Fair Work Act 2009

Section 394 - Application for an unfair dismissal remedy

Jupps Carpets and Ceramics Pty Ltd T/A Jupps Floorcoverings and Tile Specialists

Application for an unfair dismissal remedy - extension of time - alleged non-genuine redundancy - post-dismissal events - no exceptional circumstances - application dismissed

[1] On 14 July 2020 Gary Humble (Mr Humble or the Applicant) applied to the Commission under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in relation to his dismissal by Jupps Carpets and Ceramics Pty Ltd T/A Jupps Floorcoverings and Tile Specialists (Jupps or the employer).

[2] Mr Humble worked as a sales consultant from 2 May 2005 at Jupps Geraldton store in Western Australia. It is uncontested that he was dismissed by alleged redundancy on 24 March 2020, with immediate effect. He was paid five weeks in lieu of notice plus statutory entitlements (including pro rata long service leave).

[3] It is also uncontested that Jupps is a small business within the meaning of the FW Act for unfair dismissal purposes.

[4] Mr Humble acknowledges that his application was filed outside the statutory 21-day time limit. The application was allocated to me to determine the out of time issue.

[5] I issued Directions on 20 July 2020. I received written materials from Mr Humble and a formal response from Jupps through their representative Employsure Law Pty Ltd (Employsure).

[6] I heard the matter by telephone on 7 August 2020. Mr Humble was self-represented. Jupps was represented by Employsure, with permission. Both Mr Humble and Mr Clinton Cusworth (shareholder and General Manager) gave sworn evidence.

[7] The evidence of both Mr Humble and Mr Cusworth was given respectfully, indicative of a difference of view on the extension of time issue but of mutual regard between regional folk and former work colleagues that is all too often missing in unfair dismissal litigation.

[8] Following the hearing I reserved my decision. This decision determines the extension of time issue.

[9] Jupps is a small family business retailing carpets and other products from a store in Geraldton, Western Australia.

[10] At the time of dismissal its owners included the Smith family represented by Brad Smith (then Store Manager) and Mr Cusworth (General Manager).

[11] Mr Humble, a local resident, worked in the business since 2005.[1] He was made a full time employee in about 2009. At the time of dismissal he held the position of sales consultant.

[12] As a sales consultant Mr Humble worked on the shop floor and reported to the Store Manager, Mr Smith.

[13] Due to trading circumstances in part exacerbated by the economic impact of COVID-19 Mr Humble was made redundant on 24 March 2020. That morning Mr Smith had discussed business circumstances with other owners including Mr Cusworth. A decision was made by the owners that Mr Humble's position would be made redundant. The owners formed the view that no other opportunities for redeployment within the business or associated businesses were available. Mr Smith was tasked with communicating this unwelcome news to Mr Humble.

[14] Mr Smith prepared a letter of redundancy[2] and then spoke to Mr Humble. He told Mr Humble of the need for redundancy, indicated that no redeployment options existed and outlined the terms of redundancy. He handed Mr Humble the letter of redundancy.

[15] Mr Humble had no cause to question the genuineness of the redundancy as the letter spoke for itself of the reasons, and he was aware that there were no opportunities for redeployment within the company.

[16] Mr Humble ceased working on 24 March, sought to get on with his life and for almost the next three months remained of the view that his redundancy had been genuine.

[17] On 15 June 2020, as a former employee, Mr Humble went into the Jupps store. He noticed Mr Ian Ramshaw working on the sales floor. Mr Ramshaw had in the past worked occasionally in the store relieving the store manager Mr Smith. Mr Humble spoke briefly to Mr Ramshaw. It was a friendly chat. Mr Ramshaw told Mr Humble that he (Mr Ramshaw) was thinking of buying out Mr Smith's share in the business. At that time, Mr Smith was still the store manager.

[18] Over the next couple of days Mr Humble became concerned that, as Mr Smith was still the store manager, Mr Ramshaw was effectively performing his (Mr Humble's) former sales job. He formed the view that his redundancy may not have been genuine.

[19] In the fortnight 15 June to 30 June, Mr Humble, having formed this view, spoke to a friend with some knowledge of employment matters who gave him advice and suggested he might take the issue further. Mr Humble logged onto web sites for information including the Commission's web site. By 30 June he had identified that an unfair dismissal claim could examine whether his redundancy was in fact genuine. He identified that he had 21 days from dismissal in which to make such a claim and also identified that the Commission had power to extend this time. He decided he would make a claim.

[20] Over the next fortnight (30 June to 14 July) Mr Humble prepared his claim. He started doing so around 30 June but wanted to gather all his paperwork including his employment contract and lodge this on-line at the same time. From time to time during this fortnight Mr Humble went back to the Commission's web-site and lodged his application when he considered his form F2 to be complete.

[21] The circumstances by which Mr Ramshaw came to be working on the shop floor on 15 June 2020 were the subject of evidence. On that issue I make the following findings.

[22] In April 2020 Mr Smith indicated his intention to leave the business and in so doing sell the Smith family share of the business (25%) to the Ramshaw family.

[23] A heads of agreement was entered into between Mr Smith and Mr Ramshaw to this effect (Letter of Intention) on 20 April 2020.[3]

[24] It was agreed that the sale transaction would take effect from 1 July 2020 but that the sale price would not be determined and ASIC documentation not lodged until late 2020 once full year accounts had been placed before the group accountants. [4]

[25] In the weeks following the heads of agreement, Mr Ramshaw worked on the shop floor as an assistant store manager under the supervision of Mr Smith as part of his transition to ownership and taking over store management.

[26] Mr Humble says that he only became aware that another person had been employed in sales at the Geraldton store, and suspected they were performing his duties, twelve weeks after dismissal (15 June).[5] Mr Humble says that he "lodged the application soon after becoming aware that another person had joined the team in the Geraldton store."[6]

[27] Mr Humble submits there is merit to granting an extension of time because if he is right that another worker has been placed into his role, then it calls into question whether his redundancy was genuine. It follows that if the redundancy was not genuine, then his dismissal was unfair.

[28] Jupps submit that Mr Humble's explanation for the delay is not an exceptional circumstance. It says that Mr Humble attended the Geraldton showroom in or around 15 June 2020 at which time he saw Mr Ian Ramshaw working at the premises. It says Mr Humble failed to explain the whole of the delay in that his application was not filed until 14 July 2020, twenty-nine days after he attended the business.

[29] Jupps further submit that the primary application lacks merit. It contends that the dismissal was a case of genuine redundancy. It relies on the circumstances by which Mr Ramshaw came to be working at Jupps. It says that Mr Humble is wrong to assert that his role as an employee was replaced, even if some of his previous duties are performed by Mr Ramshaw.

[30] 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."

[31] Mr Humble's application can only proceed if he can establish that "exceptional circumstances" exist within the meaning of section 394(3).

[32] An applicant for an extension of time has an onus to adduce evidence in support of matters which that applicant asserts constitute exceptional circumstances.[7]

[33] The test of "exceptional circumstances" establishes a "high hurdle" for an applicant.[8] A decision whether to extend time under section 394(3) involves the exercise of a discretion.[9]

[34] 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."[10]

[35] The principles of Nulty have recently been cited with approval by the Full Bench of the Commission in Tamu v Australia for UNHCR.[11]

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

[37] 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]

[38] 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]

[39] The period of the delay that requires 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]

[40] The 21-day statutory period after Mr Humble's dismissal expired on 14 April 2020. Having filed his application on 14 July, it is ninety (90) days out of time.

[41] The time that elapsed from Mr Humble's employment being terminated to lodgement of his unfair dismissal application can be divided into three distinct periods:

• first is the period from 24 March 2020 to 15 June 2020 when Mr Humble first became aware that his redundancy may not have been genuine (an 82 day period of which 61 days are days of delay in filing);

• second is the period between 15 June 2020 to 30 June 2020, in which Mr Humble says he was researching his legal position and making a decision to lodge a claim (15 days of delay); and

• third is the period is from 30 June 2020 to 14 July 2020 (the date of lodgement) - a period Mr Humble says was working on his application and gathering "attachments"[15] (14 days of delay).

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

[42] Past decisions of the Commission (although each is decided on its own facts) 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.[16]

[43] In this case, Mr Humble did not question the genuineness of his redundancy until he observed Mr Ramshaw performing what he considered to be his job.

[44] Mr Humble was not in receipt of any information during this first period on which he could have otherwise formed a view that his dismissal may not have been a genuine redundancy. The facts he ascertained on 15 June 2020 point somewhat to a reasonable belief that his redundancy may not have been genuine but not overwhelmingly so. He noted Mr Ramshaw was selling products (a role he had performed) but he was also casually informed that Mr Ramshaw was intending to purchase Mr Smith's share of the business (Mr Humble had not been a co-owner).

[45] The explanation for this period of delay is credible although the conclusion reached by Mr Humble that his job had been taken over by Mr Ramshaw involved assumptions on his part. He was unaware of the sale agreement but did not ask questions at the time or return to the store to test those assumptions or seek further information.

The second period - decision to contest the dismissal

[46] Mr Humble says that following his visit to the store he spoke to friends and one such friend, who had some knowledge of unfair dismissals, referred him to the Commission's website.[17] Upon reviewing the Commission's website Mr Humble says that he started reading about what is and is not a genuine redundancy. He found the correct form to lodge an unfair dismissal, and started filling the form out.[18]

[47] When asked whether he became aware of the 21-day time limit to file unfair dismissal applications, Mr Humble replied that "yes, that's the first thing I saw and realised it (his application) was (going to be) outside that 21" day limit.[19] He then proceeded to investigate what circumstances may be considered exceptional in the context of a grant of an extension of time.[20]

[48] It was reasonable for Mr Humble to seek advice and reasonable for him, as a lay person, to take some time to examine web sites after 15 June. There is a credible explanation for some part of this delay though from the time he became aware of the right to litigate and aware that he had already passed the 21-day time limit his explanation for delay in the latter part of this period lacks force.

The third period - working on application until lodgement

[49] Mr Humble worked on his application for at least two weeks gathering relevant information to prove his case.

[50] Attached to his application, Mr Humble included his termination letter dated 24 March 2020, and his initial employment contract dated 22 May 2005.[21] Despite finding the Commission's online form somewhat finnicky in that it required an application to be completed from start to finish, without the opportunity to save,[22] Mr Humble remarked the "form was pretty straight forward."[23] He did not seek help from anyone in order to lodge his application, nor did he feel he needed to.[24]

[51] The explanation for the delay during this period is weak in circumstances where Mr Humble had already, prior to 30 June, made a decision to file a claim and knew that he was already out of time by a considerable margin.

[52] The circumstances surrounding the 'first period' as described above tend to weigh in favour of granting an extension of time. The explanation for delay in the first part of the second period has some merit. The explanation for delay in the third period is weak.

[53] It is commendable that a lay employee making a claim researches the unfair dismissal jurisdiction and provides as complete information as possible to enable the claim, once lodged, to be processed by the Commission and responded to. Mr Humble is to be commended, not criticised for his diligence in this regard.

[54] However, once knowing that a statutory lodgement period of 21 days existed and had already expired by a considerable margin, Mr Humble delayed by a further significant period before lodging an already out of time application.

[55] I take into account that Mr Humble was a lay person inexperienced in these matters. Yet he had on hand by at least 30 June the information needed to complete the unfair dismissal form F2. He had researched his rights and was able to navigate the Commission's website in order to lodge the application.

[56] I do not accept that in collating the letter of termination and his contract of employment Mr Humble has adequately explained the fourteen days of further delay in the third period. His redundancy letter was within his possession since the date of termination. Further, an application does not require attachments; an applicant misunderstanding this requirement is not exceptional. In his evidence, Mr Humble rightly acknowledged that the Form F2 was not complex. After an applicant identifies themselves and their employer, there are three main sections in the form: "1. Your Employment 2. Remedy and 3. Dismissal". In total, within Mr Humble's application, these three sections contain seven sentences of short to medium length. I do not accept that authoring an application of seven sentences and two attachments was unduly complex.

[57] Although the first period of delay has a reasonable explanation, the explanation for the further delay periods does not. The explanation for the delay in an overall sense is not convincing.

[58] These conclusions weigh against a finding of exceptional circumstances.

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

[59] Mr Humble was aware, after being consulted by Mr Smith, and handed a termination letter, that he had been terminated by way of redundancy as at 24 March 2020.

[60] In the circumstances where Mr Humble's case is that he did not discover his redundancy was not genuine until approximately three months after termination, Mr Humble's awareness of the dismissal date has less relevance than a dismissal for cause. This is a neutral consideration.

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

[61] Mr Humble did not initially question the genuineness of his dismissal. He cannot be criticised for that; he had no information on which to conclude otherwise. He accepted the employer at its word and on the basis of his then knowledge of business conditions.

[62] It was only after observing Mr Ramshaw working in what he believed to be his job that Mr Humble formed a view that his redundancy may not be genuine.

[63] In the days that followed 15 June, Mr Humble did not however contact Jupps to discuss his concern or seek further information.[25] Had he done so he may have been informed of the circumstances in which Mr Ramshaw was working, including the 20 April 2020 heads of agreement and Mr Ramshaw's intention to take over store management from Mr Smith.

[64] This lack of dialogue denied both sides the opportunity to informally discuss the matter without litigation. The first time the employer became aware of a dispute over the 24 March dismissal was after the making of this application on 14 July. This factor weighs against granting an extension of time.

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

[66] However, there is no particular prejudice to Jupps should the time for lodgement be extended. Jupps has lodged a detailed response and is represented by a firm with whom it has an ongoing relationship.[26] It is unlikely the employer has been or will be unduly prejudiced should an extension be granted.

[67] Nonetheless, it is a principle well established by the Commission that the mere absence of prejudice is an insufficient basis to grant an extension.[27]

[68] In the circumstances of this matter, this consideration is a neutral factor.

[69] A hearing on merit will necessarily concern Jupp's jurisdictional objection that Mr Humble's termination was a genuine redundancy. It concerns no other suggestion of performance or misconduct issues.

[70] 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."

[71] Without having conducted a merit hearing I make no concluded findings on the jurisdictional challenge by Jupps. However, on the limited evidence before me, my provisional view is that Mr Humble's case on merit is not strong.

[72] Mr Humble accepted that there was little to discuss had there been a period of consultation. The nature of the statutory consultation obligation also bears a relationship to context including COVID-19 circumstances.[28]

[73] Mr Humble also accepted there were no redeployment opportunities. Nothing so far before me suggests otherwise. At the time Mr Humble considered the redundancy was genuine.[29]

[74] The crux of Mr Humble's case is that his duties were still required to be performed and were in fact being performed by Mr Ramshaw. For this argument to succeed the Commission would need to be satisfied that Mr Ramshaw was performing Mr Humble's job.[30]

[75] Two immediate difficulties arise with this proposition, even on the limited material before me. Firstly, Mr Ramshaw appears to have been working as an assistant store manager for the purpose of taking over from Mr Smith as store manager once an arms-length sale transaction took effect. Secondly, the role Mr Humble performed (sales consultant) appears to have been a different role to that being performed by Mr Ramshaw (assistant store manager). Whilst Mr Humble assumed otherwise, it is a well-established principle that a position can be genuinely redundant even though duties of that position do not entirely disappear and remain performed by others in the business.

[76] To his credit, once this evidence emerged at the hearing, Mr Humble seemed to accept that Mr Ramshaw was not performing his exact job, but rather that salesperson duties were being shared by staff.[31] Mr Humble also accepted that Mr Ramshaw was being trained and familiarised with the business during the transitionary period prior to him purchasing Mr Smith's share of the business.[32] Evidence from Mr Cusworth was that Mr Ramshaw was working as an assistant store manager since commencement.[33]

[77] If Mr Humble's and Mr Ramshaw's jobs were distinct there would be merit in the jurisdictional challenge by Jupps. If the jurisdictional challenge is made out Mr Humble's unfair dismissal claim would not be able to further proceed.

[78] To the extent this factor is considered relevant, section 394(3)(e) does not require more than a prima facie opinion on merit.[34] It is my provisional view that the merits of Mr Humble's claim are not strong. This factor weighs against granting an extension of time.

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

[79] No evidence or submissions from Mr Humble or Jupps raise issues of fairness with and between other persons.

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

[81] Mr Humble's application was filed 111 days after the date of dismissal, therefore it is 90 days out of time.

[82] I have concluded that the explanation for the delay, in an overall sense, does not support a finding of exceptional circumstances. The first period of delay prior to Mr Humble observing Mr Ramshaw working in the store has a reasonable explanation. However, the second and third periods do not and increasingly do not as time passed. Whilst the whole of a period of delay need not support a finding of exceptional circumstances the fourteen day period of delay from 30 June 2020 in particular was attributable to no reasonable explanation.

[83] I have not found any other factor in section 394(3) to weigh in Mr Humble's favour. Given what appears to be now known, Mr Humble filed his claim in good faith but his case is not strong on merit. I therefore do not consider it appropriate to extend Mr Humble's time to lodge his application.

[84] Reference was made by the employer's representative that it may consider making a costs application should an extension of time not be granted. My conclusion that Mr Humble made his claim in good faith albeit on limited information, showed respect for his former employer and at the hearing accepted much of the additional information advanced, may be relevant to considering whether such an application is warranted.

[85] As Mr Humble's 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[35] to that effect is issued in conjunction with the publication of this decision.

G Guida, with permission, of Employsure Law Pty Ltd, for Jupps.

[4] As of 1 July 2020 Mr Ramshaw has been the store manager: audio of hearing 7 August 2020 0:47:00

[5] Audio of hearing 7 August 2020 0:25:50

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

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

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

[10] [2011] FWAFB 975 at [13]. See also Cheval Properties Pty Ltd t/as Penrith Hotel Motel v Smithers [2010] FWAFB 7251 at [5]

[11] [2019] FWCFB 2384 at [16] - [20]

[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] Audio of hearing 7 August 2020 0:35:20

[16] 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

[17] Audio of hearing 7 August 2020 0:33:00

[22] Audio of hearing, 7 August 2020 0:35:21

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

[28] See for example: Brackman v Dressed 4 Success Pty Ltd [2020] FWC 2770 at [24] per Gostencnik, DP

[30] Mr Paul Dale v Marky Industries Pty Ltd [2019] FWC 8446 at [66]

[31] Audio of hearing 7 August 2020, 01:06:25

[34] Kyvelos v Champion Socks Pty Ltd AIRCFB 10 November 2000 Print T2421 at [14]

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