Howard v New South Wales Fire Brigades

JUDGMENT: - 11 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 30 October 2002

ALISTAIR JOHN McCLYMONT AND THOMSON FINANCIAL PTY LTD

Application by Alistair John McClymont re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 Mr Alistair John McClymont ("the applicant") was dismissed for reasons of alleged redundancy on 16 April 2002. Seventy-seven days later, he lodged a claim for relief from alleged unfair dismissal pursuant to the provisions of Pt 6 ch 2 of the Industrial Relations Act 1996 ("the Act"), against his former employer, Thomson Financial Pty Ltd ("the respondent").

2 The application, therefore is 56 days out of time and for it to proceed to determination would require the Commission to exercise its discretion, pursuant to s85(3) of the Act, to accept the application outside the 21 day time limit prescribed by s85(1).

3 By consent of the parties this decision deals only with the interlocutory matter; noting, of course, that the evidence filed in the proceedings will, to some extent, overlap with the merits of the case proper.

4 When the matter was first listed on 19 July 2002, the Commission raised with the unrepresented applicant the terms of s85(3) of the Act. The applicant explained that after his dismissal he was at all times hopeful of reaching an amicable settlement with the respondent, thereby making legal proceedings unnecessary. He said he had consulted with various law firms, all of whom had advised him that he had a "strong case". When it became apparent the respondent was unwilling to settle his claim, the application was filed.

5 Mr P Fraser (Solicitor) appearing for the respondent opposed the application and maintained that the applicant's termination of employment was for reasons of genuine redundancy. As a preliminary matter he asked the Commission, in the exercise of its discretion under s85(3) of the Act, to refuse to allow the application to be accepted outside the 21 day time limit.

6 Notwithstanding the parties' opposing positions, the Commission chaired private conferences in order to discuss settlement of the claim. These conferences proved unsuccessful. Accordingly, a finding of unsuccessful conciliation was made under s87 of the Act and the interlocutory matter set for hearing. Evidence was subsequently filed and served in accordance with the Commission's directions issued on 19 July 2002.

7 The applicant commenced employment as the respondent's Business Development Manager on 17 September 2001. Soon after returning from annual leave he was made redundant when the respondent decided to reduce its sales staff from three to two.

8 The applicant was advised that he would receive the following termination payments based on a salary of $55,000 per annum:

Pay in lieu of notice $4583.33 Outstanding annual leave (6 days) $1269.14 $5852.64 (sic)

9 The applicant said he was asked to sign a release form, which included a waiver of all further claims and a six-month restraint provision excluding him from working with any competitor of the respondent. The applicant refused to sign the release form. The respondent said that the applicant was not required to sign a release form and the release form did not contain any restraint of trade on the applicant. There was some further argument as to whether the applicant should have been paid for not working during the notice period. I do not find it necessary to make findings on these matters.

10 Soon after his dismissal, the applicant entered into written communications with the respondent. I shall refer to the relevant extracts from these communications: 22 April 2002 - the applicant queried his termination payments and claimed outstanding commissions. He advised the respondent that he intended to obtain legal advice. 2 May 2002 - the applicant sent an e-mail to Acuiti Legal explaining his position and asking Acuiti Legal to write to the respondent. No correspondence was sent to the respondent from Acuiti. 8 May 2002 - the applicant described the approach taken by the respondent to be " extremely unfair and unacceptable ." He described the amount offered as "unfair". He gave an ultimatum that, unless an acceptable response to his offer of four months salary, plus outstanding commission was received by 5.00 pm on 10 May 2002, he would have " no alternative but to put this matter into the hands of my solicitor and instruct them to commence legal proceedings ." 27 May 2002 - the applicant expressed his disappointment with having had no response to his 8 May communication. He advised that he had obtained legal advice from two law firms, which confirmed he had a " strong case for compensation ." He gave the respondent until 5.00 pm on 30 May 2002 for a response or he would " have no choice but to commence legal proceedings ." 10 June 2002 - the applicant reminded the respondent of his legal advice and advised " I have now commenced legal proceedings ." 12 June 2002 - the applicant expressed regret that he was forced to take legal action, but advised that he could cease legal proceedings at any stage. 20 June 2002 - the applicant again reminded the respondent of his legal advice and said he had now commenced legal action. The application was not filed until 2 July 2002.

11 The applicant's reasons for filing his claim of unfair dismissal 56 days out of time may be summarised as follows: 1. He did not want to jeopardise negotiations with the respondent over his claims to redundancy payments and outstanding commissions. He believed he was negotiating in good faith with the respondent.

2. The respondent had advised him that it was seeking legal advice, but it did not respond to his offers of settlement.

3. The applicant had obtained legal advice and did not ignore that advice. Rather, he believed that litigation was not in the interests of achieving a settlement.

4. The applicant believed that gathering material and seeking legal advice " amounted to the commencement of legal proceedings ."

5. From the outset, the applicant had believed his redundancy was unfair and had told the respondent so, as soon as 24 hours after his dismissal.

12 Mr Jamison, agent for the applicant, submitted it was abundantly clear from the 8 May 2002, that the respondent was on notice that the applicant's termination was unfair.

13 The respondent failed to respond to a series of e-mails from the applicant which demonstrated that there was no closure to the matter. The applicant was entitled to believe the matter could be amicably resolved. The applicant believed that by gathering information and taking legal advice he was commencing proceedings.

14 Mr Jamison said the applicant should not be penalised for seeking to avoid wasting the time of the Commission if settlement was possible.

15 Mr Jamison said the applicant was experiencing hardship as he was not in full time employment. It had been five months since his termination of employment.

16 Ms Joanne Sowerby is the respondent's Human Resources representative and the person to whom most of the applicant's communications were directed.

17 It was Ms Sowerby's evidence that the applicant's dismissal was for genuine redundancy. It was not a reflection of his performance. She explained how the redundancy arose. She said at no time did the applicant seek to discuss the decision to make him redundant. Ms Sowerby outlined the numerous communications from the applicant from 22 April to 20 June 2002.

18 Ms Sowerby said that at no time did she attempt to dissuade the applicant from commencing legal proceedings or do anything to delay him from doing so. She actually said to him "you go ahead and do whatever you have to do." (The applicant did not contest that this was said by Ms Sowerby.)

19 Ms Sowerby said that the applicant had not suggested his dismissal was unfair prior to the lodgement of the claim. Rather, the applicant was concerned with his monetary entitlements.

20 Mr Britt, for the respondent, provided detailed written submissions on the relevant general law applicable to the grant of extensions of time to commence litigation and the specific provisions of s85(3) of the Act. I shall refer to the authorities referred to by Mr Britt later in my decision of this matter. There is no need to repeat them at this juncture.

21 In addressing the provisions of s85(3) of the Act, Mr Britt made submissions under the following headings:

22 The reason for, and length of delay - (s 85(3)(a)) Mr Britt submitted that the length of delay in this case was significant - 56 days outside the 21 days time limit. See Howard v New South Wales Fire Brigades [2000] IRComm 105 and Schwager v Church Stores [1999] NSWIRComm 485. The circumstances for the delay were within the applicant's control. He should be held responsible. Mr Britt put that the applicant's real reason for pursuing the application was to force the respondent's hand into paying him what he believed to be unpaid entitlements. Pt 6 ch 2 of the Act was not an appropriate vehicle for doing so. See Maity v Express Publications Pty Ltd [2001] NSWIRComm 169. The applicant had taken legal advice so ignorance of the law can be no defence. Moreover, while threatening legal action on numerous occasions, he did not do so until 2 July 2002.

23 Hardship to the employee and employer - (s 85(3)(b)) Mr Britt submitted that some degree of hardship would follow in most cases of dismissal. See Kent Gorrell v Uwatec Pty Ltd (unreported, Sams DP, Matter IRC1700 of 1999, 5 July 1999). The applicant had not demonstrated any additional or excessive hardship than would be experienced by any other dismissed employee. Further, the applicant had other avenues to pursue alleged underpayments, if that is what he really seeks. Mr Britt said the respondent would incur additional hardship in defending the unfair dismissal claim. It is entitled to know it can organise and arrange its business to meet the circumstances of the imperative to have made the applicant redundant.

24 Conduct of the employer relating to the dismissal - (s 85(3)(c) Mr Britt put that there was no evidence that the conduct of the employer had contributed to the reasons for the applicant's delay in filing the application. See Green v Mayne Nickless Ltd t/as Armaguard (unreported, Cambridge C, IRC2945 of 1997, 11 February 1998). Mr Britt submitted that there had been nothing to prevent the applicant from filing his application. His communication with the respondent did not prevent him from protecting his position. The e-mails related to his claims of underpayment and not the alleged unfairness of his dismissal. The respondent had not made any false promises, which might have held out hope of the matter being settled. The respondent did not let the matter "drag out".

25 Section 85(3) is expressed in the following terms:

The Commission may accept an application that is made out of time if the Commission considers there is a sufficient reason to do so, having regard in particular to: (a) The reason for, and the length of, the delay in making the application, and (b) Any hardship that may be caused to the applicant or the employer if the application is or is not rejected, and (c) The conduct of the employer relating to the dismissal.

26 In deciding whether to exercise its discretion to allow an out of time application, the Commission must be satisfied that a "sufficient reason" has been made out. Consistent with each case being decided on its own facts and circumstances, sufficient reason is not defined in the Act, nor is it appropriate to do so. I refer to Griffith Ex-Services Club Limited v Federated Liquor and Allied Industries Employees Union of Australia (NSW Branch) (1993) 51 IR 186, where a Full Commission observed at 190: It is not appropriate to attempt to formulate any definition as to what constitutes a "sufficient reason". See also Martin v Nominal Defendant (1957) 74 WN (NSW) 121.

27 The Commission, however, is guided as to the matters to be taken into account, by reference to sub clauses (a), (b) and (c). It is appropriate for an applicant to address each of the criteria in sub clauses (a), (b) and (c). It may be, of course, that only one of these matters, two of them or all three, might be found to constitute a sufficient reason, or reasons, for the Commission to be satisfied its discretion should be favourably exercised.

28 An authoritative judgement on the general principles in respect to the setting of time limits and the Commission's discretion to waive time limits is found in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 where McHugh J said at p551: The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that "[w]here there is delay the whole quality of justice deteriorates"… and at p552: The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost (26). Second, it is oppressive, even "cruel", to a defendant to allow an action to be bought long after the circumstances, which gave rise to it, have passed (27). Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them (28). Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period (29), as the New South Wales Law Reform Commission has pointed out (30)…

and at p553 …In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. The purpose of a provision such as s. 31 is "to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced". (35) But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires the extension. 29 In applying the principles discussed above and in the context of other decisions of this Commission, the Commission, as presently constituted, had cause to summarize the general principles applying in s 85(3) proceedings in Kent Gorrell v Uwatec Pty Ltd. 1. The Commission's power to accept out of time applications is discretionary.

The onus rests on the applicant to convince the Commission of a "sufficient reason" to accept an out of time application.

It is inappropriate to establish a rigid definition of what constitutes a "sufficient reason". Each case must be considered on its own facts and circumstances.

There is a definite purpose in the power of the Commission to exercise its discretion in extending the time limit of twenty-one days; just as there is a definite purpose in the legislature establishing time limitations for filing.

There is a public interest in the prompt institution and prosecution of litigation before the Commission.

The discretion to allow out of time applications is directed towards ensuring that justice is afforded to both parties.

Each of the subclauses (a), (b) and (c) in s.85 (3) should be addressed and an explanation provided. It is only necessary to establish a sufficient reason for thee Commission's discretion to be exercised.

Ignorantia legis neminem excusat (ignorance of the law excuses no one). 30 (See also Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3; Griffith Ex-Services Club Ltd v Federated Liquor and Allied Industries Employees Union of Australia (NSW Branch); Parker v Capitol Painters & Decorators Pty Ltd (1996) 68 IR 100, Thomas v Repco Auto Tech (unreported, Tabbaa C, IRC3900 of 1998, 23 March 1999); Baxter and Charlestown Shopping Centre Holdings Pty Ltd (unreported Harrison DP, IRC829 of 1999, 17 March 1999); Herrera and Creative Packaging Services Pty Ltd (unreported, Sams DP, IRC2108 of 1999, 11 November 1999); Maity and Express Publications Pty Ltd and Weisser and Spur Group Pty Limited [2002] NSWIRComm 15).

31 Unfortunately for the applicant his own evidence doomed his case from the outset. The applicant gave evidence that he was "aware that these claims are required to be lodged within 21 days of termination" (Ex"1" par 9). When asked in cross-examination if there was anything which prevented him from lodging his claim in time, the applicant said without qualification "no" (T.p8). His honesty was innocent and refreshing. Unfortunately, it did nothing to help his case.

32 However, lest there be any doubt, I refer, in addition, to the following relevant matters.

33 This is not a case where an employee acknowledges redundancy but some time later (after the 21 day time limit has expired) discovers that the real reason for dismissal was a sham. In these circumstances, the Commission's discretion to allow the claim to go forward might be exercised. Rather, it is apparent from the applicant's own evidence that he disputed his redundancy, both as to the fact of it and the manner in which it was done. The day after his dismissal he told the respondent he was "extremely disappointed by my redundancy as I didn't feel I was given a fair opportunity at Thomson Financial Pty Ltd." (Ex"2," Annex B).

34 That being so, it is curious that the applicant did not seek, at least, to protect his position should that have been necessary. However, what he then did was embark on a series of communications with the respondent questioning his dismissal and outstanding entitlements and threatening legal action. In the face of the respondent's unwillingness to meet his terms, not only does he not file an unfair dismissal claim, but he told the respondent he had done so, when he had not.

35 Given this factual matrix, it can fairly be said that the applicant was more than aware of his rights under the Act, but took no steps within the prescribed time period to protect his position. It would prove to be a costly oversight.

36 I would now turn to consider each of the specific subsections in s85(3) in light of the evidence in this case.

37 The applicant explained that the reason for the delay was that he did not want to jeopardise the settlement discussions or damage his relationship with the respondent.

38 This explanation sits rather uncomfortably with his threats of legal action made on a number of occasions during the negotiations. Moreover, the strong language used in his communications is hardly conducive to a favourable response from the respondent. For example the 8 May e-mail says, in part, that the respondent's offer "could be construed as misleading and deceptive conduct." If anything was destined to jeopardise settlement, then surely threats of legal action and the less than friendly language he used would be it.

39 Further, the applicant said he believed that taking advice from solicitors constituted the "commencement of proceedings". I find this explanation hard to accept. The applicant is a well-educated and intelligent person. I believe the applicant was well aware of what "commencement of proceedings" meant. His communications with the respondent are lucid and comprehensive. Indeed, his own evidence was that he knew of the 21 day time limit for filing the application. Moreover, if he was receiving legal advice from a number of sources, it beggars belief that such advice wouldn't include protecting his legal position by simply lodging an application of unfair dismissal.

40 Indeed, he understood that while having commenced legal proceedings he could "easily cease legal proceedings at any stage" (e-mail of 12 June, 2002)

41 Accordingly, I do not regard the applicant's reasons for not filing his application within 21 days as a sufficient reason for not doing so.

42 The Commission is obliged to consider the length of the delay in deciding whether to exercise its discretion. Here the delay was 56 days. On any view of it, this was a significant delay. I concur with the view expressed by Cambridge C in Schwager v Church Stores: The length of the delay adds height to the hurdle almost in an exponential relationship. That is, the further that the delay extends, the more difficult it will be to obtain the discretion to extend time.

43 I regard the delay of 56 days as significant. This, of itself, would not be decisive. However, when taken together with the other factors to be considered, the delay represents a significant hurdle for the applicant to overcome.

44 It is apposite to refer to what I said in Kent Gorrell and Uwatec Pty Ltd: There is no doubt that every dismissal brings with it some degree of hardship, either personal, emotional or financial. The applicant is not " Robinson Crusoe " in this respect. In my view, s.85(3)(b) is particularly directed towards any additional or excessive hardship occasioned upon the applicant should the application be rejected. Such hardship should be viewed in the context of the overwhelming majority of applicants, who, while experiencing varying degrees of hardship, nevertheless, are able to file within time. (See Paul Thomas v Repco Auto Tech - unreported, Tabbaa C, 23 March 1999).

45 In my opinion, there is no evidence that the applicant has suffered any excessive hardship compared to the generality of difficulties that all dismissed employees experience.

46 To my mind, the applicant's conduct both after dismissal, and during the proceedings before the Commission, reveal him to be a person of sincerity, honesty, intelligence and competence who would be a valuable asset in any organisation. While I accept the difficult employment market in the applicant's field of expertise, I think it unlikely that he would have difficulty finding alternative employment; particularly as his termination of employment had nothing to do with his performance or attitude.

47 On the other hand, the employer is entitled to expect that threats of legal action over a long period of time, (and which did not eventuate), should be regarded as nothing more than that - threats. It is not appropriate for an employer to have its business dislocated and costs incurred beyond a reasonable period in which it would otherwise expect to face actual litigation. When nothing happens for a significant period beyond 21 days, the employer is perfectly entitled to expect finality of the matter.

48 The Commission concurs with Mr Britt's submission that s85(3)(c) is directed towards the conduct of the employer relevant to the delay in the applicant filing an application for unfair dismissal. Put another way, the conduct referred to in s85(3)(c) is not about the conduct of the employer in respect to the circumstances of the dismissal itself.

49 I refer to what Cambridge C said in Green v Mayne Nickless t/as Armaguard: There was no evidence that any conduct on the part of the employer after the applicant's dismissal contributed to the reason(s) that were provided for delay in the lodgement of the application. The applicant sought to provide evidence regarding the alleged unfairness of the dismissal as a factor which should influence the exercise of the Commission's discretion to accept the application out of time. An examination and consideration of evidence of this nature could lead the Commission to a quasi determination of the application proper. Therefore the consideration of the conduct of the employer must, having established that an arguable case exists, focus upon only that conduct which is said to have contributed to any delay in the lodgement of the application.

50 I respectfully agree with Cambridge C's opinion that to undertake an inquiry of the employer's conduct at the time of dismissal would be dealing with the merits of the alleged unfairness of the dismissal and not the reasons for the applicant's delay in filing the application.

51 Viewed in this way, I cannot find any evidence that the conduct of the employer inhibited, or prevented the applicant from filing his application within time. Indeed, on one view, the respondent's consistent refusal to meet the applicant's proposed terms of settlement should have encouraged him to lodge his claim much earlier than he did.

52 I also have had regard for the undisputed evidence of Ms Sowerby that she had told the applicant to "do whatever you have to do." (Ex "A" par 15). Notwithstanding this invitation, he didn't do so, even after saying he had on a number of occasions.

53 The Commission is satisfied that there is no evidence of any dilatory conduct of the employer which would warrant a particularity of finding against the respondent under s85(3)(c) of the Act.

54 The applicant has not discharged the onus of establishing a "sufficient reason" for failing to lodge his claim of alleged unfair dismissal within the prescribed time period in the Act.

55 It follows that the Commission declines to exercise its discretion, pursuant to s85(3) of the Act, such as to permit matter IRC02/3850 to be accepted for determination.

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