In Employee v ‘The Employer’ [2023] [2023] FWC 606, Mr Strik acted for the Applicant, the employee, concerning an application for unfair dismissal remedy against ‘The employer’ company (Respondent). The decision was made by Commissioner P Ryan on 14 March 2023 in the Fair Work Commission.
This decision concerned the statutory time constraint to make an application for an unfair dismissal remedy. It explored how to determine when a dismissal occurs, and whether “exceptional circumstances” applied to the Applicant.
The statutory time constraint is relevant because s 394(2) of the Fair Work Act 2009 requires an unfair dismissal application to be filed within 21 days after the dismissal takes effect.
Termination in June
Upon concerns with the Applicant’s performance at work, the Respondent updated the contractual arrangements of employment (in February 2022), allowing for greater flexibility at work. However, between March and June, the Respondent found that the Applicant was not meeting the expectations of the arrangement.
On 22 June 2022, Mr ‘X’ (the Respondent’s Managing Director) informed the Applicant that his services were no longer required.
Applicant’s Position
The Applicant claimed that he was employed by the Respondent and was notified of his dismissal on 22 June 2022. He gave evidence that Mr X stated he would not be getting paid by [the employer] anymore; however, he was still to work on an additional, ‘[Suburb Y]’ project until a confirmation letter was sent to him.
Respondent’s Position
Mr X stated that on 22 June 2022, he told the Applicant that the new arrangement was not working and he could not continue it or continue to pay him. Regarding the [Suburb Y] project, he told the Applicant that because the Applicant had equity in it, he likely would not be paid for his work; however, this could be determined at a later date.
June to September
Upon cross-examination, the Applicant agreed that Mr X told him he would not be paid by the Respondent, the current contractual arrangement could not continue and that his engagement with the Respondent had ended.
Additionally, the Applicant did not return to the office or use office devices. Whilst he retained a corporate credit card, the Respondent submitted that it was deactivated.
On 6 August, the Applicant initiated correspondence with the Respondent to obtain formal evidence of termination. His emails and his evidence in cross-examination reveal his knowledge that his employment had already been terminated.
On 30 August, the Respondent sent a letter to the Applicant which stated that as of 24 February 2022, the parties had a contractor arrangement rather than an employer/employee relationship. It provided reasons for the termination of the contractual relationship due to failure to meet obligations. Due to the contractual nature of the relationship, the Respondent maintained that the Applicant was not an employee and that “dismissal” and “redundancy” were therefore irrelevant.
On 20 September 2022, the Applicant filed the Application for unfair dismissal.
When did the dismissal take effect?
Applicant’s Position
The Applicant submitted that whilst the Respondent told him his services were no longer required on 22 June 2022, this was not formalised until 30 August 2022, and therefore this date should be considered the date of dismissal.
Respondent’s Position
The Respondent submitted that the Applicant was aware that the arrangement between the parties ended on 22 June 2022. Additionally, it stated that the 30 August 2022 email was not an email of termination, but rather, a clarification of various matters.
Legal Reasoning
The Fair Work Commission stated there can be “no doubt” that the arrangement between the parties ended on 22 June 2022 because:
- The Applicant agreed in cross-examination that his engagement with the Respondent ended in June,
- His email correspondence supported this assertion, and
- His [social media] Profile was amended to state that he worked for the Respondent until June 2022.
The Applicant also argued that because he continued to work on the [Suburb Y] project and continued to receive emails to an active work email address, his employment had not been terminated.
His first argument was rejected as he was not sent work-related emails, and upon knowledge that his email was still active, Mr X deactivated it.
His second argument was also rejected as the Applicant was a shareholder in the work related to the [Suburb Y] project, and was not an employee/contractor of the Respondent.
For the reasons outlined above, the Fair Work Commission found that the arrangement between the Applicant and Respondent was terminated on 22 June 2022.
Exceptional Circumstances
The Applicant submitted that there were the “confusion and uncertainty as to when the termination of his employment or arrangement with the Respondent took effect” [61], which was the sole reason for his delay in applying for an unfair dismissal remedy, and that this amounted to an “exceptional circumstance.”
The Applicant’s claim that confusion and uncertainty amounted to an “exceptional circumstance” was rejected because:
- The Applicant’s cross-examination evidence and emails highlighted an awareness that “termination” occurred in June, and
- His work on the [Suburb Y] Project was clearly communicated as distinct from his work as an employee/contractor.
Outcome
The Commissioner declined to grant a time extension under s 394(3) of the Fair Work Act 2009 (Cth).
Analysis
If you believe your employment has been unfairly terminated, this decision highlights the importance of making an application sooner rather than later. Due to the 21-day requirement and the high threshold for “exceptional circumstances” to get an extension, time is of the essence.
Anthony Strik accepts briefs in employment and unfair dismissal matters. If you require experienced legal representation, please contact his chambers.