DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Richard Preiss
v
Evolution Business Systems Pty Ltd T/A Evolution Business Systems
(U2016/12895)

Application for relief from unfair dismissal – extension of time.

[1] Mr Preiss was employed by Evolution Business Systems from 15 September 2015 until his dismissal. There is some dispute over when the dismissal took place. Evolution says that the dismissal took effect on 27 September 2016. The unfair dismissal application was made on 24 October 2016. If Evolution is correct then the application is 6 days late.

[2] The circumstances surrounding the dismissal are bizarre. Evolution relies upon the following email exchange:

“On Friday 23 September 2016 Mr Woods, Managing Director or Evolution, emailed Mr Preiss that “please find attached a revised offer of change of contract after our discussions this week. In summary, offer is based around a 4 day week with a base plus commission based around a lower OTE than previous. Please have a look and let me know if any questions. If all good to go, then this can take effect from next week…”

On Saturday 24 September 2016 Mr Woods emailed Mr Preiss as follows:

“I would like to finalise things going forward by Monday (26^th) COB so this can take effect before I go away which I don’t think should be too difficult to do as it’s really a matter of whether you want to go forward with the offer or not and then going from there. Just in case it’s not clear, please find below an outline of the 2 options on the table.

(1) DP accepts offer from EBS:

• Sign and initial offer as per requirements (this will be effective as from 1^st Oct)



• EBS will make a payment of $7,701 which represents commission due for period of 01.04/16-30/06/16 ( which is made up of commission earned for period 01/04/16 -30/06/16 $28.701 less unearned commission paid for period 01/01/16 -31/03/16 which is an amount of $21,000) within 14 days after signing of revised contract.



• EBS will make a payment of $4,134 which is commission due for period 01/07/16 -09/09/16 (to date) as per agreement plus a payment as per current contract details for any commission earned for the period 10/09/16- 31/09/16 should this occur by 21^st October 2016 (3 weeks after close of period for reconciliation)

(2) DP does not accept offer from EBS:

• DP to finish up immediately (Tuesday 27^th September 2016) and ensure return of all EBS assets…to EBS office by 10am Tuesday (27^th) morning



• Provided this is completed and all assets accounted for then EBS will pay you the following gross amounts (less applicable tax) on Friday 14^th October 2016.

A payment of $3500 which represents two weeks remaining salary in lieu of notice…..”

[3] On 26 September 2016 at 4.38pm Mr Preiss replied:

“Thanks for your options.

I have decided to accept your offer and therefore consider my employment at EBS terminated in line with your option 2 below. I have discovered that accrued sick leave was not taken into account during my recent hip operation and recovery and have asked Kellie to fix this which should be done as part of the final separation pay on Friday 14^th October. I am unavailable at 10am tomorrow but will drop off all EBS assets in my possession during the course of the day and leave them in my top desk drawer if you’re not in.”

[4] Evolution says that concerns about performance led to the termination. Mr Woods says that he raised these concerns with Mr Preiss after April 2016. Mr Preiss says that the cause of the events was that Evolution unilaterally decided to alter the agreed commission arrangements which had been changed by agreement in April 2016. As a result of this unilateral change Evolution decided that $21,000 already paid in commission would be deducted from future commissions owed. Mr Preiss’ account is supported by the email of 24^th September quoted above. This understandably led to a dispute between Mr Preiss and Evolution. Mr Preiss says that Evolution said that they were dismissing him because he refused to accept the changed commission arrangements. Evolution announced their position at a meeting on 8 September 2016. The following day Evolution put forward the possibility of conversion to part time employment. A deed of release was provided to Mr Preiss but Mr Preiss said that he needed time to consider it. Mr Preiss denies that there were any performance issues raised with him prior to the dispute concerning the commission on 31 August 2016 and that the only things raised about performance prior to that were positive.

[5] Mr Preiss accepts that on 26 September 2016 he accepted the termination of his employment and acknowledged that his final termination pay would occur on 14^th October 2016. Mr Preiss says that:

“I understood the arrangements described in the second option proposed in the email … to mean that I would not receive any payment in respect of pay in lieu of notice unless I complied with the respondent’s directions including as to return of the respondent’s property. Had the respondent asked me to come to work, for example, to perform some work that needed finishing before I left, I understood that I was obliged to do so. Having said that I did not understand whether that meant I was still employed by the respondent or not. On 27 September I attended work to collect some things and to close off some work. Between then and 14 October I did not attend the workplace.”

[6] The final pay slip received on 14 October 2016 states that “employment ended 13/10/2016” and that the payment is for the period 1/10/206 to 14/10/2016. It includes the termination payment of $3,230.78.

[7] Although I accept that Mr Preiss may have been genuinely confused about the issue, particularly given that the earlier proposed deed of release provided by the employer had the termination date as 7 October 2016, I think that the most relevant matter is the direct email exchange which clearly says that termination is effective immediately and that two weeks will be paid in lieu of notice. The 27^th September 2016 is a Tuesday and the 14^th October 2016 is a Friday. It seems likely to me that the two weeks’ in lieu of notice is the period from Saturday 1 October 2016 until Friday 14 October 2016. This suggests an effective termination date of Friday 30 September 2016. This is reinforced by the final pay slip which is for the period 1/10/2016 until 14/10/2016. Presumably Mr Preiss was paid for the period to 30 September 2016 in his previous pay. Neither party was able to identify whether or not annual leave was paid on the two week period 1/10/2016 until 14/10/2016.

[8] In the proceedings the representative for Mr Preiss advanced an argument that the email of 24 September 2016 should be interpreted as providing for employment until 14 October 2016 and then payment for a further two week period in lieu of notice. The contract of employment provided for 4 weeks’ notice. I accept Mr Woods evidence that as far as he was concerned he gave notice either at the 31 August meeting or at the 8 September meeting that employment would be terminated if the commission arrangements were not accepted. Mr Preiss’ evidence supports this. He says that Mr Woods told him that he had to make a choice. I therefore accept Mr Woods’ evidence that he considered two weeks’ notice had already been given and had passed at the time of the 24 September 2016 notice. I am not satisfied that the words “two weeks’ remaining salary in lieu of notice” can reasonably be read as meaning that Mr Preiss will be paid as normal until 14 October and then two weeks’ salary in lieu of notice.

[9] The representative for Mr Preiss also argued that Mr Preiss remained under obligations during the period of notice. If this was established the period of notice must be regarded as a part of the period of employment. Three matters were raised in support of this argument. Firstly, the payment of notice and outstanding entitlements was conditional upon property being returned. Secondly, Mr Preiss was of the view that had the respondent asked him to come to work, for example, to perform some work that needed finishing before he left, he understood that he was obliged to do so. Thirdly, the significant period of time between the purported termination of employment and the actual payment of the entitlements including the payment in lieu of notice.

[10] The fact is that the property was returned. Mr Woods did not concede that if the property had not been returned that the termination of the employment would have not proceeded. In my view the statement considered in context is a threat to deduct money from final payments in the event that property is not returned rather than a statement which makes the termination and its timing conditional upon the property being returned.

[11] Mr Preiss was asked if he would have felt an obligation to provide a password if asked after the termination date. He answered in the affirmative. Mr Woods was asked if he would expect Mr Preiss to provide a password if asked and he answered yes. I consider this to be no more than evidence that both parties are responsible and cooperative rather than evidence of an ongoing employment relationship. I accept that Mr Preiss would have been prepared to return to work to perform some duties during the notice period if he had been asked. If that had in fact occurred then there is no doubt that the period of notice would be regarded as part of the period of employment. However, Mr Woods did not regard Mr Preiss as being required to perform any duties during the notice period. The notice provided which was accepted by Mr Preiss is unequivocal that he was to finish up immediately and that he would be paid two weeks remaining salary in lieu of notice. I consider that the concept that Mr Preiss may have felt some obligation if he had been asked to perform some further service to be speculative. I do not consider it to be sufficient to establish the continuation of the employment during the notice period.

[12] The third matter raised, the issue of the time between the alleged termination and the actual payment in lieu of notice, is a more compelling argument. Normally if the period of notice is to be not regarded as a period when the contract of employment remains on foot, the payment in lieu of notice is made at the time of termination. There are some regulations which require payment at the time of termination. The failure to pay at the time of termination supports a conclusion that the notice period is a period when the employment relationship remains on foot; that is, that the period was effectively a period of gardening leave. However, Mr Woods gave evidence that the delayed payment was because of cash flow issues in a small business. On balance I accept that evidence. A central issue which led to the termination was the attempt by Mr Woods to wind back Mr Preiss’ commission entitlements. This gives Mr Woods’ evidence that he delayed payment for cash flow reasons some credibility. On balance I am satisfied that employment did not continue during the notice period.

[13] I am therefore satisfied that the date of termination was 30 September 2016 and the application is therefore 3 days late.

[14] Section 394 of the Fair Work Act 2009 provides that I may allow a further period for the application if I am 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.

The reasons for delay

[15] The reason for the period of delay is the confusion over the actual date of termination. The period of delay is relatively short and this means that the period of delay which needs to be explained is correspondingly short making it more likely that the understandable confusion demonstrated by the pay slips and the negotiations may provide an explanation. However, I am not satisfied that confusion about the termination date is a strong reason in this case because Mr Preiss had been in strong disagreement and negotiations with his employer since 31 August 2016 about the underlying commission issue and the threat to terminate his employment had been around since 8 September 2016. He was aware that his employment was actually coming to an end when he accepted the termination on 26 September 2016. Therefore his ability to make the unfair dismissal application was not effected by his confusion about the actual date of termination. There is no evidence that Mr Preiss delayed his application because of the confusion about the actual date of termination.

[16] One other explanation for delay was offered by Mr Preiss. He said that he was concerned that he might not actually receive his entitlements on 14 October 2016 and so he delayed any action until after that date. I accept that Mr Preiss had a reasonable basis for this concern given the conflict which had occurred over commission entitlements. However, this does not explain all of the delay because there was plenty of time available to Mr Preiss between 14 October 2016 and the end of the 21 day period following the termination to put in an unfair dismissal application in time.

[17] Mr Preiss gave evidence that he thought about whether or not to make an application during the period after 7 October 2016 but only took serious steps to look at the website and how to apply for unfair dismissal remedy around 22 October 2016. He was not aware of the time limit for applications before this.

[18] I am not satisfied that the reasons for delay support a finding of exceptional circumstances.

Awareness of the dismissal

[19] This is a neutral factor. Mr Preiss was aware of the termination a few days before it took effect.

Action to dispute the dismissal

[20] Although there was disputation prior to the dismissal there was no action taken to contest the dismissal after it was accepted on 26 September 2016 prior to the making of the application for unfair dismissal. This factor stands against a finding of exceptional circumstances.

Prejudice to the employer

[21] Given the short period of delay there is no prejudice to the employer. This is a neutral factor.

The merits

[22] On the basis of the material before me I consider that there is a strong case. It seems likely that the dispute over commissions was a major factor in the termination. The fact that Mr Woods offered ongoing employment to Mr Preiss on 24 September 2016 provided he agreed to accept the company position in respect to past commission entitlements, suggests that the performance issues could not have been very serious. Although the full material is not before me there is sufficient material for me to conclude that this is a factor which stands in favour of a finding of exceptional circumstances. However, this is not a strong factor in this case because my preliminary assessment is based upon limited and contested information.

Fairness

[23] This is not raised as a factor by the parties. There is nothing about the circumstances of the case which suggest that any decision I might make would offend fairness as between the person and other persons in a similar position.

Conclusion

[24] Although a preliminary examination of the merits of the case support a finding of exceptional circumstances I do not consider that this is a strong enough factor in the circumstances of this case to outweigh my finding concerning the reasons for the delay and the lack of disputation of the dismissal. Considering all of the factors in Section 394 leads me to conclude that there are no exceptional circumstances which justify an extension of time in this case. The application is therefore dismissed. An order is issued separately.

COMMISSIONER

Appearances:

Mr A Mackenzie appeared for the Applicant.

Mr P Woods appeared for the Respondent.

Hearing details:

2017

Melbourne

January 13

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