Starting the Countdown: when does a ‘dismissal’ take effect?

9 December 2016
A recent decision of a Full Bench of the Fair Work Commission has confirmed important principles that apply in determining when a dismissal takes effect.

The facts

In November 2015, Mr Ayub was advised by his employer that a preliminary decision had been made to terminate his employment effective from 7 December 2015. Mr Ayub requested a review of the preliminary termination decision using his employer’s internal review processes. Mr Ayub was told that if the review was not decided in his favour the dismissal would take effect on the latter of either 7 December 2015 or the date of the review outcome letter.

The employer conducted its internal review and decided on, 14 January 2016, to uphold the preliminary termination decision.

On the employer’s evidence, on 14 January 2016, it informed an organiser at Mr Ayub’s union of the outcome of the internal review via telephone. However, the employer’s records were not clear on whether a dismissal date was communicated during this call and union records did not corroborate the existence of any call.

Other than the disputed phone call to the union on 14 January 2016, the next communication from the employer was an email to Mr Ayub dated 18 January 2016 which was sent to his designated email contact (which was in fact his wife’s email address).

Attached to the 18 January email were two letters. The first letter which was signed on 14 January 2016 and included the words ‘delivered by hand’ (even though no such delivery had been made), advised that Mr Ayub’s internal review application had been unsuccessful. The second letter which was signed on 18 January 2016, advised Mr Ayub that his employment had been terminated effective from 14 January 2016. Mr Ayub’s evidence was that he opened the email and read the attached letters on 19 January 2016.

Mr Ayub filed an application for an unfair dismissal remedy on 8 February 2016.

The question – what is the effective date of ‘dismissal’?

Under section 394(2)(a) of the Fair Work Act 2009 (Cth) (“the Act”), an application for an unfair dismissal remedy must be made “within 21 days after the dismissal took effect.”

In this case, the Full Bench was required to determine whether Mr Ayub’s application for an unfair dismissal remedy was made within 21 days after the dismissal took effect. Specifically, the Full Bench had to consider whether the dismissal took effect:

  • on 14 January 2016 (when the dismissal decision was made by the employer);
  • on18 January 2016 (when the dismissal decision was communicated); or
  • on 19 January 2016 (when the dismissal communication was received).

Mr Ayub’s  application for an unfair dismissal remedy was made either within the 21 day time limit prescribed by section 394(2)(a) of the Act or four days out of time.

The findings

At first instance, Senior Deputy President Drake was satisfied that the dismissal took effect on 14 January 2016, the consequence being that Mr Ayub’s application was lodged four days out of time. This decision was based on the fact that Mr Ayub had been informed in advance of the internal review how the dismissal date would be determined if the review was unsuccessful.

On appeal, a Full Bench of the Fair Work Commission comprised of Vice President Hatcher, Deputy President Wells and Commissioner Johns affirmed important principles to be applied when determining the question of when a dismissal takes effect including:

  • a dismissal cannot take effect prior to it being communicated to the employee (Stevanovski v Linfox Transport [2001] AIRC 388);
  • it is possible for a termination to validly be expressed to take effect subject to a condition. However the notice of termination must be “expressed with sufficient certainty so that conditional date of termination is ascertainable”; and
  • it is possible for notice of termination to be given to a third party but only if they are an agent of the employee who has actual or ostensible authority to receive that notice.

Based on these principles, amongst other factors, the Full Bench rejected the proposition that the dismissal took effect on 14 January 2016 and consequently determined that Mr Ayub’s application was within time and able to be heard.

Further question - was it necessary for Mr Ayub to read the 18 January 2016 email for the dismissal to take effect?

Although, not strictly necessary to do so, the Full Bench also considered whether the dismissal took effect on 18 January 2016 (that is, the date the dismissal email was sent) or 19 January 2016 (that is, the date that Mr Ayub said he read the email). The Full Bench found:

“In a situation where an employee is informed by email that he or she has been dismissed, the employee can usually be regarded as knowing or having reasonable opportunity to know of the dismissal when the email is received in the inbox of the employee’s usual email address. We note in this connection that s.14A of the Electronic Transactions Act 1999 (Cth) provides that an email is deemed to have taken place when the email becomes capable of being retrieved by the addressee at an email address designated by the addressee. There may be circumstances in which mere receipt of an email may not constitute a reasonable opportunity to become aware of a dismissal – for example when the employee has not read the email because of an incapacitating illness or is legitimately unable to access their email for other reasons. However a simple refusal to read an email would of course not operate to delay the date of effect of the dismissal”

The Full Bench formed the view that “Because there was no evidence demonstrating that Mr Ayub did not have reasonable opportunity to read the email on the 18th we incline to the view that that was the date upon which dismissal was effective”.

Conclusion

This decision is a useful reminder that:

  • a dismissal cannot take effect before an employee knows of it or has reasonable opportunity to know of it. This principle upholds a basic tenet of fairness as an employer cannot erode an employee’s short time limit for lodging an unfair dismissal application by simply delaying its notification to an employee of a dismissal decision; and
  • if there is any doubt about when an employee knew of or could have known of a dismissal decision the employee should provide evidence to explain any delay in accessing the dismissal notification to avoid the perception that the employee was simply refusing to read the communication when he or she was reasonably able to do so.

Decision: Ayub v NSW Trains [2016] FWCFB 500