T12007
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Francis Joy Stephens and Harris Scarfe Australia Pty Ltd
Industrial dispute - alleged breach of verbal agreement - common law contract - claim for payout of unpaid days worked in addition to rostered days - jurisdiction - whether a former employee able to bring an application in relation to termination of employment if it is not an unfair dismissal application - extension of time - exceptional circumstances - application dismissed REASONS FOR DECISION [1] On 30 March 2005, Francis Joy Stephens, (the applicant), applied, pursuant to s.29(1A) of the Industrial Relations Act 1984 ("the Act"), for a hearing before a Commissioner in respect of an industrial dispute with Harris Scarfe Australia Pty Ltd (the respondent) arising out of the alleged breach of a registered agreement. [2] A hearing was set down for 2 May 2005, which was adjourned at the request of the applicant to 20 June 2005 at Ulverstone. On that date Mrs Stephens appeared with Mr K Chen. Mr A Walker appeared for the respondent. There were further hearing days on 1 and 2 August 2005, on which dates Mr P Heerey appeared for Mrs Stephens. BACKROUND [3] In November 2002 Harris Scarfe Australia Pty Ltd (the respondent), a new entity, appointed Mrs Stephens to the position of manager of their Devonport store. Before that she had been employed by Harris Scarfe Ltd (Administrators Appointed/Receivers and Managers Appointed) and, prior to that, by FitzGeralds (the previous owners of the store). She was first employed at the store in 1990 and she had been store manager since January 2000. [4] The dispute is in relation to a claim for payment for days allegedly worked when the applicant was rostered off work. The terms of the applicant's employment were set out in a contract. It is the applicant's contention that there was also a verbal agreement that she take paid days off in lieu of the extra time worked, such agreement being reached prior to the introduction of Sunday trading in January 2003. She also contended that it was the accepted custom and practice that managers take such days off, although approval had to be sought to do so. [5] With the advent of Sunday trading, Mrs Stephens worked a two-week roster; Monday to Sunday the first week and Wednesday to Friday the second week, making ten working days per fortnight. She claims that due to various factors she worked a large number of days in addition to her rostered days. [6] The applicant resigned because of ill health on 10 May 2004, giving one month's notice. She claims she is owed for 49 days she worked when she was off roster. [7] The respondent rejects the claim on a number of grounds, including the terms of a written contract. [8] Regardless of the merit or otherwise of the claim, there are two threshold matters to be determined. The first is whether or not the claim is a dispute relating to the termination of employment. [9] The respondent argued that as Mrs Stephens is a former employee, not covered by an award or agreement, the Commission is without jurisdiction to hear the matter because a former employee is confined only to the matters set out at s.29(1A). [10] Section 29 of the Act provides:
[11] If it is found that the dispute is an industrial dispute relating to the termination of employment then the second threshold matter arises because of the fact that the application was lodged on 30 March 2005 and the date of Mrs Stephens' resignation was May 2004. [12] Section 29(1B) reads as follows:
[13] The question to be determined, therefore, is whether there were exceptional circumstances of such a nature as to justify an extension of time of approximately nine months. EVIDENCE [14] Mrs Stephen's evidence was that she took annual leave in February 2004. She returned from leave in March 2004, but shortly thereafter, on Monday 15 March, she went off on sick leave. She did not return to work and resigned on 10 May 2004, giving one month's notice, in writing. Her resignation letter reads:
[15] Attached to the resignation letter was a medical certificate certifying that she had been advised to retire on medical grounds, which said inter alia:
[16] Mrs Stephen's evidence relating to the delay in applying to the Commission was:
...
[17] Mrs Stephens said that she was treated with two anti-cancer drugs - Methotrexate and Arava, both of which caused serious side-effects, and that:
[18] During cross-examination, the following exchange took place:
[19] When asked whether, during the time between resigning in May and seeing a lawyer in August or September, she had been unable to do anything, Mrs Stephens said:
SUBMISSIONS For the applicant [20] The applicant submitted that the Commission does have jurisdiction to hear the matter. There is a dispute between Mrs Stephens and Harris Scarfe about an industrial matter, namely a matter pertaining to the relationship between an employee and an employer and the terms and conditions of employment. The Commission has jurisdiction to hear and determine industrial matters. The dispute is a dispute about the mode terms and conditions of employment, as provided for in the definition of "industrial matter" in s.3(1). If this argument succeeds, then there is no requirement for an application for extension of time [because time limits do not apply]. [21] If that argument is rejected, then it is still within jurisdiction because it is a dispute relating to the termination of employment. [22] Mr Heerey submitted that the claim arose as a consequence of the termination of employment because Mrs Stephens was only unable to access the time off because she ended her employment. [23] In the matter of the application for extension of time, it is within the Commission's discretion to find that there were exceptional circumstances that existed, albeit the extension sought would be for some significant period of time. [24] The cessation of employment was based on medical grounds, her general practitioner provided a certificate that she was unable to continue work because of health reasons. Her evidence was that she did not have the capacity because of her health and state of mind to deal with quantifying the claim. She brought her claim forward when she had sufficient health to build her resolve to do so. For the respondent [25] Mr Walker submitted that the jurisdiction of the Commission derives from s19 of the Act, which provides that:
[26] The words "subject to" means that the jurisdiction is governed by what appears elsewhere in the Act. When the application was filed the applicant was a former employee, and the jurisdiction of the Commission is limited to applications which deal with those four matters set out in s29(1A): a dispute relating to the termination of employment; a dispute concerning severance pay as a result of redundancy; a dispute relating to a breach of an award or registered agreement; or a dispute about long service leave. [27] There is no suggestion that there is any issue with the manner of the termination; there is no claim for severance pay; Ms Stephens' employment was not governed by an award or registered agreement; and there is no dispute in relation to long service leave. [28] If the jurisdiction lies anywhere, then it lies within s.29(1A)(a). [However] the claim does not relate to the termination of employment, it is simply a claim for money, in the same way that the claim in New Town Timber and Hardware v Gurr (New Town Timber and Hardware")6 was a claim for money, where Zeeman J said:
[29] The respondent submitted that this had been affirmed by Crawford J in Farrell's case.7 [30] The termination was at the initiative of the employee. There is no factor in the claim that is said to have arisen because of the fact of the termination. There is no right that arises as a result of termination, as for example, long service leave. There is no contractual right to such a payment. [31] If jurisdiction is found [on the basis of s.29(1A)(a)] then there is no evidence of exceptional circumstances to explain the delay between 14 May 2004 and 30 March 2005 when the application was filed. [32] Hedigan J, in the Victorian Supreme Court in Kent v Wilson (2000) VIC 98, dealing with the question of exceptional circumstances referred to the Oxford English Dictionary definition of "unusual incidence" or "extraordinary". The evidence is not sufficient to satisfy the exceptional circumstances test. There is evidence that Mrs Stephens was ill in the report attached to her resignation letter dated 4 May 2005 which simply said that she was unable to engage in gainful employment in the future, but it does not say that she is not able to deal with her day to day personal or business affairs. She consulted a solicitor in August, which was seven months before the application was filed and no evidence was given in relation to that period. [33] Mr Walker submitted that it would be an improper exercise of the Commission's discretion to find that there were exceptional circumstances for the entirety of that period. FINDINGS Jurisdiction [34] I am of the view that New Town Timber and Hardware is not relevant to the consideration of this case. The Act has now been amended and the Commission is clearly empowered to make an order for payment of compensation to a former employee in the case of an unfair dismissal. The present case, however, does not concern a claim in relation to alleged unfair dismissal; it is a claim for a payment arising as a result of the termination of employment. [35] Section 29(1A)(a) enables an industrial dispute to be brought if it relates to the termination of employment. If the employee had continued in her employment then she would, presumably, have been able to access the time off in lieu of extra days allegedly worked. That did not happen because the employment came to an end. It is the fact of the employment coming to an end; the resultant inability of the employee to take those paid days off; and the refusal of the employer to pay out those days on termination that has created this dispute. [36] The Act provides for four circumstances in which a former employee can apply to the Commission for the hearing of a dispute. The respondent argued that the present case does not fall into any of those categories. I disagree. [37] Section 29(1A) provides:
[38] The definition of "industrial dispute" is very broad. In s.3 it is defined as "a dispute in relation to an industrial matter". An "industrial matter" is:
[39] The Act provides for industrial disputes to be brought by former employees. Section 30 is headed "Criteria applying to disputes relating to termination of employment". [40] Section 30(1) as it now reads:
... [41] Section 30(2) provides:
[42] Section 30(3) sets out provisions relating to claims which allege unfair dismissal. [43] I consider that the Act enables disputes to be brought relating to unfair dismissal and also in relation to disputes relating to termination (but not necessarily to unfair termination) such as, for example, termination pay. [44] Regardless of its merits, the applicant's claim is for payment that arises as a result of the termination of employment. Therefore, it is a claim that is related to the termination of employment. [45] The Macquarie Concise Dictionary Third Edition defines "relate" as:
[46] The same question was considered by Abey T in T11508 of 20048 in relation to a claim by a former employee not covered by an award or registered agreement for, amongst other things, payment of annual leave. At para 130 of his decision, the Commissioner said that he was satisfied that he had jurisdiction to determine the annual leave question because the dispute in relation to annual leave in that case only arose as the consequence of the termination. But for the termination, there would have been no dispute. [47] It is the same in the instant case - had the employment not come to an end then there would have been no claim for the payment of the 49 days allegedly worked by Mrs Stephens; under the terms of the alleged verbal agreement she would have had paid days off instead. [48] The respondent argued that there was no contractual right that arises upon termination and that there is no entitlement that is created by the fact of the termination. Whilst the terms of the contract are a factor to be considered, that argument does not take into account the arbitral function of the Commission. In the case of Hughes and Tasman Group Services which was an appeal against a decision which awarded severance pay in excess of a "cap" stipulated in a contract, the Full Bench of the Commission found at para 39:
[49] The fact that no contractual right arises upon termination in respect of this claim is no barrier to the Commission's jurisdiction. The claim would need to be considered according to its merits. [50] In the case of Farrell, the claim was brought pursuant to s.29(1A)(b); a dispute relating to severance pay in respect of a former employee terminated as a result of redundancy. The Commission found that Mr Farrell's dismissal was not as the result of redundancy but because the term of his contract had expired and therefore there was no jurisdiction to hear the matter under that section. It was noted that Mr Farrell was afforded the opportunity to amend his claim at the hearing at first instance, but had declined to do so. [51] At para 21 His Honour said:
[52] I find that the dispute is a dispute relating to the termination of employment of the former employee and that therefore there is jurisdiction to hear the matter. Exceptional Circumstances [53] Section 29 (1B) provides:
[54] Matters to be considered when dealing with an application for extension of time include, as set out by Abey C in Izard and Simons ("Izard"):10 the length of the delay; the explanation for the delay; prejudice to the parties if the extension of time is or is not granted; action taken by the applicant to contest the respondent's decision; relevant conduct; the nature and circumstances of any representative error; and the applicant's prospect of success at the substantive hearing. [55] In the present case the delay before the applicant sought legal advice in relation to her claim was considerable, approximately three months; then there was a further six months delay before the application was filed. [56] Even if I were to accept that Mrs Stephens was physically and mentally unable to make a claim before August or September 2004, there is little, if anything, before me which accounts for the lengthy delay between then and the end of March 2005 when the application was filed. No explanation whatsoever was given and no evidence brought in relation to that delay, apart from Mrs Stephen's comment that: "...it obviously took him a while to get it all together." [57] It is my opinion that there is insufficient evidence to explain Mrs Stephen's delay in seeking advice. There is evidence that she suffered from rheumatoid arthritis of such a nature as to prevent her from continuing to work. There is no medical evidence that she was unable to consult a lawyer or to prepare a claim after she ceased work, apart from Mrs Stephen's statement that she was "too ill" to do so. I am disinclined to accept Mrs Stephens' evidence alone. Her evidence was that after she ceased work she suffered from "an illness" and the side effects of "anti-cancer" drugs. Whilst I make no formal finding that she deliberately misled the Commission as to the nature of her illness, it was only when cross-examined that she revealed that the "anti-cancer" drugs she was taking were for the treatment of rheumatoid arthritis and were not for the treatment of cancer. [58] I find that there is insufficient evidence to explain the lengthy delay in making the application to the Commission. [59] It appears that no other action was taken by the applicant to contest the respondent's decision not to pay the monies sought. Her claim was refused by email on 28 May 2004 and there was no evidence of any further contact with the respondent in relation to the claim until February or March 2005. [60] I do not have any evidence before me to consider in relation to the nature and circumstance of any representative error, if there was one. [61] I do not consider that exceptional circumstances exist which would warrant the granting of an extension of time of some nine months after the expiration of the 21 day time limit set out in s29(1B). [62] The application is dismissed.
P C Shelley Appearances: Date and place of hearing: 1 Exhibit A12
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