DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Heather Krebs
v
Pika Wiya Health Service Aboriginal Corporation (Administrators Appointed and under Special Administration)
(U2014/14026)

Application for relief from unfair dismissal - respondent placed under Special Administration - s.440D of the Corporations Act 2001 applies - no consent of Administrator or permission of a Court - whether application can proceed - whether Commission is a “court” in terms of the nature of the present application - approach of the AIRC adopted - Commission not a court for present purposes - no bar to application proceeding.

1. Background

[1] Ms Heather Krebs has made an application under s.394 of the Fair Work Act 2009 (the FW Act) seeking a remedy arising from an alleged unfair dismissal. Ms Krebs former employer, Pika Wiya Health Service Aboriginal Corporation (Pika Wiya) was recently placed under special administration under s.490-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the Corporations ATSI Act).

[2] Joint Administrators of Pika Wiya had earlier also been appointed under s.521.1 of the Corporations ATSI Act and s.440D of the Corporations Act 2001 (Cth) (the Corporations Act).

[3] The Joint Administrators contend that as a result of the operation of s.440D of the Corporations Act, the unfair dismissal application cannot proceed without consent of the Administrators, which was not given, or permission of a Court of competent jurisdiction, which has not been sought or given.

[4] United Voice, acting on behalf of Ms Krebs, contends that s.440D of the Corporations Act does not apply in the circumstances of an application of this nature before the Fair Work Commission. Ms Krebs is seeking that her application be heard and determined on its merits.

2. The legislation

[5] The issue raised by the Joint Administrators arises from the operations of the Corporations Act rather than the Corporations ATSI Act. Section 521-1 of the Corporations ATSI Act provides, in effect, that the Corporations Act administration provisions apply to an Aboriginal and Torres Strait Islander corporation.

[6] S.440D of the Corporations Act provides:

Stay of proceedings

(1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:

(a) with the administrator's written consent; or

(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

(2) Subsection (1) does not apply to:

(a) a criminal proceeding; or

(b) a prescribed proceeding.

[7] Both “court” and “Court” have defined meanings under the Corporations Act in the following terms:

“58AA Meaning of court and Court

(1) Subject to subsection (2), in this Act:

court means any court.

Court means any of the following courts:

(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Family Court of Australia;
(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court.

Note: The matters dealt with in Part 9.6A include the applicability of limits on the jurisdictional competence of courts.”

3. Is s.440D of the Corporations Act a bar to this application proceeding?

[8] This matter has been argued on the basis that the unfair dismissal application is a proceeding against Pika Wiya, being a company for present purposes, in relation to its property. This would appear to be correct.

[9] The central issue is whether the Commission should be considered to be a “court” for the purposes of s.440D(1) of the Corporations Act.

[10] The Joint Administrators contend that the Commission should apply the approach adopted in a number of decisions of State Supreme Courts to the effect that the Commission exercises its powers judicially and is a court for the purpose of section 440D of the Corporations Act. In particular, the Administrators referred to an article extracted from an insolvency publication 1 that referred to the decisions in Brian Rochford Ltd (Administrator Appointed) v TCFU2 and Helm v Hansley Holdings Pty Ltd (In Liquidation).3 Although not referenced, I note that the Federal Court in ALHMWU v Home Care Transport Pty Ltd4 applied a similar approach.

[11] Ms Krebs contends that the Commission should follow the Full Bench of the Australian Industrial Relations Commission (AIRC) in Smith and Ors v Silverwood and Beck Pty Ltd (in liquidation) 5 (Smith). The effect of which is that the AIRC was not a “court” for present purposes. Ms Krebs also observed that this decision had been applied in a number of cases6 under the FW Act and that some Members of the Commission had noted that they were bound to apply the approach evident in Smith.7

[12] In Smith, the Full Bench considered whether the AIRC had jurisdiction to deal with an unfair dismissal application in circumstances where the respondent employer was in liquidation and the applicant employee had not obtained the leave of the relevant Court to commence or proceed with the application. This required the Full Bench to consider the effect of s.471B of the Corporations Act, which provided as follows:

“Stay of proceedings and suspension of enforcement process

While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:

(a) a proceeding in a court against the company or in relation to property of the company; or
(b) enforcement process in relation to such property;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.”

[18] The Full Bench in Smith concluded that s.471B did not apply to the commencement or the continuation of proceedings in the Commission because the term ‘court’ in s.471B should be given its defined meaning and a contrary intention did not appear. 8 Without attempting to canvass the full reasons for that conclusion, the Full Bench reviewed the various contrary decisions and decided that the nature and jurisdiction of the Commission, including the broad public interest and policy considerations applying to its functions, were significantly different to that of a court.9 Further, the Full Bench observed that the Legislature could have included the AIRC within the scope of a ‘court’ and had not done so.10

[13] I consider that this analysis is equally applicable to s.440D of the Corporations Act and that the nature and jurisdiction of the Fair Work Commission under the FW Act is concomitant with the AIRC for present purposes.

[14] I am satisfied that I should apply the decision of the Full Bench in Smith. I also note that this approach has been very widely adopted by Members of the AIRC and this Commission since that time. As a result, I am satisfied the s.440D of the Corporations Act does not apply to unfair dismissal proceedings conducted by the Commission.

4. Conclusions

[15] I have found that s.440D of the Corporations Act does not represent a bar to this application. I observe that the Commission has a discretion as to when and how it will deal with such an application and there are potential consequences for the work of the Joint Administrators. Further, in some circumstances the advancement of an unfair dismissal application against a company in administration may be of little practical benefit depending upon the outcome sought.

[16] However, Ms Krebs intends to press her application and the Joint Administrators have not sought that the Commission exercise its discretion not to hear and determine the unfair dismissal application at this stage of the administration process. Consideration of any such approach would of course need to take account of the presumption that applications of this kind will be dealt with expeditiously and have regard to the consequences of any delay. Those consequences would include any prejudice to the parties in the context of the special administration of the employer.

[17] I will list the matter shortly for the purpose of making further directions.

Appearances:

N Grealy of United Voice for Ms Krebs.

C Sequeria of Grant Thornton, as Administrators of Pika Wiya Health Service Aboriginal Corporation (Administrators Appointed and under Special Administration).

Written Submissions:

2015

February 6, 13, 18

 1   Australian Insolvency Management Practice publicised by CCH.

 2   (1998) 47 NSWLR 47.

 3   (1999) WASCA 71.

 4   [2002] FCA 497.

 5   (2006) 142 IR 137.

 6   Jarrod Letizia v Australian Music Group T/A Allans Billy Hyde Music; John Joseph Ryan v AMG Shared Services Pty Ltd, Australia Music Group Pty Ltd, Allan Music Group Australia Pty Ltd, Allans Music & Billy Hyde Pty Ltd Trading as Allans Billy Hyde [2012] FWA 9609; North v Primarc [2013] FWC 9894; Angwin v Dimmeys Stores Pty Ltd [2014] FWC 3633.

 7   Clifford v S & N Civil Constructions Pty Ltd [2013] FWC 235; Bruce v Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen) [2013] FWC 2704.

 8   (2006) 142 IR 137 at [21].

 9   Ibid at [18] and [19].

 10   Ibid at [20].

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