Fair Work Act 2009

s.394 - Unfair dismissal

Unfair dismissal application - jurisdictional objection - late application - exceptional circumstances - extension of time granted.

[1] The Fair Work Act 2009 (Cth) (Act) provides that an applicant for an unfair dismissal remedy made pursuant to section 394 of the Act must make an application within 21 days after the dismissal took effect.[1] However, the Fair Work Commission (Commission) may allow a further period for the application to be made in exceptional circumstances.[2]

[2] This decision concerns whether I should exercise my discretion to allow Mr Mackael Stockhausen a further period for his unfair dismissal application (Application) to be made against Damstra Technology Pty Ltd (Damstra).

[3] On 3 May 2019, a hearing was conducted in relation to Mr Stockhausen's application for an extension of time.

[4] Mr Stockhausen tendered a number of documents and gave oral evidence in support of his application.

[5] Damstra tendered its letter of termination, cross examined Mr Stockhausen, and made submissions opposing the granting of an extension of time.

[6] Section 394(3) of the Act states that the Commission may allow a further period for an applicant to make an unfair dismissal application if the Commission is satisfied that there are "exceptional circumstances", taking into account the following six criteria:

(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."

[7] The test of "exceptional circumstances" establishes a "high hurdle" for an applicant.[3]

[8] The principles are well established and are set out in a decision of a Full Bench of Fair Work Australia (as the national tribunal was then called) in Nulty v Blue Star Group.[4] In that matter the Full Bench held the following (at [13]) in relation to "exceptional circumstances":

"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."

[9] A dismissal does not take effect unless and until it is communicated to the employee who is being dismissed.[5] A dismissal can be communicated orally.[6]

[10] The delay required to be considered is the period beyond the prescribed 21 day period for making an application. It does not include the period from the date of the dismissal to the end of the 21 day period. However, the circumstances from the time of the dismissal must be considered when assessing whether there is a credible reason for the delay, or any part of the delay, beyond the 21 day period.[7] In Diotti v Lenswood Cold Stores Co-op Society t/a Lenswood Organic,[8] the Full Bench explained (at [31]) the correct approach by reference to the following example:

"For example if an applicant is in hospital for the first 20 days of the 21 day period this would be a relevant consideration if the application was filed 2 days out of time as occurred in this matter."

[11] A credible explanation for the entirety of the delay is not required to make a finding of exceptional circumstances. However, in considering and taking into account the reason for the delay in accordance with s 394(3)(a) of the Act, it is relevant to have regard to whether the applicant has provided a credible explanation for the entirety or any part of the delay. The correct approach to be taken was explained by the Full Bench in Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters:[9]

"[38] As we have mentioned, the assessment of whether exceptional circumstances exist requires a consideration of all the relevant circumstances. No one factor (such as the reason for the delay) need be found to be exceptional in order to enliven the discretion to extend time. This is so because even though no one factor may be exceptional, in combination with other factors the circumstances may be such as to be regarded as exceptional.

[39] So much is clear from the structure of s.366(2), each of the matters needs to be taken into account in assessing whether there are exceptional circumstances. The individual matters might not, viewed in isolation, be particularly significant, so it is necessary to consider the matters collectively and to ask whether collectively the matters disclose exceptional circumstances. The absence of any 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 the applicant's favour, though, as we mention later, it is a question of degree and insight. However the ultimate conclusion as to the existence of exceptional circumstances will turn on a consideration of all of the relevant matters and the assignment of appropriate weight to each.

[44] As mentioned earlier, the 'reasons for the delay' is a factor to be taken into account in deciding whether there are exceptional circumstances. There is no statutory basis for the adoption of a decision rule whereby if the applicant does not provide a credible explanation for the entire period of the delay then the matter in s.366(2)(a) tells against the finding of exceptional circumstances. Common sense would suggest otherwise, it is plainly a question of degree and weight.

[45] What if the period of the delay was 30 days and the applicant had a credible explanation for 29 of those days? It seems to us that such circumstances may weigh in favour of a finding of exceptional circumstances. Of course, as mentioned earlier if there was a credible explanation for the entirety of the delay that would weigh more heavily in favour of such a finding. Conversely, if the applicant failed to provide a credible explanation for any part of the delay that would tend to weigh against a finding of exceptional circumstances."

[12] As to credible explanations for a delay or part thereof, ignorance of the 21 day timeframe is not, of itself, an exceptional circumstance.[10]

Relevant chronology of events and reasons for delay

[13] There is no dispute between the parties, and I am satisfied on the evidence, that Mr Stockhausen's employment with Damstra came to an end on 3 January 2019.

[14] The 21 day time period for Mr Stockhausen to make his Application expired on 24 January 2019.[11] Given that Mr Stockhausen filed his Application on 26 February 2019, the Application was filed 33 days late.[12]

[15] In accordance with the principles summarised in paragraphs [10]-[11] above, the delay required to be considered is the period beyond the prescribed 21 day period for lodging an application. In this case, that is the period from 25 January 2019 to 26 February 2019. However, the circumstances from the time of the dismissal on 3 January 2019 must be considered when assessing whether there is credible explanation for the delay, or any part of the delay, beyond the 21 day period.

[16] The relevant timeline of events in relation to Mr Stockhausen's dismissal on 3 January 2019 were as follows. On 18 December 2018, Mr Stockhausen was certified by his doctor as unfit for work from 18 December 2018 to 18 January 2019. Mr Stockhausen explained in his oral evidence, which I accept, that the reason for his medical incapacity at this time was because he had been diagnosed with a Major Depressive Disorder.

[17] On 18 December 2018, Mr Stockhausen's doctor wrote a letter on his behalf to the Toronto Private Hospital. In that letter, Mr Stockhausen's condition was described, in part, as follows:

"Very low mood, hopelessness, worthlessness, increased anxiety, frustration, feeling of exhaustion and fatigue, lack of sleep for past 9 months due to high levels of stress at work.

Petrified of talking about his mental health condition or seeing doctors due to multiple stressful events at work. His condition has rapidly deteriorated over the past 3 months as he has had extreme levels of stress from his management and not being supported at work by management.

Not coping now, admits to seeking help and resolve his mental health..."

[18] Notwithstanding the fact that Mr Stockhausen had a medical certificate covering a one month period from 18 December 2018, he attended work for part of the time between 18 December 2018 and his dismissal on 3 January 2019. He did so because he felt guilty about not undertaking particular work.

[19] On 3 January 2019, Mr Stockhausen was given oral notice of the termination of his employment with immediate effect. Mr Stockhausen received a letter from Damstra on 6 January 2019, confirming his dismissal on 3 January 2019 and the reasons for the dismissal.[13]

[20] On 7 January 2019, Mr Stockhausen attempted to take his own life by taking an overdose of various medication. Mr Stockhausen was found in his car by police in an unresponsive state and was taken to the Calvary Mater Newcastle hospital. From 7 to 8 January 2019, Mr Stockhausen was in the Emergency and Intensive Care units of the Calvary Mater Newcastle hospital. On 9 January 2019, he was transferred to the Toxicology unit of the Calvary Mater Newcastle hospital. From 10 to 11 January 2019, Mr Stockhausen was in the James Fletcher mental health unit of the Calvary Mater Newcastle hospital. On 11 January 2019, Mr Stockhausen was discharged from the Calvary Mater Newcastle hospital into the care of his parents.

[21] The Clinical Toxicology Pharmacology report from the James Fletcher mental health unit records that Mr Stockhausen has been diagnosed with a "Major Depressive Disorder and intimate partner relationship problem". The discharge notes from the James Fletcher mental health unit include the following comments:

"Mackael stated that the inpatient unit was 'not what I thought it was going to be' and was more interested in private psychology and psychiatric care. He felt safe to be discharged home with his parents and had no further suicidal ideation or thoughts of self-harm, and regretted his attempt. His thought form was logical, and his thought content was future focused regarding ongoing support and employment plans. He wished for a private psychiatry admission at Warners Bay Private, so a referral to them was made for him for in the near future and he was happy to go home in the meantime, with follow up with his GP and private psychology (referral from GP) for intermediate support ..."

[22] On 12 January 2019, Mr Stockhausen was admitted to the Maitland hospital because he was unable to go to the bathroom. He remained in the Maitland hospital until he was discharged on 13 January 2019.

[23] Of the seven days Mr Stockhausen spent in hospital from 7 to 13 January 2019, three of those days were spent on a ventilator because the medications he consumed on 7 January 2019 had temporarily paralysed several of his organs.

[24] After being discharged from Maitland hospital on 13 January 2019, Mr Stockhausen was cared for by his parents. He stayed at their house from 13 January 2019 until he was admitted, as an in-patient, to the the Lakeside Mental Health Clinic at the Warners Bay private hospital on 30 January 2019, where he remained until his discharge on 5 March 2019.

[25] While Mr Stockhausen was staying at his parents' house from 13 to 30 January 2019:

• (a) each day he received a telephone call from a representative of a psychological advice service to check on his well-being;

• (b) he only left his parents' house to attend a weekly appointment with his general practitioner;

• (c) spent most of his days sedated by the medication he was taking;

• (d) was under instructions from his psychiatric team not to have any internet access; and

• (e) provided his father with a copy of his letter of termination and spoke to his father about the effect of his dismissal and the request of a separation certificate from Damstra.

[26] During his time as an in-patient at the Warners Bay private hospital from 30 January 2019 to 5 March 2019, Mr Stockhausen:

• (a) remained in the Warners Bay private hospital at all times, save for once a week when he went to the gym and once a week when he was escorted by a friend or member of his family to go for a walk by Lake Macquarie or a similar outing;

• (b) attended regular lengthy appointments with his treating psychiatrist;

• (c) attended regular classes as part of the treatment regime put in place by his psychiatrist;

• (d) was not able to drive. His mother and father made decisions on his behalf;

• (e) spent time resting and recovering;

• (f) did not have access to a mobile telephone or a computer, apart from two occasions when Mr Stockhausen had access to a computer, but not the internet or email;

• (g) saw his parents on two occasions. In about mid-February 2019, Mr Stockhausen discussed with his father Damstra's reasons for his dismissal and his response to those reasons; and

• (h) on 24 February 2019, his treating psychiatrist, Dr Fowler, asked Mr Stockhausen whether he should make an unfair dismissal claim and told him that he could give instructions to his father to make such a claim. After discussing that issue with Dr Fowler, Mr Stockhausen made a decision to commence unfair dismissal proceedings against Damstra. Later on 24 February 2019, Mr Stockhausen started to give instructions to his father to prepare an unfair dismissal application. Mr Stockhausen and his father worked on the Application together and his father lodged it in the Commission on 26 February 2019.

[27] The discharge summary from the Warners Bay private hospital shows that Mr Stockhausen received psychotherapy treatment while in the Lakeside Mental Health Clinic. Mr Stockhausen was under the care of Dr Ian Fowler, psychiatrist, at the Lakeside Mental Health Clinic. Mr Stockhausen tendered a letter from Dr Fowler dated 4 March 2019. In that letter, Dr Fowler referred to the fact that Mr Stockhausen was an in-patient under his care and was "admitted following his medical recovery from a serious life threatening suicide attempt." The letter goes on to state:

"The events leading to such a catastrophe were the result of interpersonal trauma (past & current) attacks by others (personal & legal) and Mackael's own unskilful behaviour. Mackael has experienced some benefit from the antidepressant medication. However, the major work for Mackael lies in a long term individual psychotherapeutic relationship, and the development of distress tolerance. The former process is of 18 mths to 36 mths of weekly psychotherapy ..."

[28] Mr Stockhausen gave evidence that he was incapacitated and unable to complete his Application prior to 26 February 2019. Mr Stockhausen is not a medical practitioner and is not qualified to give a medical opinion that he was medically incapacitated during this period. However, I take Mr Stockhausen's evidence to mean that he felt incapable of completing his Application prior to 26 February 2019 and I accept his factual evidence as truthful and reliable on that point. Mr Stockhausen also gave evidence, which I accept, that he did not file his Application prior to 26 February 2019 because (a) work was the last thing on his mind, (b) he was suffering from memory issues, (c) he was 'putting up walls' in his mind as a consequence of the trauma he put himself through on 7 January 2019, and (d) he was trying to look after himself.

Analysis of the chronology of events and reasons for delay

[29] Damstra submits that in the absence of any evidence from one or more of Mr Stockhausen's treating doctors to explain the duration and level of his incapacity in the period from 3 January 2019 to 26 February 2019, the medical records tendered by Mr Stockhausen ought not be accepted by the Commission as evidence of incapacity and an inability to prepare and file an unfair dismissal application. Damstra submits that it is not the job of the Commission to determine incapacity and in this regard relies on a decision of a Full Bench of the Commission in Australian Postal Corporation v Zhang (Zhang).[14]

[30] In Zhang, the applicant relied on a report from her treating psychologist dated 20 April 2015 which confirmed that she was experiencing "Post Traumatic Stress Disorder (PTSD) symptoms". Ms Zhang's psychologist first saw her on 3 February 2015, following her dismissal on 9 September 2014. Notwithstanding the fact that Ms Zhang's psychologist had only stated that she had experienced "PTSD symptoms", the Commissioner at first instance had regard to the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM 5) and found that Ms Zhang suffered from PTSD in the immediate aftermath of her termination. The Full Bench held (at [22]) that, "in the absence of compelling medical evidence to that effect, such a finding was simply not open to the Commissioner." That is, the finding that Ms Zhang suffered from PTSD in the immediate aftermath of her termination. The Full Bench went on to note that "the medical evidence before the Commissioner provided no insight into the extent to which Ms Zhang was incapacitated during the entire 205 period of delay, let alone the 21 day period immediately following the termination of her employment for making an unfair dismissal application".[15] This was a factor ultimately considered by the Full Bench in finding that the reasons given by Ms Zhang for her delay were not exceptional or out of the ordinary.[16]

[31] The present case is quite different to Zhang. Unlike in Zhang, the medical evidence before the Commission in these proceedings provides some insight into the extent to which Mr Stockhausen was incapacitated during both the period of delay and the 21 day period immediately following the termination of his employment. Not only does the medical evidence show that Mr Stockhausen was diagnosed with Major Depressive Disorder in January 2019,[17] it demonstrates that he was in hospital from 7 to 13 January 2019 immediately following his "serious life threatening suicide attempt" and that he received psychiatric treatment, as an in-patient, in a specialist mental health unit of a private hospital from 30 January 2019 until 5 March 2019. This evidence supports Mr Stockhausen's explanation for the delay summarised in paragraphs [16] to [28] above.

[32] It is plain on the evidence that Mr Stockhausen was significantly impacted in his capacity to file his Application due to a traumatic event in Mr Stockhausen's life, namely a "serious life threatening suicide attempt", which required Mr Stockhausen to spend most of the next two months in medical institutions receiving medical treatment and focusing on little apart from his recovery. As to the time Mr Stockhausen spent out of medical institutions (13 to 30 January 2019), I accept Mr Stockhausen's evidence that he spent most of that time sedated by the medication he was taking. On 24 February 2019, Mr Stockhausen was authorised by his treating psychiatrist, Dr Fowler, to give instructions to his father to make an unfair dismissal claim. Mr Stockhausen did not delay in attending to that task. He worked with his father to have his Application filed in the Commission two days later (26 February 2019). Although I accept that there is no opinion evidence from a medical practitioner to the effect that Mr Stockhausen was medically incapacitated for all or any part of the period from 7 January 2019 to 26 February 2019, there is extensive evidence from Mr Stockhausen, which is supported by documentary medical evidence, in relation to the traumatic event which took place on 7 January 2019 and the impact that had on his capacity to prepare and file his Application. In all the circumstances, I accept the evidence given by Mr Stockhausen in support of his application for an extension of time and am satisfied he has provided a credible explanation for the delay in filing his Application from 7 January 2019 to 26 February 2019.

[33] Damstra criticises Mr Stockhausen for not calling his father to give evidence in support of his application for an extension of time, particularly in circumstances where his father helped prepare the Application, his father lodged the Application, his father is stated on the Application as Mr Stockhausen's representative, Damstra's written submissions lodged before the hearing invited Mr Stockhausen to call his father as a witness, and Mr Stockhausen's father attended the hearing before the Commission on 3 May 2019. I do not accept Damstra's submission that Mr Stockhausen's failure to call his father to give evidence gave rise to a "gap" in the evidence. This is not a case where representative error is the reason for the delay and evidence is required from the representative to explain the error and its impact on the delay. Mr Stockhausen has given direct evidence of his father's involvement in the preparation of the Application and his earlier discussions with his father about his dismissal and his responses to the reasons relied on by Damstra for terminating his employment. There is no relevant "gap" in the evidence. It is not necessary to call a witness to give corroborating evidence, nor is it appropriate to draw a Jones v Dunkel inference in such circumstances.[18]

[34] Because Mr Stockhausen has provided a credible reason for the delay in filing his Application from 7 January 2019 to 26 February 2019, this factor (s 394(3)(a)) weighs in favour of granting Mr Stockhausen an extension of time.

Paragraph 394(3)(b) - whether the person first became aware of the dismissal after it had taken effect

[35] Mr Stockhausen agrees that he became aware of the dismissal on the day it took effect (3 January 2019).

[36] This factor (s 394(3)(b)) weighs against a finding that there are exceptional circumstances.

Paragraph 394(3)(c) - any action taken by the person to dispute the dismissal

[37] Action taken by the employee to contest the dismissal, other than lodging an unfair dismissal application, may favour granting an extension of time.[19]

[38] There is no evidence that Mr Stockhausen took any step prior to 26 February 2019 to dispute his dismissal.

[39] This factor (s 394(3)(c)) weighs against a finding that there are exceptional circumstances.

Paragraph 394(3)(d) - prejudice to the employer (including prejudice caused by the delay)

[40] Prejudice to the employer will weigh against granting an extension of time.[20] However, the "mere absence of prejudice to the employer is an insufficient basis to grant an extension of time".[21]

[41] A long delay gives rise "to a general presumption of prejudice".[22]

[42] The employer must produce evidence to demonstrate prejudice. It is then up to the employee to show that the facts do not amount to prejudice.[23] Damstra concedes that there was little prejudice caused by the delay.

[43] Noting that the delay was 33 days, I am satisfied that there would be no greater prejudice to Damstra caused by the Application being dealt with now than there would have been had it been made within the 21 day time period. Accordingly, prejudice to the respondent is a neutral consideration.

[44] The letter of termination states that Mr Stockhausen was dismissed for two reasons. First, drafting a fake letter on Damstra letterhead, which Damstra contends is a forgery. Secondly, allowing a third party the ability to access IT equipment, software and confidential information owned by Damstra. In his Application, Mr Stockhausen asserts that there is no proof that he was the author of the fraudulent letter, his laptop computer was in the custody of his former partner because they had broken up and he was refused entry to premises, with the result that he could not obtain his personal effects, and there was no company sensitive information on the hard drive of the laptop because it is Mr Stockhausen's personal laptop.

[45] I am not able to make an assessment of the merits at this time because there are factual disputes between the parties relevant to the ultimate question of whether Mr Stockhausen's dismissed dismissal was harsh, unjust or unreasonable; detailed evidence and cross examination of relevant witnesses would be required in order to make findings in relation to such disputes. In all the circumstances, I consider this criterion (s 394(3)(e)) to be neutral.

Paragraph 394(3)(f) - fairness as between the person and other persons in a similar position

[46] The Full Bench in Perry v Rio Tinto Shipping Pty Ltd[24] considered this criterion and said (at [41]):

"Cases of this kind will generally turn on their own facts. However, this consideration is concerned with the importance of the application of consistent principles in cases of this kind, thus ensuring fairness as between the Appellant and other persons in a similar position. This consideration may relate to matters currently before the Commission or matters previously decided by the Commission."

[47] I am not satisfied that the issue of fairness as between Mr Stockhausen and other persons in a similar position is a relevant consideration in this matter. Because it is not a relevant factor it is a neutral consideration in determining whether to grant an extension of time.

[48] Having considered and weighed each of the factors under s 394 of the Act, I am satisfied that there are exceptional circumstances in this case. In reaching this state of satisfaction, I am particularly persuaded that Mr Stockhausen's circumstances were out of the ordinary course, unusual, special and uncommon, because he made a serious attempt to commit suicide four days after his dismissal and spent about the next two months of his life receiving medical treatment and focusing on his recovery. The exceptional circumstances threshold having been met, I am also satisfied, for the same reasons, that it is appropriate to exercise my discretion to extend time.

[49] Accordingly, the application for an extension of time is granted. The jurisdictional objection is dismissed. I will issue an order extending time to 26 February 2019 [PR708239].

Mr L Connolly, solicitor, on behalf of Damstra Technology Pty Ltd.

[1] Section 394(2)(a) of the Act. Note that the 21 days for lodgment does not include the date that the dismissal took effect by reason of the operation of the Acts Interpretation Act 1901 (Cth) s.36(1) (item 6 - where a period of time 'is expressed to begin after a specified day' the period 'does not include that day').

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

[4] [2011] FWAFB 975; [2011] 203 IR 1.

[5] Ayub v NSW Trains [2016] FWCFB 5500 at [35], [41] & [48]-[49]

[6] Plaksa v Rail Corporation NSW [2007] AIRC 333 (unreported, Cartwright SDP, 26 April 2007) at [8]; citing Barolo v

Centra Hotel Melbourne (unreported, AIRC, Whelan C, 10 December 1998) Print Q9605

[7] Shaw v Australia and New Zealand Banking Group Limited T/A ANZ Bank [2015] FWCFB 287 at [12]; Ozsoy v Monstamac Industries Pty Ltd [2014] FWCFB 2149 at [31]; Diotti v Lenswood Cold Stores Co-op Society t/a Lenswood Organic [2016] FWCFB 349 at [29]- [31]

[8] [2016] FWCFB 349

[9] [2018] FWCFB 3288 at [35]- [45]

[10] Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975; (2011) 203 IR 1 at [14]

[11] That is, 21 days from 3 January 2019 (not including 3 January 2019) is 24 January 2019.

[12] 26 February 2019 is 33 days after 24 January 2019.

[14] [2015] FWCFB 5285 at [21], [22] and [45]

[18] ACCC v Olex [2017] FCA 222 at [484]

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

[22] Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 556

[23] Jervis v Coffey Engineering Group Pty Limited (unreported, AIRCFB, Marsh SDP, Duncan SDP, Harrison C, 3 February 2003) PR927201 at [16]

[24] [2016] FWCFB 6963

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