[2011] FWAFB 6008 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
SENIOR DEPUTY PRESIDENT ACTON |
|
Appeal against decision in transcript of Commissioner McKenna at Sydney on 3 June 2011 in matter number U2011/6234.
Introduction
[1] This decision deals with an appeal by Mr Adam Dundas-Taylor against a decision in transcript 1 and order2 of Commissioner McKenna of 3 June 2011 in respect of Mr Dundas-Taylor’s unfair dismissal remedy application. Mr Dundas-Taylor made applications to Fair Work Australia (FWA) on 22 February 20113 and 21 March 20114 for an unfair dismissal remedy against The Cuisine Group Pty Ltd (the Cuisine Group).
[2] In his first application, being U2011/5396 made on 22 February 2011, Mr Dundas-Taylor said he was dismissed by the Cuisine Group on 8 March 2011. On being advised by FWA that, on the face of his application, he had made an unfair dismissal remedy application prior to being dismissed, Mr Dundas-Taylor discontinued his first application.
[3] Mr Dundas-Taylor’s second application, being U2011/6234 made on 21 March 2011, was objected to by the Cuisine Group on the basis that, amongst other things, Mr Dundas-Taylor was dismissed on 8 February 2011 and, so, the application had not been made within 14 days after his dismissal took effect.
[4] Mr Dundas-Taylor’s second application was then listed for FWA to determine whether it should allow Mr Dundas-Taylor a further period for the making of the application. The Commissioner declined to grant Mr Dundas-Taylor a further period for the making of his second application and dismissed the application.
[5] In this appeal decision we set out the provisions of the Fair Work Act 2009 (Cth) (FW Act) dealing with the time period for making an unfair dismissal remedy application and the Commissioner’s decision, before turning to consider the appeal.
[6] In considering the appeal we, amongst other things, deal with:
Section 394 of the Fair Work Act 2009 (Cth)
[7] Section 394 of the FW Act provides as follows:
“394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to FWA for an order under Division 4 granting a remedy.
Note 1: Division 4 sets out when FWA may order a remedy for unfair dismissal.
Note 2: For application fees, see section 395.
Note 3: Part 6-1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.
(2) The application must be made:
(a) within 14 days after the dismissal took effect; or
(b) within such further period as FWA allows under subsection (3).
(3) FWA may allow a further period for the application to be made by a person under subsection (1) if FWA 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.”
Extension of time decision
[8] The issue of whether FWA should allow Mr Dundas-Taylor a further period for the making of his second application was heard and determined by Commissioner McKenna. The Commissioner decided that Mr Dundas-Taylor was dismissed by the Cuisine Group on 8 February 2011.
[9] In respect of the matters in s.394(3) of the FW Act, the Commissioner concluded that the reason Mr Dundas-Taylor delayed in making his second application was:
• the uncertainty about the date of his dismissal,
• Mr Dundas-Taylor being advised by FWA in March 2011 that his first application may be premature as the application indicated he was working out a notice period and, so, he may wish to consider lodging a second application within 14 days of his dismissal taking effect, and
• Mr Dundas-Taylor subsequently discontinuing his first application in light of that advice.
[10] The Commissioner also concluded Mr Dundas-Taylor did not become aware of his dismissal after it had taken effect and that his first application constituted action taken by him to dispute his dismissal. With respect to prejudice to the employer, the Commissioner recognised that in May 2011 the Cuisine Group made all of the positions of its employees redundant and that the closure of the business of the Cuisine Group was pending.
[11] In considering the merits of Mr Dundas-Taylor’s second application, the Commissioner said:
“PN93
... Turning now to the merits of the application I would say that the reason given to the applicant for the termination of employment was redundancy, but the applicant considers that his role was not actually made redundant as the role was being performed by a probationary sous chef, whose pay was increased when the applicant's employment was terminated.
PN94
The respondent submitted that the dismissal was a genuine redundancy but not, I should note, by specific reference to the criteria in section 389 of the Act. Rather the respondent's materials described how it had suffered a significant downturn of business from 1 January 2011 after the closure of its flagship venue. The income from first quarter trading in 2011 was $79,000 whereas in the same period in the preceding year total income had been $687,000. The respondent implemented a staff restructure due to the downturn with the result that the applicant's position of executive chef became redundant, and the responsibilities of the position were distributed between three existing employees.
PN95
Mr Durston also described the restructuring that he had decided to make in 2011 which restructured the applicant's role of executive chef between Mr Durston himself, the sous chef and the operations manager. Although the sous chef was elevated to head chef with increased responsibilities as part of the restructure, the head chef's level of responsibility and salary were not to the same level as the role of executive chef. On 20 May 2011 all five of the respondent's remaining employees were made redundant due to the downturn. The respondent is now in the process of closing.
PN96
The respondent, Mr Durston, noted that there had been earlier financial uncertainty about the future of the business and that the respondent had paid an additional $5000 bonus to the applicant in recognition of the retention arrangements that had been made, given that uncertainty.” 5
[12] The Commissioner also noted that neither party advanced anything as to fairness as between the applicant and other persons in a similar position.
[13] In then considering whether she should allow a further period to Mr Dundas-Taylor for the making of his second application, the Commissioner said:
“PN97
I turn now to my consideration of the matter. Fair Work Australia may allow a further period beyond the standard 14 day time period for filing and unfair dismissal application if satisfied there are exceptional circumstances, taking into account the cumulative considerations in section 394(3)(a) through to section 394(3)(f). I consider that the reason for delay in filing this application is quite reasonably based. That is, the applicant took action to dispute the dismissal by initially filing the first application on or about 20 February 2011. That application was discontinued, or ‘cancelled’ to use the applicant's descriptor.
PN98
The discontinuance apparently was made on the basis of a genuinely based misapprehension that although the dismissal was notified on 8 February 2011 it would not, within the meaning of section 394(2)(b) of the Act, take effect until 8 March 2011. while there are various ways in which the letter dated 8 February 2011 could be construed, the way the termination letter and the payment advice were written, together with the arrangements that were agreed concerning work after 8 February 2011 to transition the sous chef, might allow for at least some level of potential ambiguity as to the date the applicant reasonably may have considered that the dismissal took effect.
PN99
Further, the applicant's email dated 12 February 2011 also indicated that he ‘gathered’ that his full-time employment would finish on 8 March 2011. while the first application was not in evidence, I am further satisfied that the first application like this application specified 8 March 2011 as the date the dismissal took effect, given for example the communication that was initiated by a conciliator about the first application. Significantly the applicant's decision to discontinue the first application appears to have been made only after the conciliator initiated contact with the applicant suggesting the first application may have been made prematurely, and that an appropriate course may be to discontinue the first application and file a further application within 14 days after 8 March 2011. As the applicant noted, this was the very course that he adopted.
PN100
Absent any other considerations I would have thought that the circumstances so described as to the reasons for the delay, and the applicant's understanding of the effect of the notice period, in and of themselves strongly favour an extension of time. However the considerations in section 394(3) of the Act are cumulative and the grant of an extension of time involves a discretionary decision against the background of the relevant statutory criteria. Here, the respondent's materials describe the circumstances that had given rise to the dramatic drop in income which led to the restructuring involving the redundancy of the applicant's position, as well as the subsequent redundancies of all other remaining staff and the impending closure of the business.
PN101
Given the uncontested matters advanced by the respondent in such respects, I do not consider that the merits of this application could be considered to be strong. In my assessment there may be doubt as to whether the applicant would have even reasonably arguable case for an unfair dismissal remedy, on the basis as he put it in the application form, ‘My role was not actually made redundant’. Having regard to the matters described by the respondent concerning its parlous financial position and its impending closure following the redundancies all remaining staff, it seems to me there would be prejudice, unjustifiable in my view, to the respondent were it now put to defending this application upon the granting of an extension of time, notwithstanding my conclusions as to the reasons for the delay, otherwise strongly favouring an extension.
PN102
All things considered I have not been satisfied there are exceptional circumstances that would lead me in the exercise of discretion to extend time. In the circumstances the application is dismissed. A formal order thereto will be issued to the parties later today.” 6
Consideration of the appeal
[14] It appears the Commissioner would have been satisfied there were exceptional circumstances warranting FWA allowing Mr Dundas-Taylor a further period for the making of his second application but for her conclusions about the merits of the application and the prejudice to the Cuisine Group.
[15] In respect of the merits of an unfair dismissal remedy application, we earlier pointed out that s.394(1) of the FW Act provides that a “person who has been dismissed” may apply to FWA for an unfair dismissal remedy order.
[16] Section 390(1) of the FW Act provides that “FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
“(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).”
[17] Section 382 of the FW Act provides that:
“382 When a person is protected from unfair dismissal
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.”
[18] Section 385 of the FW Act provides that:
“385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[19] Bearing in mind that, pursuant to s.390(1) of the FW Act, FWA may order an unfair dismissal remedy if satisfied the person was protected from unfair dismissal at the time of being dismissed and the person has been unfairly dismissed, we consider all the matters in ss.382 and 385 of the FW Act may be relevant to the merits of an unfair dismissal remedy application, not just whether the dismissal was harsh, unjust or unreasonable. In this sense, the structure of the FW Act in respect of unfair dismissal differs from the structure of the Workplace Relations Act 1996 (Cth) (WR Act) in respect of termination of employment.
[20] The predecessor legislation to the FW Act, the WR Act, provided that an application to the Australian Industrial Relations Commission (the Commission) for relief in respect of termination of employment had to be lodged within 21 days after the day on which the termination took effect, or within such period as the Commission allows on an application made during or after those 21 days. 7 A “note” to the legislation referred to the decision in Brodie-Hanns v MTV Publishing Ltd8 as setting down principles relating to the exercise of the discretion to extend the time for the lodgement of such an application.
[21] The principles governing the discretion to extend time set out by Marshall J in the Brodie-Hanns’ case are:
“1. Special circumstances are not necessary but the Court must be positively satisfied that the prescribed period should be extended. The prima facie position is that the time limit should be complied with unless there is an acceptable explanation of the delay which makes it equitable to so extend.
2. Action taken by the applicant to contest the termination, other than applying under the Act will be relevant. It will show that the decision to terminate is actively contested. It may favour the granting of an extension of time.
3. Prejudice to the Respondent including prejudice caused by delay will go against the granting of an extension of time.
4. The mere absence of prejudice to the respondent is an insufficient basis to grant an extension of time.
5. The merits of the substantive application may be taken into account in determining whether to grant an extension of time.
6. Consideration of fairness as between the applicant and other persons in a like position are relevant to the exercise of the Court’s discretion.” 9
[22] It can be seen that the matters in s.394(3)(a) to (f) of the FW Act are similar to the principles in the Brodie-Hanns’ case.
[23] Principle 5 in the Brodie-Hanns’ case is similar to s.394(3)(e) of the FW Act. The issue of how the merits of an application should be considered when determining an application for an extension of time for the lodgement of an application for relief in respect of termination of employment was considered by Full Benches of the Commission on numerous occasions.
[24] In Kyvelos v Champion Socks Pty Limited, 10 a Full Bench of the Commission said:
“[14] In considering whether to accept an application which has been lodged outside the time prescribed ... the Commission may consider whether, on the basis of the material relied on by the parties, the applicant has a sufficient case on the merits... It should be emphasised that in considering the merits the Commission is not in a position to make findings of fact on contested issues, unless evidence is called on those issues. Evidence is rarely called on the merits and there are sound reasons why the Commission should not embark on a detailed consideration of the substantive case... In particular, it is undesirable that parties be exposed to the requirement to present their evidentiary cases twice.”
[25] In Mappas v TAAU Australia Pty Ltd, 11 a Full Bench of the Commission said:
“[44] The appellant claims that his termination was for a prohibited reason. In particular he claims that he had complained to the Department of Employment and Workplace Relations about the wages being paid by the respondent, that he had brought to the attention of the respondent advice from the Department that the respondent was obliged to pay wages that were no less than the Federal Minimum Wage and that he was terminated within hours of a discussion with the owner of the respondent in which he insisted that the respondent comply with the Department’s advice. The respondent contends that the termination of the appellant’s employment had nothing to do with any complaint by the appellant to the Department but was due to a downturn in the business of the respondent caused by a number of factors including damage arising from a cyclone. It is not possible to determine the merits of the substantive application without a full hearing. Certainly, it is not open to this Full Bench to conclude, in the absence of such a hearing, that the merits of the appellant’s substantive application are sufficiently poor that this should weigh materially against exercising the discretion to extend time in favour of the appellant.” (Underlining added)
[26] In Nottage v National Australia Bank Ltd, 12 a Full Bench said:
“[23] There is a contest on the merits. In light of the evidentiary material on appeal it is clear the appellant will challenge most of the evidence on which the respondent has indicated it will rely. Findings of fact will be necessary and the seriousness of conduct as found weighed in the balance. We cannot conclude that the application has no merit and it is not necessary that we go any further than that.” (Underlining added)
[27] There was no contest before the Commissioner that Mr Dundas-Taylor was dismissed by the Cuisine Group. Nor was there any contest Mr Dundas-Taylor was protected from unfair dismissal at the time of being dismissed.
[28] The Commissioner points out in her decision that the reason for the dismissal was said to be redundancy. However, she also notes that Mr Dundas-Taylor contested that his position was redundant and the Cuisine Group did not contend the dismissal was a case of genuine redundancy in accordance with s.389 of the FW Act.
[29] Section 389 of the FW Act provides that:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
[30] The Cuisine Group submitted before the Commissioner that the dismissal of Mr Dundas-Taylor was consistent with the Small Business Fair Dismissal Code, although they did not elaborate on how it was so consistent. The Small Business Fair Dismissal Code is as follows:
“The Code
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[31] Mr Dundas-Taylor’s dismissal was not a summary dismissal and the Cuisine Group did not submit how Mr Dundas-Taylor’s conduct or capacity had led them to dismiss him.
[32] In respect of whether Mr Dundas-Taylor’s dismissal was harsh, unjust or unreasonable, it was not disputed that Mr Dundas-Taylor, who was employed by the Cuisine Group as an Executive Chef, did some work for the Cuisine Group after his dismissal. Nor was it disputed that a Consultant Executive Chef position of 30 hours per month for an initial period of three months was offered to Mr Dundas-Taylor by the Cuisine Group after his dismissal. Further, the submissions of both parties suggested Mr Dundas-Taylor was not given an opportunity to respond to any valid reason for his dismissal before he was dismissed.
[33] We appreciate that under s.394(3) of the FW Act in considering whether to allow a further period for the making of an unfair dismissal remedy application, FWA is required to be satisfied there are exceptional circumstances for doing so taking into account the matters in s.394(3)(a) to (f).
[34] Nonetheless, in our view in this case, there was sufficient material before FWA to preclude a conclusion that “in the absence of ... a [full] hearing ... the merits of [Mr Dundas-Taylor’s] substantive application ... [were] sufficiently poor that ... [they] should weigh materially against exercising the discretion to extend time in favour of [Mr Dundas-Taylor]” 13 or that Mr Dundas-Taylor’s substantive application “has no merit.”14
[35] In this regard, we accept that there was uncontested evidence before the Commissioner about the dramatic drop in the Cuisine Group’s income leading to a restructuring in February 2011, redundancies involving all employees of the Cuisine Group in May 2011 and the impending closure of the business of the Cuisine Group. However, there was also no contest before the Commissioner that Mr Dundas-Taylor was dismissed and was protected from unfair dismissal. Further, before the Commissioner, Mr Dundas-Taylor contested the proposition that his position was redundant at least as at 8 February 2011, the Cuisine Group failed to contend Mr Dundas-Taylor’s dismissal was a case of genuine redundancy in accordance with s.389 of the FW Act, the Cuisine Group also failed to elaborate on how Mr Dundas-Taylor’s dismissal was consistent with the Small Business Fair Dismissal Code and the submissions of both parties suggested there was an absence of procedural fairness in the dismissal.
[36] We would have thought that, on the material before her, the merits of Mr Dundas-Taylor’s second application should have been at least a neutral, if not a positive, factor in respect of the Commissioner being satisfied there were exceptional circumstances for allowing Mr Dundas-Taylor a further period for the making of his second application.
[37] In respect of prejudice to the Cuisine Group (including prejudice caused by the delay in the making of the second application), the Cuisine Group did not claim any prejudice before the Commissioner. It may be that the Commissioner was able to assume some prejudice to the Cuisine Group. However, in our view it was not open to the Commissioner to elevate that assumed prejudice to such a level that it was a decisive factor preventing her from being satisfied there were exceptional circumstances warranting FWA allowing Mr Dundas-Taylor a further period for the making of his second application.
[38] Accordingly, we consider the Commissioner made an error in the exercise of her discretion as to whether to allow Mr Dundas-Taylor a further period for the making of his second application. The error went to the manner in which the tribunal deals with s.394(3)(e) of the FW Act concerning the merits of an unfair dismissal remedy application and s.394(3)(f) of the FW Act concerning prejudice to the employer (including prejudice caused by the delay in making the application) when considering whether to grant a further period for the making of such an application. Such an error is sufficient for us to consider that it is in the public interest for us to grant permission to appeal. We do so. We will determine whether FWA should allow Mr Dundas-Taylor a further period for the making of his second application.
Extension of time
[39] We accept that Mr Dundas-Taylor’s employment was dismissed by the Cuisine Group on 8 February 2011. Mr Dundas-Taylor’s reason for the delay in making his second unfair dismissal remedy application was that he thought his employment was ceasing on 8 March 2011. We can understand why Mr Dundas-Taylor may have considered his employment was ceasing on 8 March 2011 as the actions of the employer in respect of the dismissal made the dismissal date ambiguous. Such action included failing to pay Mr Dundas-Taylor the monies due to him on his dismissal until some time after 8 February 2011 and asking Mr Dundas-Taylor to perform “handover” work for the Cuisine Group after 8 February 2011.
[40] Mr Dundas-Taylor did not first become aware of his dismissal after it had taken effect. Mr Dundas-Taylor disputed his dismissal by making his first unfair dismissal remedy application to FWA on 22 February 2011, within 14 days of his dismissal. However, he discontinued his first application on the advice of FWA.
[41] The Cuisine Group did not claim any prejudice, including prejudice caused by Mr Dundas-Taylor’s delay in making his second application.
[42] For the reasons given in paragraphs [34] and [35] above, we cannot conclude Mr Dundas-Taylor’s second application is without merit. No person raised any issue of fairness as between Mr Dundas-Taylor and other persons in a similar position.
[43] We are satisfied there are exceptional circumstances warranting us allowing a further period to Mr Dundas-Taylor for the making of his second unfair dismissal remedy application to the date it was made. The exceptional circumstances are the ambiguity associated with the date of Mr Dundas-Taylor’s dismissal, Mr Dundas-Taylor’s lodging of his first unfair dismissal remedy application within 14 days of the dismissal and his discontinuance of that first application following advice from FWA.
[44] Even if we were to assume there would be prejudice to the Cuisine Group, in light of the matters to which we have just referred such prejudice would not be sufficient to preclude us being satisfied there are exceptional circumstances warranting FWA allowing Mr Dundas-Taylor a further period for the making of his second application. In addition, while the Cuisine Group has financial difficulties which resulted in it having to dismiss someone in February 2011 and all its employees in May 2011 and which have also caused its impending closure, we are not persuaded as much should cause us not to exercise our discretion to allow a further period to Mr Dundas-Taylor for the making of his second application, following his dismissal in February 2011.
[45] As a result, we uphold the appeal in this matter and we will quash the Commissioner’s decision 15 and order16 dismissing Mr Dundas-Taylor’s second unfair dismissal remedy application. We will also issue an order allowing Mr Dundas-Taylor a further period for the making of his second unfair dismissal remedy application, being U2011/6234, until the date that application was made. An order17 to this effect is being issued at the same time as this decision.
[46] Mr Dundas-Taylor’s second unfair dismissal remedy application will be referred to a member of FWA for further conference/hearing, including in respect of the claim of the Cuisine Group that the dismissal of Mr Dundas-Taylor’s employment was consistent with the Small Business Fair Dismissal Code. A notice of listing in respect of the further conference/hearing will be issued shortly by FWA.
SENIOR DEPUTY PRESIDENT
Appearances:
Adam Dundas-Taylor on his own behalf.
Craig Durston for The Cuisine Group Pty Ltd.
Hearing details:
2011.
Sydney:
August 23.
Endnotes:
1 Transcript in Dundas-Taylor v The Cuisine Group Pty Ltd, U2011/6234, 3 June 2011.
2 Dundas-Taylor v The Cuisine Group Pty Ltd, PR510216.
3 U2011/5396.
4 U2011/6234.
5 Transcript in Dundas-Taylor v The Cuisine Group Pty Ltd, U2011/6234, 3 June 2011.
6 Ibid.
7 Workplace Relations Act 1996 (Cth), s.643(15).
8 (1995) 67 IR 298.
9 Ibid at pp 299-300.
13 Mappas v TAAU Australia Pty Ltd, [2007] AIRCFB 260 at paragraph 44.
14 Nottage v National Australia Bank Ltd, [2007] AIRCFB 716 at paragraph 23.
15 Transcript in Dundas-Taylor v The Cuisine Group Pty Ltd, U2011/6234, 3 June 2011 at PN69-103.
16 Dundas-Taylor v The Cuisine Group Pty Ltd, PR510216.
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