s.394 - Unfair dismissal

Application for an unfair dismissal remedy - extension of time - voluntary administration - proceeding not statute barred - delay caused by uncollected posted mail - exceptional circumstances - time extended - parties to be heard on further case management

• [1] Jarrod Osborn (Mr Osborn or the applicant) has applied to the Commission under s 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in relation to his dismissal by Social Energy Australia Pty Ltd (Social Energy, the Respondent or the employer) on 7 June 2022.

• [2] Mr Osborn's application is dated 7 June 2022. In email form it was received on 2 August 2022. In hard copy, it was received and date-stamped by administrative staff of the Commission on 3 August 2022.

• [3] The application is notionally thirty-five days outside the statutory 21-day period for making unfair dismissal claims. Mr Osborn submits that if out of time, an extension should be granted.

• [4] I listed a directions hearing on the extension of time issue for 22 August 2022.

• [5] On the morning prior to the 22 August 2022 directions hearing, my chambers received the following from solicitors purporting to represent the administrator of the Respondent:

"We refer to the above matter which is listed for a Directions Hearing before Deputy President Anderson at 9.30am (ACST) on Monday, 22 August 2022 by telephone. The Applicant, Mr Jarrod Osborn, has been copied into this email.

We wish to notify the Commission and the Applicant that Social Energy Australia Pty Ltd (Administrator Appointed) ("the Company") was placed into voluntary administration on Friday, 19 August 2022. We have been instructed to act for the administrator appointed, namely Philip Campbell-Wilson of Grant Thornton, who provided our firm with instructions after 4pm on Friday, 19 August 2022 to appear at Monday's Directions Hearing. Accordingly, we intend to seek leave from the Commission to appear for the Company at the Directions Hearing.

Given the recent appointment of the administrator, we intend to seek a 4 week adjournment of the matter on behalf of our client to enable the administrator to gain more clarity on the future of the Company and obtain further information regarding Mr Osborn's application. During this time, we expect that the first meeting of creditors will be held, which is required to take place within 8 business days of the administrator's appointment, and that the administrator will begin investigations into the company's affairs. In the meantime, we understand that the Commission has sought further information from Mr Osborn regarding his application and has indicated that it may have been lodged out of time.

This email has been sent as a matter of courtesy to notify the Commission and the Applicant of the Company's position in advance of the Directions Hearing. We are, of course, prepared to make these submissions at the Directions Hearing and address any further queries from the Commission regarding this matter."

• [6] I granted the administrator permission to be represented, conditional upon being satisfied that the company had, in fact, been placed into voluntary administration.

• [7] I adjourned the matter until later that day (22 August) to enable solicitors for the administrator to identify the provisions of the Corporations Act 2001 (Cth) (Corporations Act) which applied to the administration, and to make any submissions on the impact the administration has on the Commission's jurisdiction to determine the extension of time question.

• [8] I also advised the parties of an apparent administrative error on the Commission's part that led to the application being out of time, and my provisional view that those circumstances are exceptional and would warrant an extension of time, should the Commission have jurisdiction to make a determination.

• [9] Upon the matter resuming, solicitors for the administrator confirmed that the respondent was placed in voluntary administration on 19 August 2022 under the Corporations Act.[1]

• [10] By directions issued on 22 August 2022 I provided a further opportunity for the administrator and for Mr Osborn to place written submissions on the extension of time issue and case management in light of the aforementioned.

• [11] The administrator submits that the unfair dismissal application is not statutorily stayed by s 440D of the Corporations Act because Commission is not a court within the meaning of that section. However, the administrator submits that the Commission should, in the exercise of discretion, stay the unfair dismissal proceedings pending meetings of creditors and investigation of the company's affairs.

• [12] Mr Osborn submits that his application should proceed without further delay. He seeks an extension of time, conciliation and, absent a settlement, a hearing on the merits. He seeks an order for compensation for an alleged unfair dismissal and submits that if an order is made then he would be a creditor even if the company is wound up.

• [13] Section 440D of the Corporations Act provides:

(1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:

(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

• [14] Section 58AA of the Corporations Act provides the following definition in relation to the meaning of "court" and "Court":

(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under this Act may, subject to Part 9.7, be brought in any court.

Note: The matters dealt with in Part 9.7 include the applicability of limits on the jurisdictional competence of courts."

• [15] The respondent was placed into voluntary administration on 19 August 2022. This is not a creditors winding up (to which s 500(2) applies).

• [16] The Commission is not a court within the meaning of s 58AA. Section 440D of the Corporations Act does not represent a bar to Mr Osborn's unfair dismissal application proceeding.[2]

• [17] Consequently, the Commission has jurisdiction to determine when and how it will deal with the application. The position of the parties is relevant. Discretionary considerations involve the potential consequences for the work of the joint administrators. In some circumstances the advancement of an unfair dismissal application against a company in administration may be of little practical benefit depending upon the outcome sought. Also relevant is the statutory presumption that applications of this kind will be dealt with expeditiously, and the consequences of any delay. Those consequences would include any prejudice to the parties in the context of the special administration of the employer.[3]

• [18] In the current circumstances, I do not consider it prejudicial to the work of the joint administrators for the extension of time issue to be determined. It is a discrete matter and can be determined on the papers. Doing so will provide a measure of certainty in respect of an issue that requires a decision if the application is to proceed. If the extension is not granted, the proceeding falls away. If the extension is granted, the rights of the parties, including the joint administrators, to put views on further case management are preserved.

• [19] Accordingly, as there is no statutory bar to doing so, I proceed to determine the extension of time question on the basis that if an extension is granted then I will hear further from the parties on case management in light of the administration.

• [21] Mr Osborn is a resident of South Australia. He was employed by Social Energy as a residential energy consultant until dismissed on 7 June 2022. His dismissal took effect that day.

• [22] Immediately upon being dismissed, Mr Osborn considered his dismissal unfair. That same day (7 June 2022) he completed and dated an unfair dismissal application.

• [23] Mr Osborn posted the application from an Adelaide suburb (Davoren Park) on 17 June 2022 by Australia Post express post to the mailing address advised on the Commission website "PO Box 8072 Station Arcade Adelaide SA 5000".

• [24] Mr Osborn heard nothing for five weeks. On 25 July 2022 he telephoned the Commission. He advised an administrative officer that he had posted an unfair dismissal application and enquired about its status. He was advised that no record existed of its receipt. He was emailed a blank unfair dismissal application form and invited to resubmit his application by email.

• [25] On 2 August 2022 Mr Osborn resubmitted his application by email. A number of pages were missing.

• [26] On 3 August 2022 an administrative officer of the Commission telephoned Mr Osborn to draw his attention to the pages missing. Mr Osborn advised that he had located the express post tracking receipt of his originally posted application and advised that it had been sent to the Station Arcade Adelaide post box and had been delivered there on 21 June 2022.

• [27] The administrative officer immediately arranged for another Commission staff member to visit the post box in person wherein the application was located in an unopened express post envelope. Upon returning, the Commission staff member date-stamped the application as received on 3 August 2022.

• [28] On 4 August 2022 Mr Osborn re-sent by email his earlier emailed application with no pages missing. He also sent by email tracking receipt details for the earlier posted application. His email read:[4]

Please note, original application was mailed, received but misplaced. Please reference Aus post tracking number [tracking number redacted]

If you require me to resend proof documents that have been received, I can do this.

• [29] In his response to question 1.5 of the hard copy posted application, Mr Osborn indicated that his application was being made within 21 calendar days of his dismissal taking effect.[5]

• [30] On 10 August 2022 Mr Osborn received a letter form the Commission advising that his application was out of time and required an extension of time.

• [31] That afternoon (10 August 2022) Mr Osborn wrote to the Commission in the following terms:[6]

Can you please explain to me why I'm being penalized when in fact the original application was posted within the time frame and misplaced by your organization?

Seems odd to me. I understand the act and the standard rules, surely an exemption can be applied here?

I have proof that the application was received within the 21 days on June 24.

Thank you for your understanding and consideration."

• [32] On 12 August 2022 the employer filed a response in the Commission dated 11 August 2022, opposing the application on merit but not raising a jurisdictional issue or issue concerning it being out of time.

• [33] 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."

• [34] An out-of-time application can only proceed if the applicant can establish that "exceptional circumstances" exist within the meaning of s 394(3).

• [35] 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]

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

• [37] I apply s 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]

• [38] The principles of Nulty have been cited with approval by subsequent full benches of the Commission.[11]

• [39] Mr Osborn's application is out of time. Although the FW Rules 2013 permit an application to be "lodged" by "sending the document by post to an office of the Commission" it is not "made" within the meaning of s 394(2) until this occurs. A mailed application is not made when drafted, dated or posted.

• [40] In the case of a posted application, the making occurs when the postal process is complete and the posted application is received by "an office of the Commission".

• [41] I do not consider that the moment a postal officer places an application in an external post box leased by the Commission to be an act of lodgement. At that point, the document has not been transmitted into the care and control of the Commission. Until collected, it remains in the care and control of the postal authority. Lodgement occurs when the mailed application is received within the language of r 13(2)(b) of the Fair Work Commission Rules 2013 (FW Rules 2013_)_ by "an office of the Commission". Only when received in this sense is an application "made".[12]

• [42] Given this, I do not consider Mr Osborn's application to have been "made" on 21 June 2022 when the express post envelope was deposited into the Commission's post box in Adelaide.

• [43] In this matter, it was "made" in the relevant sense on the earlier of when removed from the post box by an officer or agent of the Commission (on 3 August) or when a second version was emailed to the Commission (on 2 August). As the latter occurred earlier, that was an act of electronic lodgement consistent with r 12(2)(c) of the FW Rules 2013.

• [44] Having not been "made" until 2 August 2022, the application is thirty-five days outside the statutory 21-day time period for filing unfair dismissal claims (29 June to 2 August inclusive). If it is to proceed, an extension of time is required.

• [45] I now consider the factors set out in s 394(3).

• [46] The reason for delay in lodging an application is a factor that must be considered. The FW Act does not specify what reason or reasons for delay might fall in favour of granting an extension although decisions of the Commission have referred to an acceptable or reasonable explanation.[13] The absence of an explanation for any part of the delay will usually weigh against an applicant. 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.[14]

• [47] 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.[15]

• [48] The period of 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.[16]

• [49] In this matter, the evidence clearly establishes, and I so find, that the reason for delay was a failure by the Commission to remove mail prior to and during the delay period in a timely manner from its Adelaide post box or ensure appropriate arrangements were in place for this to occur.

• [50] This appears to have occurred due to a systems error consequent on the Commission ceasing, from 7 June 2022, temporary arrangements put in place during the pandemic whereby hard copy mail to Commission registries had been redirected and processed at a central location in Melbourne due to the closure of registries in each State. Upon this temporary arrangement ceasing, an administrative system was not promptly put in place to recover mail no longer redirected away from the Adelaide registry.

• [51] I observe that the error appears to have been a systems oversight and not an error by a registry officer of the Commission. Indeed, administrative officers in Adelaide promptly attended to the issue raised by Mr Osborn, and upon the provision of postal and tracking details, immediately located the posted application.

• [52] Mr Osborn posted his application well within time (day 10). It was deposited by Australia Post in the Commission's post box within time (day 14). But for the systems error, the application would have been received (that is, removed from the post box and taken to the registry) within time.

• [53] Mr Osborn of his own motion actively followed up the status of his application and was responsive to the request made by Commission staff to re-send his application by email, although I take into account that it took Mr Osborn seven days to do so.

• [54] The explanation for the delay is reasonable. It weighs in favour of a finding of exceptional circumstances.

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

• [55] Mr Osborn was aware of his dismissal taking effect on 7 June 2022, and its reason.

• [56] In the circumstances, this is a neutral consideration.

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

• [57] Mr Osborn held a view at the time of dismissal that his dismissal was unfair.

• [58] He did not communicate with the employer after dismissal, preferring to pursue this legal option.

• [59] In the circumstances, this is a neutral consideration.

• [60] Social Energy, in its response prior to the appointment of administrators, did not advance any specific prejudice should an extension be granted. A claim would have to be responded to, involving time and cost.

• [61] There is potentially some greater level of prejudice to the employer in responding to the claim now that joint administrators have been appointed. That appointment occurred after the late application was "made". The claim would now need to be responded through the administrators for as long as their appointment remains in place. There is potentially also some countervailing prejudice to Mr Osborn if the company is wound up prior to his application being determined.

• [62] These matters are capable of further consideration independent of the extension of time issue. I have indicated that if the extension is granted, the rights of the parties, including the joint administrators, to put views on further case management are preserved.

• [63] In any event, the absence of prejudice would not of itself be a reason to grant an extension.[17]

• [64] This is a neutral consideration given the scope for further directions on case management.

• [65] The dismissal appears to have been on performance grounds associated with sales targets and related matters.

• [66] As I have not heard evidence on these questions, it is not possible to express even a provisional view on the strength of the respective cases.

• [67] I have taken into account that there may be an increased level of difficulty in the employer presenting its evidence in this matter and that there may be some unquantifiable increase in prejudice now that joint administrators have been appointed.

• [68] In this matter, this is a neutral issue.

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

• [69] This factor does not arise in this matter.

• [70] Even though the length of delay is considerable, the delay was primarily occasioned by a systems error on the Commission's part consequent on a centralised mail redirection ceasing.

• [71] The explanation for delay is reasonable and an error of this type most unusual. It was not one Mr Osborn could have known of or foreseen. In the truest sense of the phrase, it was an exceptional circumstance.

• [72] The fact that the employer is now in administration is a relevant but neutral consideration given the scope that exists for further directions on case management and the potential for prejudice to impact both parties. Other statutory factors are neutral or not relevant.

• [73] I take into account that the administrators submit a neutral position on whether an extension of time ought to be granted. They advocate neither for nor against that proposition.

• [74] Considered overall, I am well satisfied that the circumstances are exceptional. It is appropriate to exercise discretion to extend the time. Mr Osborn lodged his application in a timely manner and followed up its progress.

• [75] There being exceptional circumstances, the time for lodgement of application U2022/8008 is extended so as to permit it to be further heard and determined.

• [76] The application is re-listed for further directions on 2 September 2022.

• [77] An order[18] giving effect to this decision is issued in conjunction with its publication.

Ms C Cavallaro, with permission, on behalf of the administrators for Social Energy Australia Pty Ltd (Grant Thornton Australia Limited)

[1] ASIC Form 505 'External Administration or Controllership: appointment of an administrator or controller'; ASIC Extract Snapshot 22/8/2022

[2] Smith & Ors v Trollop Silverwood & Beck Pty Ltd (2003) 142 IR 137; Ryan and Letizia v AMG Shared Services [2012] FWA 9609

[3] Krebs v Pika Wiya Health Service Aboriginal Corporation (Administrators Appointed and under Special Administration)

[2015] FWC 1232

[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] John Mamur v Coles Group Supply Chain Pty Ltd [2020] FWCFB 4954 at [7] and [19]; Dennis Obel v Central Desert Regional Council [2021] FWCFB 167 at [6]

[12] Hong Ye v Minister for Immigration and Multicultural Affairs [1998] FCA 341; (1998) 153 ALR 327, 330 and 332

[13] Manoj Ellikuttige v Moonee Valley Racing Club Inc [2018] FWCFB 4988 at [30] and [36]

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

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

[16] 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

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

[18] PR745271

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