Thomas Cosgrove v Clarity Interiors
[2020] FWCFB 5464
•14 OCTOBER 2020
| [2020] FWCFB 5464 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Thomas Cosgrove
v
Clarity Interiors
(C2020/5627)
VICE PRESIDENT CATANZARITI | SYDNEY, 14 OCTOBER 2020 |
Appeal against decision [2020] FWC 3355 of Commissioner Platt at Adelaide on 30 June 2020 in matter number U2020/8365.
Introduction
[1] This decision deals with an appeal, for which permission to appeal is required, made by Mr Thomas Cosgrove (Appellant) under s 604 of the Fair Work Act 2009 (Cth) (FW Act) against a decision 1 and order2 of Commissioner Platt issued on 30 June 2020. The Commissioner declined (under s 394(2) of the Act) to extend time to the Appellant to file an unfair dismissal application made under s 394 of the Act.
[2] The Appellant filed his unfair dismissal application on 17 June 2020. In the Appellant’s application, he alleged that he was unfairly dismissed from his employment by The Trustee for Clarity Group Unit Trust T/A Clarity Interiors (Respondent/Clarity Interiors) on 3 April 2020. Section 394(2) of the Act requires that an application for an unfair dismissal remedy be made within 21 days after the dismissal took effect, or within a further period for the application to be made if the Fair Work Commission (Commission) is satisfied that exceptional circumstances exist.
[3] Section 394(3) provides:
“(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] Mr Cosgrove’s unfair dismissal application was filed 54 days out of time, pursuant to the statutory time limit stipulated in s 394(2) of the Act. In his decision, the Commissioner held that:
“[32] Having taken into account each of the factors referred to in s.394(3)(a) to (f) of the Act, I am not persuaded that there are exceptional circumstances warranting the granting of an extension of time and, accordingly, I decline to exercise my discretion to so order. In reaching this conclusion, I am particularly influenced by the merits in that Mr Cosgrove is not protected from unfair dismissal pursuant to s.382 of the Act by virtue of his service not meeting the MEP.
[33] Accordingly, the application for an extension of time is refused. The jurisdictional objection is upheld and the substantive Application for an unfair dismissal remedy is dismissed.”
[5] The Commissioner issued an Order to that effect. 3
[6] Mr Thomas Cosgrove has applied for permission to appeal the decision. Mr Cosgrove appeals the decision on a number of grounds.
[7] On the basis of our consideration that Mr Cosgrove’s application for permission to appeal may adequately be determined without oral submissions, and with the consent of the parties, the appeal has been conducted without holding a hearing and is determined on the papers pursuant to s 607(1) of the FW Act.
Factual background
[8] The factual background to the matter is as follows.
a) Mr Cosgrove commenced employment with Clarity Interiors as a senior estimator on 1 July 2019.
b) Mr Cosgrove’s employment was terminated by Clarity Interiors, ostensibly because redundancy due to the impact of COVID-19 on 3 April 2020.
c) That is to say, Mr Cosgrove was employed by Clarity Interiors for more than 6 months, but less than 12 months. This is important because, if Clarity Interiors is a small business, Mr Crosgrove had not served the minimum employment period (MEP) and was statute barred from commencing an unfair dismissal remedy.
d) In its Form F3 – Employer response, Clarity Interiors raised two jurisdictional objections, as follows:
i. that the dismissal was a genuine redundancy; and
ii. that Mr Cosgrove’s employment did not meet the minimum employment period (MEP).
[9] Small business is defined in s.23 of the FW Act as follows:
“(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.”
[10] At the time of the dismissal Clarity Interiors engaged 23 workers. 7 of them were classified by Clarity Interiors as employees. 16 were classified as contractors. Mr Cosgrove called into question the classification of the 16 so called contractors. It was an issue in dispute in the proceeding. 4
[11] On 17 June 2020 Mr Cosgrove filed his unfair dismissal application. In his application, in answer to the question 1.4 “Are you making this application within 21 calendar days of your dismissal taking effect”, Mr Cosgrove conceded he was not. He then went on to explain the following:
“I simply was not aware until 11th June 2020 the Clarity Interiors were in fact still carrying out the work I was … scheduled to undertake … and it wasn’t until yesterday 16th June 2020 that I became aware that another person who wasn’t previously employed at Clarity was in fact carrying out some of my original duties which included Estimating, Project Management, Contract Administration and Business Development.”
The decision
[12] In his decision, the Commissioner dealt with each of the matters he was required to take into account under s 394(3) of the FW Act.
[13] In relation to s 394(3)(a), the Commissioner reviewed the material and evidence before him and concluded:
“[15] The delay required to be considered is the period beyond the prescribed 21 day period for making an application. It does not include the period from the date of the dismissal to the end of the 21 day period. However, the circumstances from the time of the dismissal must be considered when assessing whether there is a credible reason for the delay, or any part of the delay, beyond the 21 day period. 5 In Diotti v Lenswood Cold Stores Co-op Society t/a Lenswood Organic,6 the Full Bench explained the correct approach by reference to the following example:
“[31] For example if an applicant is in hospital for the first 20 days of the 21 day period this would be a relevant consideration if the application was filed 2 days out of time as occurred in this matter.”
[16] An acceptable explanation for the entirety of the delay is not required to make a finding of exceptional circumstances. However, in considering and taking into account the reason for the delay in accordance with s.394(3)(a) of the Act, it is relevant to have regard to whether the applicant has provided an acceptable explanation for the entirety or any part of the delay. The correct approach to be taken was explained by the Full Bench in Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters: 7
“[38] As we have mentioned, the assessment of whether exceptional circumstances exist requires a consideration of all the relevant circumstances. No one factor (such as the reason for the delay) need be found to be exceptional in order to enliven the discretion to extend time. This is so because even though no one factor may be exceptional, in combination with other factors the circumstances may be such as to be regarded as exceptional.
[39] So much is clear from the structure of s.366(2), each of the matters needs to be taken into account in assessing whether there are exceptional circumstances. The individual matters might not, viewed in isolation, be particularly significant, so it is necessary to consider the matters collectively and to ask whether collectively the matters disclose exceptional circumstances. The absence of any explanation for any part of the delay, will usually weigh against an applicant in such an assessment. Similarly a credible explanation for the entirety of the delay, will usually weigh in the applicant’s favour, though, as we mention later, it is a question of degree and insight. However the ultimate conclusion as to the existence of exceptional circumstances will turn on a consideration of all of the relevant matters and the assignment of appropriate weight to each.
…
[44] As mentioned earlier, the ‘reasons for the delay’ is a factor to be taken into account in deciding whether there are exceptional circumstances. There is no statutory basis for the adoption of a decision rule whereby if the applicant does not provide a credible explanation for the entire period of the delay then the matter in s.366(2)(a) tells against the finding of exceptional circumstances. Common sense would suggest otherwise, it is plainly a question of degree and weight.
[45] What if the period of the delay was 30 days and the applicant had a credible explanation for 29 of those days? It seems to us that such circumstances may weigh in favour of a finding of exceptional circumstances. Of course, as mentioned earlier if there was a credible explanation for the entirety of the delay that would weigh more heavily in favour of such a finding. Conversely, if the applicant failed to provide a credible explanation for any part of the delay that would tend to weigh against a finding of exceptional circumstances.”
[17] I am satisfied that on 16 June 2020, Mr Cosgrove received information which reasonably led him to believe that his redundancy was not genuine, he then lodged the Application the following day.
[18] Mr Cosgrove has provided a credible reason for the entirety of the delay in filing his Application, this factor weighs in favour of granting an extension of time.”
[14] As to s 394(3)(b), the Commissioner found that Mr Cosgrove became aware of the dismissal on 3 April 2020, and that this was a neutral consideration.
[15] In relation to s 394(c), the Commissioner found that there was no evidence that Mr Cosgrove took action to dispute the dismissal. In the circumstances the Commissioner considered this to be a neutral factor.
[16] In relation to s 394(3)(d), the Commissioner noted that “there is no submission that the granting of an extension of time represents prejudice to Clarity.” 8
[17] In relation to the merits of Mr Cosgrove’s application, the Commissioner’s assessment for the purpose of s 394(3)(e) was as follows:
“[27] In terms of the merits of the application, there are two issues to consider, the first is whether the dismissal was a genuine redundancy and if not whether the dismissal was unfair. There is a contest on whether Clarity has met the three factors required by s.389 of the Act, in order for the dismissal to be regarded as a ‘genuine redundancy’. There is insufficient evidence before me to make a preliminary assessment on this topic. This portion of the merits is thus a neutral consideration.
[28] The second issue is whether Mr Cosgrove’s service with Clarity is sufficient to meet the MEP. Based on the information before me, I accept that Clarity had 7 employees as at the date of the dismissal and is a small business within the meaning of s.23 of the Act. There was an element of doubt and also knowledge gaps in respect of Mr Cosgrove’s view concerning the number of persons employed by Clarity and its associated entity, and he was unable to submit any firm evidence to counter the detailed information provided by Clarity.
[29] The applicable MEP is 12 months and there is no dispute that Mr Cosgrove’s service is less than this. As a result of s.382 of the Act, Mr Cosgrove is not protected from unfair dismissal and the Application (even if an extension of time was granted) is doomed to fail.
[30] I have regarded the merits as a factor which weighs against the extension of time issue.”
[18] The Commissioner found that s 394(3)(f) was a neutral consideration because “it was not submitted the issue of fairness as between the Applicant and other persons in a similar position is a relevant consideration in this matter.” 9
[19] The Commissioner’s overall conclusion was that he was not satisfied that there were exceptional circumstances in Mr Cosgrove’s case warranting a conclusion that he should exercise his discretion to allow a further period to lodge his application. In making that decision the Commissioner explained that he was “particularly influenced by the merits” of the matter. 10
Appeal grounds and submissions
[20] Mr Cosgrove’s notice of appeal contained a number of grounds of appeal. However, each of them centred around the Commissioner’s finding under s.394(3)(e) that Clarity Interiors was a small business and, consequently, that Mr Crosgrove had not served the minimum employment period. In the notice of appeal the Appellant characterised this factual finding as:
a) the Commissioner wrongly applying a principle;
b) a mistake of fact;
c) the Commissioner being guided by irrelevant factors;
d) the Commissioner failing to consider the employment status of the 16 additional workers.
e) the Commissioner made a significant error of fact.
[21] The notice of appeal contended that the matter was in the public interest because sham contracting is illegal in Australia.
[22] Mr Cosgrove raised a diverse range of matters in his written submissions, including that:
a) s.394(3)(a) had been decided in his favour by the Commissioner;
b) s.394(3)(e) was a central issue before the Commissioner.
c) The,
“Respondent was requested by Commissioner Platt to provide evidence on the number of employees in the business. The Commissioner made no request to the Respondent to clarify the working relationship of the other 16 workers of the business and the Respondent refers to his contract because and as the Commissioner noted in the hearing-in P in 34 of the Transcript “subcontractors who are not employees do not count towards the definition under [section] 23.”
[23] Clarity Interiors contended that the “appeal should be dismissed on the basis that it does not satisfy the requirements set out in section 400 and 604 of the FW Act.” It contended “that none of the grounds of appeal … reveal any error of the House v The King kind, which would warrant permission being granted…”.
Consideration
[24] An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.11 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[25] This appeal is one to which s 400 of the FW Act applies. Section 400 provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.
[26] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [43], Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 400 as “a stringent one”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.12 A Full Bench of the Commission, in GlaxoSmithKline Australia Pty Ltd v Makin, identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 13
[27] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.14 However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.15
[28] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal. 16 However it is necessary to engage with those grounds to consider whether they raise an arguable case of appealable error.
[29] In the present matter we must first decide whether to grant permission to appeal. If we are satisfied that we should grant permission to appeal we should then decide the merits of the appeal.
[30] The test of “exceptional circumstances”, in relation to extensions of time to lodge applications under s 394(3), establishes a “high hurdle” for an application for an extension, and a decision as to whether to extend time under s 394(3) involves the exercise of a broad discretion. 17 Therefore it will be necessary, in an application for permission to appeal against a decision made under s 394(3), to demonstrate that there is an arguable case and that there was appealable error in the exercise of the discretion. This will require the identification of error of the type described in House v The King18 – that is, that the decision-maker has acted on a wrong principle, has mistaken the facts, has taken into account an irrelevant consideration or failed to take into account a relevant consideration, or has made a decision which is unreasonable or manifestly unjust. Additionally, where an error of fact is alleged, s 400(2) requires that it must be a significant error of fact. The overriding public interest requirement of s 400(1) remains.
[31] For the reasons below we have decided that the permission to appeal and the appeal can be determined principally having regard to the grounds of appeal centred around the Commissioner finding that Clarity Interiors was a small business.
[32] When considering the merits of a matter in the context of an application for an extension of time, the member at first instance should not embark upon a detailed consideration of the substantive case. In a jurisdictional hearing the Commission is not in a position to make findings of fact on contested issues. That is an assignment to be undertaken by the Commission during the substantive hearing.
[33] In the matter of Kornicki v Telstra-Network Technology Group 19the Commission considered the principles applicable to the extension of time discretion under the former s.170CE(8) of the Workplace Relations Act 1996 (Cth). In that case the Commission said:
“The merits of the substantive application. If the application has no merit then it would not be unfair to refuse to extend the time period for lodgment. However we wish to emphasise that a consideration of the merits of the substantive application for relief in the context of an extension of time application does not require a detailed analysis of the substantive merits. It would be sufficient for the applicant to establish that the substantive application was not without merit.” 20
[34] One of the substantive factual contests between the Appellant and the Respondent that goes to the Commission’s jurisdiction is whether Clarity Interiors is a small business such that the consequence is that Mr Cosgrove did not serve the MEP. Without further evidence about the status of the 16 workers characterised as contractors this is not a factual dispute that it was possible for the Commissioner to resolve at an extension of time hearing.
[35] It was clearly a contested matter. The Respondent only filed evidence in relation to the 7 agreed employees. The Commissioner then relied upon what amounted to a submission from the bar table 21 (rather than any evidence) about the remaining workers.
[36] If the Applicant can establish to the satisfaction of the Commission that any 8 of the 16 contested workers are also employees Clarity Interiors will not be a small business. In that event, the Appellant will have satisfied the MEP. If he can then defeat the second jurisdictional objection (that of genuine redundancy) then he may well be able to establish that the termination of his employment was harsh, unjust or unreasonable. It would be open to the Commission, after considering each of the elements of section 387 of the FW Act, to find that the termination of the Applicant’s employment was unfair. A remedy may then flow in Mr Cosgrove’s favour.
[37] In the decision the Commissioner held that:
“[28] The second issue is whether Mr Cosgrove’s service with Clarity is sufficient to meet the MEP. Based on the information before me, I accept that Clarity had 7 employees as at the date of the dismissal and is a small business within the meaning of s.23 of the Act. There was an element of doubt and also knowledge gaps in respect of Mr Cosgrove’s view concerning the number of persons employed by Clarity and its associated entity, and he was unable to submit any firm evidence to counter the detailed information provided by Clarity.
[29] The applicable MEP is 12 months and there is no dispute that Mr Cosgrove’s service is less than this. As a result of s.382 of the Act, Mr Cosgrove is not protected from unfair dismissal and the Application (even if an extension of time was granted) is doomed to fail.
[38] Based on the limited evidence before the Commissioner we cannot discern how he could be so certain as to find that the application was “doomed to fail”. It was not open to the Commissioner to come to a final conclusion that the remaining 16 workers were not employees. He fell into error in doing so at this stage of the proceeding.
[39] For these reasons we consider that Mr Cosgrove has in his notice of appeal and submissions identified a House v The King error.
[40] Because the Commissioner’s determination about the Respondent being a small business was fundamental to his decision and that, on balance, this resulted in the Commissioner not granting an extension of time, we consider that the decision manifests an injustice to Mr Cosgrove and accordingly that the grant of permission to appeal would be in the public interest. We therefore grant permission to appeal. We also uphold the appeal because the Commissioner acted on a wrong principle in unnecessarily making a definitive finding of fact in relation to s.394(3)(e).
[41] The Commissioner was “particularly influenced” by the finding in relation to the merits of the matter. Consequently, one criteria was in favour of granting an extension of time (s.394(3)(a)), one was against (s.394(3)(e)) and the others were either neutral or not relevant. Overall, the Commissioner declined to exercise his discretion to extend the time for Mr Cosgrove to file his application.
[42] The finding that the Commissioner’s definite finding in relation to the MEP issue manifested an injustice to Mr Cosgrove and that, in making a definitive finding, the Commissioner acted on a wrong principle does not necessarily mean that the Applicant should be granted an extension of time. As we have observed above a decision as to whether to extend time under s 394(3) involves the exercise of a broad discretion. 22 It may be that, even if s.394(3)(e) is held to be not without merit, in the overall exercise of discretion an extension of time may not be granted. The consideration of each of the matters in s.394(3) is not a mathematical exercise that is simply decided by which matters are in favour or against the granting of an extension of time.
[43] In light of our conclusion we consider that the appropriate course is to remit the matter to the Commissioner to re-determine Mr Cosgrove’s application for an extension of time in accordance with these reasons.
Orders and directions
[44] We make the following orders:
1. Permission to appeal is granted.
2. The appeal is upheld.
3. The decision ([2020] FWC 3355) is quashed.
4. The application in matter U2020/8365 is remitted to Commissioner Platt for re-consideration in accordance with these reasons on the basis of the evidence admitted to date and such further evidence as the Commissioner may decide to admit.
[45] If the Commissioner decides to grant an extension of time it will then be necessary for him to deal with the Respondent’s other jurisdictional objections, that:
a) the dismissal was a case of genuine redundancy;
b) the Applicant’s employment does not meet the minimum employment period.
[46] If both jurisdictional objections are defeated then the Commissioner will determine if the dismissal was harsh, unjust or unreasonable.
VICE PRESIDENT
Hearing details:
Matter determined on the papers.
Final submissions filed by the Appellant in reply on 9 September 2020.
Final submissions filed by the Respondent on 9 September 2020
Printed by authority of the Commonwealth Government Printer
<PR723532>
1 [2020] FWC 3355
2 PR720514
3 PR720514
4 Transcript PN28 - 50
5 Shaw v Australia and New Zealand Banking Group Limited T/A ANZ Bank[2015] FWCFB 287 at [12]; Ozsoy v Monstamac Industries Pty Ltd[2014] FWCFB 2149 at [31]; Diotti v Lenswood Cold Stores Co-op Society t/a Lenswood Organic[2016] FWCFB 349 at [29]-[31]
6 [2016] FWCFB 349
7 [2018] FWCFB 3288 at [35]-[45]
8 [2020] FWC 3355, [26]
9 [2020] FWC 3355, [31]
10 [2020] FWC 3355, [32]
11 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194, 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ
12 O’Sullivan v Farrer [1989] HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]-[46]
13 [2010] FWAFB 5343, 197 IR 266 at [27]
14 Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30]
15 Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office[2014] FWCFB 1663, 241 IR 177 at [28]
16 Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]
17 Lombardo v Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations[2014] FWCFB 2288 at [21]
18 [1936] HCA 40, 55 CLR 499
19 Print P3168, 22 July 1997 per Ross VP (as he then was), Watson SDP and Gay C.
20 Ibid.
21 Transcript PN155 - 156
22 Lombardo v Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations[2014] FWCFB 2288 at [21]
47
13
0