DECISION

Fair Work Act 2009
s.394—Unfair dismissal

James Deeth
v
Milly Hill Pty Ltd
(U2014/15784)

Application for relief from unfair dismissal - extension of time for filing application.

[1] This decision concerns an application lodged by Mr Deeth pursuant to s.394 of the Fair Work Act 2009 (the Act) for the Fair Work Commission to deal with the alleged unfair termination of his employment by Milly Hill Pty Ltd (Milly Hill or the Company).

[2] The extension of time application was initially set down for hearing in Armidale on 13 March 2015 but, prior to hearing, both parties requested that I decide the issue ‘on the papers’.

[3] Both parties filed written submissions. Mr Deeth was represented by Sydney City Lawyers and the Company was represented by Watson McNamara & Watt Solicitors.

Background

[4] Mr Deeth was first employed by Milly Hill on or about 13 August 2012 as an apprentice butcher. The Company operates a butcher shop in Kempsey, New South Wales. The Company states that it is a small business as defined in the Act. The Company dismissed Mr Deeth after he was arrested and charged with a serious criminal offence not related to his employment. As the criminal charge(s) have not yet been resolved, I do not intend to include any details of the alleged crime(s) in this decision.

Chronology

[5] No written notice of termination was ever supplied to Mr Deeth and the exact date of the termination of Mr Deeth’s employment at the initiative of the Company is in dispute between the parties. I have gleaned the following chronology from the parties’ submissions:

1. On Sunday 21 September 2014, Mr Deeth was charged with a serious criminal offence. This is uncontested.

2. On 22 September 2014, the Applicant’s father telephoned Mr J Latham (the Manager of the Company), advising him that the Applicant would not be at work that day as he was in police custody. This does not appear to be contested.

3. Later on 22 September 2014, Mr P Strelitz (the Company’s owner) telephoned the Applicant’s father and was told that bail had not been granted to the Applicant. This does not appear to be contested.

4. On 23 September 2014, the Applicant did not attend work. This is uncontested.

5. On 24 September 2014, a long term customer of the Company told a Company employee that he would not accept further home deliveries from the Applicant. This is only an assertion made by the Respondent.

6. On 24 September 2014, Mr Strelitz telephoned Mr Latham and the two decided to replace Mr Deeth and Mr Deeth’s position was offered to a new employee on the same day. This statement appears in Watson McNamara & Watt’s letter of 30 October 2014.

7. On 25 September 2014, the Applicant’s mother advised Mr Strelitz that the Applicant had been granted bail and wished to return to work to fulfil the last eight months of his apprenticeship. Mr Strelitz outlined to the Applicant’s mother some perceived problems in that course of action and told her that he would consider the matter and ‘get back to you’. This is confirmed in Watson McNamara & Watt’s letter of 30 October 2014.

8. On 26 September 2014, Mr Strelitz advised the Applicant verbally that his employment was being terminated with immediate effect. This is uncontested.

9. On 26 September 2014, Mr Strelitz advised the Applicant’s mother that a new worker had replaced Mr Deeth and he would not be able to return to work as that would cause the Company to “lose customers and possibly staff”. This is uncontested.

10. On 29 September 2014, Mr Deeth attended the Company’s premises with his father. Mr Deeth alleges that Mr Latham told him that he was not dismissed but would be placed on leave without pay until the situation was clarified. The Company strongly denies that this conversation occurred.

11. In early October 2014, Mr Deeth engaged Sydney City Lawyers.

12. On 9 October 2014, Sydney City Lawyers wrote by email to Mr Latham acknowledging the verbal dismissal on 26 September 2014 of Mr Deeth by Mr Strelitz but saying further: “We are further instructed that our client was later advised by you on 29 September 2014 that his employment was not terminated.” The letter goes on “to seek clarification concerning our client’s current and future employment status with Milly Hill Pty Ltd.” No reply was forthcoming from Mr Latham or the Company. These matters are confirmed by documentary evidence before me.

13. On 21 October 2014, Sydney City Lawyers again wrote by email to Mr Latham acknowledging a payment made to Mr Deeth on 16 October 2014 and asking whether “The payment represents a severance pay, denoting the termination of our client’s employment.” The letter goes on to note the non-response to the earlier letter and states: “We further note that our several telephone calls to the owner of Milly Hill Pty Ltd, Peter Strelitz, have not been returned.” The letter then goes on to state that unless “an appropriate response to our enquiries” is received by 4 pm on 22 October 2014 then “we will commence legal action against the employer without further notice.” These matters are confirmed by documentary evidence before me.

14. In late October 2014, the Company instructed Watson McNamara & Watt to act for it.

15. On 30 October 2014, the Company’s solicitors wrote to Mr Deeth’s solicitors enclosing what were styled as “a draft Letter of Separation and the draft Employment Separation Certificate”. The letter went on to say in relation to those documents that “we would welcome any comments on both these documents.” The Letter of Separation stated that Mr Deeth’s employment was terminated on 9 October 2014 while the Separation Certificate gave no date of termination and was itself undated. These matters are confirmed by documentary evidence before me.

[6] The form F2 - Unfair Dismissal Application states the following in relation to what allegedly occurred between 30 October 2014 and the filing of the application for relief on 4 December 2014:

“The solicitors then tried to negotiate a compensation payment for the applicant’s alleged unfair dismissal, and commenced to negotiate such a payment with Watson McNamara & Watt. The solicitors emailed Watson McNamara & Watt on 27 November 2014, asking for a reply to telephone conversations concerning a compensation payment. There was no reply to that email so the applicant instructed the solicitors to commence action in the Fair Work Commission.

[7] The alleged email of 27 November 2014 referred to above has not been supplied to me and the documentary chain available to me ends with the 30 October 2014 letter referred to above. In submissions, Sydney City Lawyers claims that negotiations between the parties concluded on 16 December 2014 when the Company declined the payment of any compensation to Mr Deeth. No documentation in that regard has been provided to me for my consideration. I now come to the point where I must determine, on the balance of probabilities, exactly when the termination of employment occurred so as to allow me to determine the degree of lateness in the making of the application for relief. In this context, I respectfully agree with the comments of the Full Bench in Spillard v Patrick Stevedores Holdings 1 (Spillard) in which the Bench considered the case of Nesterczuk v Mortimore2. The Bench in Spillard said in that regard:

“The point we seek to draw from that case is that whilst it is wrong, in circumstances where a choice cannot be made between two versions of events, to hazard a guess at a possibility, a finder of fact needs to have regard to all of the evidence to ascertain whether inferences can be drawn to lead to a conclusion of probability.” 3

[8] Guided by the Full Bench’s comments above, I am unable to determine which account of events of 29 September 2014 between Mr Deeth and Mr Latham is to be preferred. I therefore intend to decide the date of termination issue on the documentary materials available to me and facts which are uncontested between the parties. I will not pay regard to mere assertions made by the parties. In taking this approach, I have concluded that the most probable date that Mr Deeth was sure that his employment had been terminated was on 16 October 2014 when his entitlements were paid out. I am buttressed in this view by the letter of 21 October 2014 sent by Mr Deeth’s solicitors to Mr Latham, the details of which appear above. All in all, I therefore find and determine that the most probable date when the employment relationship between the parties ended was 16 October 2014. Based on that date, Mr Deeth’s application for relief was lodged some 28 days late.

Legislative Framework

[9] Sections 394(2) and (3) provide:

“394 Application for unfair dismissal remedy
...

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(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.”

Written submissions

Mr Deeth

[10] Mr Deeth, per his solicitors, filed written submissions in support of there being ‘exceptional circumstances’ which would make the granting of extension of time reasonable in all the circumstances:

“1. The Respondent did not clearly indicate to the Applicant that he had been summarily dismissed at the time of the dismissal;

2. The Applicant did not receive information that his employment had been terminated from the Respondent until on or about 4 November 2014, being subsequent to the Applicant's actual summary dismissal of either the 26 September 2014 or 9 October 2014; and

3. The Applicant solicitors, Sydney City Lawyers, were inactive in lodging an unfair dismissal claim once clear indication was received, on or about 4 November 2014, that the Applicant had been summarily dismissed.”

[11] The submissions go on to argue that Mr Deeth sought legal advice when he was seeking clarification of his future employment situation with the Respondent. He gave clear instructions to his solicitors but they were “inactive in failing to lodge an unfair dismissal claim once clear notice of dismissal was obtained from Watson McNamara and Watt.” “There had been ongoing negotiations with representative of the Respondent in an attempt to resolve the matter between the parties, obviating the need to file a claim. When these negotiations collapsed, the Applicant’s representative lodged a claim with the Commission.”

[12] The submissions further argue that the delay in filing was a short one and does not cause any prejudice to the Respondent. In relation to the merit issue, the submissions argued:

“The Applicant’s dismissal was harsh, unjust and unreasonable for the following reasons:

a. Deleterious consequences for the personal and economic situation of the applicant. The Applicant had been employed under an apprenticeship of 3 years from 13 August 2012 by the Respondent. Upon termination, the Applicant had, and still has, approximately ten months to complete the apprenticeship. Following the dismissal, the Applicant has been unable to gain any further employment, including employment to complete his apprenticeship;

b. The reason for termination was not valid, and is not defensible or justifiable on an objective analysis of the relevant facts. The golden thread of the criminal law affords the Applicant the presumption that he is innocent until proven guilty of the offence [with which he is charged] ...

c. The Applicant was not given an opportunity to respond or provide any explanation to the Respondent as to his conduct. The Respondent formed his view of the alleged incident from media reports and gossip.”

[13] Mr Deeth submits that the offence with which he is charged was not related to his employment and there is no relevant connection between his alleged offence and his employment with the Respondent. “By summarily dismissing the Applicant prior to the charges being determined, the Respondent has denied the applicant natural justice and the presumption of innocence.”

[14] The submissions go on to say that there is no evidence that the Respondent’s business would suffer damage through the continued employment of the Applicant and that the nature of the business would allow Mr Deeth to be placed in a position where he did not directly deal with the public. In relation to the Respondent’s assertions as to representational damage, the submissions note that another employee of Milly Hill was convicted of armed robbery prior to being employed and, when the employee discovered this, no action was taken against him and he remains in the Company’s employ. The employment of this person is not disputed contested by the parties.

The Company

[15] Milly Hill, per its solicitors, filed written submissions opposing an extension of time. Those submissions argue that the Applicant understood that he had been terminated on 26 September 2014 and failed to instruct his solicitors to lodge his application within time and that any ignorance of the required timeframe is not an exceptional circumstance.

[16] “The lodgement time of 21 days continues to apply irrespective of whether the Applicant believed he was negotiating with the Respondent.”

[17] In relation to representative error, the Company argues that: “It is not the role of the tribunal to act as an insurer for solicitors who fail to properly advise their client’s or act in their client’s best interests.”

[18] The company submits that it will suffer prejudice if an extension of time is granted on the grounds that the length of the delay gives rise to an inherent presumption of prejudice and the Respondent has already replaced Mr Deeth.

[19] In relation to the merit question, the Company argues that the summary dismissal was in compliance with the Small Business Fair Dismissal Code “because the Respondent held the reasonable belief that his conduct threatened to cause serious impact on the viability of the Respondent’s business.” “Where the conduct of an employee outside of work threatens to have a deleterious impact upon the business’s reputation and/or viability and profits the employer has no option but to terminate that employee’s employment.”

[20] “The Respondent is not making any judgment on the Applicant’s guilt or innocence with respect to the criminal charges. He has made a decision, based on evidence that the reputation and viability of his business have been threatened by the alleged conduct of the employee.”

[21] The company argues that “It was not the criminal behaviour itself which lead to the dismissal, rather the impact that alleged behaviour threatened to have on the Respondents business.”

[22] “The respondent is not asserting the Applicant’s behaviour will impact upon his dealings with restaurant and retail outlets in South East Queensland or wider New South Wales. The Respondent’s submissions are that the criminal behaviour would seriously damage the reputation of the Kempsey butcher ship where the applicant was employed and where the criminal activity was highly publicised.”

[23] I have also paid regard to the material contained in Mr Deeth’s application for relief and the Employer’s Response to that application.

The reason(s) for the delay

[24] Mr Deeth’s solicitors claim that the application was lodged late due to the firm being “inactive in lodging an unfair dismissal claim once clear indication was received, on or about 4 November 2014, that the Applicant had been summarily dismissed.” Mr Deeth’s solicitors therefore rely on representative error rather than any inaction on Mr Deeth’s part to explain the late lodgement and to establish ‘exceptional circumstances’, making an extension of time fair and reasonable.

[25] I am satisfied that Mr Deeth instructed his solicitors within a few days of his verbal dismissal by Mr Strelitz. It is clear that Sydney City Lawyers acted promptly to correspond with the company to clarify Mr Deeth’s employment status. Their letters of 9 and 21 October 2014 met with no response. The Sydney City Lawyers’ letter of 21 October 2014 put the Company on notice that a lack of a suitable reply by 4 pm on 22 October 2014 would result in the commencement of legal action. Sydney City Lawyers failed to take such action and did not even do so following the letter of 30 October 2014 from Watson McNamara & Watt. The firm opted instead to pursue direct negotiations with Milly Hill. When such negotiations broke down, an application for relief for unfair dismissal was filed on Mr Deeth’s behalf on 4 December 2014.

[26] Mr Deeth is, or at least was, a young apprentice butcher in regional New South Wales. It is fair to assume that he has no real knowledge of the law and that he relied entirely on his solicitors for advice and action. He was prompt in instructing Sydney City Lawyers and was entitled to rely on them to act in his best interests. His solicitors failed him by not ensuring that his application for relief was filed within time.

[27] Although I have expressed some criticism of Sydney City Lawyers, the entire factual matrix of this case shows me that very little could have been taken as certain as to what Mr Deeth’s employment status was until 16 October 2014, when his entitlements were paid out by the Company. The Company was unresponsive to correspondence and never issued a formal notice of termination. Even the attachments to the letter of 30 October 2014 are merely styled as ‘drafts’ upon which comment is invited.

[28] All in all, I am satisfied that Mr Deeth actively pursued the question of his employment status and was entitled to be confused as to what that status was for some considerable time. The fault for late lodgement clearly lies with Sydney City Lawyers which, after receiving the letter of 30 October 2014, should have acted promptly to file an application for relief even if it intended to pursue a negotiated outcome. I am therefore satisfied and find that the primary reason for late lodgement was representative error on the part of Sydney City Lawyers.

[29] However, the above finding is not the end of the matter and does not automatically lead to a finding that ‘exceptional circumstances’ exist. I will return to this point in my conclusions and findings.

When the Applicant first became aware of the dismissal

[30] I repeat my earlier finding that the most likely date on which Mr Deeth could have been sure that his employment with Milly Hill had ended was 16 October 2014.

Action taken by the Applicant to dispute the dismissal

[31] As noted earlier, I am satisfied that Mr Deeth, and even his father and mother, took every reasonable step in this regard.

[32] Mr Deeth promptly engaged solicitors and through them there was activity all through October and November in relation to the employment relationship between Mr Deeth and Milly Hill.

Prejudice to the Respondent

[33] The Respondent claims prejudice but as I am satisfied that much of what occurred between 22 September 2014 and 30 October 2014 can be laid at the Company’s door and this matter may not have come before me in the way that it has if Mr Strelitz had bothered to issue a formal termination notice to Mr Deeth. The Company or replied to Mr Deeth’s solicitors’ letter of 9 October 2014.

[34] Any Respondent will suffer some prejudice through the need to defend an application such as this. That in itself does not constitute a factor which would militate in favour of the granting of an extension of time. Ultimately the question of prejudice to the Respondent has been a neutral factor in my consideration.

Merits of the Application

[35] Merit issues are strongly contested between the parties. In my view, Mr Deeth’s case is certainly not without merit when all the relevant factors are considered.

[36] The Company appears to have decided to dismiss him as early as 24 September 2014 when it replaced him with another employee. It took no action to inform Mr Deeth until 26 September 2014 and indeed appears to have actively misled the Applicant’s mother in the telephone conversation between her and Mr Strelitz on 25 September 2014.

[37] Mr Deeth’s situation in regard to criminal offences as at 26 September 2014 was that he had been charged and bailed. There was no relationship between the alleged offence(s) committed by Mr Deeth and his employment by the Company. On the face of the materials available to me, it would be difficult for the company to establish that any act of misconduct by Mr Deeth occurred such as to justify summary dismissal. Also, on the materials available to me, there is no evidence that the company followed the Small Business Fair Dismissal Code.

[38] Therefore, I find that Mr Deeth’s application for relief is not lacking in obvious merit. This finding has not been determinative in my decision making.

Fairness between the Applicant and other persons in a similar position

[39] In the case before me, the circumstances appear to be peculiar to Mr Deeth and therefore this matter has been neutral in my consideration.

Conclusions and Findings

[40] Section 394 of the Act requires me when considering whether to grant an extension of time to be “satisfied that there are exceptional circumstances …” In this application, Mr Deeth relies on representative error by his solicitors as constituting such exceptional circumstances.

[41] The concept of ‘exceptional circumstances’ was considered by Vice President Lawler in Johnson v Joy Manufacturing Co Pty Ltd 4. In that decision, his Honour considered the ordinary English meaning of the word ‘exceptional’5. In so doing, he referred to the decision of Commissioner Whelan in Parker v Department of Human Services6 where the Commissioner said:

“Branson J in a decision of the Full Court of the Federal Court 7 described exceptional circumstances as simply circumstances sufficient to render it just and equitable to grant relief.

Dealing with the expression ‘exceptional circumstances’ as used in regulations dealing with the cancellation of visas, the Full Court of the Federal Court, in a recent decision also noted that the expression had been considered by the courts on numerous occasions:

Although the expression ‘exceptional circumstances’ is not defined in the Regulations it has been the subject of consideration in numerous cases. Assistance in interpreting the expression can be found in comments of Lord Bingham Cornwall CJ in R v Kelly (Edward) [2000] 1 QB 198 at 208 as follows:

We must construe ‘exceptional’ as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered.  8”

[42] The Concise Oxford Dictionary 9 relevantly defines ‘exceptional’ as “forming an exception; unusual…” In my view, the word ‘exceptional’ does not carry with it connotations of meaning approximate to ‘extraordinary’ or ‘extreme’.10

[43] In Clark and Ringwood Private Hospital 11 (Clark) the Full Bench held that the question of whether an error by an applicant’s representative constitutes an explanation for delay is only one of a number of factors to be considered in deciding whether or not an out of time application should be accepted.

[44] This approach has been consistently followed by subsequent Full Benches. 12.

[45] As noted above, I am prepared to accept on balance that Mr Deeth sought legal assistance in early October 2014 and subsequently relied on his solicitors to act in his best interests. Any allegation that Mr Deeth was dilatory in pursuing his rights is not sustainable. On what is before me, it is unsurprising that he would have been in some doubt as to what the actual situation in relation to his continued employment was. As also noted above, the Company never issued a formal notification of termination of employment and as late as 30 October 2014, per its solicitors, it only provided documents styled as ‘drafts’. From on or about 22 October 2014, any delay in lodging the application for relief can only be laid at the door of Sydney City Lawyers. Given my earlier finding that the employment relationship most probably ended on 16 October 2014, had Sydney City Lawyers filed Mr Deeth’s application for relief any time on or before 6 November 2014 then an extension of time issue would not have arisen.

[46] In my view, the totality of the circumstances surrounding the termination of Mr Deeth’s employment together with the representative error attributable to Mr Deeth’s solicitors combined to form exceptional circumstances such as to allow me to safely exercise my discretion to extend time. I therefore find that ‘exceptional circumstances’ exist in this case and further find that an extension of time should be granted to the date on which the substantive application was filed, being 4 December 2014. Mr Deeth’s application will now be referred for conciliation.

[47] An order reflecting this decision is in PR562312.

COMMISSIONER

 1  

(2010) 193 IR 184.

 2   (1965) 115 CLR 140.

 3   Ibid at para 13. See also Nesterczuk v Mortimore, (1965) 115 CLR 140.

 4   [2010] FWA 1394.

 5   Ibid, at paragraph 28.

 6   [2009] FWA 1638.

 7   Hewlett Packard Aust Pty Ltd v GE Capital Finance Pty Ltd (2003) FCAFC 256.

 8   Maan v Minister for Immigration and Citizenship (2009) FACFC 180.

 9   Oxford University Press, Oxford, 1982.

 10   Transcript PNs111-112.

 11   Print P5279, 22 September 1997.

 12   See Robinson v Interstate Transport [2011] FWAFB 2728 and Drake v Coles Supermarket Australia Pty Ltd T/A Coles Supermarkets [2014] FWCFB 6746.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR562311>