rang Mr Newman again about the agreement proposed. She asked if there was “any information about the bonus” and that, either way, she could not sign the agreement proposed and if it meant she was “redundant then so be it”. Mr Newman said “thank you very much for that, we’ll make the last day to be the print date” - 20 March 2013. 92
[53] On 20 March 2013 she received a letter from Equal Media signed by Mr Newman. 93
[54] Where possible, Ms De Silva-McKay worked from home. 94
[55] The work that Ms De Silva-McKay performed in 2013 was the same as the work she performed in 2012. 95
[56] Over the course of 1 January 2013 through until 20 March 2013, Ms De Silva-McKay did not “take any instruction from Mr McKay about the work” that she performed. 96 Over that period, Ms De Silva-McKay took “instructions solely from Mr Newman”,97 who she knew “ceased to be the Managing Director of EQ Life on and from 1 January of this year”.98
The submissions of the parties
EQL
[57] EQL submitted that the key issue for resolution is the determination of the period of Ms De Silva-McKay’s employment with EQL, which began on 30 January of 2012. There is disagreement as to the date that it ended.
[58] EQL also submitted that the employment of Ms De Silva-McKay by EQL ended on 31 December 2012, the date that EQL ceased to be responsible for publication of the Magazine on which Ms De Silva-McKay was employed.
[59] EQL further submitted that from 1 January 2013, publication of the Magazine was outsourced to a business known as Equal Media. It submitted that from 1 January 2013, and in any event prior to Ms De Silva-McKay having attained 12 months employment by EQL, she was employed by Equal Media. It follows that Ms De Silva-McKay did not attain 12 months employment with EQL.
[60] EQL conceded that there is “nothing in writing” from EQL “that confirms the cessation of Ms De Silva-McKay’s employment with effect from 31 December” 99 but submitted that there are other ways of establishing the existence of an employment relationship. EQL relied on several pieces of evidence that the employment with EQL ceased on that date:
1. Mr Newman was the former CEO of EQL and on 1 January 2013 became CEO of Equal Media. His evidence is that in late October or early November 2012, he had discussions with Ms De Silva-McKay, and others, about the decision of EQL to outsource publication of the Magazine to Equal Media and that the effect of those discussions, including discussions with Ms De Silva-McKay, was that her employment with EQL would terminate with effect from 31 December 2012. Ms O’Connor gave evidence that discussions to that effect occurred between her and Mr Newman in relation to her own employment and she had discussions to similar effect with Ms De Silva-McKay; and it was clear to both of them that both of their employment with EQL would terminate with effect from 31 December 2012.
2. Equal Media in January 2013 commenced trading at a different location from EQL and Ms De Silva-McKay moved with it.
3. From January 2103, Ms De Silva-McKay was using her Equal Media email and information technology rather than her EQL email.
4. Most significantly, Ms De Silva-McKay was paid from January 2013 by Equal Media and not by EQL. Her final payment from EQL was received in mid December 2012.
5. Ms De Silva-McKay’s evidence that she did not take any instruction from anyone other than Mr Newman, a man who, on her evidence, she knew from 1 January 2013 ceased to have a role within EQL.
[61] EQL submitted that the evidence supports a conclusion that the employment relationship changed from 1 January 2013 and is consistent with Ms De Silva-McKay having commenced employment with Equal Media from 1 January 2013 and ceased her employment with EQL with effect from 31 December 2012.
[62] EQL submitted that it evinced its intention to not be bound by the employment contract from 31 December 2012, in October or November 2012. It submitted that if the giving of notice of the termination of Ms De Silva-McKay’s employment by EQL verbally, rather than in writing in accordance with clause 6 of the employment contract technically constitutes a repudiation of the contract, that repudiation was accepted by reason of the fact that Ms De Silva-McKay continued to work, consistently with the proposition that was put to her by Mr Newman in October or November 2012.
Ms De Silva-McKay
[63] Ms De Silva-McKay advanced two principal submissions:
1. The contract of employment continued with EQL on the basis that the contract of employment with EQL was never terminated in accordance with the terms of the contract. The contract of employment between EQL and Ms De Silva-McKay continued.
2. Alternatively, if there was a repudiation of the contract by the offering of another contract with a different entity and/or other conduct, on the evidence, the repudiation was never accepted by Ms De Silva-McKay and the contract with EQL therefore remained on foot, such that Ms De Silva-McKay continued the employment relationship with EQL.
[64] Ms De Silva-McKay rejected EQL’s characterisation of the issue for determination as whether Ms De Silva-McKay’s employment with EQL extended beyond 30 January 2013 (beyond 12 months). Ms De Silva-McKay characterised the issue for determination as whether her contract of employment was extinguished as at 1 January of 2013. Ms De Silva-McKay submitted that it is critical to analyse the employment relationship in terms of the contract, which is the only written communication to Ms De Silva-McKay that has any bearing on the termination, dismissal, cessation which occurred on 20 March 2013.
[65] Ms De Silva-McKay also submitted that the employment relationship between her and EQL is a legal relationship regulated by the terms of a written contract. Ms De Silva-McKay has the benefit of the terms of her contract with EQL as an ongoing position that as at 1 January 2013 and beyond was still in existence. The contract of employment was not extinguished by EQL. It continued at least up until 20 March 2013 because there was no act by the employer in writing to end that relationship by written notice.
[66] Ms De Silva-McKay submitted that the meaning of “dismissal” in s.383 of the Act for the purposes of calculating the minimum employment period “at that time” has to be interpreted as a termination on the employer’s initiative (s.386(1) of the Act). Ms De Silva-McKay submitted that, given the employment contract between herself and EQL which was ongoing, because she had completed the probationary period, and the absence of any activation of the termination of employment clause within it by the giving of written notice, the statements of Mr Newman in his discussions with Ms De Silva-McKay in the later part of 2012 were too vague and too indefinite to constitute a termination of employment by EQL. Those discussions involved no more than an understanding that there would be an outsourcing arrangement and that Ms De Silva-McKay would be offered a job.
[67] Ms De Silva-McKay further submitted that the definitive evidence as to the termination of the employment is the 20 March 2013 letter from Mr Newman to her 100—the letter that ended the employment. That was the act of the employer who intended to bring the employment to an end, or having the probable result of bringing the employment relationship to an end or was likely to have that effect.101
[68] As to repudiation of the employment contract, Ms De Silva-McKay rejected the EQL argument that if there was repudiation, it was back in October or November 2012. Whilst accepting that there were discussions about Equal Media, “if you look at the employment relationship, nothing definite in terms of any repudiatory conduct on the part of EQ Life occurred until they purported to effectively replace the contract with EQ Life with a contract with Equal Media” 102 on 7 January 2013, which was not accepted by Ms De Silva-McKay. Ms De Silva-McKay elected to continue her employment with EQL.
Did Ms De Silva-McKay complete the minimum employment period in accordance within s.383 of the Act?
[69] There is disagreement within the parties’ submissions as to the question for determination. The question to be determined is clearly that contended for by EQL - the period of Ms De Silva-McKay’s employment with EQL, which began on 30 January of 2012. Specifically, did Ms De Silva-McKay complete a minimum period of employment with EQL of one year ending at the earlier time when she was given notice of the dismissal or immediately before the dismissal.
[70] There is agreement that Ms De Silva-McKay commenced her employment with EQL on 30 January 2012. If she was given notice of the dismissal or was dismissed after 30 January 2012, Ms De Silva-McKay completed the minimum period of employment. If notice of the dismissal was given or the dismissal occurred before 30 January 2012, Ms De Silva-McKay did not complete the minimum period of employment.
[71] For the purpose of my decision I will consider only whether Ms De Silva-McKay was dismissed and when she was dismissed. It is unnecessary to consider whether earlier notice of the dismissal was given in order to determine the question before me.
[72] Before considering whether, on the facts disclosed by the evidence, Ms De Silva-McKay’s employment with EQL was terminated at the initiative of EQL and, if so, when, I will deal with Ms De Silva-McKay’s submission that the contract of employment was not extinguished by EQL until 20 March 2013, when Mr Newman sent a letter on that date to Ms De Silva-McKay, because there was no prior act by the employer in writing to end that relationship by written notice. I accept that the employment relationship between Ms De Silva-McKay and EQL was governed by a written contract, which provided for written notice of termination in clause 6 and that no written notice of termination was given by EQL prior to 1 February 2013. However, the failure of EQL to terminate the employment in compliance with the terms of the employment contract within the minimum period of employment does not mean that her employment was not terminated at the initiative of EQL within that period. It may, and in my view does, in the circumstances of this matter, mean that the termination of Ms De Silva-McKay was effected in breach of the contract of employment. Dismissal in s.383 of the Act, for the purposes of calculating the minimum employment period is the time of the termination on the employer’s initiative and relates to termination of the employment relationship, not termination of the contract of employment. As noted in J Searle v Moly Mines Limited: 103
“[22] Before turning to the facts of this case there is another issue which arose in the course of the submissions with which we should deal. That matter concerns the relevance of the principles governing the termination of a contract of employment. It is clear that the statutory test relates to termination of the employment relationship, not termination of the contract of employment. The difference is well illustrated by the following passage from the joint judgment of Brennan CJ and Dawson and Toohey JJ in Byrne and Frew v Australian Airlines Ltd:
‘It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson . . .’
[23] In the case of wrongful dismissal, as the passage shows, the employment is terminated by the employer even though the contract continues until the employee accepts the repudiation, thereby bringing the contract to an end. In applying the statutory test it is the termination of the employment relationship which is important.” [References removed]
[73] Ms De Silva-McKay contended that the 20 March 2013 letter from Mr Newman to her is the only documentation which purports to end any employment relationship. This may be so. But, the 20 March 2013 letter 104 in stating “Please find attached a letter outlining your cessation of employment” is terminating Ms De Silva-McKay’s employment with Equal Media. It is executed by Mr Newman in his capacity as Managing Director of Equal Media. Reference in the letter to the cessation of her employment and Ms De Silva-McKay’s entitlements in respect of redundancy payments is, on its plain terms, a commentary on the EQL employment and does not nor purport to terminate her employment with EQL. It provides background to Ms De Silva-McKay’s employment with Equal Media and a response to her previous queries of Mr Newman in respect of the payment of redundancy entitlements.
[74] In fact there is no written termination of Ms De Silva-McKay’s employment by EQL at all. There was no termination of the employment in accordance with the terms of the employment contract. The termination of the EQL employment came about by other undocumented means.
[75] I am satisfied that, in the discussions between Mr Newman and Ms De Silva-McKay in respect of the outsourcing arrangements between EQL and Equal Media, EQL evinced a clear intention to end the employment relationship between EQL and Ms De Silva-McKay on 31 December 2012, consequent upon outsourcing of her work in the production of the Magazine to Equal Media. EQL gave effect to that intention by ceasing to offer Ms De Silva-McKay work after 31 December 2012 and ceasing to pay her after that date or otherwise exercise any responsibility for or toward her as an employee. Given the terms of clause 6 of the employment agreement, its actions to terminate Ms De Silva-McKay’s employment without written notice breached and repudiated the employment contract.
[76] The repudiation was accepted by Ms De Silva-McKay in accepting and undertaking employment with Equal Media from 1 January 2013. Whilst there was a dispute about the terms of the employment contract between her and Equal Media, Ms De Silva-McKay accepted and undertook employment with Equal Media from 1 January 2013, under the direction of Mr Newman who Ms De Silva-McKay understood to be Managing Director of Equal Media on her previous terms and conditions, accepting payment on that basis. From 1 January 2013, Ms De Silva-McKay performed work, as directed by Mr Newman in his capacity as Managing Director of Equal Media, knowing that Mr Newman ceased to perform the role of Managing Director with EQL from 31 January 2013, accepted payment for the work from Equal Media, notwithstanding the unresolved dispute about the terms of an employment contract with Equal Media, and accepted direction from Equal Media and confirmed leave arrangements with Equal Media. Whilst Ms De Silva-McKay had legitimate concerns as to whether her terms and conditions had changed and whether her service with EQL was recognised by Equal Media, and pursued those concerns vigorously with Mr Newman, it could be said that Ms De Silva-McKay did not accept and undertake employment with Equal Media from 1 January 2013.
[77] The repudiation of the employment contract and its acceptance by Ms De Silva-McKay brought an end to the employment relationship on 1 January 2013. The termination of the employment resulted at the initiative of EQL through its action, and clear intent, in repudiating its employment contract with Ms De Silva-McKay.
[78] I find that Ms De Silva-McKay was dismissed from her employment with EQL with effect from 1 January 2013. Given the starting date of the employment on 30 January 2012, and was dismissed before 30 January 2012, I find Ms De Silva-McKay did not complete the minimum period of employment.
Alternative submission of Ms De Silva-McKay
[79] As a final alternative submission, Ms De Silva-McKay contended that if it was found that she had not met the minimum employment period requirement in accordance with s.383 of the Act, she met that requirement in respect of Equal Media on the basis that the transfer of her employment from EQL to Equal Media meant that she had in excess of 12 months continuous service with Equal Media (she met the minimum employment period requirement), as a result of the combined effect of the following sections of the Act; s.384(2)(b)—Period of employment, s.22—Meanings of service and continuous service and s.311—When does a transfer of business occur. Ms De Silva-McKay applied to amend her application, pursuant to s.586 of the Act, to alter the name of the respondent from EQL to Equal Media. 105
[80] Equal Media was not represented in the proceedings before me. It is obvious, and was properly conceded by Ms De Silva-McKay, 106 that such a amendment to her application could not be made without notifying Equal Media of the application and affording it an opportunity to be heard in respect of the application and address the power under s.586 of the Act to effect such an amendment and, if that power exists, whether the discretion to do so should be exercised to effect the particular amendment sought in the circumstances of the matter.
[81] To my immediate knowledge, without the benefit of substantive submissions by Ms De Silva-McKay and without any submissions by Equal Media, I am not aware of any Full Bench authorities in respect of the use of s.586 under the current Act to amend a s.394 application in respect of the name of the respondent, other than one 107 which determined that a Member of the Commission could exercise power under s.586 of the Act, for that purpose, on his/her own motion. No question otherwise arose in the appeal in that case as to the power to exercise s.586 of the Act.
[82] Another Full Bench 108 determined that the power under s.586 of the Act did not extend to setting aside a notice of discontinuance of s.394 applications, finding that, in the context of the current Act, “s.586 provides a power to correct or amend an application, or to waive an irregularity in the form or manner in which an application is made. It is not a power to revoke or set aside an application.”109
[83] A number of single Members have relied upon s.586 of the Act to amend the name of respondents in s.394 applications (and general protections applications), although in different factual circumstances to those arising in the current matter. 110
[84] Ms De Silva-McKay raised an authority in which s.586 of the Act was relied on to alter the name of a respondent in an application and add additional entities as respondents. 111 The decision was appealed in part on the grounds that the Commissioner at first instance did not have power to amend the application so as to bring into the proceedings the other entities but, that point was not pressed for the purposes of the appeal. The appeal112 has proceeded to a re-hearing on another basis and the Full Bench has not been required to deliberate the s.586 point to date (and may not need to do so).
[85] It appears to me, without deciding the question, that s.586 of the Act provides a power to amend the name of a respondent in a s.394 application, although there may be a question as to whether the amendment proposed–the substitution of a different party to an existing proceeding–falls within the character of a correction or amendment to Ms De Silva-McKay’s initiating application. On the basis that it is at least arguable that the amendment proposed may be affected within the power under s.586 of the Act, rather than immediately dismiss the application of Ms De Silva-McKay at this point, I will afford her an opportunity to formally apply to amend her application to name Equal Media as the respondent and serve the application on Equal Media.
[86] If such an application is made, Ms De Silva-McKay will have the opportunity to make full submissions in support of the application and Equal Media will have the opportunity to put full submissions against the application, addressing both the power to do so under s.586 of the Act and the exercise of the discretion to do so, in the particular circumstances of this matter. If a formal application to amend the application is not made within the required time, I will make an order dismissing Ms De Silva-McKay’s application.
[87] I will provide a period of 14 days from the date of this decision for Ms De Silva-McKay to make an application to amend her application and (if made) to serve it on Equal Media. If no such application is made within that period, I will make an order dismissing the application of Ms De Silva-McKay at the end of that period.
[88] I note that Ms De Silva-McKay is entitled to bring a new application in respect of the termination of her employment, directed against Equal Media, subject to the acceptance of the application by the Commission under s.394(2)(b) of the Act, beyond the period specified for such applications in s.394(1) of the Act. Ms De Silva-McKay may chose to make such an application, rather than formally apply under s.586 of the Act to amend her current application given a substantial commonality of the factual circumstances to the grounds for a late application and the discretionary considerations in respect of the amendment of the current application.
SENIOR DEPUTY PRESIDENT
Appearances:
M McKenny of Counsel for the applicant.
J Snaden of Counsel for the respondent.
Hearing details:
2013.
Melbourne:
September 9.
1 Exhibit EQ1.
2 Exhibit EQ2, at para 2.
3 Exhibit EQ3, at para 1.
4 Exhibit DM4, at para 4.
5 Exhibit DM4, at para 5.
6 Exhibit DM4, at para 5.
7 Exhibit DM4, at para 1.
8 Exhibit EQ2, at para 9.
9 Exhibit EQ2, at para 10.
10 Exhibit DM4, at paras 1 and 11.
11 Exhibit EQ2, at para 10.
12 Exhibit EQ2, at para 10.
13 Exhibit EQ2, at para 2.
14 Exhibit EQ3, at para 1.
15 Exhibit EQ2, at para 2.
16 Exhibit EQ3, at para 1.
17 Transcript, at para 15.
18 Transcript, at para 17.
19 Exibit EQ2, at para 3 and Attachments JN3–7 and Exhibit EQ 3, at paras 2–7.
20 Exhibit DM4, atAttachment TDM8.
21 Exhibit DM4, at Attachment TDM1.
22 Exhibit DM4, at Attachments TDM5–7.
23 Exhibit DM4, at Attachment TDM3.
24 Exhibit DM4, at Attachment TDM8.
25 Exhibit EQ2, at Attachments JN11 and JN12.
26 Exhibit EQ2, at para 9.
27 Exhibit EQ2, at para 10 and Transcript, at para 96.
28 Exhibit EQ2, at para 11.
29 Exhibit EQ2, at para 11.
30 Transcript, at para 97.
31 Transcript, at para 103.
32 Transcript, at paras 155 and 166.
33 Transcript, at paras 106, 110–111and 115.
34 Exhibit EQ2, at para 12.
35 Exhibit EQ2, at para 13.
36 Exhibit EQ2, at para 14.
37 Exhibit EQ2, at para 15.
38 Transcript, at paras 198–200.
39 Transcript, at paras 278 and 328.
40 Transcript, at paras 282 and 329.
41 Transcript, at paras 283 and 330.
42 Transcript, at para 331.
43 Exhibit EQ2, at para 16.
44 Transcript, at paras 129–130.
45 Transcript, at paras 126–128.
46 Exhibit DM4, at attachment TDM8.
47 Exhibit EQ2, at para 17.
48 Transcript, at paras 143–144 and 167–168.
49 Transcript, at paras 148 and 151.
50 Exhibit DM3, at p.2.
51 Transcript, at para 270.
52 Transcript, at para 353.
53 Exhibit EQ3, at paras 1 and 7–9.
54 Exhibit EQ3, at para 10.
55 Exhibit EQ3, at para 11.
56 Exhibit EQ3, at para 12.
57 Transcript, at para 431.
58 Exhibit EQ3, at para 12.
59 Exhibit EQ3, at para 13.
60 Exhibit DM4, at para 4.
61 Exhibit DM4, at para 4. The Agreement is found in Exhibit DM4, at Attachment TDM1.
62 Exhibit DM4, at para 4. The Agreement is found in Exhibit DM4, at Attachment TDM1.
63 Exhibit DM4, at para 11 and Transcript, at paras 532–534.
64 Transcript, at paras 507 and 514.
65 Transcript, at para 517.
66 Exhibit DM4, at paras 12–13.
67 Exhibit DM4, at para 15.
68 Exhibit DM4, at para 15.
69 Transcript, at paras 536–539.
70 Transcript, at para 540.
71 Transcript, at para 541.
72 Transcript, at para 556.
73 Transcript, at paras 551–553.
74 Transcript, at paras 558–559.
75 Transcript, at para 560.
76 Transcript, at paras 569–570.
77 Exhibit DM4, at para 17.
78 Transcript, at para 204.
79 Exhibit DM4, at para 18.
80 Exhibit DM4, at para 19.
81 Exhibit DM4, at para 20.
82 Transcript, at paras 215–218.
83 Exhibit DM4, at para 21.
84 Exhibit DM4, at para 22.
85 Exhibit DM4, at para 26.
86 Exhibit DM4, at para 26.
87 Exhibit DM4, at para 27 and Attachment TDM5.
88 Exhibit DM4, at para 27.
89 Exhibit DM4, at para 29.
90 Exhibit DM4, at para 31.
91 Exhibit DM4, at para 32 and Attachment TDM6.
92 Exhibit DM4, at para 35.
93 Exhibit DM4, at para 36 and Attachment TDM8.
94 Exhibit DM4, at para 38.
95 Transcript, at para 501.
96 Transcript, at para 583.
97 Transcript, at para 584.
98 Transcript, at para 585.
99 Transcript, at para 33.
100 Exhibit DM4, at Attachment TDM8.
101 Mohazab v Dick Smith Electronics (1995) 62 IR 200 and O’Meara v Stanley Works, PR973462.
102 Transcript, at para 649.
103 [2008] AIRCFB 1088.
104 Exhibit DM2, at Attachment TDM8.
105 Transcript, at para 690.
106 Transcript, at para 690.
107 Achilleus Taxation Pty Limited ATF The Achilleus Taxation Trust; Achilleus Accounting Pty Limited ATF The Achilleus Accounting Trust v Thomas Hobbs [2012] FWAFB 5679.
108 Chandra Gupta Narayan v MW Engineers Pty Ltd[2013] FWCFB 2530.
109 Chandra Gupta Narayan v MW Engineers Pty Ltd[2013] FWCFB 2530, at para 6.
110 For example, Ms Kataryzna Wybranski v Telstra (Contracted by Regent Recruitment)[2012] FWA 2566, Thomas Hobbs v Achilleus Taxation Pty Limited ATF The Achilleus Taxation Trust; Achilleus Accounting Pty Limited ATF The Achilleus Accounting Trust[2012] FWA 2907 and Michael Robinson v Interstate Transport Pty Ltd T/A Fred’s Interstate Transport and anor [2011] FWA 696 (an appeal determined in [2011] FWAFB 2728 did not address s.586).
111 Dianne McMahon v Wilson Curry Pty Ltd; GreenGroup Property Investments Pty Ltd; A&M Green Investments Pty Ltd; S&K Green Investments Pty Ltd; GreenGroup Property Holdings Pty Ltd; Kensington Gardens Lifestyle Estates; A&M Investment Pty Ltd; Glendette Pty Ltd; Eastcoast Management Services Pty Ltd [2013] FWC 1269.
112 C2013/287.
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