Davina Johnson v Granite Transformations Pty Ltd

[2017] FWC 1443

[2017] FWC 1443

FAIR WORK COMMISSION

DECISION

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

Davina Johnson
v
Granite Transformations Pty Ltd
(U2016/12849)

COMMISSIONER CAMBRIDGE SYDNEY, 16 MARCH 2017

Unfair dismissal - jurisdictional objection - s. 386 - employment not terminated on initiative of employer - application dismissed.

[1] This Decision involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was made by Davina Johnson (the applicant). The respondent employer is Granite Transformations Pty Ltd (the employer).

[2] The application was filed at Sydney on 24 October 2016, and the employer filed a response on 4 November 2016. The application indicated that the date that the applicant was allegedly constructively dismissed was 14 October 2016. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] Further conciliation of the claim was conducted, by consent, at the commencement of the scheduled Hearing held on 22 February 2017. Conciliation was unsuccessful, and the matter proceeded to arbitration which dealt with the determination of the issue of the jurisdictional objection raised by the employer, which involved the question of whether the applicant was a dismissed employee.

[4] At the Hearing, the applicant represented herself. The applicant gave evidence as the only witness who was called to provide evidence in support of the claim. However, the Commission permitted three further witness statements made on behalf of the applicant to be introduced into evidence without the deponents of those statements being called as witnesses. The employer was represented by its Company Secretary, Mr Grigg, who provided submissions on behalf of the employer. The employer did not introduce any witness evidence.

Factual Background

[5] The applicant commenced employment with the employeron 19 March 2001. The applicant was engaged as an Administration Assistant, and her work was governed by the terms of the Clerks - Private Sector Award 2010 (the Award). The applicant worked at the employer’s Sydney head office located at North Ryde. The employer conducts a kitchen renovation business, and it describes itself as the world’s largest specialist kitchen renovation network with two hundred showrooms and branches throughout Australia, USA, Canada, United Kingdom and New Zealand.

[6] In August and September 2016 there was a change in the ownership and management structure of the employer’s business. In early September 2016, the employer convened a staff meeting which, inter alia, advised employees of significant restructuring that would include a detailed review of all positions. As part of this review employees were required to produce a job description of the position that they occupied together with an executive summary report of particular work that an individual was currently engaged on.

[7] During September 2016, new management structures were implemented and these changes caused a number of the employer’s managers to resign from their employment. On around 22 September 2016, the applicant was alerted to a job advertisement listed online on the seek.com recruitment website. This job advertisement was for an Accounts Receivable/General Accounting Assistant, and responses to the job advertisement were to be made to one of the employer’s Directors, Mr Satori.

[8] The applicant believed that the job advertisement on the seek.com website was for the position that she held. In a letter dated 28 September 2016, the applicant wrote to the employer’s Global COO in Florida, USA, Mr Hanlon, raising concern about what she believed to be her position being advertised. The applicant sought clarification from Mr Hanlon about “the stability” of her employment.

[9] On 1 October 2016, the applicant sent an email to Mr Satori which advised that as she had not received a response from Mr Hanlon to her letter of 28 September, she sought clarification regarding her employment from Mr Satori. On 3 October 2016, Mr Satori responded to the applicant and indicated that when he had a chance he would call the applicant and speak with her via Skype.

[10] On 4 October 2016, the applicant wrote to Mr Satori advising, inter alia, that she felt isolated in her employment and that she was “being bullied into resigning”. On 6 October 2016, Mr Satori sent an email to the applicant which stressed that in accordance with his previous advice, he would contact the applicant to discuss her concerns when he had an opportunity. Mr Satori explained that he had not had a chance to have such a discussion because he had been busy in Florida, and delays with communication were caused by a hurricane possibly hitting that area. Mr Satori also provided explanation about some of the changes that involved removing the applicant’s access to certain bank account functions, and he rejected the proposition that the employer would be required to discuss in detail all aspects of its executive decisions concerning restructured roles and functions in the business. Mr Satori concluded his communication to the applicant by advising her to endeavour to focus on her job as the employer went through a management transition.

[11] The advice provided by Mr Satori in his email of 6 October did not satisfy the applicant and she consulted lawyers who sent a five-page letter dated 11 October 2016, to Mr Satori which, inter alia, asserted that the applicant had been subjected to unlawful constructive dismissal, unlawful adverse action, and avoidance of redundancy entitlements. This letter concluded with four stipulated demands that were to be addressed by 4 pm on Friday, 14 October 2016 and failure to meet these demands would result in commencement of various legal proceedings.

[12] At 4:23 pm on Friday, 14 October 2016, the applicant submitted her written resignation which stated, inter alia, that the resignation was not provided voluntarily, and that the termination of employment was considered to be at the employer’s initiative.

[13] On 16 October 2016, Mr Satori sent an email to the applicant and her lawyers which, inter alia, advised that the position advertised on seek.com was not that occupied by the applicant, but for a position in a related company. Further, Mr Satori advised that the applicant’s “sudden termination now gives us the problem that we need to fill your position and we will do so.”

The Applicant’s Case

[14] The applicant did not file any written submissions prior to or during the Hearing on 22 February 2017, and she offered no substantive oral submissions during the Hearing. The applicant was clearly an inexperienced litigant. Shortly after the Hearing had concluded the applicant sent an email communication to the Commission which was copied to the employer, and which contained six pages of written submissions dated 17 February 2017. It appeared that the applicant had mistakenly failed to provide written submissions which had been prepared in advance of the Hearing. The applicant subsequently sought to have the Commission accept and consider these submissions. The employer has objected to the Commission having regard for the written submissions of the applicant dated 17 February 2017, and which were provided only after the conclusion of the Hearing on 22 February.

[15] The Commission has decided to accept the written submissions of the applicant dated 17 February 2017, and to have due regard for that material. The employer was provided with a period of a further seven days to provide any additional written submissions made in response to the applicant’s written submissions. The employer has confined its further written communications to a reiteration of its objection to the Commission accepting and considering the applicant’s late written submissions.

[16] The written submissions made by the applicant acknowledged that the applicant must demonstrate that the employer engaged in conduct which forced the applicant to resign from her employment. In this regard, the written submissions of the applicant asserted that the employer’s conduct intended to bring about the end of the applicant’s employment or it was conduct which, upon objective analysis, was likely to result in the applicant’s resignation.

[17] The applicant submitted that support for the assertion that the applicant’s resignation was not voluntary was provided by the words that were contained in her letter of resignation. The letter of resignation stated that the resignation was at the employer’s initiative and it was not voluntary. Further, the letter of resignation stated that because the employer had ignored requests for information about the future of the applicant’s employment, the applicant had no option other than to resign.

[18] The applicant’s submissions set out various aspects of the conduct of the employer which were asserted to support the proposition that the employer was acting in a manner which was unreasonable, designed to alienate the applicant in her employment, and encourage her to resign. In particular, lack of information about the employer’s restructuring, advertising the applicant’s position, alteration to the applicant’s access to the employer’s banking records, and lack of response to concerns raised by the applicant, were cited as actions of the employer which were said to be intended to result in the applicant’s resignation or likely to produce that resignation.

[19] The applicant further submitted that as she had witnessed the employer’s treatment of other employees which resulted in their respective resignations, she perceived that the same treatment was being directed at her so as to induce her resignation. The submissions of the applicant acknowledged that an objective analysis of the employer’s conduct was required in order to ascertain whether its actions or course of conduct, resulted in the termination of the applicant’s employment by way of her resignation. The applicant submitted that upon objective analysis, she was entitled to treat the employment to be at an end because of the unreasonable conduct of the employer including its failure to comply with the consultation provisions of the Award.

[20] The applicant submitted that she had no choice other than to resign her employment due to the employer’s unreasonable conduct. It was further submitted that the circumstances constituted the constructive dismissal of the applicant, and that dismissal satisfied the criteria for whether the dismissal was harsh, unjust or unreasonable. The applicant’s submissions addressed the various requirements of s. 387 of the Act which were said to establish that the constructive dismissal of the applicant was unfair.

[21] As the applicant had obtained alternative employment she submitted that any remedy of reinstatement was not appropriate. The further submissions of the applicant then addressed the amount of compensation that she sought as remedy for her unfair dismissal.

The Employer’s Case

[22] Mr Grigg, who appeared for the employer, made verbal submissions opposing the unfair dismissal claim on the basis that the applicant had not been dismissed from her employment. Mr Grigg said that the employer had endeavoured to communicate with the applicant as best that it could during the period when the employer was transitioning to a new management structure. Further, Mr Grigg said that the job advertisement that had been placed on seek.com was for a person to replace another employee in a related company who was absent from work as a result of a personal tragedy.

[23] Mr Grigg relied upon the written submissions that had been filed by the employer. These submissions asserted that various actions of the employer were both reasonable and not intended to bring about the resignation of the applicant. The employer submitted that it had not advertised the applicant’s role, and it had not made a definite decision such that the consultation obligations of the Award had not been activated. Further, the employer submitted that there was no obligation to pay the applicant any severance payment as she had demanded.

[24] The submissions made by the employer further asserted that when assessed objectively, the communications between the applicant and Mr Satori could not establish conduct on the part of the employer of a nature that would see the applicant’s resignation as a probable result. The employer submitted that it had no intention of bringing the applicant’s employment to an end, and it did not force the applicant to resign. Further, the employer submitted that the applicant’s demands were unreasonable, misconceived and unfounded.

[25] The employer submitted that the applicant voluntarily chose to resign on 14 October 2016, with immediate effect, and this meant that the respondent had to hire another person to fill the applicant’s role. The employer submitted that the applicant had not been constructively dismissed, and the application for unfair dismissal remedy should be dismissed by the Commission.

Consideration

[26] Section 385 of the Act stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:

(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.

[27] In this case there was a jurisdictional objection raised in respect to that element contained in subsection 385 (a) of the Act, specifically whether the applicant was a person who had been dismissed. The question of whether or not a person has been dismissed from employment involves mixed findings of both fact and law. Further, section 386 of the Act prescribes a meaning of “dismissed”. Relevantly, sub-section 386 (1) of the Act is in the following terms:

“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.”

[28] In this instance the applicant provided a written resignation from her employment in a letter dated 14 October 2016. The applicant has asserted that she was forced to resign from her employment because of conduct, including a course of conduct, engaged in by the employer. These circumstances are often described as a constructive dismissal in that it is asserted that it was the desire of the employer to have the applicant resign from employment, and that action of the employer essentially compelled the applicant to resign.

[29] The concept of constructive dismissal which involves the alleged forced resignation of an employee, often includes a resignation that provides the requisite notice given by the employee. In this instance the resignation provided by the applicant did not include any period of notice, and such circumstances can be comprehended by the concept of constructive dismissal as explained by the learned authors of the often quoted source book, Macken’s Law of Employment  1and the following passage from that text is instructive:

“Alternatively, the employee may, in certain circumstances, treat herself or himself as discharged from further performance of the contract, and leave the employment without giving the requisite notice. This course will be justified where the conduct of the employer amounts to a repudiation of the contract, that is, the employer’s breach or proposed breach is sufficiently serious to allow the employee to regard herself or himself as discharged from further performance of the contract. The term “constructive dismissal” is often used to describe this situation.”

[30] Consequently, the circumstances in this instance involve an alleged constructive dismissal where the resignation given by the employee did not include any period of notice. In such circumstances, the conduct of the employer must be carefully examined so as to establish whether it was sufficiently serious so as to be an egregious breach of the contract of employment which represented a repudiation of the contract of employment. If the evidence established that the employer’s conduct was such an egregious breach, proper basis would exist so as to permit the applicant to regard herself as discharged from further performance of the contract. In such circumstances, the applicant would be constructively dismissed.

[31] There is a significant amount of case law authority on the question of constructive dismissal. One case which is often referred to is that of Mohazab v Dick Smith Electronics (No2) 2(Mohazab) which succinctly summarised the concept of constructive dismissal as follows:

“However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.” 3

[32] In Mohazab, the Full Bench of the Court also referred to another authority in the case of Allison v Bega Valley Council  4 (Allison). The following extracts from the decision in the Allison case is particularly helpful for application in the present circumstances:

“Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?”

and

“In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee...”

[33] In the present case, the relevant actions of the employer were connected with the decision to implement some significant management restructuring. The evidence has established that a number of the employer’s managers, including the applicant’s direct superior, were sufficiently aggrieved by the impact of the management restructuring that they chose to resign. In this context, the applicant was understandably concerned about the security of her employment, and the nature of any changed circumstances of her employment.

[34] The applicant formally raised her concerns about her future employment with various Directors of the employer. The applicant’s concerns were heightened by what she believed to be a job advertisement for the position that she held. Importantly however, an objective analysis of the responses that were provided to the applicant by Mr Satori do not support the proposition that the employer was acting in a manner that was designed to produce or likely to lead to the resignation of the applicant.

[35] Although there was some delay in the employer’s responses to the applicant’s documented concerns, in his email communication of 6 October 2016, Mr Satori explained the reason for delay, he provided explanation for the bank account access changes, and concluded by suggesting that when a company goes through management transition the applicant would be best served to focus on her job. Further, Mr Satori repeats an invitation to discuss the applicant’s concerns further at an appropriate time.

[36] An objective reading of the email communication of 6 October 2016 from Mr Satori to the applicant does not provide basis for conduct that could be construed to be unreasonable. Essentially, Mr Satori indicated that he was prepared to have further discussions with the applicant about her concerns, and he provided explanation for some of the changes that had occurred. In addition, Mr Satori rejected the proposition that he would be required to disclose in detail the employer’s decision making in respect to aspects of the management transition that the company was undertaking. The content and tenor of the communication from Mr Satori on 6 October manifests as a firm but reasonable response to the applicant’s concerns, and it invites further discussion and by implication, on-going employment.

[37] Unfortunately, rather than pursuing further discussion at the invitation of Mr Satori, the applicant engaged lawyers who sent the employer a very strongly worded five-page letter of demand. This communication from the applicant’s lawyers on 11 October 2016, did not enhance the prospects for any rectification of the applicant’s concerns, but instead acted to galvanise the termination of the employment. In most employment relationships, a strongly worded letter of demand from lawyers acting for an employee would be unlikely to be conducive to the continuation of the employment.

[38] The letter of demand from the applicant’s lawyers stipulated that by 4 pm Friday, 14 October 2016, the employer was to pay to the applicant a number of alleged statutory entitlements, together with accrued annual leave and long service leave payable upon termination of employment. Twenty three minutes after this deadline the applicant submitted her letter of resignation. However, it is clear from the letter of demand that the applicant had already treated her employment to be at an end, and she was demanding particular payments that can only become entitlements upon the termination of employment.

[39] Although the employer had not responded to the letter of demand within the stipulated deadline of 4 pm 14 October, it was clear from the contents of the letter of demand that the applicant had, on or before 11 October 2016, treated the employer’s prior conduct as unreasonable and egregious so as to amount to a repudiation of the contract of employment. On any objective and balanced assessment of the communications and other actions of the employer in response to the applicant’s understandable concerns, there can be no finding that the employer acted in a manner that was intended or likely to result in the resignation of the applicant. Further, the actions of the employer could not be properly construed to represent conduct that the applicant could treat as a repudiation of the contract of employment. Indeed, the employer was encouraging the applicant to focus on her job, and inviting further discussion and other communication as a means to address the concerns that she had raised. These are hardly the actions of an employer that was acting in a manner intended or likely to bring the employment to an end.

Conclusion

[40] The determination of this matter has involved a contest about whether or not the applicant was a person dismissed from employment. Upon application of the relevant tests and an analysis of the evidence involving the circumstances of the termination of employment, it has been established that the resignation of the applicant was not caused by conduct, or a course of conduct, on the part of the employer.

[41] Unfortunately, the applicant (and/or her advisors), has appeared to misconstrue the concept of constructive dismissal, and she has translated the employer’s responses to her understandable concerns into conduct which was artificially elevated to represent the repudiation of the employment. A constructive dismissal is not established simply because an employee decides to treat the conduct of an employer as the repudiation of the employment. The conduct of the employer will be the true initiator of the termination of employment only if it can be objectively and properly established to have been incompatible with the continuation of the employment.

[42] As a matter of fundamental fairness, the applicant was obliged to accept the invitation of the employer to engage in further discussion about her concerns. If, after further discussion, the employer made little or no attempt to resolve or otherwise mitigate legitimate residual issues, only then could the concept of constructive dismissal be potentially enlivened. In this instance, the applicant did not have proper basis upon which to treat the actions of the employer as a repudiation of the employment.

[43] Further, the applicant was plainly misguided when she subsequently attempted to rely upon a written resignation which was described to be at the employer’s initiative, and given because she allegedly had no option other than to resign. The applicant had a variety of options other than resignation, including; formalising and pressing an application for leave which she had earlier alluded to; accepting the invitation from Mr Satori for further discussions regarding her concerns; and engaging further with Mr Hanlon about her concerns.

[44] Consequently, a careful analysis of the circumstances in this instance has established that it was not the actions of the employer that operated as the real and effective initiator of the termination of the contract of employment. The applicant was not a person dismissed from employment, and the jurisdictional objection as advanced by the employer must be upheld.

[45] The application is dismissed as it is without jurisdictional foundation. An appropriate Order shall be issued accordingly.

COMMISSIONER

Appearances:

Ms D Johnson appeared unrepresented.

Mr J Grigg appeared for the employer.

Hearing details:

2017.

Sydney:

February, 22.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR590949>

 1   Macken’s Law of Employment , [Sappideen et al,] Seventh edition, Lawbook Co. @ [9.20] page 346.

 2 Mohazab v Dick Smith Electronics Pty Ltd (No.2), (1995) Industrial Relations Court of Australia, 62IR 200.

 3   Ibid @ page 207.

 4 Allison v Bega Valley Council, (1995) Full Commission of the Industrial Relations Commission of NSW, 63IR 68.