[2018] FWC 4986
FAIR WORK COMMISSION

DECISION


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

Mr Christopher Wragg

v
Queensland Scaffolding Pty Ltd
(U2018/3094)

COMMISSIONER HUNT

BRISBANE, 27 AUGUST 2018

Application for an unfair dismissal remedy – jurisdictional objections – whether applicant completed minimum employment period –application made out of time – applicant in a form of employment after being independent contractor – minimum employment period completed – applicant unware of date of dismissal – applicant did not act promptly to pursue unfair dismissal remedy - extension of time not granted – application dismissed.

[1] Mr Christopher Wragg was employed by Queensland Scaffolding Pty Ltd (QS) until he was dismissed. Mr Wragg made a claim pursuant to s.394 of the Fair Work Act 2009 (the Act) alleging that he had been unfairly dismissed from his employment with QS. Mr Wragg nominated on his application form that the dismissal took effect on 23 March 2018 and he was bringing his application within 21 days of the dismissal. Mr Wragg’s application was lodged in the Fair Work Commission (the Commission) on 23 March 2018.

[2] In a supplementary submission filed by Mr Wragg on 11 June 2018 he nominated 5 December 2017 as the date of the dismissal, stating, “When all access to company accounts was removed and access locks were changed with no previous warning.”

[3] Despite being served the application on 13 April 2018, QS did not file an employer response to the application until July 2018. Upon the application being allocated to me it became apparent through correspondence filed by QS that it considered that there were a number of jurisdictional issues to be determined.

[4] The jurisdictional objections to Mr Wragg’s application made by QS were:

•  Mr Wragg was dismissed on 25 November 2017, and his application was made to the Commission outside of the 21-day time limit provided for by s.394(2)(a) of the Act;

•  Mr Wragg became an employee of QS on 19 June 2017 and had not completed the minimum period of employment necessary to be protected from unfair dismissal, pursuant to ss.382(a), 383(a) of the Act; and

•  Mr Wragg’s annualised earnings exceeded the high income threshold pursuant to s.333 of the Act and r.2.13 of the Fair Work Regulations 2009 (the Regulations).

[5] It is not necessary to address in this decision the substantive reasons for the dismissal. From the moment the application was listed for a jurisdictional hearing, the conduct of the parties towards each other deteriorated to what I consider to be an unsatisfactory level. Each party requested a security officer in attendance during the hearing. Each party’s conduct during the hearing was acceptable and relatively cordial. It is clear that, at a point in time, the parties had held a close friendship.

[6] The jurisdictional hearing was held on 19 July 2018. Mr Wragg gave evidence on his own behalf, along with his partner, Ms Emma Thompson. Evidence for QS was given by Mr Brett Hicks, Director, and Ms Brianna Burnett, Office Manager. Until recently, Mr Hicks and Ms Burnett had been in a domestic relationship.

Minimum Employment Period

[7] The facts of this matter relevant to the minimum employment period are somewhat complex and are peculiar in that Mr Wragg had been involved with QS since its inception as its founder and, for a time, sole director.

[8] Mr Wragg established QS in or around May 2015 and his evidence is that it grew quickly and was performing well. He considered that more directorial assistance was required to manage its growth and so offered Mr Hicks an opportunity to join the company as a director, which he accepted.

[9] In or around December 2016, Mr Wragg was removed as a director of QS. The parties agreed that this occurred because of Mr Wragg’s poor credit rating, and that removing him as a director would improve the company’s prospects of obtaining credit in the future.

[10] Mr Wragg gave conflicting evidence about his removal as a director from QS. He first alleged that somebody had forged his signature and that he had never agreed to be removed as director. Mr Wragg later conceded that he and Mr Hicks had made an agreement for him to step aside as a director of the company and for him to continue working in the business, but to continue to be able to make decisions with Mr Hicks in the capacity of a ‘pseudo-director’ of the company.

[11] During the period May 2015 until 18 June 2017, Mr Wragg issued invoices to QS for his services to QS. The invoices were issued by Mr Wragg through another company of which he was a director, QSPECS Pty Ltd.

[12] From the moment Mr Hicks became a director of QS, he too issued invoices to QS from his family trust for his services to QS. Mr Wragg and Mr Hicks held a very convivial relationship, and enjoyed each other’s friendship socially.

[13] Ms Burnett’s evidence is that when she joined the business in or around mid-2017, she recommended that Mr Wragg and Mr Hicks be paid wages as direct employees of QS. It was apparent that there was an issue with the Australian Taxation Office (ATO) and the personal services income derived through the efforts of Mr Wragg and Mr Hicks respectively being paid to companies or trusts.
[14] Mr Wragg commenced receiving wages from QS on 19 June 2017, and QS considers that the employment of Mr Wragg commenced at this time. QS submitted that prior to this date Mr Wragg was an independent contractor.

[15] It is clear in the correspondence relied on by both parties that throughout all of 2017, Mr Wragg and Mr Hicks corresponded in a manner of co-directors.

[16] During the hearing Mr Wragg relied on bank statements which evidenced a series of payments that were paid directly into his personal bank account by QS. That is, they were not paid by QS into the QSPECS Pty Ltd bank account, but rather to Mr Wragg’s personal account directly. The payments were labelled ‘directors loan’ and were received by him on the following relevant occasions:

[17] Mr Wragg’s submission is that these payments were made to him as wages and evidence an employment relationship. QS submitted that the payments were loans to him as a director, and are technically recoverable by QS. No taxation was remitted and the payment to Mr Wragg on each occasion was entirely at Mr Hicks’ discretion. It became apparent that at any time Mr Hicks required to personally withdraw funds from QS for his private purposes, he would make a reciprocal payment to Mr Wragg’s personal account. It was not necessary for Mr Wragg to request a payment; the payment was made because Mr Hicks wished to share the funds of QS. It is notable that Mr Wragg was not a director at this point in time. QS submitted that at this relevant time he was an independent contractor.

[18] Mr Wragg also contested the date of the dismissal. In order to determine whether the minimum employment period has been met, it is necessary to determine when the dismissal took effect.

[19] Sections 382(a) and 383 of the Act relevantly provide as follows:

“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

…

383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[20] It is not disputed that QS employed at least 15 employees in late 2017, and accordingly it is not a small business employer. Therefore the minimum employment period is 6 months.

Date of dismissal

[21] QS submitted that the date of dismissal was 25 November 2017, and accordingly Mr Wragg did not have 6 months’ service at the time since he commenced employment on 19 June 2017. Mr Wragg stated during the hearing that he did not consider the dismissal to have taken effect until sometime after 19 December 2017, and therefore he certainly had 6 months’ service, if the Commission was not with him on the service prior to 19 June 2017.

[22] It is relevant to note that tragically, Mr Wragg’s partner, Ms Thompson miscarried twin girls a short time prior to the dismissal. This greatly affected Mr Wragg.

[23] The following relevant evidence was admitted (with relevant editing). While I have considered all of the correspondence between the parties, the following correspondence is directly relevant to the determination of the date of the dismissal, and the consideration necessary for the out of time application:

[24] A further tranche of very detailed text messages was exchanged between Mr Wragg and Mr Hick between 17 – 21 December 2017.

[25] The following payments were made by QS to Mr Wragg:

[26] On 7 January 2018 Mr Wragg sent a text to Mr Hicks to inform him of the death of a mutual friend, and the funeral of his daughters to be held on 8 January 2018.

[27] On 19 January 2018 Mr Wragg sent to Mr Hicks the following text message:

[28] The above is a heavily edited version of the text message that, on my rough estimate, ran to around 2500 words.

[29] On 23 January 2018 Mr Wragg sent a text to Mr Hicks of approximately 1400 words including:

Out of time application

[30] Section 394 of the Act states:

[31] Mr Wragg originally indicated to the Commission that he was not provided with a Centrelink Separation Certificate until approximately 15 March 2018, and therefore he considered he was still employed by QS. He submitted that Mr Hick had promised him six months’ paid leave.

[32] As noted above in paragraph [2], Mr Wragg indicated that he considered his termination date to be 5 December 2017.

[33] During the hearing I made it clear to Mr Wragg that it would only be necessary to determine the out of time application in the event I determined that Mr Wragg met the minimum employment period. Mr Wragg stated that he understood this jurisdictional issue.

[34] I inquired of Mr Wragg his ability to have made a claim during December 2017, and January – March 2018. Mr Wragg’s oral evidence was that he was travelling with Ms Thompson into very outback areas of Australia. He was extremely depressed, but did not see a medical professional until his return to Brisbane. In correspondence to Mr Hicks, Mr Wragg repeatedly enforced his view that he was depressed.

[35] Mr Wragg and Ms Thompson travelled to and lived on outback properties of people they knew. Mr Wragg would almost nightly sleep on the ground or in a swag. Ms Thompson would either join him or seek accommodation in their host’s residence. Ms Thompson’s evidence is that she had to do almost all daily living tasks for Mr Wragg as he was suffering from severe depression and was incapable of looking after himself.

[36] The respondent submitted that Mr Wragg was active on Facebook during this time and filed evidence of an extraordinarily glowing review of a vanilla bean that he had used. Mr Wragg denied that he was the author of the review. Ms Thompson gave evidence that she was the author of the review. The review used very eloquent language.

[37] During the hearing I had the opportunity to review Mr Wragg’s Facebook profile for the months from the dismissal until 23 March 2018. I observed that Mr Wragg was relatively active, including posting a video of him crossing a creek bed in a 4WD, together with ‘selfies’ taken by him.

[38] Mr Wragg agreed in cross-examination that he wrote the following Facebook post on 13 February 2018 relevant to a cage for his dogs (edited):

CONSIDERATION

Minimum employment period

[39] While it is necessary to determine when QS informed Mr Wragg of the dismissal, it becomes a complex issue when regard is had to Mr Wragg’s understanding of whether his employment is at an end, or the business arrangement is at an end. This is further complicated by Mr Wragg’s grief at the relevant time.

[40] I determine that on 11 December 2017 and as extracted above at [23(h)], Mr Wragg communicated with Mr Hicks his understanding that his employment had come to an end. The language used by Mr Wragg is clear. While it could be said that earlier than this date QS had terminated the employment, it is very clear that by 11 December 2017, Mr Wragg understood he had been dismissed.

[41] If the employment is said to have commenced on 19 June 2017, as submitted by QS, Mr Wragg did not have six months’ service at the time of the dismissal and his application would be dismissed. I find, however, that there are unusual circumstances that result in Mr Wragg’s employment being considered to have commenced earlier than 19 June 2017.

[42] The ‘directors loans’ paid to Mr Wragg during February and March 2017 are an unusual payment to make to an independent contractor for services provided. The payments were made personally to Mr Wragg, and not to the contracting entity, QSPECS Pty Ltd. While it was submitted by QS that it could call upon Mr Wragg to return funds if it wished, it has not done so.

[43] The payments were effectively a share of profits granted by Mr Hicks to Mr Wragg out of benevolence and his determination to be ‘fair’ to Mr Wragg. Even during the period of the dismissal, large sums of money were paid by QS to Mr Wragg to allow Mr Wragg to establish a scaffolding business. Mr Hicks shared with Mr Wragg leads and suggestions of people he could work with in the future.

[44] It is not clear if the payments made by QS to Mr Wragg were indeed fair, considering his earlier involvement with the business. That is not a matter that needs consideration by this Commission.

[45] I am satisfied that the payments made by QS directly to Mr Wragg in February and March 2017 indicate something more than an independent contracting relationship at the time. The payments don’t constitute wages, per se, as they were not taxed, nor declared. This may be an issue between the parties and the ATO.

[46] Although there is a fine balance, I am satisfied that there was an employment relationship of sorts from 2 February 2017 when the first payment was directly made to Mr Wragg by QS. Accordingly, at the time of the dismissal Mr Wragg had approximately nine months’ service. Accordingly, the minimum employment period has been satisfied.

Extension of time consideration

[47] Having earlier determined that the date of the dismissal was 11 December 2017, the application has been filed 102 days after Mr Wragg understood he had been dismissed, and 81 days beyond the 21 day threshold.

The reason for the delay

[48] Mr Wragg cited various reasons for the delay, including that he was under the impression Mr Hicks was going to or had granted him six months’ paid leave. Noting the correspondence between the parties, Mr Wragg’s assertion that he had been promised six months’ paid leave is not supported by any evidence and I do not find that such an offer was made.

[49] Understandably, Mr Wragg was grieving throughout December 2017 and his mind was not clear. It does excuse why he was unable to bring a claim of unfair dismissal within the 21 day time limit. However, by 19 January 2018, as evidenced by the extraordinarily long text message sent to Mr Hicks at [27], it was clear that Mr Wragg was not only wishing to bring a claim of unfair dismissal, he was extensively travelling. He fished enough to have filled two freezers, had a flying lesson, and visited beaches.

[50] From early 2018, Mr Wragg travelled great distances. Even if he did so as a passenger, it is clear that Mr Wragg had capacity to make a phone call to complete an unfair dismissal application, or visit the Commission website to do so. He had capacity to send an approximate 2,500 word text message, and a further 1,400 word text message days later. There are further, page-length emails sent by Mr Wragg at this relevant time, not reproduced in this decision.

[51] I do not accept Ms Thompson’s evidence that she wrote the ‘vanilla bean’ Facebook review. The words contained within are very much like the words used by Mr Wragg in his other correspondence. He is a very good wordsmith, and the review is too much like his other correspondence for me to accept that Ms Thompson wrote it. Furthermore, Mr Wragg wrote another similar review on 13 February 2018 relevant to the dog cages. I accept that Mr Wragg considered that he was depressed. However, his evidence and that of Ms Thompson, that Mr Wragg was extremely incapacitated at this time is not accepted.

[52] In all of the circumstances I have determined the reason for the delay weighs against exercising the discretion to grant the extension of time.

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

[53] While it may be said that the dismissal occurred earlier than 11 December 2017, I have determined above that it was understood by Mr Wragg on that date. Accordingly, this is a neutral factor in considering whether to exercise the discretion to grant an extension.

Any action taken by the person to dispute the dismissal

[54] Action taken by an employee to contest the dismissal, other than lodging an application, can be treated as favouring the grant of an extension of time.1

[55] Mr Wragg indicated by 19 January 2018 that he wished to formally contest the dismissal. This is a factor that weighs in favour of exercising the discretion to grant an extension.

Prejudice to the employer (including prejudice caused by the delay)

[56] The delay of 81 days may cause some prejudice to QS, although it was not submitted how. Mr Hicks would have a fair degree of recall relevant to the circumstances of the dismissal.

[57] I determine that this is a neutral factor when considering whether to exercise the discretion to grant an extension.

The merits of the application

[58] In the matter of Kornicki v Telstra-Network Technology Group2 the Commission considered the principles applicable to the exercise of the discretion to extend time under s.170CE(8) of the Workplace Relations Act 1996 (Cth). In that case the Commission said:3

[59] In this decision I have deliberately not dealt with the substantive issues of merit relevant to the direct circumstances surrounding the dismissal. This is for all parties’ interests as the material disclosed involves quite personal matters known to Mr Wragg, Mr Hicks and Ms Burnett, some of which may prejudice these individuals.

[60] It is not apparent that the application is without merit or that merit is anything other than a neutral consideration.

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

[61] Neither party made relevant submissions as to the relative fairness as between the applicant and other persons in a similar position.

[62] A relevant principle in consideration of this criterion was articulated by the Full Bench in Perry v Rio Tinto Shipping Pty Ltd:4 

[63] This is a neutral factor when considering whether to exercise the discretion to grant an extension.

Conclusion

[64] I have considered each of the criteria set out in s.394(3) of the Act. I am not satisfied that there are exceptional circumstances for me to exercise my discretion to extend time for Mr Wragg to make his application.

[65] Accordingly the application is dismissed. It is not necessary to deal with the jurisdictional issue of whether Mr Wragg’s earnings are in excess of the high income threshold.

al of the Fair Work Commission with member’s signature.

COMMISSIONER

Appearances:

Mr Christopher Wragg for the Applicant

Mr Brett Hicks for the Respondent

Hearing details:

19 July 2018, Brisbane

Printed by authority of the Commonwealth Government Printer

<PR620223>

1 Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298 at 299-300.

2 Print P3168, 22 July 1997 per Ross VP, Watson SDP and Gay C.

3 Ibid.

4 [2016] FWCFB 6963 at [41].