Daniel Sorraghan v Bayport Group

[2013] FWC 6881

[2013] FWC 6881

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Daniel Sorraghan
v
Bayport Group
(U2013/9668)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 18 SEPTEMBER 2013

Application for relief from unfair dismissal.

Introduction

[1] On 17 May 2013 Mr Sorraghan filed an application under s.394 of the Fair Work Act 2009 (the Act) against the Bayport Group for an unfair dismissal remedy. He claimed that his employment was terminated. Bayport claims that there was no termination of employment.

[2] The matter was conciliated and no settlement was reached.

[3] Pursuant to s.596(1)(a) I granted permission for the parties to be represented by counsel, because it would enable the matter to be dealt with more efficiently given the complexity of the matter.

[4] Written submissions and witness statements were filed, and the following witnesses gave evidence:-

● Mr Daniel Sorraghan

● Mr Richard Torossi

● Mr Andrew Neal

[5] I have had regard to all the submissions and evidence. I issued this decision on transcript, and reserved the right to publish further reasons for decision. This is an edited version of the decision given on transcript.

The Act and Authorities

[6] Before considering whether or not the termination of employment was unfair, I must be satisfied under s.385 of the Fair Work Act 2009 that Mr.Sorraghan was dismissed.

[7] Section 386 provides:

386 Meaning of dismissed
(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(2) However, a person has not been dismissed if:
...
(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

[8] In O’Meara v. Stanley Works Pty Ltd 1a Full Bench of the Australian Industrial Relations Commission reviewed the authorities on termination of employment in the following terms:

‘[19] The circumstances in which a resignation, while apparently a termination of employment by the employee, nevertheless constitutes a termination at the initiative of the employer, have been considered in a number of cases. A prominent authority is the decision of a Full Court of the Federal Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (Mohazab). In that case, the employer made a threat that unless the employee resigned the employer would ask the police to charge the employee with an offence. The analysis of the concept of termination at the initiative of the employer by the Court in that case has not always been quoted in full. It is desirable that we do so in this case. After referring to dictionary definitions of the term “initiative” and the convention giving rise to the statutory provisions, the Full Court said:

“These definitions reflect the ordinary meaning of the word ‘initiative’. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression ‘termination at the initiative of the employer’ as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘termination of employment’: Siagian v Sanel (1994) 1 IRCR 1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process. An example would be a situation where the employer decided to dismiss an employee and did so orally or in writing with immediate effect. Other situations may be more complex as exemplified by the circumstances considered by Moore J in Grout v Gunnedah Shire Council (1994) 1 IRCR 143; 57 IR 243 where an employee had given written notice purporting to terminate the employment relationship. The notice was not reasonable but was accepted by the employer which later refused to allow the employee to withdraw the notice. A question arose as to whether that was a termination of the employment at the initiative of the employer and his Honour held it was. His Honour said at 160-161; 259:

‘I have already said that Div 3 concerns termination at the initiative of the employer. The respondent submits that “initiate” means “to begin, commence, enter upon; to introduce, set going, or initiate”: see Shorter Oxford English Dictionary. In this matter, it is submitted, it was the applicant and not the respondent that initiated the termination by writing the letter of 18 May. This, in my opinion, gives the expression “termination” in the Act, read in conjunction with Art 3 of the Convention which speaks of “termination … at the initiative of the employer”, a narrow meaning that was not intended. A principal purpose, if not the sole purpose, of Div 3 is to provide an employee with a right to seek a remedy in circumstances where the employee did not voluntarily leave the employment. An employee may do some act which is the first in a chain of events that leads to termination. An example would be an employee who engaged in misconduct at work which ultimately led to the employer dismissing the employee. However, that situation and the present are not situations where the termination was at the initiative of the employee. In both instances the step or steps that effectively terminated the employment or purported to do so were taken by the employer.’

In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p 3, referred to the situation of an employee who resigned because ‘he felt he had no other option’. His Honour described those circumstances as:‘… a termination of employment at the instance [of] the employer rather than of the employee.’
And at p 5: ‘I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.’” 

[20] Moore J, one of the members of the Full Court in Mohazab, addressed the question further in Rheinberger v Huxley Marketing Pty Limited (Rheinberger). His Honour said, after referring to extracts from Mohazab:

“However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer’s conduct.” 

[21] In this Commission the concepts have been addressed on numerous occasions and by a number of Full Benches. In Pawel v Advanced Precast Pty Ltd (Pawel) a Full Bench said:

“[13] It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee. In the instant case the uncontested factual findings are that the applicant had for almost the whole of his employment performed welding duties; that there was no objective threat to his health and safety involved in the requirement that he undertake welding duties so long as it was not on a continuous basis and that the welding he was required to do was not continuous.”

[22] In the Full Bench decision of ABB Engineering Construction Pty Ltd v Doumit (ABB Engineering) it was said:

“Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination. The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer’s conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer’s conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.” 

[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.”

Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.’ [Footnotes omitted]

Decision

[9] Was Mr.Sorraghan’s employment terminated? There was a difference of evidence between Mr Sorraghan, and Mr Torossi, the managing director, as to what was said on 8 May. I had the opportunity to observe the witnesses giving evidence and I prefer the evidence given by Mr Torossi. I accept his version of events, set out at paragraph 7, 8, 9, 10, 11 and 12 of his witness statement.

[10] The evidence by Mr Torossi is consistent with a contemporaneous note contained in exhibit B3 which, according to Mr Torossi, was written down five minutes after the conversation in question and provides: ‘Spoken to Daniel. Hostile, abusive behaviour. “See you in court, you weak cunt. You’ve had it in for me. You can shove your job, you cunt”’ and records that Mr Torossi then asks that he be removed from the job. That language is also consistent with language that Mr Neal gave evidence about, in paragraph five of exhibit B4, and some of that language was conceded by Mr Sorraghan. A number of issues flow from that.

[11] The question arises of the significance to be given to the words used by Mr Sorraghan on 8 May 2013, namely, ‘You can shove your job up your arse, you cunt’. Following the use of that language Mr Sorraghan was driven home and never returned to the workplace or attempted to resume his duties. He did contact the employer later, at the next pay day, about his entitlements. That again suggests an acceptance that the job has come to an end as a result of the conversation he had. Mr Torossi accepted, at the time, the resignation on 8 May. It would have been open to Mr Sorraghan attempt to return to the job and resume his duties, but he did not do so. He therefore confirmed the interpretation placed by Mr Torossi on the conversation. It was in effect a resignation by Mr Sorraghan constituted by his language, and then by his conduct, which was consistent with that language.

[12] I accept that as a building site there is some rough and tumble in the language used, and that accounts to some degree for the colourful language used by Mr Sorraghan. Nevertheless, it was well in excess of a reasonable response to a perfectly reasonable warning letter. It is not appropriate to screw up a warning letter and throw it at your employer. It was not appropriate to abuse your employer when faced with a perfectly reasonable disciplinary issue, an issue regarding maintenance of expensive machinery, by engaging in verbal abuse of the nature of the language used.

[13] It was a perfectly reasonable direction of the employer to ask that Mr Sorraghan be removed from the premises and driven home. There is no suggestion, in any of that, of forcing conduct; of forcing Mr Sorraghan to resign. Mr Sorraghan was not forced to resign because of, “Conduct, or a course of conduct, engaged in by his or her employer” within section 386(1). Rather the employer engaged in an ordinary disciplinary conversation which was met with great hostility, abuse and inappropriate conduct which cannot be justified and which amounted to a resignation in terms of the language used and the course of the conduct engaged in by Mr Sorraghan.

[14] Mr Sorraghan alleges, at paragraph six of Exhibit S2, that the real reason for his dismissal was to cause him hardship because of the breakdown of his family relationship. However, the evidence is that the employer went out of its way to assist Mr Sorraghan in relation to his personal issues. It allowed Mr Sorraghan to take several days off work so that he could attend court – and that’s contained in exhibit E2, the witness statement of Mr Torossi, paragraph 14 – and in paragraph 15 they indicate:

‘We bent over backwards to ensure that Graham and Daniel were able to co-exist within the workplace with the least possible conflict. Not only did we give them both days off to deal with their personal issues but we also ensured that they were separated at all times; that they we working on different sites. This was an inconvenience at times but it was something that we were happy to do to keep the peace between two long serving employees and to give them both the chance to work without being exposed to problems in their personal lives.’

[15] There was some cross-examination of the witnesses in relation to such issues. I accept the evidence given by Mr Torossi. Mr Sorraghan has not properly recognised the measures taken by the employer to assist him in his personal difficulties.

[16] In this case Mr Sorraghan had an effective, and a real choice not to resign. He had the choice to accept the disciplinary approach taken by the employer, which in the circumstances, on the evidence before me, was by no means unreasonable. He chose not to accept that but chose instead to resign his employment. There was certainly no termination at the initiative of the employer, in all the circumstances.

[17] Was there a demotion within s.386(2)(c)? Mr Sorraghan was a plant operator required to perform on a range of machines. He continued to be a plant operator required to perform on a range of machines. Mr Sorraghan describes himself as a plant operator in his witness statement, and that is the same description given by Mr Torossi in his witness statement. There was no demotion in terms of his classification.

[18] In relation to the change of machines, it was argued by Mr Sorraghan that that in effect was a change of duties. It appears that as a plant operator Mr Sorraghan was obliged to perform work on such machines as he was directed to work on. It is true that the machine he was directed to perform on Wednesday was less comfortable, in many respects, than the previous machine. However, the previous machine was an extremely expensive machine and the employer had issues about the proper maintenance of the machine by Mr Sorraghan. Clearly it was a legitimate concern of the employer that such an expensive machine be properly maintained and not be damaged. Exhibit B5 of the witness evidence given by Mr Torossi and Mr Neal suggests that there was a real issue as to damage to the machine and proper maintenance. It was an appropriate direction of the employer to give in those circumstances.

[19] Even if there was a demotion, was there a ‘Significant reduction in his or her remuneration’? In this case it is agreed that the financial loss, from loss of a car, was some $4760 plus maintenance of the car and similar expenditure. However, as Mr Torossi said repeatedly, this was not a permanent arrangement. It was ‘For the time being.’ This case can therefore be distinguished from other cases, such as decision of the Industrial Relations Court of South Australia, Woolworths v. Russian 2.

[20] An order dismissing the application is contained in PR541679.

DEPUTY PRESIDENT

Appearances:

Mr P Harris of counsel for the applicant

Mr G McKeown of counsel for the respondent

Hearing details:

2013

Melbourne

6 September

 1   [2006] AIRC 496

 2 (1995) 64 IR 169.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR541678>