Walker, Bradley George v Illingworth David Financial Planning Pty Ltd
[2019] FWC 5167
•30 JULY 2019
| [2019] FWC 5167 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Walker, Bradley George
v
Illingworth David Financial Planning Pty Ltd
(U2019/2630)
COMMISSIONER CIRKOVIC | MELBOURNE, 30 JULY 2019 |
Application for an unfair dismissal remedy – effective date of dismissal – whether to extend time for lodging the application.
[1] On 8 March 2019, Bradley Walker (the Applicant) lodged an application with the Fair Work Commission (the Commission) alleging unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act). The Respondent is Illingworth David Financial Planning Pty Ltd (the Respondent).
[2] The Applicant commenced employment with the Respondent on 1 May 2014. 1 He was employed as a Senior Financial Advisor.2
[3] The matter came before me for hearing on the issue of jurisdiction.
[4] The Applicant submits that his dismissal took effect on 15 February 2019 or alternatively 18 February 2019. The Respondent submits that the dismissal took effect on 21 December 2018 or alternatively on 31 December 2018.
[5] If the dismissal took effect on 15 February 2019 then the application is in time. If the dismissal took effect on 21 December 2018 then the application was lodged 56 days outside the statutory time period permitted by s.394(2)(a) of the Act. If the dismissal took effect on 31 December then the application was lodged 46 days out of time.
[6] For the reasons set out below, I find the Applicant’s dismissal took effect on 31 December 2018. Therefore his application was filed 46 days late. Further, I have concluded that I am not satisfied that there are exceptional circumstances warranting the granting of a further period for the making of an application under s.394(3) of the Act. Accordingly, the application will be dismissed.
Background
[7] Permission to be represented was granted to both parties pursuant to s.596. The matter was heard on 17 May 2019 and 25 June 2019.
[8] The Applicant gave evidence on his own behalf in the form of a witness statement and was cross-examined and re-examined at the hearing. For the Respondent, directors Mr Paul Bourke and Mr Michael Noonan gave evidence in the form of witness statements and were also cross-examined and re-examined.
[9] It is not in contest that, at a meeting between the Applicant and directors of the Respondent on 21 November, the Applicant was handed a letter (the Termination Letter)which is reproduced below. The Termination Letter indicates that the Applicant’s employment would cease on 21 November 2018:
“Dear Bradley
CONFIRMATION OF TERMINATION OF EMPLOYMENT DUE TO GENUINE REDUNDANCY
This letter confirms that your employment will be ending, due to genuine redundancy, effective from close of business on 21 November 2018.
Your termination payment will include the following items, less any applicable taxation:
Salary/wages up to 21 November 2018: $2,076.92
Unused annual leave: $6,379.86
Severance pay: $10,834.61
Payment in lieu of notice: $3,894.23
Total: $23,274.08
Please ensure that you return all work related items or property to use when you leave.
We thank you for your service to Illingworth David Pty Ltd and wish you well in your future endeavours.
Yours sincerely
Paul Bourke
Director
Illingworth David Pty Ltd”
[10] It is also not in contest that during the 21 November meeting, and at a further meeting on 22 November 2018, the parties came to an “alternative arrangement” as to the “ending” of the Applicant’s employment on 21 November. While the specifics of the alternative arrangement are disputed, the following facts are not in contest:
• at the 21 November 2018 meeting:
• it was clear that there was no option for the Applicant’s then current role to continue;3
• the Applicant was offered the opportunity for an alternative role of Servicing Advisor, which was being advertised externally; 4
• the Applicant was offered to purchase a client list from the Respondent; 5
• at the 22 November 2018 meeting the Applicant confirmed that he would like to purchase the client list;
• the parties met again on 21 December 2018;
• on 21 December 2018 it was announced at a staff function that it was the Applicant’s last day of employment;
• the Respondent’s last day of trading for 2018, before Christmas break, was 21 December;
• in the new year, the Applicant continued to attend the Respondent’s office in some capacity until 15 February 2019; and
• the Applicant did not receive any wages from the Respondent for his attendance.
[11] The date of termination of the Applicant’s employment is the subject of dispute due to the Parties’ differing views as to the appropriate legal characterisation of the events above.
Effective Date of Dismissal
[12] For the purpose of an unfair dismissal, the relevant definition of “dismissed” is found in s. 386(1) of the Act, which provides that a person has been “dismissed” if:
“(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged by his or her employer.”
[13] A termination of employment “does not take effect unless it is communicated to the employee whose employment is being terminated.” 6
[14] The Applicant submits that his employment “continued” until 15 or 18 February 2018, the latter date coinciding with the expiry of the Applicant’s financial licence to provide financial advice in the name of the Respondent, which the Applicant characterises as “the determinative factor in the employment”. 7 The crux of the Applicant’s argument is that he could no longer remain employed in the position of financial advisor post 18 February 2019 and in those circumstances the “termination at the initiative of the respondent” was effected on that date.8
[15] The Applicant also advances the position that the “effective date” of the termination of his employment was subject to a “qualifying condition, which wasn’t going to happen necessarily if the if a commercial arrangement could be reached.” 9 Counsel for the Applicant submits that:
“ …. The condition – I suppose it’s the way the evidence will present itself, but the condition as to the timing of a commercial negotiation is never known. No one knows how long that may take. That might inform the evidence in this case , that the relationship continued for a period of time but it then came to an end because there was no deal.” 10
[16] The Applicant concedes that whilst “there wasn’t any ambiguous words or conduct about the ending of the employment relationship”, that “at the very least there is an ambiguity about what occurred at the end of December 2018” and that the Applicant “continued to work for the respondent during January and February.” The Applicant characterises 15 February 2019 as the date that the “condition failed”. 11
[17] The Respondent submits that the Applicant’s employment was terminated alternatively on 21 or 31 December 2019, the former date coinciding with the Applicant’s working out his notice period and the announcement before staff, and the latter date coinciding with the Applicant’s eligibility to his yearly bonus. The Respondent submits that if the Applicant is found to have continued his employment until 15 or 18 February 2019, the Applicant was not dismissed but left voluntarily. 12
The evidence
[18] The Applicant’s evidence included the following relevant points:
• had he not decided to purchase the respondents client list, he would have “left “ the Respondent on 21November 2018 and “wouldn’t have had any other option”; 13
• the discussion of working out his notice period did not happen at a meeting, and that a memorandum emailed to him on 10 December 2018 was the “first time December 21 was put on the table”; 14
• in the meetings of 21 and 22 November 2018 it was confirmed that he would be paid his December quarter bonus for all work completed up until December 31;
• on 22 November 2018 Michael Noonan said that the directors had discussed paying the Applicant a thousand dollars per week in the new year;
• he knew on 10 December 2018 that the Respondent’s intention was for his employment to end on 21 December 2018; 15
• from 21 November to 21 December he “facilitated work on the go, and … completed work that was – new business that was outstanding. From January 14, it was a matter of servicing, reviewing existing clients and carrying out the ASIC review files;” 16
• from 21 November, he did not engage in any writing new business, which had previously been a facet of his role; 17
• on the evening of 20 December 2019, the Applicant emailed the directors a draft memorandum with proposed discussion points for the meeting the following day, including the phrase “propose my employment ceases per se on Dec 31 which coincides with the bonus period and normal remuneration”; 18
• it was announced to the staff at the function of 21 December that he would be leaving and that that would be his final day; 19
• at the meeting of 21 December the directors refused his proposal that his liability to pay the Respondent for Capital Gains Tax as part of the commercial negotiation should be waived in lieu of receiving the thousand dollars per week offered on 22 November 2018;
• he was paid his final entitlements and redundancy “a couple of days later”; 20
• in January 2019, he “came and went” as he pleased; 21 working approximately three days per week, compared to the 38 hours he had previously worked; 22
• the object of his continuing to service clients was a “warm handover”, in the case that the sale of the client list succeeded; 23
• on 15 February the Applicant advised Mr Noonan and Mr Male that he “would no longer be coming in”, citing the reason for doing so as being that “my licence came through, my authorised representative licence”; 24
• his decision to leave on 15 February 2018 was entirely his own decision, voluntarily and without pressure from anyone; 25
• On 18 February, he sent an email to all staff and directors as follows:
“Hi all
Just letting you know I have vacated the office on Friday and handed in my key to Sam. I am ready to be taken off as an AR of IDFP and have asked Leane to do that for me today. From a work point of view, I did a hand over with Sharon and so everything is up to date. In regards to the contract of sale, solicitors will be forwarding a reply to Coulter Roache this week. If you have any queries regarding anything let me know.
Thanks for any help and guidance over the last 4.5 years, especially the accounting knowledge you have passed on over the journey, it has been great to have that resource and you were always very giving with your time.
Kind regards
Brad” 26
[19] The Applicant also gave the following evidence:
Mr Crawford: “So you're saying, at no point in time it was communicated to you that your employment would end, your full time employment as a financial adviser, would end at 21 December?”
Mr Walker: “That was first communicated to me in a memorandum of understanding that was emailed to me on the 10 December. That was the first time December 21 was put on the table.” 27
…
Mr Crawford: “Mr Walker, under the heading, "Work arrangements", you say yourself, "I propose that my employment ceases on December 31." So you were well aware that your role, being your financial planner role, was coming to an end on 31 December for redundancy?”
Mr Walker: “Yes, that's right.”
Mr Crawford: “So you would agree that to the extent that you did return in the new year, that such work was separate and distinct to your role that existed up until 31 December, being the senior financial planner, or the financial planner?
Mr Walker: “Yes, other than the viewpoint of servicing clients which was for the mutual benefit of buying the client base.”
Mr Crawford: “But as you've indicated, you were aware and you proposed, yourself, your employment would come to an end on December 31 for a redundancy, so it seems clear that you understood and accepted that your return to the office wouldn't have been employment?”
Mr Walker: “Well, in my interpretation, employment, but I knew that employment was certainly ending by way of what – or the way I'd been conducting employment previously by way of the way I've been paid, having to come in on normal work hours and all that sort stuff, yes. Because as per the November 22 discussion, it was floated that this process might take some time and that I might be paid a thousand dollars a week because of the nature that I wouldn't be needed to come into the office on a 40 hour week.”
Mr Crawford: “Yes but it was well understood that your employment was coming to an end on the 31st, and to the extent that you would be coming back in, this would be, as you've just said, for the sole purposes of facilitating the purchase of your clients and starting the business?”
Mr Walker: “That's correct. As well as the ASIC review, but yes to your question.” 28
[20] As to the “alternate arrangement”, Mr Bourke, director of the Respondent, gave the following relevant points of evidence:
• At the 22 November 2018 meeting the directors agreed that the Applicant could work out his notice period instead of receiving payment in lieu, so that he could finalise outstanding work and maintain his relationship with the relevant clients; and his final day of work would be 21 December 2018;
• the Applicant’s final pay including annual leave and redundancy was paid into his account on 21 December 2018;
• the Applicant asked to come back to the office in 2019 to facilitate the purchase of his client base; and this was allowed for this sole purpose, in order to assist the Applicant. 29
[21] Mr Noonan, director of the Respondent, gave evidence that his comments to the Applicant about paying the Applicant a thousand dollars a week were made on the assumption that that possibility of payment would only be relevant if the Applicant was working for the Respondent, and that it was not intended to be a formal offer. 30
Findings
[22] On the basis of the material before me, I have determined that the Applicant’s dismissal took effect on 31 December 2018. The evidence as to the effective date of termination is inconsistent, however it is unequivocal that the Applicant’s employment was terminated at the latest on 31 December 2018, of which he was well aware as demonstrated by his exchange with the Respondent at [19] above. In coming to my conclusion, I have had regard to the evidence of the parties above and the following aspects of the Applicant’s attendance at the office in 2019: 31
• he attended approximately three days a week;
• he was not paid for his attendance;
• his purpose for attending was to facilitate the setting up of his business;
• the work that he did in 2019 had some benefit to the Respondent, including compliance with an ASIC audit and servicing its clients, however, this work was also of immediate benefit to the Applicant personally, with respect to his own professional obligations 32 and a potential “warm handover” of the clients;
• the Respondent did not receive any fees directly from any work that the Applicant did, because its business structure is not based on time-billing. 33
[23] While I accept the Applicants proposition that a notice of termination may validly operate subject to a condition, the material in this case indicates there was no “conditional termination”. Both parties were aware that the Applicant’s employment was ending in December 2018. I also reject the Applicant’s suggestion that the lapsing of the Applicant’s licence with the Respondent is the determinative point in time. While a licence to provide financial advice is undoubtedly necessary to be employed as a financial advisor, it is entirely possible to remain licenced and yet not be employed.
[24] It follows that the Applicant was dismissed within the meaning of s.386(1) of the Act on 31 December 2018.
[25] The Respondent promulgated a number of alternative arguments relating to different ways in which the Applicant could be considered “dismissed”. Given my finding, these do not need to be explored.
[26] Based on my finding at [24] above, the Applicant’s application is 46 days out of time. I turn now to whether an extension of time can be granted to allow the application.
Matters to be taken into account pursuant to s.394(3)
[27] Subsection 394(3) of the Act provides that the Commission may allow a further period for an application to be made if it is satisfied there are exceptional circumstances (emphasis added). The Commission in concluding whether exceptional circumstances exist must take into account the following factors:
“(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.”
[28] The meaning of ‘exceptional circumstances’ was considered by a Full Bench in Nulty v Blue Star Group Pty Ltd, 34 where it was noted that, in order to be exceptional, the circumstances must be out of the ordinary course, or unusual, or special, or uncommon, although they need not be unique or unprecedented. The Full Bench also noted that exceptional circumstances can include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together can be considered exceptional.
[29] I will deal with each of the matters in s394(3) separately.
(a) The reason for the delay
[1] The Act does not specify what reason for delay might weigh in favour of granting an extension however decisions of the Commission have referred to an acceptable or a reasonable explanation. 35 In Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd aFull Bench of the Commission noted that the absence of an 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.36
[2] The Applicant submits that if I regard the application being lodged out of time, there are exceptional circumstances giving rise to the delay. The crux of the Applicant’s submission is that the parties were negotiating the terms of an agreement during January and February 2019, and “that is out of the ordinary, and an unusual circumstance for the purpose of the test in Nulty v Blue Star” The Respondent says that this is “not a legitimate reason for delay”. 37
[3] On the basis of the material presented to me, I am not persuaded that the reason for delay offered by the Applicant is satisfactory for the purpose of s.394(3). Mr Walker accepted the severance payment paid to him in December 2018, and made a commercial decision to continue negotiations with the Respondent rather than pursue the rights available to him under the Act. I do not criticize the Applicant for this decision. However, in the circumstances, I am not persuaded that this is a proper explanation of the delay of 46 days. This weighs against granting an extension of time.
(b) Whether the person first became aware of the dismissal after it had taken effect
[4] On the evidence before me, the Applicant received notification that his dismissal would take effect on 31 December 2018. He had the full 21 days to lodge his application. However, given the factual matrix of this case, I consider this criterion is neutral.
(c) Any action taken by the person to dispute the dismissal
[5] Action taken by an employee to contest the dismissal, other than lodging an unfair dismissals application, may favour the granting of an extension of time. 38
[6] The Applicant submits that this “didn’t arise because of the unusual situation of the condition about the Applicant continuing in his employment.” 39
[7] The Respondent submits that the Applicant did not take any action to dispute the dismissal after it took effect other than lodging the unfair dismissal claim 46 days late and that there is no evidence of the Applicant taking steps to contest the termination.
[8] In this matter I consider this factor to be a neutral consideration.
(d) Prejudice to the employer (including prejudice caused by the delay)
[9] Prejudice to the employer will go against the granting of an extension of time. 40
[10] The Applicant submitted that there is “a short delay “and that “no material has been put forward by the respondent”. 41
[11] The Respondent conceded that prejudice was a neutral consideration. 42
[12] On the basis of the above, I consider this factor to be a neutral consideration.
(e) Merits of the application
[13] The Commission notes that for the purpose of determining whether to grant an extension of time to the Applicant to file his application it “should not embark on a detailed consideration of the substantive case.” 43
[14] The Applicant submits that “the applicant would challenge the question of his redundancy “and that, in addition to redistributing the applicants responsibilities, “there was actually a new staff member put on”. 44
[15] The Respondent submits that the case is one of genuine redundancy.
[16] A highly meritorious claim may persuade the Commission to accept an explanation for delay that would otherwise have been insufficient. 45 However, the Commission cannot make any findings on contested matters without hearing evidence. Evidence on the merits is rarely called for the purposes of determining an extension of time application. As a result, the Commission should not embark on a detailed consideration of the substantive application.46 I have not done so.
[17] Accordingly, I am not able to make a final assessment of the merits as there are factual disputes between the parties that have not been tested. I find this criterion to be neutral.
(f) Fairness as between the person and other persons in a similar position
[18] This consideration may relate to fairness in matters of a similar kind that are either currently before the Commission or that have been decided in the past. 47
[19] The Full Bench in Perry v Rio Tinto Shipping Pty Ltd[2016] FWC 6963 considered this criterion and said:
“Cases of this kind will generally turn on their own facts. However, this consideration is concerned with the importance of the application of consistent principles in cases of this kind, thus ensuring fairness as between the Appellant and other persons in a similar position. This consideration may relate to matters currently before the Commission on matters previously decided by the Commission.” 48
[20] The Applicant submits that this is a neutral consideration and the Respondent did not provide submissions on this point. 49
[21] I am not satisfied that the issue of fairness as between the Applicant and other persons in a similar position is a relevant consideration in this matter. As it is not a relevant factor, it is a neutral consideration in determining whether to grant an extension of time.
Conclusion
[22] Having considered all of the factors set out in s.394(3), in particular the inadequacy of the Applicant’s explanation for the delay, on balance, I am not satisfied that there are exceptional circumstances warranting the granting of a further period for the making of an application under s.394. Accordingly, the application is dismissed.
[23] An order to that effect will be published separately to this decision.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
Appearances:
Mr M McKenney of Counsel, for the Applicant
Ms S Crawford of Coulter Roache Lawyers, for the Respondent
Hearing details:
2019
Melbourne
17 May, 25 June 2019.
<PR710675>
Printed by authority of the Commonwealth Government Printer
1 F2 filed 8 March 2019.
2 Transcript PN179.
3 Transcript PN188.
4 Transcript PN189.
5 Witness Statement Bradley Walker 1 May 2019; Witness Statement Paul Bourke 8 May 2019.
6 Burns v Aboriginal Legal Service of Western Australia (Inc) (unreported, AIRCFB, Williams SDP, Acton SDP, Gregory C, 21 November 2000) Print T3496 [24].
7 Transcript PN1212-1214.
8 Transcript PN1322.
9 Transcript PN121.
10 Transcript PN142.
11 Transcript PN145.
12 Respondent’s Final Written Submissions 24 June 2019.
13 Transcript PN222.
14 Transcript PN229.
15 Transcript PN232.
16 Transcript PN239.
17 Transcript PN237-239.
18 Exhibit A2.
19 Transcript PN252.
20 Transcript PN253.
21 Transcript PN246.
22 Transcript PN241.
23 Transcript PN389.
24 Transcript PN164.
25 Transcript PN280.
26 Witness Statement Bradley Walker 1 May 2019, attachment one.
27 Transcript PN229.
28 Transcript PN365-368.
29 Witness Statement Paul Bourke 8 May 2019.
30 Transcript PN1100-1101.
31 see eg, On Call Interpreters & Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 279 ALR 341.
32 See Transcript PN262-264.
33 Transcript PN1046.
34 [2011] FWAFB 975.
35 See respectively Blake v Menzies Aviation (Ground Services) Pty Ltd[2016] FWC 1974 [9]; Roberts v Greystanes Disability Services; Community Living [2018] FWC 64 [16].
36 [2018] FWCFB 901 [39].
37 Respondents’ Outline of Submissions 8 May 2019.
38 Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299-300.
39 Transcript PN129.
40 Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, 299-300.
41 Transcript PN129.
42 Transcript PN759.
43 Kyvelos v Champion Socks Pty Ltd, Print T2421 [14].
44 Transcript PN131.
45 Haining v Deputy President Drake (1998) 87 FCR 248, 250.
46 Kyvelos v Champion Socks Pty Ltd, Print T2421 [14].
47 Wilson v Woolworths [2010] FWA 2480, [24]-[29].
48 Perry v Rio Tinto Shipping Pty Ltd[2016] FWC 6963, [41].
49 Transcript PN697 and PN759.
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