Industrial Relations Commission of New South Wales CITATION: Robyn Anne Robson and Gloria El Kafrouni [2008] NSWIRComm 1066 APPLICANT Robyn Anne Robson PARTIES: RESPONDENT Gloria El Kafrouni FILE NUMBER(S): IRC 455 of 2008 CORAM: McKenna C CATCHWORDS: CATCHWORDS Unfair dismissal – out of time application – subsequent notice of motion re jurisdiction and late application – evidence and principles re late application considered – identity of employer considered re transfer of employment from personal employer to corporate employer – Held: Application accepted out of time – finding that the personal employer was the relevant employer at date of dismissal – jurisdictional aspects of notice of motion dismissed – costs reserved – directions for hearing re substantive claim of unfair dismissal – file remitted to Registry for allocation of hearing date LEGISLATION CITED: Industrial Relations Act 1996 (NSW) s84 Workplace Relations Act 1996 (Cth) s643 Hurrell v Queensland Cotton Corporation (2003) 125 IR 145 McClusky v Karagoizis [2002] FCA 1137; (2002) 120 IR 147 CASES CITED: Mid-City Skin & Laser Centre v Zahedi-Anarak [2006] NSWSC 844 Nokes v Doncaster Amalgamated Colleries Ltd [1940] AC 1014 at 1026 Sebastian v Roads and Traffic Authority of New South Wales (1995) 62 IR 190 Textile Footwear & Clothing Union of Australia v Bellechic Pty Ltd [1998] FCA 1465 HEARING DATES: 30 June 2008 (re out of time application and notice of motion) DATE OF JUDGMENT: 22 July 2008 APPLICANT (respondent to notice of motion) Mr M Jaloussis, solicitor LEGAL REPRESENTATIVES: W G McNally Jones Staff RESPONDENT (applicant on the notice of motion) Mr P Wilson, accountant DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES McKENNA C 22 July 2008 Matter No IRC 455 of 2008 ROBYN ANNE ROBSON AND GLORIA EL KAFROUNI Application by Robyn Anne Robson re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2008] NSWIRComm 1066 1 Originally, Robyn Robson ("the applicant") initiated proceedings in the Australian Industrial Relations Commission ("AIRC") naming Little Bright Stars Pre-School as the respondent to proceedings under s643 of the Workplace Relations Act (1996). Gloria El Kafrouni ("the respondent") had personally traded under the business name of Little Bright Stars Pre-School until 6 December 2007, when she incorporated her business as Little Bright Stars Pre-School Pty Ltd. 2 The application to the AIRC was not made within the time limits applicable to such applications. The parties were in dispute about what unfolded in the proceedings before Larkin C and it was otherwise unclear from the evidence what transpired. It suffices to note that on, 2 April 2008, the applicant filed a notice of discontinuance in the AIRC proceedings. 3 On 4 April 2008, the applicant initiated the present proceeding pursuant to s84 of the Industrial Relations Act 1996 ("the Act") alleging she was harshly, unreasonably or unjustly dismissed by the respondent. The matter was allocated to my colleague, Murphy C, for conciliation. The respondent declined to attend the conciliation proceedings listed before Murphy C, albeit it is clear from the file record she was aware of the listing. Murphy C gave directions for hearing in the absence of the respondent. Information concerning the directions for hearing subsequently was forwarded to the respondent. Under those directions, the parties' materials were to be filed and served at the following intervals: applicant, 20 May 2008; respondent, 10 June 2008; applicant, 20 June 2008. The matter was allocated to me for hearing on a date appointed by the Registry, namely, 30 June 2008. 4 While there is some ambiguity, on my reading of the transcript of the proceedings before Murphy C, the directions may have been intended to comprehend the substantive application rather than just the out-of-time issue. In any event, the materials filed by the applicant dealt solely or principally with the out-of-time issue. 5 The respondent did not file and serve materials in accordance with the directions made by Murphy C. However, on 10 June 2008, the respondent's then solicitors filed a notice of motion in the following terms: The respondent will on a date to be fixed move the Commission at 47 Bridge Street for orders that: 1. the Commission has no jurisdiction to hear and determine the subject matter of the proceedings. 2. the application in these proceedings be struck out for want of jurisdiction. 3. alternatively the proceedings be struck out as the applicant has commenced these proceedings outside the time allowed under section 85(1) of the Industrial Relations Act 1996. 4. alternatively the date listed for the hearing being 30 June 2008 be vacated. 5. the applicant pay the respondent's costs of these proceedings including the cost of this motion. 6. such further or other orders as this honourable Commission deems appropriate. Upon the grounds set out in the affidavits in these proceedings. 6 The notice of motion was allocated to me and I listed it for mention on 20 June 2008. I determined to deal with the matters arising from the notice of motion concurrently with the out-of-time claim on the date already listed for hearing, namely, 30 June 2008. 7 On 24 June 2008, the applicant's solicitors wrote to me and then sent an expanded letter to Registrar concerning programming issues. The letter to the Registrar sought an adjournment of the hearing to a later date or, in a new and alternative application, to allow his client's evidence to be served by 26 June 2008 and for the original statements to be handed-up in the proceedings. Those applications were allocated to Staff J. The file record noted the outcome of the proceedings before Staff J as follows: Application for adjournment rejected. Matter will proceed to hearing re extension of time and notice of motion on Monday 30 June 2008. Directions varied that have been made to provide that the respondent is to serve any further statements or affidavits that it seeks to rely upon in respect of matter that are the subject of consideration on Monday [30 June 2008] by 4.00pm today [26 June 2008]. Such service may be effected by facsimile. Further directions in respect of filing of evidence in substantive hearing to be left to Commissioner. The respondent did not serve a copy of any additional materials on the applicant in accordance with the varied directions made by Staff J. 8 On 30 June 2008, the day of the hearing, the respondent's solicitor appeared only to seek leave to withdraw his appearance on the basis that his instructions from the respondent had been withdrawn. I granted leave accordingly. The matter then proceeded into the hearing concerning the late application and the notice of motion. The applicant was represented by Mr M Jaloussis, solicitor; the respondent was represented by Mr P Wilson, accountant. Over the objection of Mr Jaloussis, I permitted Mr Wilson to lead oral evidence from the respondent notwithstanding that the respondent had not served, nor filed in the proceedings, any additional affidavits or statements of evidence pursuant to the amended directions given by Staff J. OUT-OF-TIME APPLICATION 9 As the applicant's initial application to the AIRC was not made within time, the provisions of s85(2) of the Act concerning the mandatory acceptance of certain applications that already have been filed federally do not apply in the applicant's case. As such, the question of whether the application should be accepted out-of-time falls for discretionary consideration under the provisions of s85(3) of the Act, which reads: The Commission may accept an application that is made out of time if the Commission considers there is a sufficient reason do so, having regard in particular to: (a) the reason for, and length of, the delay in making the application, and (b) any hardship that may be caused to the applicant or the employer if the application is or is not rejected, and (c) the conduct of the employer relating to the dismissal. 10 As to the reason for, and length of, the delay in making the application, it may be noted the applicant's employment with the respondent terminated by dismissal on 10 January 2008. Thereafter, the applicant began making contact with various State and federal departments, agencies and tribunals concerning alleged underpayments arising in connection with her period of employment with the respondent. The applicant was, however, unaware around the time of her dismissal that she may have any avenues with respect to contesting the dismissal itself. In evidence, the applicant stated she thought the changes to employment laws meant did not have any relevant entitlements. Subsequent discussions with an officer of the AIRC alerted the applicant to the potential for filing an unfair/unlawful termination application. In due course, the applicant made an application to the AIRC, after having originally completed an application for the waiver of filing fees but not, as explained in her evidence, an application itself. The application to the AIRC bears a date stamp of 25 February 2008. As noted earlier, it is unclear from the evidence what transpired in the AIRC proceedings, but there is documentary material to show the applicant filed a notice of discontinuance on 2 April 2008. The applicant then commenced the present application on 4 April 2008. While the period of time from 10 January 2008 to 4 April 2008 is considerably beyond the 21-days time limit for making the application, the length of that delay properly needs to be considered in the context of the earlier proceedings that had been initiated before the AIRC on 25 February 2008 - while noting, nonetheless, that the application to the AIRC was itself out-of-time. 11 Despite the lateness of the application to both the AIRC and to this Commission, I am satisfied there is sufficient reason to accept the late application. In so concluding, I have, among a range of other matters, taken particular notice of the applicant's evidence that she simply was unaware she may be able to contest the dismissal before filing in the AIRC. The delay, although not insubstantial, can, for the larger part of it, be explained by reference to the applicant's lack of knowledge of potential remedies coupled with the initiation of proceedings federally before commencing this application (see Hurrell v Queensland Cotton Corporation (2003) 125 IR 145). Once the proceedings before the AIRC were discontinued, the application to this Commission was filed within two days. 12 The applicant considers that she was unfairly dismissed; she is still unemployed and seeks monetary compensation. Mr Jaloussis submitted that if the extension of time is not granted, there will be a hardship to the applicant in as much as she would not be able to have the merits of her case tested. On the other hand, the respondent operates a small business and has expressed concern about the disruption to her business and the legal costs involved in contesting the application. As to hardship, the evidence, such as it was, did not lean predominantly in favour of either party. However, the matters referred to by the respondent regarding the costs of contesting the claim may, on one view of it, be seen against the background of her refusal to attend earlier conciliation proceedings and the interlocutory proceedings she initiated against the background of the failure to comply with directions. 13 The respondent delegated the dismissal to Mr Wilson, who communicated the dismissal by voicemail left on the applicant's mobile telephone, apparently in response to the applicant's repeated telephone messages to the respondent about payment for her annual leave. The alleged conduct of the respondent relating to the dismissal suggests, absent any other considerations, the applicant would have at least an arguable case she was harshly, unreasonably or unjustly dismissed – and this may be regarded as relevant to the acceptance of the late application: Sebastian v Roads and Traffic Authority of New South Wales (1995) 62 IR 190. WHO WAS THE EMPLOYER? 14 Central to the question of further proceedings in relation to this matter is the identity of the proper employer. It is common ground the respondent initially operated her pre-school in person under the business name Little Bright Stars Pre-School. It is also common ground that from 6 December 2007, the business was operated as an incorporated entity named Little Bright Stars Pre-School Pty Ltd ("the company"). If the applicant was employed by the respondent when she was dismissed on 10 January 2008, the application to the Commission would be jurisdictionally competent. If, however, the applicant was employed by the company, the application would, in the wake of Work Choices, fail for want of jurisdiction. 15 The issue concerning the correct employer raises mixed questions of fact and law. In short, the applicant's case contended that she was never informed of, nor consented to, any proposal to transfer her employment from the respondent to the company. Mr Jaloussis submitted that, in the absence of advice and consent, the purported transfer of employment to the company was ineffective and the respondent continued as the relevant employer when the dismissal occurred. On the other hand, evidence from the respondent contended she had provided relevant information to the applicant, and that the applicant consented to being employed by the company. In this respect, the respondent deposed as follows: 1. I am the sole director and principal of the company Little Brightstars Pre-School Pty Ltd. 2. The pre-school centre/kindergarten commenced operations on 19 February 2007 under my sole proprietorship. 3. I employed Robyn Robson (Robyn) as a casual employee of the business, employed as a child-care worker, and she commenced working with the pre-school centre on or about 19 February 2007. 4. In November 2007 the business was restructured and arrangements were made for the transfer of the employees to the company Little Brightstars Pre-School Pty Ltd. 5. In anticipation of the restructure I had a conversation with Robyn on or about 2 November 2007 in the following terms: I said, 'Robyn, we're arranging a restructure of the pre-school business. You'll be employed by Little Brightstars Pty Ltd. Your employment will be on the same basis as now, that is on a casual basis.' She said, 'I don't mind as long as I get paid'. 6. … 7. Robyn was given a copy of the relevant Wage Records Worksheet at the end of each week [after incorporation, recording Little Brightstars Pty Ltd as the employer] at the end of each week by either me or Peter Wilson, accountant for the company. 16 Additionally, the respondent's evidence and submissions adverted to a number of other ancillary matters said to support the contention the applicant was aware of, and had consented to, the transfer of her employment to the company. For instance, the respondent contended that the applicant would have seen the certificate of registration for the company hanging in the staff-room (the applicant denied that she had seen any such certificate and contested the proposition that there was a staff-room at the pre-school). The respondent's submissions adverted also to miscellaneous references by the applicant to her employer being a company, as well as the fact that she initially commenced proceedings federally - in support of the proposition that the applicant knew she was employed by the company and that the avenues for her various applications were in the federal jurisdiction. The respondent's submissions relied also on the fact that the applicant previously operated a pre-school of her own, in suggesting she may have greater experience in industrial matters that was being acknowledged. As to this, the applicant said the business side of the operations of that pre-school were all handled by her former husband or administrative staff; she was involved only in the care of children. 17 The evidence was sharply divergent on the issue of whether the respondent informed the applicant of the proposed transfer of employment, and whether the applicant consented to such a transfer; and whether the ancillary matters relied on in the respondent's case provided further support on the issue of knowledge and consent. On balance, I prefer the applicant's evidence that she was not informed of the transfer and, consequently, did not give requisite consent. In so concluding, I have given particular consideration to the evidence of the respondent that from November 2007 "arrangements were made for the transfer of the employees to the company Little Brightstars Pre-School Pty Ltd". Under cross-examination, the respondent could not elaborate relevant arrangements said to have been made from November 2007 to transfer the applicant's employment to the company. For instance, there was no evidence of advice to the Australian Taxation Office or to any relevant superannuation scheme concerning a change in the employer. 18 Similarly, the respondent's evidence as to the conversation around 2 November 2007 was said to have included discussion about the applicant's ongoing employment as a casual employee. It seems to me improbable that this aspect of the conversation occurred. First, the applicant is firmly of the view that while she initially was employed as a casual, she became a permanent employee well before November 2007. Second, and in support of the applicant's contention she was a permanent employee, the respondent paid the applicant at least some annual leave. Annual leave payments ordinarily would not be extended to a casual employee, thereby suggesting the applicant was permanent rather than casual. Third, the employment records tendered by the respondent do not record the payment of a casual loading, again suggesting the applicant was a permanent employee rather than casual. If this aspect of the respondent's evidence concerning a short conversation does not withstand scrutiny as it concerns casual employment, I am inclined to doubt that any part of the conversation occurred. As such, I prefer the applicant's evidence that the proposed transfer of employment was not discussed with her around 2 November 2007. 19 Given my conclusion that the evidence of the applicant is to be preferred to that of the respondent concerning the alleged conversation around 2 November 2007, the evidence concerning the ancillary matters is not particularly relevant. However, it is appropriate to make some comment concerning those matters given the reliance placed on them by the respondent, namely: the certificate of company registration; documents titled "Weekly time and wages record worksheet – Casual employee"; references by the applicant to her employer as the "company"; and the initiation of proceedings federally. 20 I accept the applicant's evidence that she did not see the certificate of company registration, there being only supposition to the contrary that she must have seen it. 21 I am inclined to doubt the reliability of the employment records tended into evidence by way of documents titled "Weekly time and wages record worksheet – Casual employee" in which the company is nominated as the applicant's employer. The documents were said to have been provided to the applicant and, as a result, were also said to support the view that the applicant would have seen the company's name, rather than the respondent's name, specified as the employer. First, the respondent acknowledged that she did not provide any such documents to the applicant prior to incorporation and it remains unsatisfactorily explained why this should have commenced only after incorporation. Second, the applicant denies ever having received any such documents at all. The applicant, in her various claims to different bodies concerning alleged underpayments, has asserted (long before these proceedings commenced) she did not receive relevant documents such as payslips and group certificates – albeit she affixed other documents to such claims. Third, there is no signature of the applicant in the "Employee declaration" section of the documents. Fourth, the applicant contested the accuracy of the hours recorded in the documents and was strongly of the view that her hours would have been accurately recorded in other documents kept for the NSW Department of Community Services (those documents were not produced on a call from Mr Jaloussis, as Mr Wilson did not have them on the day; production was otherwise opposed on relevance grounds). Fifth, the content of the documents does not appear accurately to reflect superannuation payments, in that they record an employer contribution to the HESTA superannuation scheme being made, whereas the record of contributions provided in a HESTA superannuation statement does not record any employer contributions in the six months to 31 December 2007. 22 The respondent relied on miscellaneous references by the applicant to "the company" when referring to her employer. Similar reliance was placed on the fact the applicant had initially contacted the federal Workplace Ombudsman and the AIRC as being indicative of the proposition that she was aware she was employed by the company. In my view, nothing of relevance turned on these matters. The applicant was befuddled by which bodies she should contact and, indeed, which proceedings were which – as indicated by her repeated apologies when giving her evidence about her confusion in relation to such matters. Similarly, I am satisfied the applicant's references to the "company" were not used in a legal sense, but were used in a generic sense to refer to the pre-school/the respondent as her employer; and nor do I accept that such references reasonably should be considered as indicating the applicant had agreed to transfer her employment to the company. 23 Lastly, the applicant acknowledged in her evidence that she has problems with her memory with things that affect her personally. Even with this acknowledgement, I prefer and accept the applicant's evidence that the conversation said to have taken place around 2 November 2007 did not occur. In so concluding, I have taken into account particularly what I perceive as the unreliability of the evidence concerning the conversation as it involved casual employment status and the difficulties I have described with accepting the reliability of the ancillary evidence in the form of documents titled "Weekly time and wages record worksheet - Casual employee". 24 In short, I prefer and accept the applicant's evidence that the respondent did not have the conversation alleged to have occurred around 2 November 2007. It follows that I accept there was no consent, express or implied, from the applicant to a transfer of her employment from the respondent to the company. 25 Given my conclusions as to the evidence, I turn now to the question of whether the respondent or the company was the employer of the applicant as at the date of dismissal on 10 January 2008. As I noted in Wrzosek v Rainbow Nominees Pty Ltd ACN 000 774 774 (Receivers and Managers Appointed) trading as The Bernly Private Hotel [2006] NSWIRComm 1155, a decision referred to by Mr Jaloussis: [15] … It is a fundamental basis of employment law that an employee cannot be transferred from one employer to another without the consent of the affected employee – the rationale lying, in part, in the personal nature of the employment relationship and the fact an employee cannot be forced to transfer to the employment of a different person or entity: Nokes v Doncaster Amalgamated Colleries [1940] AC 1014 at 1026. 26 Given the approach to the transfer of employment adopted since at least as early as the decision in Nokes v Doncaster Amalgamated Colleries [1940] AC 1014 at 1026 and adopted in more recent cases (such as Textile Footwear & Clothing Union of Australia v Bellechic Pty Ltd [1998] 1465 FCA; McClusky v Karagoizis [2002] FCA 1137; (2002) 120 IR 147; Mid-City Skin & Laser Centre v Zahedi-Anarak [2006] NSWSC 844), coupled with my findings on the evidence, I consider the respondent, rather than the company, was relevantly the employer of the applicant on 10 January 2008. As such, the application before the Commission under s84 of the Act is jurisdictionally competent. 27 Accordingly, the parts of the respondent's notice of motion concerning want of jurisdiction and the rejection of the late application are dismissed. I order accordingly. Nothing was advanced by either party in relation to the question of costs, which was also addressed in the notice of motion. Leave is reserved in that respect. 28 I now direct that the evidence on the substantive issue be filed and served as follows: 1. All evidence in the proceedings shall be by way of signed written statements comprising the witnesses' evidence. 2. The applicant is to file and serve all written statements to be relied upon for each witness together with any other relevant documentation by 12 August 2008. 3. The respondent is to file and serve all written statements to be relied upon for each witness together with any other relevant documentation by 2 September 2008. 4. The applicant is to file and serve any reply to the respondent's documents by 9 September 2008. 5. The parties shall include in or with their written statements all matters and documents upon which they rely or they allege are relevant to the proceedings. 6. Without the leave of the Commission, written statements and other documentation filed and served later than the time specified in these directions may not be relied upon by either party. 7. Cross-examination of a witness shall not be allowed unless, at least seven days prior to the hearing, notice in writing has been given to the opposing party that a witness is required for cross-examination. 29 I will now remit the file to the Registry for the allocation of a hearing date for the substantive application concerning the allegedly unfair dismissal. _______________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.