Daunt v SKF Australia Pty Ltd; Donahue v SKF Australia Pty Ltd [2001] QIRC 154 (2001)168 QGIG 117

12 October, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 117 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74(2)(b) – application for extension of time Brian Daunt AND SKF Australia Pty Ltd (No. B1144 of 2001) Herbert Donahue AND SKF Australia Pty Ltd (No. B1146 of 2001) COMMISSIONER THOMPSON 1 October 2001 Application for extension of time – Long-term employment by both applicants – Redundancy – Key factors in considering extension of time – Limited prospects of success at a substantive hearing – Application rejected. DECISION Background An application for an extension of time, pursuant to s. 74(2)(b) of the Industrial Relations Act 1999 (the Act) was filed on behalf of Mr Brian Daunt (B1144/01) and Mr Herbert Donahue (B1146/01) which related to applications made by both persons for reinstatement following the termination of their employment by SKF Australia Pty Ltd (SKF). -- 1 of 4 -- 118 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 12 October, 2001 Both the applicant(s), and the respondent, agreed through their legal representatives that the matters should be heard together, and reached further agreement that each of the parties would rely upon written outlines of submissions and filed statements of evidence, supportive of their positions, without the need for a hearing to be formally held. The Commission accepted the position put forward by each of the parties, in respect of having the matter dealt with by written material, and determined that a decision would be made after the consideration of all the material filed by each of the parties. Applicant(s) In respect of Mr Daunt, it was submitted that his application was some twenty-two (22) days beyond the twenty-one (21) day time limit prescribed in the Act. This was due, in the main, to a claim that he was mentally affected by the termination, and during the period subsequent to his termination, he was unable to make decisions and to take appropriate action in relation to his rights to seek redress for unfair dismissal. In an affidavit filed by Mr Daunt, he stated that he had commenced employment with the respondent on 1 March 1970, and remained in continuous employment until the termination of that employment on 18 May 2001. At the time of the termination, he was employed as a Store Supervisor. On 17 May 2001, the date prior to the termination, he received correspondence, dated 9 May 2001, from NSP Buck Pty Limited (NSP), the administrator of the SKF Superannuation Fund, advising that they had been notified that he had ceased employment and provided him with details as to his Superannuation entitlements. On 18 May 2001, upon his arrival at work, he was met by the State Manager, Mr Peter Watkins and, at that time, was advised that his employment had been terminated forthwith on the basis that he was being made redundant. The applicant alleged that no prior discussion had occurred in relation to the proposed redundancy, and the manner of his termination had placed him in a most stressful position. It was only sometime after he had received his redundancy pay, and he was considering how he would need to reorganise his life, that he was made aware that he may have some legal recourse against the company. On 28 June 2001, he met with his legal adviser and subsequently filed an application seeking reinstatement. Mr Sam Sciacca, of Sciacca’s Lawyers & Consultants, on behalf of the applicants, submitted that Mr Daunt had good prospects of success if the extension of time was granted, based upon the factual situation regarding the termination. The applicant was not in a position, due to the impact of the termination upon his life, to respond effectively to either make a decision or take the appropriate action relating to his unfair dismissal at the time of his termination. According to Mr Sciacca, the position of the respondent would not be prejudiced by the late filing of the application for reinstatement. In the case of Mr Donahue, it was submitted that his application was twenty-three (23) days beyond the twenty-one (21) day time limit prescribed in the Act, and that the reason for not meeting the requirements of the Act related to a medical condition and to the way in which he was mentally affected by the termination, and in the period subsequent to his termination, to make decisions. In the affidavit filed by Mr Donahue, he stated that at the time of termination, he held the position of internal sales representative and his period of employment had been from 23 March 1969 until 17 May 2001. In addition, his evidence, at paragraph 3, indicated that for a majority of the time in which he was employed by the company, he held the position as Branch Manager. As was the case with Mr Daunt, the first knowledge the applicant had of his termination came by way of a letter received from NSP, dated 9 May 2001, and received on 17 May 2001, which advised that the applicant’s employment had ceased and of the superannuation entitlements that were owing at the time. Immediately upon receipt of the NSP correspondence, Mr Donahue phoned Mr Watkins, the State Manager, and was advised by him that he would return his phone call some time later that night. Later that evening, the applicant was contacted by way of a conference phone facility involving the State Manager, the Human Resources Manager, and the Sales Manager. At that time, he was advised that he was to be made redundant, that his employment was terminated forthwith, and that he would not be required to present to work the next day. On the impact of the termination of his employment upon him, the applicant, at paragraph 12 of his affidavit stated “I went into a slight depression that became severely stressed. I suffer from diabetes and the termination of employment did not help my diabetic condition.”. He further stated that whilst waiting for his redundancy payment, he contacted the Queensland Industrial Registry, and had documentation forwarded to his home address which he claims that, after perusal, he was unable to fully comprehend the detail provided in that documentation. He subsequently contacted his legal representative on 28 June 2001, and was advised then of the twenty-one (21) day time limitation provided for in the Act. The submissions made by Mr Sciacca, supportive of the position of Mr Donahue’s application for an extension of time, were identical to those made in respect of Mr Daunt. Respondent In opposing the application, the respondent relied upon an affidavit provided by Mr Ashok Kapoor, the Financial Controller of the respondent company, in addition to submissions provided in writing by Ms Kirsty Clarke, of Clarke and Kann, on behalf of the respondent. The witnesses’ affidavits contained similar core information relating to the type of business carried out by the respondent and detail of the restructure of the business that led to the decision to make redundant the positions held by both Mr Daunt and Mr Donahue. -- 2 of 4 -- 12 October, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 119 In relation to the correspondence received by each of the applicants from NSP advising of their termination and superannuation entitlements, this was addressed in paragraphs 6 and 7 of the affidavit of Mr Kapoor, where he stated:– “6. In or about early May 2001, SKF requested NSP Buck Pty Ltd (‘NSP’) a superannuation body, to prepare a Benefit Quotation Statement in relation to the Applicant’s superannuation entitlements, as the Applicant’s position was redundant as a result of the restructure at Bowen Hills. 7. Without SKF’s knowledge or consent, NSP sent the Applicant the letter dated 9 May 2001 (attached to the Applicant’s application dated 28 June 2001 and filed in this proceeding) notifying the Applicant of his termination of employment.”. An explanation was sought from NSP as to their conduct in the matter, and a written response was provided, advising that the request from the company was processed incorrectly and NSP’s sincere regret for what had occurred. In the case of Mr Daunt, the respondent made available five (5) weeks’ pay in lieu of notice, in addition to six (6) months’ severance pay which was paid shortly after the termination. Attention was also drawn to the failure of the applicant to provide any medical evidence relating to an alleged medical condition that had been relied upon as a reason for his failure to lodge an application within the required time period. The evidence of Mr Kapoor, as it related to Mr Donahue, provided information of the notice and severance payment made by the respondent, which was identical in terms of five (5) weeks’ and six (6) months’ payment respectively. Contained within the affidavit was a question in relation to the failure of the applicant to provide medical evidence to support the claim that he was suffering conditions that prevented the application being made within the prescribed time. Finally, at paragraph 15 of the affidavit, it was stated that Mr Donahue had secured alternative full-time employment within one (1) or two (2) weeks of being terminated. Mr Kapoor maintained that the redundancies were of a genuine nature, and having regard for the benefits paid to the applicants, that the claim should be considered by the Commission as lacking merit. Ms Clarke submitted that the period of time in both applications was some twenty (20) days after the twenty-one (21) day period, and both applications had prejudiced the respondent, in that it had caused an expenditure of legal costs as well as the loss of time and resources in responding to the application. The position of the respondent was that the company had completed a restructure of its business. As a result of that restructure, there were no longer jobs available to which both applicants could be placed. In relation to both Mr Daunt and Mr Donahue, the termination of employment was for a valid reason, namely due to redundancies. It was further submitted that the applicants were more than adequately compensated following the termination of their employment, and that the termination benefits were in excess of those prescribed in the Act, and the severance rates of pay, as prescribed by the Termination, Change and Redundancy case (1984) 9 IR 115. Finally, that in the circumstances, the respondent’s submission was that the claims by the applicants were unlikely to succeed having regards to the merit of the applications, and of the payments already made by the respondent. Conclusion When lodging an application for reinstatement, an employee must do so in accordance with s. 74(2)(a) and (b) of the Act:– “(2) The application must be made within– (a) 21 days after the dismissal takes effect; or (b) a further period the commission allows on application made at any time.”. The applications filed in this matter fall outside of the twenty-one (21) day period as provided for in s. 74(2)(a) of the Act. The Commission is therefore required to consider whether an extension of time is appropriate under s. 74(2)(b) of the Act. In the case of both applicants, they had been employed by the respondent for what would be considered a lengthy period of time, with Mr Daunt and Mr Donahue having some thirty-one (31) and thirty-two (32) years of service respectively. Their terminations were by way of redundancy due to the restructure of the respondent’s business, and each of the applicants was paid five (5) weeks’ in lieu of notice and received a further severance payment of some six (6) months’ pay. As long-term employees, for the applicants the experience in finding out that their services were to be terminated through correspondence received from a third party (NSP) would have been, by any reasonable standard, most discerning. Whilst the blame for such actions cannot be sheeted home to the respondent, it is nevertheless conceivable that the circumstances would have had a significant impact on each of the applicants. This aside, however, in consideration of the extension of time applications, the Commission has, in previous matters, relied upon a set of key factors as set out in the decision of Linnane VP in Tracey Colfax v Jupiters Limited (B1547 of 2000):– “In ordinary circumstances the key factors to be considered in the construction and operations of provisions such as s. 74(2)(b) of the Act are to be found in the decision of the then Chief Industrial Commissioner in Breust v Qantas Airways Limited (1995) 149 QGIG 777. These factors will be:– (i) the length of the delay; (ii) the explanation for the delay; (iii) the prejudice to the Applicant if the extension of time is not granted; (iv) the prejudice to the Respondent if the extension of time is granted; and (v) any relevant conduct of the Respondent. -- 3 of 4 -- 120 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 12 October, 2001 The three caveats to be added to the approach in Breust v Qantas Airways Limited are:– (i) that s. 74(2)(b) of the Act vests an unlimited statutory discretion in the Commission which must always be exercised; (ii) that the time limit of twenty-one (21) days provided for in s. 74(2)(b) must be respected; (iii) that the Applicant’s prospects of success at the substantive hearing is always a relevant matter i.e. that where it appears that an applicant has no, or very limited, prospects of success the Commission should not grant an extension of time.”. In applying the key factor approach, as in the Breust v Qantas Airways Limited:– (i) length of delay – Daunt twenty-two (22) days, Donahue twenty-three (23) days; (ii) the explanation for the delay – • Daunt – only after receiving his redundancy pay did he become aware that he may have some legal recourse, and further that he was mentally affected by the termination which inhibited him from taking the appropriate course of action; • Donahue – he stated that he suffered from diabetes and following his termination went into “a slight depression that became severely stressed”. Whilst waiting for his redundancy payment, he contacted the Queensland Industrial Registry and was forwarded documentation relating to the lodgement of an application, but had difficulty in comprehending the detail contained within that advice. In respect of both the applicants, I have discarded their claims in respect of either medical or mental conditions simply because of their failure to provide any form of medical evidence supportive of that particular claim. I further find that the position of Mr Donahue, that he could not fully comprehend the material obtained from the Queensland Industrial Registry, as being difficult to accept on the basis of his evidence that for a majority of his employment, he had held the position of Branch Manager within the respondent company which, in the view of the Commission, is a position that one would reasonably expect the person to have the capacity to decipher the type of information that would have been provided by the Registry. (iii) the prejudice to the Applicant if the extension of time is not granted – The prejudice to the Applicants in not being granted an extension of time would be to deny them the opportunity to seek redress for what they allege was an unfair dismissal through the way in which the redundancies were processed. (iv) the prejudice to the Respondent if the extension of time is granted – In the granting of an extension of time in these matters, it is reasonable to assume that the respondent would incur legal costs in defending their position after having voluntarily paid amounts of monies to each of the applicants in excess of what would be their legal entitlements. (v) any relevant conduct of the Respondent – The Commission is most critical of the way in which both applicants became aware that their employment was to cease, however accepts the evidence of the respondent that the actions of NSP were not as a direct result of any instruction given by the respondent. The Commission is also critical of the failure to provide adequate consultation with each of the applicants prior to effecting the redundancies. In addressing the previously mentioned caveats (i) and (ii), I have taken into account the unlimited statutory discretion available to the Commission, and duly noted that the time limit of twenty-one (21) days must, in all circumstances, be respected. In relation to caveat (iii), I have looked at this in respect of the prospects of success at a substantive hearing, in particular, the remedies available to be considered by the Commission at ss. 78 and 79 of the Act. The evidence that a restructure of the respondent company had taken place, and that the jobs of Mr Daunt and Mr Donahue were no longer available, was unchallenged by the applicants. Therefore, in the view of the Commission, if the applicants were to be successful at a substantive hearing, it would not be practicable to order reinstatement. The other option then available to the Commission would be at s. 79(2)(a) and (3) of the Act:– “(2) The commission must not award an amount of compensation that is more than– (a) if the employee was employed under an industrial instrument – the wages the employer would have been liable to pay the employee for the 6 months immediately after the dismissal, paid at the rate the employee received immediately before the dismissal; or . . . (3) The commission must take into account any amount paid to the employee by the employer on the dismissal.”. It would appear then that if the applicants were successful, the ability of the Commission to award an amount of compensation over and above the monies that had already been paid to the applicants, would be severely limited. Having considered all of the evidence, submissions, and applied the key factors and caveats as in Tracey Colfax v Jupiters Limited, I am not convinced that an extension of time as sought under s. 74(2)(b) of the Act is warranted. The applications from both Mr Daunt and Mr Donahue in this matter are rejected. I order accordingly. J.M. THOMPSON, Commissioner. Released: 2 October 2001 -- 4 of 4 --