[[2007] AIRC 590]

s.643 - application for relief in respect of termination of employment

Appeal - termination of employment - extension of time- whether hearing was required - whether denial of natural justice - Workplace Relations Act 1996 ss.638(f), 642(6), 643(1) and (14), 647 and 648.

[1] The National Australia Bank Ltd (the respondent) terminated the employment of Mr C Nottage (the appellant) on 3 May 2007. The appellant filed an application for relief in relation to the termination on 31 May 2007. The application was made pursuant to s.643(1)(a) of the Workplace Relations Act 1996 (the Act). That section provides that an application for relief may be made on the basis that the termination in question was harsh, unjust or unreasonable.

[2] Section 643(14) of the Act provides that an application is to be made within 21 days after the day on which the termination took effect but that the Commission may extend the time. The appellant's application, having been filed 28 days after the termination took effect, was seven days outside the prescribed time. The Commissioner decided, pursuant to provisions to which we shall refer, to determine the extension of time question without an oral hearing. In a decision published on 18 July 2007 the Commissioner declined to extend the time for lodgement. This is an appeal, for which leave is required, against that decision. The appellant contends that the Commissioner's decision is wrong, should be quashed, and that we should extend the time for lodgement and accept the appellant's application. The appellant also purports to appeal against the decision not to hold a hearing pursuant to s.648(3), a provision which we deal with below. It will not be necessary to deal with that aspect of the appeal separately.

[3] Section 643(14) reads:

"643 Application to Commission to deal with termination under this Subdivision

(14) An application under subsection (1) or (3) must be lodged within 21 days after the day on which the termination took effect, or within such period as the Commission allows on an application made during or after those 21 days."

[4] The following note, appearing after s.643(15)of the Act, is apparently intended to provide guidance as to the manner in which the discretion to extend time in s.643(14) is to be exercised:

"Note: In Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298 the Industrial Relations Court of Australia set down principles relating to the exercise of its discretion under a similarly worded provision of the Industrial Relations Act 1988."

[5] The "principles" in Brodie-Hanns v MTV Publishing Ltd [1] (Brodie-Hanns) are as follows:

"(1) Special circumstances are not necessary but the Court must be positively satisfied that the prescribed period should be extended. The prima facie position is that the time limit should be complied with unless there is an acceptable explanation for the delay which makes it equitable to extend.

(2) Action take by the Applicant to contest the termination, other than applying under the Act, will be relevant. It will show that the decision to terminate is actively contested. It may favour the granting of an extension of time.

(3) Prejudice to the employer including prejudice caused by delay will go against the granting of an extension of time.

(4) The mere absence of prejudice to the employer is an insufficient basis to grant an extension of time.

(5) The merits of the substantive Application may be taken into account in determining whether to grant an extension of time.

(6) Consideration of fairness as between the Applicant and other person in a like position are relevant to the exercise of the Court's discretion."

[6] Section 647 permits the Commission to determine an extension of time application without an oral hearing and s.648 governs the procedure to be adopted. Section 648 is as follows:

(1) The Commission must, in deciding whether or not to hold a hearing for the purposes of deciding:

(b) whether to grant an extension of time application within the meaning of section 647;

take into account the cost that would be caused to the business of the employer concerned by requiring the employer to attend a hearing.

(2) If the Commission decides not to hold a hearing, the Commission must, before making a decision:

(a) invite the employee and the employer concerned to provide further information that relates to whether the order should be made or the extension of time granted; and

(3) If, as a result of information provided as mentioned in subsection (2), the Commission considers that it would be desirable to hold a hearing, the Commission may do so.

(a) be given by notice in writing to the employee and the employer concerned; and

(b) specify the time by which the information referred to in the invitation is to be provided."

[7] In considering whether or not to hold a hearing the Commission is required to take into account the cost to the employer's business if attendance at a hearing is required: s.648(1). If the Commission decides not to hold a hearing it must invite the parties to provide further information in relation to the application and take that information into account: s.648(2). After considering the information supplied in response to the request the Commission may hold a hearing if it considers it would be desirable to do so: s.648(3).

[8] As we have noted, the appellant's application for relief was filed on 31 May 2007 some 7 days out of time. In its notice of appearance, dated 14 June 2007, the respondent asserted that the appellant's employment had been terminated for making inappropriate comments to customers/patrons at a local restaurant. It noted that the application was out of time and submitted that the Commission should not extend time. On 21 June 2007 the Commissioner invited the parties to provide the Commission with further information pursuant to s.648(2). So far as relevant the invitation was in the following form:

"The Act does not require the Commission to hold a hearing for the purposes of deciding whether to extend the time for lodgement of the application in this matter. If the Commission decides not to hold a hearing, it must invite the Applicant and the Respondent to provide further information relating to whether it should extend the time for lodgement of the application and take account of any such information. The Commission in this instance has decided to not hold a hearing.

The Commission therefore invites both the Applicant and the Respondent to provide further information relating to whether it should extend the time for lodgement of the application in this matter. The information must be provided to the Commission by COB Wednesday 4 July 2007. The information provided should be of the same calibre as documents tendered in court. Statements should be tendered in affidavit format."

[9] Two things in particular should be noted concerning the terms of the notice. The first is that while it invites the parties to file further information the notice does not require that the parties serve such information on each other. The second is that there is no provision for the appellant to reply to any further information provided by the respondent.

[10] The material furnished by the appellant pursuant to the notice given by the Commissioner on 21 June 2007 was in affidavit form. In it the appellant deposes to the following matters relevant to the delay in filing the application:

(a) the effect of the termination of his employment on the appellant's family had been devastating;

(b) the appellant took advice from RMB Lawyers, which then briefed Mr Neil SC and Mr Chin of counsel;

(c) in about the first month following the termination of his employment the appellant found it very difficult to organise his thoughts and make decisions; lost his self-esteem and self-belief and the capacity to know what he was going to do;

(d) he had been employed by the respondent for 23 years and 3 months and at the time of the termination was managing the Wollongong Business Banking Centre and was in receipt of a base salary of $156,243 including superannuation plus bonuses for performance;

(e) the appellant was interviewed by Mr Neil SC in a telephone conference on 24 May 2007; at the time the appellant was of the belief that his employment was not subject to any award. He was unsure of the basis for the belief other than a recollection that no representative of the bank had ever discussed the possibility his employment might be covered by an award and he had a general view that executive appointments like his were not subject to any award;

(f) Mr Chin was briefed shortly thereafter and on 31 May 2007 advised the appellant's solicitor by telephone that the appellant's employment might have been covered by a relevant award and that an application might be made for relief under the Act; and

(g) the appellant thereupon instructed his solicitor to file the application and the application was filed on the same day.

[11] As it happened, the appellant filed virtually no material relating to the merit of his claim. His affidavit contained a general denial that he had been involved in inappropriate behaviour. The respondent, on the other hand, filed three affidavits, each of which gave detailed particulars of the behaviour alleged against the appellant including records of interviews with a number of witnesses. It is common ground that the appellant was unaware of this material until after the Commissioner's decision of 18 July 2007.

[12] In deciding not to extend the time for lodgement the Commissioner made findings in relation to each of the Brodie-Hanns criteria. His findings were as follows:

"1. In relation to the first Brodie-Hanns principle, the Applicant has failed to properly explain the delay in filing the substantive application.

The Applicant was clearly informed of allegations of misconduct first made known to him on 27 March 2007. From that time the Applicant was on notice that the allegations if proven would jeopardise his continued employment with the Respondent. The Applicant - while rejecting the allegations outright - was acutely aware of the seriousness of the allegations and of the likely consequences for him if proven correct in both a professional and personal sense. The Applicant sought proper advice sometime from early April 2007: the allegations were continuously denied and vigorously defended. The substantive application was filed on 31 May 2007 - seven (7) days beyond the statutory time limit (24 May 2007).

I am not persuaded that special circumstances existed which might lead to an extension of the prescribed period for the filing of the substantive application.

2. In relation to the second Brodie-Hanns principle, I am not satisfied that the Applicant actively contested his pending, or actual termination. While the evidence demonstrated that the Applicant challenged the allegations against him, I have no evidence that potential termination of employment was actively contested from 27 March 2007 onwards.

3. In relation to the third and fourth Brodie-Hanns principles, I am not satisfied that a delay in filing the substantive application would prejudice the Respondent in any way.

4. In relation to the fifth Brodie-Hanns principle, I have given consideration to the merit arguments tendered - albeit in affidavit form with supporting documentation - and I am satisfied that the weight of evidence against the Applicant concerning allegations of serious and wilful misconduct arising from documented incidents of inappropriate behaviour while under the influence of alcohol far outweigh the Applicant's defence pleadings. I conclude that there is no merit in the substantive application.

5. In relation to the sixth Brodie-Hanns principle, I am satisfied that the Applicant was afforded a number of opportunities to explain/defend his position - without success. Throughout the investigation the Applicant obtained legal advice and was properly represented. As such, in my view, he was dealt with fairly and reasonably in the context of other persons in a like position." [2]

[13] Of particular significance is the finding in paragraph 4 of the passage that there is no merit in the substantive application. On the hearing of the appeal the appellant's counsel tendered, without objection, an affidavit sworn by the appellant on 27 August 2007. The affidavit denies most of the allegations made in the three affidavits filed by the respondent on 4 July 2007. The denials are bolstered by a significant amount of evidentiary material. This material includes draft statements taken by the appellant's solicitor from two witnesses present at the times at which the appellant is alleged to have engaged in inappropriate conduct.

[14] There are a number of grounds of the appeal but it is only necessary to mention one, namely: the Commissioner failed to accord the appellant procedural fairness in holding his substantive claim had no merit without providing an opportunity to test the allegations made against him by cross-examination. As developed on the appeal this ground was directed to the fact that the material in the affidavits filed by the respondent on 4 July 2007 was relied upon by the Commissioner in finding that there was no merit in the appellant's application. This was said to be a denial of procedural fairness because the appellant did not know the material had been filed and had no opportunity to meet it either by cross-examination or in any other way.

[15] It was conceded, properly, by counsel for the respondent that procedural fairness required that the appellant be given a copy of the respondent's affidavit material of 4 July and an opportunity to respond to it. The licence accorded to the Commission to dismiss an application without a hearing does not in any way abridge the obligation upon the Commission to afford an applicant a proper opportunity to be heard.

[16] We do not find that the Commissioner intentionally deprived the appellant of an opportunity to be heard. The omission of a requirement, in the invitation of 21 June 2007, that each party serve any further material on the other may have been an oversight. Furthermore an experienced practitioner ought to ensure that contentious material filed with a decision-maker is made available to the other side as a matter of course. But at the end of the day the result was that the Commissioner's decision was based on material of which the appellant was unaware and could not reasonably have been aware. There was a constructive failure to exercise the jurisdiction conferred on the Commission by s.643(14). Such a constructive failure is an error for the purposes of s.658(2). The Commissioner's decision must be quashed.

[17] We have decided to exercise the discretion in s.643(14) ourselves. This is the most practical and expeditious way to deal with the extension of time question. We shall deal with each of the criteria referred to in Brodie-Hanns. Despite what appears in the Commissioner's decision we confirm that special circumstances are not necessary. If we are satisfied that it would be equitable to extend time we should do so.

[18] We deal first with whether there is a reasonable explanation for the delay in filing. In this respect there are some additional statutory provisions which are relevant. Section 638(1)(f) excludes an employee from the operation of the relevant termination of employment provisions if the employee was earning more than the rate prescribed in the Workplace Relations Regulations 1996 unless the employee was employed under award-derived conditions. [3] The concept of employment under award-derived conditions is dealt with in s.642(6) of the Act. It is not necessary to set that section out. The appellant was earning more than the specified rate and accordingly he was unable to make an application under s.643 of the Act unless he was employed under award-derived conditions.

[19] The appellant alleges that, being a reasonably senior executive of the respondent, it had not previously occurred to him that he might have been employed under award-derived conditions. His evidence, including the evidence admitted on appeal, indicates that he was unaware that he may have been able to maintain a claim for relief pursuant to s.643 until being so advised on 31 May 2007, the day on which the application was lodged. Because of the procedure adopted by the Commissioner the appellant was not cross-examined in relation to that evidence and for the purposes of this application it must be accepted. As the Commissioner pointed out, however, the appellant had engaged a solicitor to advise him some time prior to the termination of his employment. This occurred when the respondent suspended the appellant and conducted an inquiry into the allegations against him. The appellant's contract of employment was in evidence and it refers in several clauses to the application of various award provisions. Those references are not of such a nature as to put the appellant on notice that he may have been employed under award-derived conditions. We should add that neither party asked us to decide whether the appellant was employed under award-derived conditions or not and in the circumstances it is not convenient or appropriate to do so.

[20] On our view of the matter the appellant's evidence of his state of mind immediately after the termination must, in the absence of challenge, be given considerable weight. He testified that he found it difficult to organise his thoughts and make decisions and lost his self-esteem, self-belief and capacity to know what he was going to do. He did not consult senior counsel until 24 May 2007. There is no evidence of the content of that consultation and it was a further week before advice was received that he might have a claim. We accept that in the circumstances there is a reasonable explanation for the delay.

[21] There is no evidence that the appellant actively contested the termination at the time it occurred. It may be doubted, however, whether there was a great deal of scope for protest as he was excluded from the workplace almost immediately. The evidence is equivocal as to the time at which he took legal advice about the termination but it is clear that he had done so by 24 May 2007 - some 21 days after the termination took effect. At that time he conferred with senior counsel. It is also clear from a subsequent memorandum of advice from counsel that a range of options were considered to challenge the termination. We regard this consideration as neutral.

[22] There will be no particular prejudice to the respondent if time is extended. The prejudice of having to defend the action, which arises in every case in which time is extended, is not of itself a sufficient prejudice. The issue of prejudice is also neutral.

[23] There is a contest on the merits. In light of the evidentiary material on appeal it is clear the appellant will challenge most of the evidence on which the respondent has indicated it will rely. Findings of fact will be necessary and the seriousness of conduct as found weighed in the balance. We cannot conclude that the application has no merit and it is not necessary that we go any further than that.

[24] So far as we can discern no considerations of fairness as between the appellant and other persons in a like position arise in this case.

[25] Taking all of these matters into account we have decided to extend the time for lodgment. While termination of employment is always a serious matter we are conscious of the appellant's age, family responsibilities, salary and former position of seniority. The effect of the termination on his career prospects is potentially very serious indeed. Extending the time for lodgment does not of course mean that the application will succeed, or that other potential difficulties have been resolved. It means only that at this stage there is a matter before the Commission.

[26] Our order will be that leave be granted to appeal, that the Commissioner's decision of 18 July 2007 be quashed and that the time for filing the application for relief be extended to 31 May 2007.

I Neil SC with D Chin of counsel for Mr C Nottage.

E Collins of counsel with W Boyce for the National Australia Bank Ltd.

[2] [[2007] AIRC 590 at [10].

[3] See ss. 638(6) and (7) and Workplace Relations Regulations 1996, Chapter 12 rr.12.3 and 12.4.

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