T11310
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Stephen Izard and R G Simons as Trustee for R G Simons Family Trust
Industrial dispute - severance pay as a result of redundancy - extension of time to lodge application - exceptional circumstances - application dismissed - long service leave - to be relisted at request of applicant REASONS FOR PRELIMINARY DECISION [1] On 11 February 2004, Stephen Izard (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with R G Simons as Trustee for R G Simons Family Trust trading as T & H Investments. [2] The matter was listed for a conciliation conference on 18 February 2004. Mr S McElwaine appeared for the applicant and Mr M Fruin, together with Mr R Simons and Mrs L O'Toole appeared for the respondent. Mr Fruin raised a preliminary objection in that the application had been lodged out of time. The hearing was adjourned until 14 April to hear argument on the preliminary matter only. [3] This matter concerns an application for an extension of time pursuant to s.29(1B) of the Act which reads:
[4] The application pursuant to s.29(1A) lodged on behalf of Mr Izard was received in the Commission on 11 February 2004. The application seeks a remedy in relation to severance pay as a result of redundancy. This part of the application is clearly subject to the time limit of 21 days specified in s.29(1B). There is no time limit in relation to the second part of the application concerning long service leave. It follows that this preliminary decision relates only to the claim for severance pay. [5] There is a dispute as to when the termination actually occurred. The respondent contends that Mr Izard resigned on 29 May 2003. The applicant denies that he ever resigned and that the termination occurred at the initiative of the employer on 14 October 2003. Either way the application is significantly out of time. [6] During the hearing evidence was taken from Mr Izard. The respondent relied on cross-examination and submissions from the bar table. Background [7] Mr Izard, a qualified accountant, was engaged by the respondent as a full-time accountant in August 1993. Mr Izard was paid a salary, which at the time of termination was $50000pa. [8] The uncontested evidence was that Mr Izard was permitted to provide accounting services for a limited number of outside clients, provided this did not compromise his work with the respondent. [9] Mr Izard occupied an office on the respondent's premises. He did not pay any rent and it would appear that, save certain software applications, all equipment and furnishings were provided by the respondent. Mr Izard was also paid a vehicle allowance and on occasions filled his vehicle with petrol from the respondent's pump. [10] There was no suggestion that from August 1993 to May 2003, the relationship between Mr Izard and the respondent was anything other than an employee/employer relationship. [11] Some time prior to May 2003 Mr Simons informed Mr Izard that he was scaling back operations and that there would not be a position for a full-time accountant into the future. Mr Izard's evidence on this point was:1
[12] At this point Mr Izard relocated to his own office in Kings Meadows. He continued to perform his normal work for the respondent, albeit taking steps to expand his own client base. [13] Note: It is unclear whether this relocation took effect from the end of May or June 2003. However nothing turns on this discrepancy so far as the preliminary decision is concerned. [14] In accordance with past practice Mr Izard continued to pay himself (along with other employees of the respondent) on a weekly basis. He did not however claim the vehicle allowance or avail himself of free petrol. [15] Mr Izard said that details of all wages paid (including his own) were faxed to Mr Simons each payday. At no stage did Mr Simons raise any objection to this arrangement. [16] At some stage prior to 14 October 2003 Mr Simons asked Mr Izard for a quote for the provision of accounting services. Apparently this quote was not acceptable to Mr Simons who subsequently entered into an arrangement with another accounting firm. [17] On 14 October 2003 Mr Izard was denied access to the bank accounts of the respondent's businesses. It was from this point that the applicant contends that his employment was brought to an end at the initiative of the employer. He denies that he at any stage resigned. Events Post 14 October 2003 [18] On 20 October 2003 Mr Simons wrote to Mr Izard in the following terms:2
[19] Mr Izard responded by fax of same date as follows:
[20] The attachment to this fax referred to calculations for "normal hours", "long service leave", "annual leave" and "superannuation". [21] Mr Simons responded on 21 October3 seeking clarification of the long service leave claim and certain other "reimbursed expenses". [22] Correspondence continued to flow between Mr Izard, Mr Simons and the newly appointed accountants. At no stage did Mr Simons specifically reject the long service leave claim. Indeed Mr Izard said that Mr Simons had told him:4
[23] It is also clear that Mr Izard was refusing to return the financial records until the entitlements he considered due, were paid. [24] The first mention of redundancy pay is found in correspondence from Mr Izard dated 20 January 2004:5
[25] Mr Izard's evidence was that he was confident he would eventually be paid in that Mr Simons had never specifically rejected his claims and the delay was consistent with the Company's track record in relation to payment of creditors. [26] Matters came to a head on 30 January 2004 when Mr Simons wrote in the following terms:6
[27] Mr Izard said that whilst he had not obtained specific advice in relation to redundancy, he thought he had an entitlement to severance pay. He had not raised it prior to 20 January because his initial calculations were premised on parting on good terms. [28] Mr Izard said that the first opportunity to consult with Mr McElwaine was 5 February 2004. He was not aware of the existence of time limits for the lodgement of a claim relating to redundancy pay. Extension of Time Principles [29] Whilst there is little by way of guidance for a consideration of "exceptional circumstances" within this jurisdiction, there is ample authority on the principles and considerations relevant to extension of time applications generally. The leading decisions include: Erhardt v Goodman Fielder Food Services Ltd [1999] 163QGIG 20 Linnane VP; Skelly v Prouds Jewellers Pty Ltd [1994] 53 IR 3 Full Bench; Brodie Hahns v MTV Publishing Ltd [IRC of Aust] VI 1725 R of 1995 Marshall J; Kent Gorrell v Uwatec Pty Ltd NSWIRC, Sams DP, 1700 of 1999 5 July 1999. [30] The common threads in these authorities point to the following as being relevant matters for consideration: · The length of the delay. · The explanation for the delay. · The prejudice to the applicant if the extension of time is not granted. · The prejudice to the respondent if the extension of time is granted. · Action taken by the applicant to contest the termination, other than applying under the Act. · Any relevant conduct of the respondent. · The nature and circumstances of any representative error. · The applicant's prospect of success at the substantive hearing. [31] These considerations are underpinned by the following principles: · Prima facie the time limits should be complied with. There is public interest in the prompt institution and prosecution of litigation before the Commission. · Ignorance of the law is no excuse. · The onus rests on the applicant to demonstrate sufficient reason to justify an extension. · Each case must be considered on its own facts and circumstance. · The mere absence of prejudice to the respondent is an insufficient basis to grant an extension of time. · The discretion to allow out of time applications is directed towards ensuring that justice is afforded to both parties. · Considerations of fairness as between the applicant and other persons in a like position are relevant to the exercise of discretion. Industrial Relations Act 1984 [32] Prior to 1 January 2001 applications needed to be lodged within 14 days of the date of termination with a discretionary power for the Commission to extend for "any further period the Commissioner considers appropriate in the circumstances". [33] This section was amended by the Industrial Relations Amendment Act 2000 [No. 104 of 2000]. The time limit was extended to 21 days with the power to extend only when the Commissioner "considers there to be exceptional circumstances". [34] This provision has no direct parallel in any other industrial jurisdiction in Australia. The following summarises the position in the Commonwealth and State jurisdictions:
[35] There can be no doubt that Parliament intended through the 2000 amendment to both extend the time period and lift the bar in terms of granting extensions of time. [36] The phrase "exceptional circumstances" is not defined and there is little guidance available in terms of authority. In Schwerin v Equal Opportunity Board and Others [1994 2 VR at 287] McDonald J noted the Oxford English Dictionary 2nd ed. definition of "exceptional":
[37] McDonald J went on to note with approval the comments of Hedigan J in Owens v Stevens [unreported, 3 May 1991] who was considering the expression "exceptional circumstances" as appearing in Sch. 5 of the Magistrates Court Act. [Vic]:
[38] In light of these observations it would seem sensible to be guided by the principles established by the various industrial tribunals. As such I conclude that the considerations and principles summarised earlier in this section to be relevant to an application for an extension of time pursuant to s.29(1B). [39] For an application to be successful there would need to be an additional element or elements consistent with the ordinary and natural meaning of the word "exceptional". Findings [40] I turn firstly to the question of date of termination. [41] The respondent asserts that Mr Izard resigned on 29 May 2003. The arrangement thereafter was one of a contract for services and hence no employment relationship existed. [42] Mr Izard denied that he resigned at any time. He asked for the previous arrangement to be continued for a period of three months, a proposition to which Mr Simons agreed. He said that the arrangement came to an end on 14 October 2003 as a consequence of actions taken by the respondent. [43] The respondent did not produce any evidence to support his assertion. Mr Izard's evidence was not broken under cross-examination, and in the absence of any contrary evidence, it must be accepted. I therefore find that the relationship between Mr Izard and the respondent came to an end on 14 October 2003. [44] The remaining question is whether, at the time of termination, the relationship between Mr Izard and the respondent was a contract of service or a contract for services. If it was the latter, then there would not be an employment relationship and the relevant time of termination would revert to the earlier date. [45] The relocation of Mr Izard to an office in Kings Meadows from which he conducted a private accounting practice, points to a contract for services. However the relocation in itself is not fatal to a continuing employment relationship in that there are numerous examples whereby employees perform work in locations remote from the employer's place of business. The critical test is the nature of the arrangement between Mr Izard and the respondent, not where the work is performed. [46] On the evidence before me Mr Izard continued to perform the same work for the respondent as he had done prior to the relocation. He continued to be paid the same salary on a weekly basis. Mr Simons was aware of this practice and raised no objection. [47] At some stage Mr Simons asked Mr Izard for a quote to provide accounting services on an ongoing basis. This action suggests that Mr Simons was considering changing the arrangement to a contract for services, but did not proceed with it. [48] On the available evidence I conclude that the arrangement post the relocation of Mr Izard continued to be a contract of service. [49] I find therefore that an employment relationship remained on foot until 14 October 2003 at which time it was terminated at the initiative of the employer. [50] I now apply the principles outlined earlier in this decision to the facts of this case. [51] The application was lodged some 14 weeks out of time. This is a substantial delay, which goes against the granting of an extension. [52] The fact that Mr Izard was unaware of the time limit does not constitute an "exceptional circumstance". [53] Mr Izard's claim if granted amounts to a substantial sum of money (approximately $20000). On its face the application would have some prospect of success in a substantive hearing, even though the employment relationship was anything but typical. [54] Nothing was put which would lead me to conclude that the employer would be placed in a position of prejudice should the claim be allowed to proceed. [55] Mr Izard actively and vigorously pursued his claim in respect of long service and annual leave with his former employer in the period immediately following the termination. He did not however pursue a claim for severance pay based on redundancy. The first mention of a redundancy payment is found in his letter of 20 January 2004 whereby he states that it (the redundancy claim) will not be pursued if the other matters are settled. No actual claim for redundancy was made until the application to the Commission dated 10 February 2004. [56] The letter from the Company dated 30 January 2004 was the first occasion the respondent specifically rejected the claims. Up until that point the tenor of the various responses was along the lines of seeking clarification and an indication that any entitlements legally due would be paid. The respondent did not however have a claim for redundancy pay to consider. How Mr Simons would have responded had he been faced with such a claim is a matter of conjecture. [57] Had Mr Izard lodged with the respondent a claim for a redundancy payment at the same time as the claim for long service leave and related matters, and the same sequence of events followed, I would have no hesitation in concluding that an "exceptional circumstances" case had been made out. [58] The fact is he did not. The claim for redundancy was not made until 10 February 2004. Hence the conduct of the respondent as it related to the long service leave claim is not a relevant consideration. [59] The case for an extension of time based on the existence of "exceptional circumstances" has not been made out. This aspect of the claim is therefore dismissed. I so order. [60] The remaining matters in the application will be re-listed at the request of the applicant. The findings above concerning the date of termination, the circumstances of the termination and the employment status of Mr Izard at the time of termination may assist the parties in resolving the outstanding issues.
Tim Abey Appearances: Date and Place of Hearing: 1 Transcript PN 112 to 119 |