s.394 - Unfair dismissal

Application for an unfair dismissal remedy - application filed 96 days out of time - extension not granted - application dismissed.

• [1] Mr Mathew Jones (the Applicant) asserts that on 19 February 2025, he was notified of his dismissal from employment with Mastones Pty Ltd (the Respondent). The Applicant outlined in his Form F2 - Unfair dismissal application (Form F2) that the dismissal took effect on 20 February 2025. In both the Applicant's Outline of argument: Extension of time and witness statement dated 9 July 2025, the Applicant assert that his dismissal took effect at 8.00am on 20 February 2025. At the determinative conference, the Applicant claimed he was told that the dismissal took effect on 19 February 2025. The Respondent submits the Applicant was not dismissed within the meaning of s.386 of the Fair Work Act 2009 (the Act) and claims instead that he resigned from his employment on 20 February 2025. This is therefore a case in which there is no dispute that the Applicant's employment with the Respondent ceased and I consider it is open to me to determine that the Applicant's employment came to an end on a particular date without deciding whether or not he was dismissed within the meaning of s.386 of the Act.[1] For the purpose of determining this extension of time application, I am prepared to assume, without deciding, that the Applicant was dismissed on 20 February 2025.[2] The period of 21 days in s.394(2)(a) of the Act for the Applicant to make an unfair dismissal application ended, therefore, at midnight on 13 March 2025. The Applicant's application was filed 96 days outside of this 21-day period on 17 June 2025. As such, he requires the Commission to allow him an extension of time (s.394(2)(b)).

• [2] The Act allows the Commission to extend the period within which an unfair dismissal application must be made only if it is satisfied that there are "exceptional circumstances", taking into account the factors in s.394(3)(a) to (f). Briefly, exceptional circumstances are circumstances that are out of the ordinary course, unusual, special or uncommon, but the circumstances themselves do not need to be unique nor unprecedented, nor even very rare.[3] Exceptional circumstances may 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 can be considered exceptional.[4] The requirement that the matters outlined in s.394(3)(a) to (f) be taken into account means that each matter must be considered and given appropriate weight in assessing whether there are exceptional circumstances. I now consider these matters in the context of the Applicant's application for an extension of time.

• [3] The Act does not specify what reason for delay might tell in favour of granting an extension, however, decisions of the Commission have referred to an acceptable or reasonable explanation. The absence of any explanation for any part of the delay will usually weigh against an applicant in the assessment of whether there are exceptional circumstances, and a credible explanation for the entirety of the delay will usually weigh in the Applicant's favour, however, all the circumstances must be considered.[5]

• [4] The delay required to be considered is the period beyond the prescribed 21-day period for making an unfair dismissal application. It does not include the period from the date of the dismissal to the end of the 21-day period, which in this case ended at midnight on 13 March 2025. However, the circumstances from the time of the dismissal must be considered when assessing whether there is a credible reason for, in this case, the 96-day delay, or any part of that delay, beyond the 21-day period.[6]

• [5] The Applicant was both a director and employee of the Respondent. As employee, he held the position of a store manager. The Applicant's father, Stephen Jones, was also a director. By 19 February 2025, the Respondent appeared to be in financial distress and Stephen Jones appears to have negotiated a Heads of Agreement, pursuant to which Stephen Jones and the Applicant were to resign as directors and sell their shares in the Respondent for a nominal price. In return, and in broad terms, the purchasers were to:

a) continue to operate the Respondent's business following renegotiation with the relevant landlord and franchiser;

b) make payments towards the Respondent's debts;

c) appoint new directors;

d) pay the shareholder equity (other than to Stephen Jones); and

e) enter into a loan agreement with Stephen Jones.

• [6] The Heads of Agreement stipulated that the Applicant was to resign as a director of the Respondent and cease his employment as store manager, in return for which he would be transferred a Mercedes Van and paid 8 weeks' severance pay, plus an additional sum of $200,000.00 (the first instalment of which was to be a $50,000.00 payment).

• [7] From 21 February 2025, Stephen Jones sent the Applicant a number of text messages updating him in relation to the various transactions related to the sale and outlining a number of tasks the Applicant was to attend to. By this time, the Applicant appears to have formed the view that he had been misled and coerced into signing each of the Heads of Agreement, the share transfer document and a document recording his resignation as a director. He sent an email dated 24 February 2025 to Stephen Jones outlining his concerns and a series of demands, including a demand for the payment of his termination entitlements. There were further text messages sent by Stephen Jones on 2, 3 and 11 March 2025 providing updates in relation to the sale transaction and seeking to reassure the Applicant in relation to the payments that would be made to him pursuant to the Heads of Agreement. As outlined above, the 21 days for the Applicant to make an unfair dismissal application ended, at midnight on 13 March 2025 and by this time, relations between the Applicant and Stephen Jones had evidently seriously deteriorated. The Applicant engaged lawyers who sent a letter to Stephen Jones dated 18 March 2025. In this letter, the allegations that the Applicant had been misled and coerced into signing the Heads of Agreement, his resignation as a director and the share transfer document, and that he only did so under duress, were repeated. A settlement proposal was also outlined. A response to this letter was evidently sent by lawyers retained by Stephen Jones. This letter did not outline a response to the 18 March 2025 letter per se, but instead attached a draft Share Sale Agreement which was intended to give effect to what had been originally agreed under the Heads of Agreement. There were evidently two follow up emails to this letter sent on 22 April 2025 and 16 May 2025 which prompted the Applicant's lawyers to send a letter in reply dated 26 May 2025. This letter asserted a range of breaches in relation to the Heads of Agreement and ultimately outlined an updated settlement offer that was stated to be open for acceptance until 6 June 2025. Relevantly, the letter concluded as follows:

"Should this offer not be accepted, and in light of the above mentioned breaches of the Agreement, we will rely on the following condition contained in Annexure B of the Agreement:

The transfer of shares shall be reverted to the original shareholding should the Conditions of the Agreement, including the terms under Annexure A, are not adhered to and once all refundable deposit monies are returned to the purchaser(s).

• [8] The updated settlement offer was not accepted and the Applicant filed his Form F2 on 17 June 2025.

• [9] The Applicant advanced a number of reasons for the delay, comprising:

a) He was very stressed by the situation that was confronting him, having lost his employment and employment related housing.

b) He had been repeatedly promised that his entitlements would be paid during the 21-day time period and time passed while he was waiting for this to occur, with there being no follow through by Stephen Jones.

c) He was trying to work through the issues amicably and while he initially thought he was going to be paid in April 2025, it was some time before the correspondence passing between the parties made it apparent that all avenues for such an outcome had been exhausted.

d) It was only after the 21-day time period had elapsed that he became aware of the extent of the misconduct to which he had been subjected.

e) He only became aware that there was a 21-day time period within which to make an unfair dismissal application after the 21 days had elapsed.

• [10] It is accepted that the Applicant may have experienced stress (including financial stress) and a negative reaction as a result of his dismissal, however this is not of itself unusual. Stress, anxiety, shock and a degree of trauma from a dismissal are not uncommon reactions. I am not, however, persuaded that either the Applicant's account of his reaction to his dismissal or the evidence more generally reveals that he was rendered so debilitated and unfocussed that he could take no steps either within the 21-day period that followed his alleged dismissal or during the 96-day delay that followed. In this regard, the Applicant demonstrated the capacity to enter into an exchange of correspondence with Stephen Jones and he was also able to source and instruct lawyers to advocate on his behalf.

• [11] I have taken into account the Applicant's explanation that he was initially trying to resolve his claims for entitlements through the correspondence he had with Stephen Jones and that which was sent by his lawyers. I do not consider that either this explanation, or the responses of the Respondent and Stephen Jones provide him with acceptable reasons for the delay. Further, the Applicant's assertion that it was only after the 21-day time period had elapsed that he became aware of the extent of the misconduct against him is of no moment. This is because the Applicant appears to have both formed the view that he had been misled and coerced into signing the various document referred to above in [7], and commenced making demands for the payment of his termination entitlements, well within the 21-day time period. If he was aggrieved by the cessation of both his directorship and his employment, the Applicant could, and should, have taken the steps required to make an unfair dismissal application in conjunction with his other actions. Put simply, the Applicant did not have to wait until it became apparent that his correspondence with the Respondent would not resolve his issues before proceeding to lodge his unfair dismissal application.

• [12] I have also noted that the Applicant first came across the Commission's website after the 21-day period had expired, and that it was only at this point that he first became aware of the 21-day time period. It is, however, well established that ignorance of one's rights will not usually provide an acceptable explanation for a delay in lodging an unfair application within the time prescribed[7] and unfamiliarity is not exceptional. I also consider that once the Applicant became aware of the 21-day time period, it was incumbent upon him to take action without further delay. However, even after having become aware of the 21-day time period, it was not until a further delay of two months had passed that the Applicant filed the Form F2.

• [13] Having regard to the evidence before me, I am not persuaded there were circumstances within the 21-day period prescribed for making an unfair dismissal application that provide a credible reason for the 96-day delay. Nor do I consider there was an acceptable or reasonable explanation for the 96-day delay, or material parts of it. The absence of an acceptable or reasonable explanation for the delay weighs against a conclusion that there are exceptional circumstances.

Whether the person first became aware of the dismissal after it had taken effect - s.394(3)(b)

• [14] I am satisfied that the Applicant was aware of the cessation of his employment after this had taken effect and that he therefore had the full period of 21 days to lodge his application. This consideration is a neutral one.

Action taken to dispute the dismissal - s.394(3)(c)

• [15] The evidence clearly indicates that the Applicant took action to dispute the cessation of his employment as a store manager. This factor weighs in favour of a finding that there are exceptional circumstances.

• [16] Although the delay in this case is not insignificant, I cannot identify any greater prejudice that would accrue to the Respondent caused by the application being dealt with now than there would have been had it been made within the 21-day time period. However, the mere absence of prejudice is not in my view a factor that would point in favour of the granting of an extension of time. The consideration is a neutral one.

• [17] I am required to take into account the merits of the application in considering whether to extend the time but the substantial merits of the application are not able to be fully examined or agitated at this stage of the proceeding, which is essentially interlocutory. Indeed, as s.396(a) of the Act makes clear, the Commission must decide whether the application was made within the period required by s.394(2) (which includes deciding whether a further period should be allowed under s.394(3)), before considering the merits of the application. The weight to be given to the merits consideration is dependent on the extent to which there is merit in the substantive application.[8]

• [18] In broad terms, the Applicant alleges that he was removed from his positions of director and store manager under duress, without notice or due process and having been misled. He claims he was the only person removed from the business structure following the sale of shares and that his job as store manager was not redundant. The Applicant asserts his position was filled by someone else immediately after his removal.

• [19] In addition to asserting that the Applicant resigned and was not dismissed, the Respondent relies on various documents the Applicant signed. The Respondent also asserts that the Applicant was a very poor and erratic performer as a store manager and that this contributed to the Respondent reaching the point of being unable to meet its debts and having to enter into the Heads of Agreement. The Respondent also objects to the Applicant's unfair dismissal application on the basis that that the Applicant's earnings exceeded the high-income threshold.

• [20] It is not possible to make any firm or detailed assessment of the merits of the Applicant's unfair dismissal application at this time. They would turn on some points of fact, which would need to be tested if an extension of time were granted and the matter proceeded to arbitration. The arguments and counterarguments relating to whether the Applicant's dismissal was unfair would most certainly be further developed and tested, and the merits of his application would depend on the factual findings made at the final hearing. In these circumstances, I consider the merits of the Applicant's unfair dismissal application to be a neutral consideration.

Fairness as between the person and other persons in a similar position - s.394(3)(f)

• [21] This consideration may relate to matters currently before the Commission or to matters previously decided by the Commission. It may also relate to the position of various employees of an employer responding to an unfair dismissal application. However, cases of this kind will generally turn on their own facts. The Applicant did not bring to my attention any relevant matter concerning this consideration and I am unaware of any relevant matter. The matters the Applicant raised in relation to this consideration were directed at the merits of his case. This is a neutral consideration.

• [22] The requirement is that there be exceptional circumstances before time can be extended under s.394(3) of the Act contrasts with the broad discretion conferred on the Commission under s.185(3) of the Act to extend the 14-day period within which an enterprise agreement must be lodged, which is exercisable simply if in all the circumstances the Commission considers that it is "fair" to do so.

• [23] Having considered each of the considerations in s.394(3) of the Act, I have found paragraph 3(c) weighs in favour of an extension, while paragraphs 3(b), 3(d), 3(e) and 3(f) are neutral. The s.394(3)(a) consideration weighs against an extension. Having had regard to and weighed each of the matters I am required to take into account under s.394(3), and having considered them collectively, I am not satisfied that there are exceptional circumstances. In my view, there are no exceptional circumstances in this case, either when the various circumstances are considered individually or together. Because I am not satisfied that there are exceptional circumstances, there is no basis for me to allow an extension of time. I therefore decline to grant an extension of time under s.394(3). Accordingly, the Applicant's unfair dismissal application is dismissed.

Mr Stephen Jones and Ms Stephanie Jones for Mastones Pty Ltd.

[1] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 at [86].

[3] Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975 at [13].

[5] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd [2018] FWCFB 901 at [39].

[6] 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].

[7] Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975 at [14].

[8] Long v Keolis Downer T/A Yarra Trams [2018] FWCFB 4109 at [71].

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