Business

Major success for Wallis v Corridors College

DECISION

Fair Work Act 2009 s.394—Unfair dismissal

David Wallis v Corridors College Limited T/A Corridors (U2018/7184)

DEPUTY PRESIDENT BEAUMONT PERTH, 1 NOVEMBER 2018

Application for an unfair dismissal remedy – company in voluntary administration – s 440D of the Corporations Act 2001 – whether permission of a Court required in these circumstances.

[1] On 12 July 2018, Mr David Wallis (Mr Wallis) made an application for remedy for unfair dismissal under s 394 of the Fair Work Act 2009 (Cth) (Fair Work Act). Mr Wallis’ employment was terminated by Corridors College Limited T/A Corridors (Corridors/Administrators) on 22 June 2018.

[2] During the course of the matter the circumstances of Corridors changed when it was placed into voluntary administration. Consequently, the dispute before the Commission was whether s 440D of the Corporations Act 2001 (Cth) (Corporations Act), operated to stay the proceedings in the absence of the Administrator’s (defined in paragraph 9) consent or with leave of the Court.

[3] I have found that s 440D of the Corporations Act does not represent a bar to the application for remedy for unfair dismissal.

[4] Having heard the matter on 30 October 2018, I allowed the parties (notwithstanding the notable absence of Corridors or its Administrators) to file further submissions addressing an authority that was raised in the telephone Hearing. On 31 October 2018, correspondence was received from a legal representative informing this Commission that the Administrators were legally represented and its client now no longer objected to the jurisdiction of the Commission having premised such objection on s 440D of the Corporations Act.

[5] I simply observe that there are potential consequences for the Administrators who have persistently, for the most part, been non-compliant with the Directions issued by this Commission and declined to present for Hearing. The Commission has discretion as to when and how it will deal with such an application and the matter will be listed shortly for the purpose of making further directions.

[6] Set out below are the reasons for my decision.

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[2018] FWC 6718

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Background

[7] On 11 October 2018, the parties attended a Mention. At the Mention both agreed to participate in a further conciliation conference with a view to seeing whether the matter could be resolved without proceeding to arbitration. The matter was listed for conciliation on 19 October 2018, and for a hearing on 30 October 2018 regarding the jurisdictional issue of the minimum employment period.

[8] Directions were issued to the parties on 11 October 2018 and 16 October 2018. The Directions issued on 16 October 2018 were issued subsequent to the email received from Lavan Legal on 15 October 2018. The email was from a solicitor from Lavan Legal advising Chambers that Corridors had instructed that it had been placed in voluntary liquidation and requested that the conciliation conference for 19 October 2018, be adjourned. Neither Corridors nor the Administrators attended the conciliation conference and it did not go ahead.

[9] On 18 October 2018, Mr Corey Turner (Mr Turner), Executive Restructuring Services, KPMG, informed Chambers by email that Corridors had been placed into voluntary administration on 17 October 2018 and that Messrs Clint Joseph, Matthew Woods and Hayden White (the Administrators) were appointed joint and several Administrators of Corridors pursuant to s 436A of the Corporations Act.

[10] Section 436A of the Corporations Act provides that a company may appoint an administrator if the board of that company thinks it is or will become insolvent:

(1) A company may, by writing, appoint an administrator of the company if the board has resolved to the effect that:

(a) in the opinion of the directors voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and (b) an administrator of the company should be appointed. (2) Subsection (1) does not apply to a company if a person holds an appointment as liquidator, or provisional liquidator, of the company.

[11] The role of an administrator is set out in s 437A of the Corporations Act and relevantly provides that:

(1) While a company is under administration, the administrator:

(a) has control of the company’s business, property and affairs; and (b) may carry on that business and manage that property and those affairs; and (c) may terminate or dispose of all or part of that business, and may dispose of any of that property; and (d) may perform any function, and exercise any power, that the company or any of its officers could perform or exercise if the company were not under administration.

(2) Nothing in subsection (1) limits the generality of anything else in it.

Note: A PPSA security interest in property of a company that is unperfected (within the meaning of the Personal Property Securities Act 2009) immediately before an administrator of the company is appointed vests in the company at the time of appointment, subject to certain exceptions (see section 267 of that Act).

Source: [2018] FWC 6718

 

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