Fair Work Act 2009

Section 394 - Application for an unfair dismissal remedy

Coopella Nominees Pty Ltd T/A Sea & Vines Property Management

Application for an unfair dismissal remedy - extension of time - whether genuine redundancy - discretionary considerations - no exceptional circumstances - application dismissed

[1] On 3 February 2021 Abby Higgins (Ms Higgins) lodged an unfair dismissal application under section 394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of her employment by Coppella Nominees Pty Ltd trading as Sea & Vines Property Management (Sea & Vines or the Employer) which took effect on 23 December 2020.

[2] Ms Higgins' application was made forty-two (42) days after the date of dismissal, being twenty-one (21) days beyond the statutory time-limit. Ms Higgins provided the following explanation:[1]

"The Applicant believed that the termination of her employment, upon the ground of redundancy, was not genuine. This was confirmed to the applicant when, on Monday 1/02/2021, it came to her attention that another person had been employed to perform the job which she had been informed was being abolished as part of a redundancy/restructure."

[3] The matter was allocated to me to determine whether an extension of time should be granted. This decision deals only with that issue.

[4] I issued Directions on 5 February 2021. Information about an extension of time and factors the Commission is required to take into account were provided to the parties.

[5] Ms Higgins and Sea & Vines filed materials and witness statements in advance of the hearing.

[6] I heard the matter by telephone on 25 February 2021. With permission, Ms Higgins was represented by a legal practitioner and Sea & Vines was represented by a paid agent.

[7] Ms Higgins gave sworn evidence, as did a director of Sea & Vines, Jacqueline Scott, and a Property Management Administrator, Susan Beechee.

[8] The evidence of Ms Higgins, Ms Scott and Ms Beechee was given respectfully, and few factual differences emerged. Each made appropriate concessions, and each had good recall. Ms Scott in particular was impressive under cross examination.

[9] Following the hearing I reserved my decision.

[10] Sea & Vines is a property management company operating in southern suburban Adelaide owned by Ms Scott and her husband. Ms Scott is the working director. The business has operated since 2011. The business operates in conjunction with a real estate franchise Ray White Port Noarlunga, where Ms Scott also works in real estate sales. The business employs only two persons.

[11] Ms Higgins worked in the business as a part-time administrative officer from March 2018. Her duties included answering calls, managing reception, interacting with landlords and tenants and associated tasks. She reported to the other employee, the Property Manager.

[12] Prior to Ms Higgins being employed, the position was full-time. When the previous incumbent left, the position was advertised as full-time. Ms Higgins applied.

[13] At the interview with Ms Scott in 2018, Ms Higgins sought the position but was unable to work full-time. She sought that the position become a part-time job, four days per week. Ms Scott agreed. Ms Higgins commenced as a part-time employee working about 30.4 hours per week (Tuesday to Friday), and remained such until her termination.

[14] At the time of agreeing to make the position part-time, Ms Scott reached a loose agreement with Ms Higgins that when Ms Higgins' son turned 8 years, she would work full-time.

[15] In May 2020, upon Ms Higgins' son having turned 8 years, Ms Scott broached the subject of Ms Higgins working full-time. Ms Scott still considered that the job needed to be full-time, and that the arrangement of an employee from the real estate company keeping an eye on property management administration on Mondays was not working out.

[16] However, Ms Higgins still wanted Monday's off work. Ms Higgins advised that she could not convert to full-time.

[17] Ms Scott persevered for a few months but by July 2020 the arrangement covering the business on Mondays was no longer acceptable. Ms Scott's circumstances had also changed. Her health had taken a turn for the worse and she could not reliably work the hours she had.

[18] In July 2020, Ms Scott employed a second part-time employee - working on Mondays and some additional hours during the week.

[19] In September 2020 Ms Higgins asked Ms Scott if she could reduce her hours to 25 per week (3 days) as her circumstances had changed. She needed to care for her ill mother. Ms Scott advised that this was not possible. Ms Higgins remained at 30.4 hours per week (4 days) but still wanted the business to try to accommodate 25 hours or she would have to look around for other options.

[20] In October 2020 the second part-time employee (who had been employed in July 2020) left the business, leaving Ms Scott with the same dilemma she had in May 2020.

[21] In October 2020 Ms Scott and her husband discussed the dilemma of how to staff the business given Ms Higgins was not wanting to work full-time and preferring even fewer hours, the second part-timer having left, and Ms Scott's health limitations.

[22] It was decided that the business needed to restructure the position back into a single full-time role as it had been prior to March 2018, that Ms Higgins' part-time role would no longer exist, and that Ms Higgins would be formally given the option of the full-time role or otherwise made redundant.

[23] On 4 November 2020 Ms Scott met Ms Higgins and told her that it had been decided the role would be full-time and that her part-time position would be made redundant. The Employer followed up formally with a letter on 6 November 2020 which provided, in part:[2]

Change of Property Management Administrator Role

As discussed in our meeting on 4 November 2020, I am restructuring the business (change of business needs) and as a result it is proposed that your position will be made redundant as I no longer require the part-time job done by you to be done by anyone...

I can offer you the following alternate position in lieu of termination of employment:

• Full-time Property Management Administrator of 38 hours per week (7.6 hours per day x 5 days per week) to start effective Monday 18 January 2021.

I would appreciate if you would consider this role as I would love to keep you on board...

If nothing to the contrary comes out of this letter you will in due course be given a letter of termination...

[24] Three days later, 9 November 2020, Ms Higgins advised Ms Scott that she could not accept the offer:[3]

In response to your offer of full-time employment I will be declining as I am unable to work full-time with my mother and son.

I will wait for your thoughts on the finalisation of my employment date.

[25] On 25 November 2020 Ms Scott sent a formal letter of termination:[4]

Notification of Termination of Employment Due to Redundancy

Further to my letter to you on 6th November 2020 now that consultation is finished, and you have chosen not to accept the full-time position which is available from 18th January 2021, there is unfortunately no alternative but to give you 4 weeks notice of the termination of your employment due to the position being made redundant.

Your last day of employment will be on Wednesday 23rd December 2020.

Thank you for your commitment and service to the company. We wish you all the very best in your future endeavours

[26] Ms Higgins worked in the business in her part-time role until 17 December 2020 when she took a week of personal leave. Her employment ceased on 23 December 2020 and her accrued entitlements were paid out.

[27] In the week following 9 November 2020, in an informal discussion between Ms Higgins and Ms Scott, Ms Scott advised that she (Ms Scott) would not be advertising the role but rather be putting out informal feelers amongst her contacts in the industry to find a full-time employee.

[28] Ms Scott had developed a close friendship with a former employee, Ms Beeche. Ms Beeche had left the business in April 2018 to live in Melbourne. They maintained regular contact. In late November 2020, after having been advised by Ms Higgins that she declined the full-time offer, Ms Scott and Ms Beeche were chatting in a regular personal phone call. Ms Scott casually asked Ms Beeche in a half-joking manner, 'you're not planning to come back to Adelaide any time soon', or words to that effect. Ms Beeche replied to the effect, 'well, having lived through the COVID lockdown in Melbourne and the situation in Victoria, we actually are planning to come back to South Australia'. Ms Scott then said that if Ms Beeche was serious, she (Ms Scott) would have a chat to her (co-director) husband and get back to her on what might be available.

[29] On 11 December 2020 Ms Scott sent a letter of offer to Ms Beeche in a full-time role as a property management administrator,[5] and followed this up with an email of 16 December 2020.[6] They exchanged text messages on 21 December 2020[7] in which Ms Beeche confirmed she had received the letter and was looking forward to the role.

[30] Ms Beeche commenced on 27 January 2021.

[31] Ms Higgins had heard whispers before she left the business that Ms Beeche would be returning and (in her view) taking her role.

[32] She did not broach the subject directly with Ms Scott but felt that her suspicions were aroused when told the job was not to be advertised.

[33] At the time of termination, she felt that the redundancy was not genuine, that there had been a plan to replace her with Ms Beeche, and that her job did not need to be made full-time.

[34] In late January 2021, after Ms Beeche had commenced, word passed (by an unnamed source) to Ms Higgins that Ms Beeche had started in the role. Ms Higgins had this confirmed as fact on 1 February 2021. Having 'proof' of her suspicion, Ms Higgins decided to take action. She contacted the Fair Work Commission, learned of her rights to claim unfair dismissal and seek an extension of time, and consulted a solicitor.

[35] Proceedings were filed on her behalf two days later, 3 February 2021.

[36] Section 394(3) of the FW act provides:

(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:

(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

(f) fairness as between the person and other persons in a similar position."

[37] Ms Higgins' application can only proceed if she can establish that "exceptional circumstances" exist within the meaning of section 394(3).

[38] An applicant for an extension of time has an onus to adduce evidence in support of matters which that applicant asserts constitute exceptional circumstances.[8]

[39] The test of "exceptional circumstances" establishes a "high hurdle" for an applicant.[9] A decision whether to extend time under section 394(3) involves the exercise of a discretion.[10]

[40] I apply section 394(3) in the context of the Full Bench decision in Nulty v Blue Star Group Pty Ltd:

"[13] In summary, the expression "exceptional circumstances" has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe "exceptional circumstances" as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural "circumstances" as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of "exceptional circumstances" includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon."[11]

[41] The principles of Nulty have recently been cited with approval by subsequent full benches of the Commission.

[42] I now consider each of the factors in section 394(3).

[43] The reason for the delay in lodging an application is a factor that must be considered. The absence of an explanation for any part of the delay will usually weigh against an applicant in such an assessment. Similarly, a credible explanation for the entirety of the delay will usually weigh in an applicant's favour, though it is ultimately a question of degree and insight.[12]

[44] However, a reasonable explanation for the delay is not needed for the whole of the period of delay or may in fact not be required at all if the circumstances are otherwise exceptional.[13]

[45] The period of the delay requiring explanation is the period commencing immediately after the time for lodging an application has expired, ending on the day on which an application is ultimately lodged. That said, regard may be had to any circumstances from the date the dismissal took effect when assessing whether the explanation for the delay is acceptable or credible.[14]

[46] The 21-day statutory period after Ms Higgins' dismissal expired on 13 January 2021. Having filed her application on 3 February 2021, it is twenty-one (21) days out of time.

[47] The time that elapsed from Ms Higgins' dismissal to lodgement can be divided into two distinct periods:

• firstly, a period of nineteen (19) days from 13 January 2021 until she received confirmation to her satisfaction on 1 February 2021 that Ms Beeche was working in the business; and

• secondly, a period of two (2) days between 1 and 3 February 2021 in which Ms Higgins was taking advice on her position and making a claim.

The first period - awareness that the redundancy may not be genuine

[48] Past decisions of the Commission have accepted that material facts known by a redundant employee only after the statutory time limit has expired may constitute exceptional circumstances warranting an extension of time.[15] However each matter is decided on its own facts, and not each case of an employee learning of circumstances post a purported redundancy will constitute exceptional circumstances.[16]

[49] In this case, the explanation for the delay in the first period is weak.

[50] Ms Higgins, on her own evidence, had a belief at the time of termination that her redundancy was questionable. She also had an apprehension that her redundancy may have been orchestrated to allow Ms Beeche back in the business to replace her.

[51] Yet she waited until she had "proof" that Ms Beeche was working in the business before taking any action.

[52] Whilst waiting to confirm a fact explains the delay, doing so in circumstances where a belief or apprehension was held by Ms Higgins at the time of dismissal has the effect of holding the statutory time limit hostage to a factual confirmation.

[53] There is no reason why an application could not have been filed within time based on a reasonably held belief, and the Employer then put to proof on the merit of its decision.

[54] Moreover, Ms Higgins took no action in this first period of delay to seek out any advice or contingent advice based on her suspicion. Ms Higgins could have but failed to take advice or make inquiries in this first period (or at any time post dismissal) about her rights in circumstances where she believed she had been treated unfairly.

The second period - decision to contest the dismissal

[55] Ms Higgins moved swiftly, once she had 'proof' that Ms Beeche was working in the business, to take advice and make a claim.

[56] It was only in the process of taking that advice (when she was already 19 days out of time), that she learned of the statutory time limit.

[57] However, it is well established that mere ignorance of the statutory time limit does not constitute exceptional circumstances warranting an extension of time.[17]

[58] Considered overall, the explanation for the delay is unconvincing and weighs against a conclusion of exceptional circumstances.

Awareness of the dismissal taking effect (section 394(3)(b))

[59] Ms Higgins was aware from 6 November 2020 that if she did not accept the full-time offer her employment would be terminated. She was further aware on 25 November 2020 that her employment would end on 23 December 2020, as it did.

[60] Ms Higgins was in no doubt as to the stated reason for dismissal.

[61] That she was well aware of the dismissal taking effect before and at the time of termination is a neutral consideration and does not weigh in favour of an extension of time.

Action taken to dispute dismissal (section 394(3)(c))

[62] Ms Higgins held a sense of suspicion in the weeks prior to dismissal, at the time of dismissal and in the weeks that followed dismissal that her redundancy may not be genuine, and that Ms Beeche may have been brought back into the business on (what she considered) an incorrect pretence that her job could not be performed on a part-time basis.

[63] Yet Ms Higgins decided not to raise the issue with her Employer. Whilst she had previously let Ms Scott know that she felt she could do the job part-time, she did not contest the decision. In the words of her email of 9 November 2020, she "accepted the letter of redundancy".

[64] To the extent that this may have been understandable not to sour relations in a small office whilst still employed, Ms Higgins nonetheless did not broach her concerns with Ms Scott in the weeks following her termination taking effect, even though she could have done so.

[65] The failure to have informed the Employer of her genuinely held concerns during the delay period, and only do so through the instigation of a late unfair dismissal application, weighs somewhat against an extension of time.

[66] As a general principle, an employer is entitled to arrange its affairs and organise its resources on the basis that claims can no longer be made beyond the lodgement period, except in exceptional circumstances.

[67] Sea & Vines would incur limited prejudice should an extension be granted. A claim would have to be responded to, involving time and cost.

[68] These considerations, whilst real for a small business, should not be given disproportionate weight. Sea & Vines has lodged a detailed response and is represented by an agent specialising in such claims. The nature of the prejudice in this matter is not unique in any particular respect.

[69] However, the absence of prejudice would not itself be a reason to grant an extension.[18]

[70] This is a neutral consideration.

[71] A hearing on merit will necessarily concern the employer's jurisdictional objection that Ms Higgins' termination was a genuine redundancy. The matter concerns no other suggestion of performance or misconduct issues.

[72] Section 389 of the FW Act provides:

(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:

(b) the enterprise of an associated entity of the employer."

[73] I have heard some evidence on merit but have not conducted a merits hearing. I make no concluded findings on the jurisdictional challenge by Sea & Vines. However, on the limited evidence before me, my provisional view is that Ms Higgins' case on merit is not strong even though her sense of grievance is real.

[74] There was a period of consultation, albeit limited, and a period of notice.

[75] There were operational reasons advanced by Ms Scott for the part-time position being converted back to full-time. A core grievance Ms Higgins has with her dismissal appears to be that she believes that the restructure was unnecessary in the sense that her job could be performed in four days and that she was completing all tasks within that time frame. On this, the Employer has a somewhat different view. Irrespective of whether tasks were completed satisfactorily within four days, it says there was no appropriate coverage from within its staff complement across the fifth day.

[76] Whilst a merits hearing would delve more deeply into these issues, the Employer's position is not without some ostensible merit. Subject to lawful compliance, it is an employer's right to structure staffing on a particular basis in its business.

[77] At best, the merits are a neutral consideration not weighing in favour of an extension of time.

Fairness between persons in similar position (section 394(f))

[78] No evidence or submissions from Ms Higgins or Sea & Vines raise issues of fairness with and between other persons.

[79] In these circumstances, this is not a relevant factor.

[80] Ms Higgins' application was filed forty-two (42) days after the dismissal took effect. It is twenty-one (21) days out of time.

[81] Even though Ms Higgins' sense of grievance is and was real, there are no factors weighing in favour of an extension of time other than that she acted promptly to file a claim once proof was obtained that Ms Beeche was working in the business.

[82] This notwithstanding, the explanation for the delay until that time is unconvincing and all other factors either weigh against granting an extension of time or are neutral considerations.

[83] Considering the length of the delay and other relevant factors (including the "high hurdle" set by the statutory provision), I do not consider that exceptional circumstances exist. An employee made redundant with a belief that their dismissal may not be genuine but waiting until they are satisfied that they have sufficient 'proof' of that belief is insufficient to constitute exceptional circumstances.

[84] There being no exceptional circumstances, the time for lodging the claim cannot be extended.

[85] As Ms Higgins' application is out of time and as the time for lodgement has not been extended, I am unable to proceed with the jurisdictional objection or conduct a merits hearing. The application is dismissed. An order[19] to that effect is issued in conjunction with the publication of this decision.

Mr P Moloney (Moloney & Partners), with permission, for the Applicant

Ms A Bisbal with Ms R Vagnoni (Workplace Partners), with permission, for the Respondent

[8] Smith v Canning Division of General Practice [2009] AIRC 959

[9] Lombardo v Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations [2014] FWCFB 2288 at [21]

[10] Halls v AR & MA McCardle & Sons Pty Ltd and Ors [2014] FCCA 316

[11] [2011] FWAFB 975 "Nulty" at [13]. See also Cheval Properties Pty Ltd t/as Penrith Hotel Motel v Smithers [2010] FWAFB 7251 at [5]

[12] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters [2019] FWCFB 3288 at [35]- [45]

[13] Stogiannidis (Ibid); Elliott v LEAP Legal Software Pty Ltd t/a LEAP Legal Software [2018] FWCFB 3288

[14] Shaw v Australia and New Zealand Banking Group Limited [2015] FWCFB 287 at [12]; Ozsoy v Monstamac Industries Pty Ltd [2014] FWCFB 2149 at [31] - [33]; Perry v Rio Tinto Shipping Pty Ltd T/A Rio Tinto Marine [2016] FWCFB 6963; Czoy v Monstamac Industries Pty Ltd [2014] FWCFB 2149

[15] John Byrnes v Rexel Electrical Supplies Pty Ltd [2015] FWC 5776; McMechan v National Roads and Motorists' Association [2016] FWC 5826; Williams v The Building Connection Group Pty Ltd [2017] FWC 30

[16] Anderson v Spirit WA Pty Ltd t/a Professionals Rockingham [2020] FWC 4199; Humble v Jupps Carpets and Ceramics Pty Ltd [2020] FWC 4378

[17] Nulty above fn 11, at [14], as quoted with approval in Dennis Obel v Central Desert Regional Council [2021] FWCFB 167 at [6]

[18] Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298 at 299-300

[19] PR727428

Printed by authority of the Commonwealth Government Printer