One aspect of the Fair Work Act’s unfair dismissal regime which has been particularly contentious is the strict time limit for filing applications. Initially, the Act reduced that period to 14 days, but it was later extended to 21 days from the date of dismissal. However, the ability of the Commission to extend that time was constrained by the Act, and requires an applicant who is late in filing their application to identify some ‘exceptional circumstances’ warranting an extension of time.

A Full Bench decision handed down last week (Ayub v NSW Trains [2016] FWCFB 5500) points to another potential area of contention, being the identification of the time at which the dismissal takes effect. We think the decision warrants some attention being directed at how terminations are effected, and might lead to some interesting arguments in extension of time cases.

The key matters arising from the Full Bench’s decision seem to be:

  • The Full Bench has concluded that the normal common law rules for when employment ends in circumstances where a letter is sent to an employee – i.e. that the letter is deemed to have been received at the time it was sent – do not necessarily apply when determining the date of termination. The decision introduces a new concept, being whether the employee had a “legitimate explanation” for not reading the termination letter.
  • This means that the Commission will look at the time when the employee actually opens the letter which carries the news of the dismissal. The termination date cannot be before that occurs – or before there is a “reasonable opportunity” for that to occur.
  • It doesn’t matter that the letter says that the effective date of the termination is the date of the letter – because that would be allowing a ‘retrospective termination’ if the employee didn’t read it for some days after it was received. The Full Bench regarded this as impermissible under the Act.
  • An English authority is quoted and applied – and the decision actually contemplates that there needs to be an allowance for employees on leave or, for any number of other personal reasons, being unable to access their email or read the letter.
  • Where employees are seeking an extension of time, the decision leaves open room for assertions that, even though the letter or email may have been sent, they were unable to read the letter or email until a time less than 21 days from when they filed their application.
  • This issue may be particularly problematic for remote workers, as they will be travelling to and from site, and may live in another jurisdiction to that of their employer.

To reduce the risk of an employee making a successful claim of this sort, there are some practical steps employers can take:

  1. Ideally, hand the termination letter to the employee in person at the conclusion of the termination meeting;
  2. If that is not possible, use multiple avenues to send the termination letter to the employee – for example, send it simultaneously by post and by email, using a read receipt; and
  3. Give the employee a phone call to tell them that their employment has been terminated, and that a termination letter has been, or will be, sent (however, note that, under the Act, a notice of termination is only effective if it is in writing).