Tony Course v DoubleIQ Pty Ltd

[2020] FWC 4004

[2020] FWC 4004

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tony Course
v
DoubleIQ Pty Ltd
(U2020/9588)

COMMISSIONER BISSETT MELBOURNE, 7 AUGUST 2020

Application for an unfair dismissal remedy - circumstances not exceptional - application dismissed.

[1] This decision concerns an application by Mr Tony Course (Applicant) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (FW Act). The Applicant said he was dismissed by DoubleIQ Pty Ltd (Respondent).

EFFECTIVE DATE OF DISMISSAL

[2] There was a conflict as to when the Applicant’s dismissal took effect. A determination of this issue is necessary to determine if the application was, in fact, lodged out of time.

[3] The Applicant’s evidence was that he was dismissed on either the 2 June 2020 or 23 June 2020. The Respondent’s evidence was that the Applicant was dismissed either on 29 February 2020 or 2 June 2020 at the latest, which is 21 days earlier than the date indicated in the Applicant’s application.

[4] For the reason set out below I am satisfied that the date of dismissal was 2 June 2020 at the latest.

[5] The Applicant relies on the decision in Ayub v Sydney Trains 1 (Ayub) to support his contention that his date of dismissal was 23 June 2020. In Ayub the Full bench of the Commission said:

[19] When the termination occurs without notice on the basis that a sum of money is paid in lieu of the notice that would otherwise be required, then the termination would take effect when communicated to the employee subject perhaps to the additional requirement that the amount in lieu of notice has actually been paid to the employee. 2 [citation in original]

[6] The Applicant submits that he was not paid in lieu of notice, that he was entitled to 3 weeks’ notice given his length of service and therefore the date of dismissal is 23 June 2020 – that is 3 weeks after his dismissal – because he was not paid the three weeks’ notice required.

[7] The Applicant’s submissions in this respect are misplaced. The decision in Ayub does not say that the date of dismissal for the purposes of an unfair dismissal application is extended if the required notice is not paid. This is confirmed by a consideration of the decision in Siagian v Sanel Pty Limited 3(Siagian) referenced in the paragraph relied upon by the Applicant. Siagian considered, in part, the effect and meaning of “pay in lieu of notice” on the date of termination and what cause of action might be open to a person receiving (or not) pay in lieu of notice. In this case the Applicant has not received any pay in lieu of notice. Further, the Applicant accepts that his employment was terminated on 2 June 2020.

[8] The Full Bench in Metropolitan Fire and Emergency Services Board v Garth Duggan 4 explained the distinction between date of dismissal and notice requirements as follows:

[21] The word “dismissed” is defined in s.386 of the Act. It includes a person’s employment being “terminated on the employer’s initiative”. The expression “termination on the employer’s initiative” is concerned with the termination of the employment relationship, not the employment contract. The employment contract and the employment relationship are related but distinct.

[22] A notice, whether oral or in writing, which is ineffective to terminate the employment contract may nonetheless be effective to terminate the employment relationship. For example, a wrongful dismissal of an employee by an employer, or a unilateral resignation by an employee other than in accordance with the terms of the contract, is effective to bring the employment relationship to an end, but it does not automatically discharge the contract of employment. [footnotes omitted]

[9] The Full Bench went on to consider the decision in Ayub relied on by the Applicant. It said:

[29] The Full Bench in Ayub did not consider the relationship, if any, between the notice requirements in s.117(1) and a notice of dismissal in accordance with s.383(a)(i) of the Act. The Full Bench did, however, draw on common law principles to determine when a dismissal with notice would take effect. There is no suggestion in the reasons of the Full Bench in Ayub that a dismissal with notice would not take effect unless the notice, or payment in lieu thereof, complied with s.117 of the Act.

[footnotes omitted]

[10] The date of dismissal, or date of termination at the initiative of the employer – as used in Part 3-2 of the FW Act – for these reasons was not 23 June 2020 but was 2 June 2020 when the Applicant received an email that said, in part, the “by this email and effective immediately, we are ending our business relationship with you” (further considered below).

NOT AN EMPLOYEE

[11] The Respondent says that the Applicant was not an employee. This is not a matter I need to determine at this point in time although it may be a relevant consideration when I consider the merits of the application in relation to the extension of time application. Should I grant an extension of time this matter will still be relevant in determining the ultimate merits of the claim of the Applicant.

EXTENSION OF TIME

[12] For the reasons given below I do not need to definitively determine if the date of dismissal was 29 February or 2 June 2020. This decision is made on the basis that the date of dismissal was 2 June 2020. It is axiomatic that if I find the application was out of time on this date of dismissal and that an extension of time should not be granted, I could not find otherwise for a dismissal date of 29 February 2020.

[13] Accordingly, for the purposes of determining if I should grant an extension of time, the date of the Applicant’s dismissal was 2 June 2020. The unfair dismissal application was lodged on 14 July 2020.

[14] Section 394(2) of the FW Act states that an application for an unfair dismissal remedy must be made ‘within 21 days after the dismissal took effect’, or within such further period as the Commission allows pursuant to s.394(3). The period of 21 days ended at midnight on 23 June 2020. The application was therefore filed 21 days outside the 21 day period. The Applicant asked the Commission to grant a further period for the application to be made under s.394(3). The Respondent opposed this request.

[15] The FW Act allows the Commission to extend the period within which an unfair dismissal application must be made only if it is satisfied that there are ‘exceptional circumstances’. Briefly, exceptional circumstances are circumstances that are out of the ordinary course, unusual, special or uncommon but the circumstances themselves do not need to be unique nor unprecedented, nor even very rare. 5 Exceptional circumstances may include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together can be considered exceptional.6

[16] Section 394(3) requires that, in considering whether to grant an extension of time, the Commission must take into account the following:

(a) the reason for the delay;

(b) whether the person first became aware of the dismissal after it had taken effect;

(c) any action taken by the person to dispute the dismissal;

(d) prejudice to the employer (including prejudice caused by the delay);

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.

[17] The requirement that these matters be taken into account means that each matter must be considered and given appropriate weight in assessing whether there are exceptional circumstances. I now consider these matters in the context of the Application.

Reason for the delay

[18] The FW Act does not specify what reason for delay might tell in favour of granting an extension however decisions of the Commission have referred to an acceptable or reasonable explanation. The absence of any explanation for any part of the delay will usually weigh against an applicant in the assessment of whether there are exceptional circumstances, and a credible explanation for the entirety of the delay will usually weigh in the applicant’s favour, however all of the circumstances must be considered. 7

[19] The Applicant commenced his engagement with the Respondent in early 2018. Apparently in 2018 there was an exchange between the Applicant and Mr Denis Claridge of the Respondent in relation to an agreement between DoubleIQ and the Applicant. It apparently related to a joint venture (JV) called Stoploss Pty Ltd. The Agreement (which does not appear to have been finalised or signed) related to structures, equity, shareholdings and other matters including regular payments to the Applicant. There is an ongoing dispute between the parties as to ownership of the intellectual property (IP) arising from the collaboration over a two year period.

[20] On 29 February 2020 there was a conversation between Mr Claridge and the Applicant. Mr Claridge says that he advised the Applicant that he would no longer fund the JV or invest in the project it was working on. The Applicant says that he was told in that conversation that if an agreement with Price Waterhouse Coopers (PWC) did not eventuate, funding for the project would cease.

[21] In May 2020 there was some discussion between the Applicant and Mr Claridge reflected in a draft “Settlement and Collaboration Agreement” 8 which appears to have been directed at confirming the future collaboration of the Applicant and Respondent. This agreement was never made or executed.

[22] On 2 June 2020 Mr Claridge sent the Applicant an email arising from the failure to finalise the Settlement and Collaboration Agreement. That email said:

Hi Tony,

Confirming that, despite good faith attempts by both sides, we have been unable to reach an agreement.

With that in mind, by this email and effective immediately, we are ending our business relationship with you and Stop Loss Pty Ltd. We will be updating PWC accordingly.

We kindly request that you and Stop Loss Pty Ltd return to us all our property, materials and documents (originals, copies and electronic versions), including all documents which contain information that is not in the public domain and which relate to our business, organisation or affairs.

As a gesture of goodwill, we would like to transfer to you $31,557 + GST in lieu of employee benefits for period 1st July 2018 to 29th February 2020 where you were contracting to doubleIQ. Please send us an invoice for the same.

All the best…

[23] The Applicant says that from 3 June 2020 he was engaged in mediation with the Respondent. Mediation took place on 19 June 2020 and (unsuccessfully) concluded on 23 June 2020.

[24] On 23 June 2020 the Applicant contacted the Fair Work Ombudsman (FWO) in relation to payments the Applicant considered due to him by the Respondent. He said that the FWO suggested he put his claim in writing to the Respondent and request a reply within 7 days.

[25] On 26 June 2020 the Applicant sent an email as follows to the Respondent:

From: Tony Course [email protected]

Date: Fri, Jun 26, 2020 at 3:18 PM

Subject: Amount payable within 7 days as advised by FairWork.

To: Sally Claridge [email protected]
Cc: Sally Claridge <yyyy @zzzz.com>

Dear Sally

Please find attached final invoice with amounts owing as per advice below from FairWork.

The amount of $89,859 is payable within 7 days (by 3rd July)

Self-explanatory note from Fairwork below is included to back up amounts owing….

“Dear Tony, Thank you for contacting the Fair Work Ombudsman. Under the Fair Work Act your employer cannot backdate your termination and must pay you correctly for all hours worked. At the end of employment if you have been terminated you are entitled to notice, or payment in lieu of notice, your accrued annual leave, and potentially redundancy depending on how your employment has ended. If your employer is not paying you the correct entitlements or has underpaid you for the time you have worked your first step is to calculate what you are owed and write to your employer stating that they have seven days to make the full and correct payment. You should also advise them that if the correct payment is not made within that timeframe that you will call the Fair Work Ombudsman for further assistance. Kind regards, Garth Fair Work Ombudsman”

For detailed calculation of amounts owing, please see attachment.

Dennis was aware of the claim to Fairwork and the potential ramifications to doubleIQ by email on 21/6. It has always been my preference to resolve this and other matters outstanding by negotiation – unfortunately this has not been possible.

Tony
Phone: 04xx xxx xxx
[private details removed]

[26] Attached to the email was a breakdown of monies the Applicant said were owed to him for entitlements to leave, redundancy and “amounts owing” for the period January to June 2018 and March to June 2020. The total amount he said was owing was “$81,690 (excluding GST)” and “$89,859 (including GST)”.

[27] The Applicant said that he did not have a discussion with the FWO at this time about his alleged dismissal or termination of employment.

[28] On 2 July 2020 the Applicant had his lawyer send a letter to the Respondent. That letter commenced “we act for Stoploss Pty Ltd…and Tony Course…in relation to the intellectual property owned by Stoploss and Course which is currently in your possession and control.” The letter goes on to seek an amicable settlement of the IP dispute. That letter sought some response from the Respondent by 3 July 2020.

[29] The Respondent replied to the Applicant’s lawyer and indicated it would require 7 days to consider the matters raised. The Applicant says that when he did not hear from the Respondent by 10 July 2020 he then considered lodging an application for unfair dismissal.

[30] The Applicant says that on 6 July 2020 he again spoke to the FWO as the Respondent had not replied to his email with respect to the amounts he said were owed to him. He said that the FWO advised him to contact Jobwatch which he attempted to do from 7 July 2020 until 13 July 2020, when he finally got through to them. He said there were delays in contacting both the FWO and Jobwatch caused by COVID-19 and difficulties getting through to both organisations by phone. He said that on 13 July 2020 Jobwatch assisted him in navigating the Commission website and he subsequently lodged his application on 14 July 2020.

[31] Mr Claridge of the Respondent gave evidence that from 2015 to 2018 he worked with the Applicant in a collaboration on the development of software. In 2015 a joint venture company called Stoploss Pty Ltd was incorporated for the purpose of developing and commercialising the proposed software. The Applicant and Mr Claridge are directors of that company.

[32] Mr Claridge said that by 2018 the Respondent had formed the view that the development and commercialisation of the software would not be successful. In early 2018, there was a change in direction with the Applicant and the Respondent started working on a new software concept.

[33] Mr Claridge said that in early 2020 it was apparent the new software would not be a success and around 25 February 2020 the Respondent advised the Applicant that it was no longer willing to fund the joint venture. Mr Claridge agreed that there is an unresolved dispute in relation to intellectual property developed during the period of the joint venture from 2018 to 2020.

[34] Mr Claridge said that the Settlement and Collaboration document from May 2020 was an attempt to find a resolution to the future collaboration between the Applicant and Respondent. No agreement was reached and Mr Claridge reached the conclusion that agreement would not be reached in the future. This resulted in the email he sent to the Applicant on 2 June 2020. Mr Claridge said that it was noteworthy that the draft of the agreement did not mention any employment relationship between the Applicant and Respondent.

[35] Mr Claridge said that the Respondent received the letter from the Applicant’s lawyer of 2 July 2020. The letter did not raise any employment matters but rather sought to reopen the failed negotiations of May 2020 with respect to the Settlement and Collaboration Agreement. Mr Claridge said the Respondent required time however to consider the content of the letter and responded to the Applicant advising that more time was required.

[36] Mr Claridge said the Respondent did not respond to the Applicant’s claim for payment of money on 26 June 2020 as it did not believe it owed the Applicant any money.

[37] I do not consider that the reasons for the delay given by the Applicant, individually or together, provide an acceptable or reasonable explanation for the delay in making the application for unfair dismissal. The Applicant has two main reasons for the delay – that he sought advice from the FWO about money he said the Respondent owed to him and that he was attempting to negotiate a settlement with the Respondent.

[38] On the second matter, the Applicant was not seeking to settle any matters associated with his employment, including termination of employment, with the Respondent by the letter of 2 July 2020. Rather he was seeking to settle an ongoing business dispute in relation to intellectual property rights. Nothing in the correspondence of 2 July 2020 raises any issue in relation to employment or even suggests of an employment relationship between the Applicant and Respondent. This is no criticism of the Applicant – he is entitled to pursue what he says are his IP rights but this was hardly a new issue to him. It appears to have been a matter bubbling along from the time he entered into a relationship with the Respondent. It does not explain the reason for the delay in making his unfair dismissal application. Further, it indicates that the Applicant had the wherewithal to gain legal advice but he chose to seek advice as to his IP claim and not in relation to any employment claim.

[39] The first matter relied on by the Applicant to explain the delay is that he sought advice from the FWO in relation to money he believed was owed to him by the Respondent. However, in seeking such advice the Applicant does not say that he raised any issue with the FWO in relation to the termination of his employment. Again, he had the forethought to contact the Ombudsman but only on how to claim from the Respondent money he believed due to him, not in relation to the alleged termination of his employment.

[40] The Applicant agreed that he did not consider making an application for unfair dismissal until he failed to receive a reply to his letter in relation to intellectual property rights on 10 July 2020 – the extension sought by the Respondent to reply. Whilst it is apparent the Applicant acted following non-receipt of a reply to his letter and filed his application four days later, this does not provide a suitable explanation as to why his application was not filed within 21 days of the date of his dismissal or why it took a further 21 days to make the application. It appears that the decision to pursue an employment claim only arose after the failure to resolve the intellectual property claim but neither of these claims precluded the other being pursued simultaneously. He had been pursuing the business claim for some time. This, however, does not explain the length of the delay in making the application.

[41] The absence of an acceptable explanation for the delay weighs against a conclusion of exceptional circumstances. There is nothing, in this case, that stopped or limited the Applicant’s capacity to make his application within time except that he chose to pursue his intellectual property claim.

Whether the person first became aware of the dismissal after it had taken effect

[42] The Applicant was notified of the dismissal on 2 June 2020. He agreed that this was the date of his dismissal. At the time he made his application he did not appear to consider that the effective date of dismissal was 23 June 2020 or any other date. I am satisfied that he was aware of his dismissal on 2 June 2020.

[43] I have considered this a neutral matter in my consideration.

Action taken to dispute the dismissal

[44] The Applicant did not take any action to dispute his dismissal except for the making of this claim. He was in negotiations with the Respondent up until late May 2020 and on 2 July 2020 sought to reignite those negotiations, but they were not in relation to his employment, rather they were in relation to his intellectual property rights. The only other ‘employment’ type matter the Applicant raised with the Respondent was in relation to payments he said were owed to him. This was not action taken to dispute his dismissal.

[45] I do not consider these steps to constitute ‘action to dispute the dismissal’. This circumstance does not weigh in favour of a conclusion that there are exceptional circumstances.

Prejudice to the employer

[46] I cannot identify any prejudice that would accrue to the company if an extension of time were to be granted. The mere absence of prejudice is not in my view a factor that would point in favour of the grant of extension of time. However, if one were to consider the absence of prejudice as favouring of an extension, I would attribute it little weight in the consideration of whether there are exceptional circumstances.

Merits of the application

[47] The FW Act requires me to take into account the merits of the application in considering whether to extend time. The competing contentions of the parties in relation to the merits of the application are set out in the materials that have been filed and I do not repeat them here. Suffice it to say that there is an unresolved issue as to whether the Applicant was an employee. If it is found that the Applicant was an employee, there is a further contested issue as to whether the dismissal was a genuine redundancy. Having examined these materials, it is evident to me that the merits of the application turn on contested points of fact which would need to be tested if an extension of time were granted and the matter were to proceed. It is not possible to make any firm or detailed assessment of the merits. The Applicant has a prima facie case, to which the Respondent raises an apparent defence. I do not consider the merits of the present case to tell for or against an extension of time. I consider the merits to be a neutral consideration.

Fairness as between the person and other persons in a similar position

[48] This consideration may relate to matters currently before the Commission or to matters previously decided by the Commission. It may also relate to the position of various employees of an employer responding to an unfair dismissal application. However, cases of this kind will generally turn on their own facts. In the present case, the Applicant made submissions on this question as to what he considers the motivation of the Respondent to be in terminating his employment with it. This is not a matter to consider here and I am not aware of any persons or cases that are relevant to the question of fairness as between the Applicant and other persons in a similar position. I consider this to be a neutral consideration in the present matter.

Conclusion

[49] Having regard to the matters I am required to take into account under s.394(3), and all of the matters raised by the Applicant, I am not satisfied that there are exceptional circumstances such that an extension of time should be granted.

[50] I therefore decline to grant an extension of time under s.394(3). Accordingly, the application for an unfair dismissal remedy must be dismissed. An order 9 to this effect will be issued with this decision.

COMMISSIONER

Appearances:

T. Course on his own behalf.

R. Millar of Counsel for the Respondent.

Hearing details:

2020.
Melbourne by telephone.
July 27.

Printed by authority of the Commonwealth Government Printer

<PR721419>

 1   [2016] FWCFB 5500.

 2    Siagian v Sanel Pty Limited (1994) 54 IR 185 at 203.

 3   Ibid.

 4   [2017] FWCFB 4878.

 5   Nulty v Blue Star Group Pty Ltd[2011] FWAFB 975 at [13].

 6   Ibid.

 7   Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd[2018] FWCFB 901 at [39].

 8   Exhibit A3.

 9   PR721420.