Whitton v Trustee for Rahul Family Trust [2016] FWC 2070 (4 April 2016) [2016] FWC 2070 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.394 —Unfair dismissal Melanie Whitton v Trustee for Rahul Family Trust T/A United Partners Transport and Logistics Pty Ltd (U2015/15219) DEPUTY PRESIDENT GOOLEY MELBOURNE, 4 APRIL 2016 Application for relief from unfair dismissal - costs application dismissed. [1] On 2 March 2016, I dismissed Ms Melanie Whitton’s application for an unfair dismissal remedy because she had not served the minimum employment period. [2] On 5 March 2016, United Partners Transport and Logistics Pty Ltd (United Partners) applied under section 611(2)(b) of the Fair Work Act 2009 (the FW Act) for costs because, it submitted, it should have been reasonably apparent to Ms Whitton that her application had no reasonable prospects of success. Permission to appear [3] United Partners sought permission to be represented by a paid agent. Ms Whitton opposed the application. United Partners submitted that United Partners was a small business and due to his obligations Mr Nav Rahul was unable to attend. It further submitted that English was not Mr Rahul’s first language. Ms Whitton accepted that Mr Rahul’s first language was not English but said he had no difficulty communicating in English. She further submitted that Mr Rahul was able to leave the business and had done so on other occasions. I determined to grant permission for United Partners to be represented. I accept that it would be unfair not to permit representation because Mr Rahul would be unable to represent United Partners effectively. I do so because his small business commitments meant he could not attend the hearing. [4] At the hearing, United Partners objected to Ms Whitton’s submissions being accepted. It did so because she was required to file her evidence and submissions by midday on 28 March 2016. Ms Whitton filed her submissions on 29 March 2016 at 5.09pm. Ms Whitton accepted that she had not complied and said that she had forgotten to send them before Easter and when she returned home after Easter she immediately sent them. [5] In Queensland v. J.L.Holdings Pty Limited 1 the High Court accepted the importance of case management principles but said: “However, nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim.” 2 [6] While United Partners submitted it would be prejudiced by Ms Whitton’s late submission, I do not consider that any prejudice suffered by United Partners was such that I should refuse to allow Ms Whitton to make submissions in opposition to the application. Further, it was clear that Mr David Bates was able to have some discussion with his client about Ms Whitton’s submission prior to the hearing. [7] I therefore determined to allow Ms Whitton to rely upon her submissions. Background [8] Ms Whitton applied for an unfair dismissal remedy on 20 November 2015. She said she commenced employment on 29 April 2015 and her employment was terminated on 1 November 2015. [9] On 23 November 2015, United Partners were advised of the application. On 14 December 2015, the parties were notified of a conciliation conference to be held on 1 February 2016. On 15 December 2015, United Partners advised that it was seeking legal advice and its lawyers would respond when they returned from leave on 22 January 2016. [10] On 28 January 2016, United Partners’ lawyers sent a letter addressed to the Commission. The letter was sent on “a without prejudice save as to costs”basis. The letter asserted that Ms Whitton had not served the minimum period of employment. It also invoked the Small Business Fair Dismissal Code . It stated that United Partners employed seven persons. It advised that Ms Whitton had been employed from 29 April 2015 until she was dismissed on 1 November 2015. It submitted that she had been employed for less than 12 months. United Partners sought to have the application dismissed under the “s.587 Code”. It is advised that United Partners reserved its rights to seek costs. [11] On 29 January 2016, Mr Bates filed a notice that he was acting for United Partners. He advised that United Partners would not participate in the conciliation conference and asked that United Partners’ jurisdictional objections be determined on the papers. [12] On 2 February 2016, United Partners filed the employer response and advised that Ms Whitton had commenced employment on 29 April 2015 and she had been notified of her dismissal on 28 October 2015 and it took effect at the same time. [13] It raised three objections: 1. the application was not lodged within 21 days of the date of the dismissal; 2. Ms Whitton had not served the minimum period of employment; and 3. the dismissal was consistent with the Small Business Fair Dismissal Code . [14] United Partners alleged that Ms Whitton’s application had not been lodged until 9 December 2015 and was therefore out of time. It alleged that as United Partners was a small business and Ms Whitton had been employed for less than 12 months, she had not been employed for the minimum employment period. It further relied on the section 388(2) of the FW Act. [15] On 4 February 2016, I caused to be sent to the parties the following: “The Applicant made a telephone application on 20 November 2015 alleging that the termination of her employment was unfair. The Applicant then lodged a Form F2 on 9 December 2015. The Applicant says that her employment ended on 1 November 2015 whilst the Respondent says that she was dismissed on 28 October 2015. If the Applicant was dismissed on 28 October 2015, her telephone application was not made within 21 days of the date the dismissal took effect and the Applicant will need to apply to extend the time. I further note that the Respondent alleges that the Applicant has not served the minimum employment period as it is a small business and the Applicant was employed for less than 12 months. The Respondent is directed to file and serve, by noon on 12 February 2016, documentary and witness evidence to support its contention that: (a) The date the dismissal took effect was 28 October 2015; and (b) It is a small business. The Applicant is directed to file and serve, by noon on 19 February 2016, any documentary evidence and witness statements in reply. If the Respondent took over the business from a previous employer, the Respondent is required to provide a copy of any correspondence provided to the Applicant before she commenced employment that advised her that her service with the previous employer would not be recognised by the Respondent. Deputy President Gooley will then consider the material filed and if there are no factual disputes in relation to the Respondent’s claim that it is a small business, she will determine the matter without conducting a hearing.” [16] On 12 February 2016, Mr Bates advised my office that he would be filing the required information but noted that it contained some sensitive personal information and asked that it not be made available to Ms Whitton. Unfortunately due to an administrative error by my staff when the material was filed a copy was forwarded to Ms Whitton. When Mr Bates advised us of this a confidentiality order was issued. [17] In its material, Mr Rahul provided a statutory declaration which advised that he operated two post offices and he had three causal staff and one full time staff member. He said he had had another business but it had been sold prior to Ms Whitton’s dismissal and had no staff. He attested that he did not own, operate or have an interest in any other associated entity. [18] He also provided a copy of an email dated 28 October 2015 sent at 11.41pm which terminated Ms Whitton’s employment. [19] On 19 February 2016, Ms Whitton filed her submissions. She stated: “I do note the Respondent has taken two months to raise the fact that they do not have the required employees for my claim to have any merits. This unfair dismissal claim was accepted December 2015. This is unfair to take such a long period to respond to this claim has endured further legal fees in itself.” [20] She further submitted that “I made this claim upon the basis and belief that the Respondent owned and operated several Jim’s Carpet Cleaning Franchises in Western Australia and I had thought between Bullsbrook Post Office, North Beach Post Office and the franchises owned that they may in fact have the required employee numbers for my claim to be accepted. The recent statement that the Jim Carpet Cleaning Franchise has no employees is unusual. The recent claim made that only one full time employee is employed at North Beach Post Office in my opinion cannot be true. It is impossible to run a Post Office with such few employees. Upon hiring me at Bullsbrook Post Office Nav advised me that he had employed a Full Time Postal Manager and was paying him $23.00 per hour when we were in negotiations over my rate of pay. Nav also worked at North Beach Post Office. During my employment Madhu advised me of another female that had been employed for North Beach and a further female had been employed who was going to be covering either North Beach or Bullsbrook. I also note the recent information provided by the Respondent does not appear to prove the number of employees.” [21] On the same date, United Partners filed submissions in response noting that as Ms Whitton’s application was filed after the 21 day time limit her application must be dismissed. It further stated that “the Respondent declines to read or reply to the Applicant’s defamatory and offensive submissions. The Applicant is now placed on notice that the Respondent reserves their right to initiate litigation for the recovery of all costs so far incurred without further notice being given.” [22] Mr Bates sent further emails to the Commission about this matter none of which were provided by him to Ms Whitton and were not relevant to the objection being dealt with at that time by the Commission. [23] After advising Ms Whitton that her submissions had not addressed the issue of whether United Partners was a small business, Ms Whitton advised on 1 March 2016 that she had no evidence to file in relation to the status of the business. [24] As there was no factual dispute between the parties, I determined the matter without a hearing. A decision was issued on 2 March 2016. The Legislative Framework [25] The Commission has the discretion to award costs against a party if certain preconditions are met. [26] Section 611 of the FW Act provides as follows: “(1) A person must bear the person’s own costs in relation to a matter before the FWC. (2) However, the FWC may order a person (the first person ) to bear some or all of the costs of another person in relation to an application to the FWC if: (a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or (b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.” Should it have been reasonably apparent to Ms Whitton that her claim had no reasonable prospects of success? [27] In Baker v Salva Resources Pty Ltd 3 a Full Bench summarised the approach to be taken in relation to section 611(2)(b) of the Act as follows: “[10] The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed: ● should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test [ Wodonga Rural City Council v Lewis , PR956243 , at para 6]; and ● a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless [ Deane v Paper Australia Pty Ltd , PR932454 , at paras 7 and 8] or so lacking in merit or substance as to be not reasonably arguable . [ A Smith v Barwon Regional Water Authority , [2009] AIRCFB 769 at para 48].” Submissions of United Partners [28] United Partners submitted that it should have been reasonably apparent to Ms Whitton that her application had no reasonable prospect of success because it was: 1. lodged out of time; 2. she had not been employed for six months; 3. she had not been employed for twelve months and United Partners was a small business. [29] It submitted that even if Ms Whitton had not fully understood the “fatal jurisdictional deficiency in her application when it was initially lodged” it should have been apparent when the Form F3 was lodged on 2 February 2016 that her claim was manifestly untenable or groundless. [30] United Partners submitted that it had incurred costs of approximately $6000 in relation to this matter. It attached invoices to support this. It submitted that given Ms Whitton’s “unreasonableness, harassment and intimidation of her former employer – and given her failure to discontinue her application in a timely matter – United seeks recovery of indemnity costs.” It submitted that it was appropriate to award indemnity costs because Ms Whitton had engaged in misconduct/and or delinquency. [31] At the hearing and in response to Ms Whitton’s submission, United Partners accepted that it could not claim costs unrelated to the unfair dismissal claim. Submissions of Ms Whitton [32] Ms Whitton opposed the application. She said that United Partners could have saved two months’ worth of costs if it had responded to her claim promptly and not the Friday prior to the scheduled conciliation conference. [33] Ms Whitton denied that she had not been employed six months. She submitted that United Partners had not produced a read receipt for the email to prove it had been read at the time it had been sent. She said she had not read the email until after 29 October 2015. She further noted that United Partners had submitted invoices for work performed between 28 October and 2 November 2015 which was prior to her lodging her claim. She further noted that the invoice referred to consideration of payslip evidence. Consideration [34] There was dispute between the parties about the date of Ms Whitton’s dismissal. United Partners relied upon an email sent to Ms Whitton on 28 October 2015 at 11.41pm. Ms Whitton said that the email was not received until 1 November 2015. United Partners submitted that this is false and email is a virtually instantaneous form of communication and it would be exceptional for an email to take more than three days to reach the intended recipient. It submitted that the email was received on 28 October 2015 but not read until 1 November 2015. [35] United Partners rely on this both to support its claim that Ms Whitton’s claim was lodged outside of the 21 day time limit and that Ms Whitton had not served 6 months. Effective Date of Dismissal [36] A Full Bench of the Australian Industrial Relations Commission in Commonwealth of Australia (Australian Taxation Office) v Wilson 4 held as follows: “[11] Counsel for the Commonwealth referred us to a number of authorities but conceded that there are few on point. One decision which appears to us to bear directly on the issue is Transport Workers’ Union of Australia v National Dairies Limited (1994) 57 IR 183. In National Dairies Keely J, sitting in the Industrial Relations Court of Australia, was required to decide whether the employment in question terminated before or after the date on which legislation providing statutory remedies for unfair dismissal commenced to operate. In the course of his judgment His Honour said: “It was accepted by the respondent’s counsel, for the purpose of the present hearing, that the employer’s letter of purported termination was not received by the applicant until 30 March 1994. In my opinion the mere posting of the letter of termination does not in itself amount to a termination of the employment of the employee concerned until its contents are communicated to the employee. I am unable to uphold the respondent’s submission that the intention of the legislature was to make it a contravention of the Act for an employer to perform actions “pursuant to which the employer seeks to terminate an employee even if that wish is never communicated to the employee ie even if a letter of termination posted by an employer is never received by the employee.”” With respect we agree with His Honour’s conclusion. Whilst it is clear that a contract can be terminated unilaterally, it is beyond contemplation, unless there is special provision in the contract to the contrary, that a contract could be terminated without communication of the termination to the other party. We think that at common law, where termination occurs by letter, generally the termination is not effective until the letter is received. There may be a qualification to that general position. It may be that, in some circumstances, a termination is effective when its communication could ordinarily be expected to have been received. If an employer has attempted in good faith to communicate the termination and the Commission forms the view that the employee has deliberately avoided receipt of such communication, it may be arguable that in such circumstances termination occurred despite the fact that it has not physically been communicated to the employee. Those circumstances did not, however, exist in this matter and we therefore refrain from further discussion of the point.” [37] In WorkPac Pty Ltd v Bambach 5 a Full Bench applied this principle to a casual employee. Mr Bambach, a casual employee, had been injured at work in 2010 and had provided medical certificates to his employer until 23 September 2011. On that day Mr Bambach provided a certificate that he was fit to return to work and on 17 October 2011 Mr Bambach received an Employment Separation Certificate advising him that his employment had ceased on 24 September 2011. The Full Bench found that “even if the Employment Separation Certificate constituted the instrument which terminated Mr Bambach’s employment, it did not take effect until he received it on 17 October 2011.” 6 [38] Ms Whitton’s date of dismissal was relevant both to the submission that she had not been employed for 6 months and that she did not lodge her application in time. It is not necessary for me to determine the date the dismissal took effect for the purpose of this costs application. Six months employment [39] I am not satisfied that Ms Whitton’s application had no reasonable prospects of success because it should have been reasonably apparent that she had not been employed for six months. [40] Ms Whitton commenced employment on 29 April 2015. To have been employed for six months she needed to have still been employed at midnight on 28 October 2015. I note that United Partners in its initial response to Ms Whitton’s application said that Ms Whitton was employed until she was dismissed on 1 November 2015. In its Form F3 it said the dismissal took effect on 28 October 2015. There was a live issue before the Commission on the authorities set out above whether an email sent at 11.41pm on 28 October 2015 could reasonably be presumed to have been received and read before midnight. Out of time [41] If Ms Whitton’s employment was not terminated until 1 November 2015 then her application was not lodged outside of the 21 day time limit. Ms Whitton lodged her application by telephone on 20 November 2015. While she did not comply with the rules and lodge a completed application by 4 December 2015, I am not satisfied that it would have been reasonably apparent to her she would not succeed in having compliance with the rules being waived or if necessary that she would have had no prospect that an application for an extension of time would succeed. Small Business – minimum employment period [42] I am not satisfied that it should have been reasonably apparent to Ms Whitton when she lodged her application that United Partners was a small business. Ms Whitton would have been aware of the number of employees in the post office she worked but it was not put that she would had any knowledge of the business affairs of United Partners. The issue of whether a business is a small business is not a matter of doing a head count of those you work with. It is necessary to know whether the company operates other businesses and whether it has associated entities. [43] On 29 January 2016, for the first time, United Partners said it was a small business. [44] United Partners did not file its employer response form until 2 February 2016. At this time it asserted that it had three employees which included all employees employed within associated entities as defined by section 50AAA of the Corporations Act 2001 . [45] I accept that this put Ms Whitton on notice that, if this were supported by evidence, her claim had no reasonable prospects of success. However I do not accept that it should have been reasonably apparent, given that at this time, no evidence had been filed. [46] However once Mr Rahul filed his statutory declaration on 12 February 2016 and in light of the fact that Ms Whitton had no evidentiary basis to challenge his evidence, it should have been reasonably apparent to her that her claim could not succeed. Conclusion [47] The decision to award costs, once there is a finding that it should have been reasonably apparent, at least from 12 February 2016, that her claim had no reasonable prospects of success, is discretionary. [48] I have decided that I will not exercise my discretion to award costs and I do so for the following reasons. [49] Ms Whitton was unrepresented and did not have the advantage of receiving legal advice. While it was put that she had access to free legal advice, until United Partners filed its evidence in support of its objection, any advice she received would only have been of a very general nature. [50] I have had regard to the inconsistent information put forward by United Partners, namely the date of the dismissal and the number of employees. I have also had regard to the fact that this matter could have been resolved earlier. United Partners did not file its employer response until 2 February 2016. United Partners also declined the opportunity to resolve this matter at conciliation and that was its right. However by doing so it lost the opportunity to clearly explain to Ms Whitton the exact nature of its objection and the facts it relied upon to support the objection. Mr Bates acknowledged at the hearing that one outcome of conciliation is that a party may discontinue. He did not think this was likely given the letter sent to Ms Whitton two days before the conciliation. However that letter did not set out in any detail how United Partners supported its claim that it was a small business. [51] I have had regard to the fact that, once United Partners filed its submission, it was not directed to do anything as the decision was made on the papers and I note Mr Bates’ advice that United Partners had declined to read or reply to Ms Whitton’s submissions. [52] Accordingly the application for costs is dismissed. DEPUTY PRESIDENT Appearances : M. Whitton on her own behalf. D. Bates for the Respondent. Hearing details: 2016. Melbourne and Perth, by telephone link: March 31. 1 [1997] HCA 1 ; [1996-97] 189 CLR 146. 2 ibid., at p.154. 3 [2011] FWAFB 4014 4 PR901127 5 [2012] FWAFB 3206 6 Ibid at [19] Printed by authority of the Commonwealth Government Printer <Price code C, PR578622>