Ian Ardley v Bendigo Urban Investments T/A G.J. Gardner Homes Bendigo
[2016] FWC 628
•12 FEBRUARY 2016
| [2016] FWC 628 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Ian Ardley
v
Bendigo Urban Investments T/A G.J. Gardner Homes Bendigo
(U2015/12000)
COMMISSIONER GREGORY | MELBOURNE, 12 FEBRUARY 2016 |
Application for extension of time.
Introduction
[1] Mr Ian Ardley was first employed by Bendigo Urban Investments T/A G.J. Gardner Homes Bendigo (“Gardner Homes”) as a Construction Supervisor in May 2010. He subsequently worked in that role until early 2015 when he was moved to the position of Maintenance QA Supervisor. His salary was also reduced as a consequence of this change.
[2] Mr Ardley then continued to be employed by Gardner Homes until 7 September last year when he resigned. He subsequently lodged an unfair dismissal application in which he acknowledged he had resigned, but claimed he was forced to do so because of the conduct engaged in by his former employer.
[3] Gardner Homes subsequently raised separate jurisdictional objections to the application. It submits, firstly, that if Mr Ardley claims to have been dismissed from his employment his termination can only have occurred at the time his employment as a Construction Supervisor came to an end. This occurred in early 2015. Therefore, it submits his application was lodged well outside the standard 21 day time limit.
[4] It also submits Mr Ardley resigned from his employment and, therefore, is not a person who has been “dismissed.”
[5] During the course of the proceedings Gardner Homes acknowledged this second ground of objection is the principal one relied upon, given Mr Ardley continued to be employed until 7 September 2015. This decision accordingly deals with that jurisdictional objection.
[6] Mr M. Alkan from HR Experts and Ms A. Fitzgerald of Counsel were both granted leave to appear on behalf the Applicant and Respondent respectively under s.596(2)(a) of the Act as the nature of the application, including the jurisdictional objections, involves some complexity.
The Issue to be Determined
[7] Section 385 of the Act relevantly provides:
“A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable” 1
[8] Section 386 continues to relevantly provide:
(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
[9] There is no issue between the parties that Mr Ardley resigned from his employment. However, the issue to be determined, given the jurisdictional objection raised by Gardner Homes, is whether he was forced to do so because of the conduct, or a course of conduct, engaged in by his former employer.
[10] If the Commission determines this issue in favour of Mr Ardley then he is a person who has been “dismissed” under ss.385 and 386 of the Act and the matter will be relisted to deal with his substantive unfair dismissal application. However, if the Commission finds he has not been “dismissed” then the application must also be dismissed.
The Evidence and Submissions
[11] Gardner Homes submits, at the outset, that Mr Ardley was not dismissed, but resigned because of the health issues impacting on him. It submits this is supported by the medical certificate provided by his General Practitioner, which indicates he can no longer continue in employment because of his state of health. It submits he is accordingly unable to perform the inherent requirements of the job. It continues to submit there is no evidence to suggest his health issues resulted from his employment at Gardner Homes.
[12] It continues to submit Mr Ardley was informed on 11 November 2014 that it had decided to move him from his position as a Construction Supervisor because of on-going issues to do with his work performance. It also submits it created a new role for him as a Maintenance QA Supervisor, and in a meeting on 18 November he agreed to this change in role. However, he was allowed to complete the projects he had been supervising in his Construction Supervisor role, and then moved to the new position in early 2015.
[13] Mr Kriss Gill is a Director of Gardner Homes, and has been since October 2005. His responsibilities include construction management and the oversight of the construction supervisors and other employees, including Mr Ardley.
[14] His evidence indicated that in the latter part of 2013 he began receiving a number of complaints about Mr Ardley’s work performance, and he subsequently met with him on a regular basis to discuss these issues. However, after performance reviews in April and July in 2014 Mr Gill said Mr Ardley’s performance was not improving, and it was therefore decided in November he could no longer continue to work as a Construction Supervisor. It was, however, decided a Maintenance QA Supervisor role would be created for him at a reduced salary level. He said Mr Ardley subsequently agreed to accept this different role. Further negotiations then took place about an appropriate salary level. It was also agreed he would remain in the Construction Supervisor role until early 2015 in order to complete some of the existing work he was responsible for.
[15] Mr Gill said there continued to be ongoing issues with Mr Ardley’s work performance in his new role, and in August last year a further formal discussion took place about these issues. He said Mr Ardley was also told at that time he would not be receiving a salary increase after he had requested his salary be reinstated to what it was when he was working as a Construction Supervisor.
[16] He said Mr Ardley subsequently telephoned him on 19 August to say he was unwell and would not be at work. Mr Gill said Mr Ardley did not return to work at Gardner Homes from that point and remained on sick leave until his letter of resignation was received on 7 September.
[17] Mr Gill’s witness statement also attached a copy of the resignation letter, dated 7 September 2015, from Mr Ardley. It states:
“I, Ian Ardley tender an Involuntary Resignation effective immediately.
On 11th November 2014 I was requested to attend a meeting with Danny and Kris. After a brief discussion took place, I was told that it was your desire that I take on a new role in a position that you were going to create within the company, that would be better suited to me. This role involved Q/A inspections and Maintenance Supervisor, to which I replied that I would be interested, depending on the pay. I was asked to give it some thought and we would hold another meeting in about 1 week.
Approximately on the 18 November 2014 another meeting was held with you (Danny and Kris). When asked about the new position I replied that I was prepared to undertake the role, subject to the pay. Through discussion involving the tasks within the role, when it came to the subject of pay terms, what was offered as a remuneration amount of Seventy Thousand Dollars per annum as the upper level of a supervisors pay, I replied that I can’t accept that figure as I am already on Eighty Thousand Dollars per year plus super and car allowance and at that amount would put a huge financial burden on me and send me broke. Further, on questioning the role it became clear to me that this was a demotion rather than an equivalent role change. Kris replied that if I didn’t accept the role then by mid 2015 there would not be a job at all. My pay decrease came into effect in the beginning of February 2015.
As I felt that I was left with no choice but to accept the pay cut, as I was soon to turn 62 years of age and believed that I would have little chance of obtaining employment again. Having never received any warnings and the demotion was completely unexpected; I fail to understand as to why was demoted.
It is not my desire to resign for several reasons, however, ultimately as the events described above I am left with no other option but to resign.
Due to a medical condition as described in the attached letter, I am unable to provide notice as required.
Regrettably,
Ian Ardley” 3
[18] Mr Gill said that following receipt of this letter, and after discussions with a fellow Director, Mr Darren Wade, it was decided to provide Mr Ardley with a letter accepting his resignation. It was also decided his notice period would be paid out, and he would be provided with an additional amount equivalent to one week’s salary. The letter also acknowledged the health issues Mr Ardley was experiencing, and expressed the hope he would now have the opportunity to concentrate on dealing with these issues. Mr Gill also indicated in cross-examination he did not take issue with Mr Ardley’s decision to resign as he had already been off work on sick leave for three weeks, and he assumed his on-going health issues had got to the point where he was no longer able to continue in employment.
[19] Mr Gill also said that at no time between December 2014 and July last year did Mr Ardley raise concerns about taking on the new role of Maintenance QA Supervisor, and relinquishing the Construction Supervisor role, despite having the opportunity to do so. He also said Mr Ardley continued to work as normal throughout most of this period, despite the issues to do with his health.
[20] Gardner Homes submits, in conclusion, Mr Ardley resigned from his employment because of the health issues impacting on him, which had worsened to the point where he was no longer able to perform the inherent requirements of the job. It points to the medical certificate from his doctor as providing further confirmation of this.
[21] It also submits there is no evidence to suggest Mr Ardley’s health issues were caused by his work or by its actions. Gardner Homes submits instead it sought to work with him to try and assist him remain in employment.
[22] Mr Ardley submits, in response, that he commenced working with Gardner Homes in 2010 as a Construction Supervisor. However, in November 2014 he was asked to attend a meeting with two of the Directors of the business, Mr Gill and Mr Wade, which involved a discussion about a new role for him. At that point the level of remuneration in this new role had not been determined. Mr Ardley said he agreed to consider the proposal, but required confirmation about the remuneration package. He said he was subsequently told the new role would be at a lower salary level, and if he did not accept the new position it was likely his existing role would not continue beyond the middle of 2015. Mr Ardley said he eventually agreed, reluctantly, to take on the new role because of concerns about losing his job. He said his salary was subsequently reduced by $10,000 dollars in February 2015 after he commenced in the new role, and he later signed a new employment contract on 24 March “under duress.” 4
[23] Mr Ardley said he suffered significant financial hardship as a consequence of his reduction in income, and in late July he met again with the General Manager, Mr Darren Wade, and requested to have his salary restored to its previous level. He also sought back payment of the shortfall. He later approached Mr Wade again in August after having received no response to his earlier request, and was then told his salary would not be increased.
[24] Mr Ardley submits, in conclusion, he was effectively dismissed at the initiative of his employer, Gardner Homes, and this followed as a consequence of the sequence of events involving, firstly, the change in his role and, secondly, the subsequent decrease in his salary by an amount of $10,000. Mr Ardley also submits he only ever agreed to these changes under duress. He also submits the reduction in his level of remuneration was significant, and it was an outcome forced upon him by the conduct of Gardner Homes, which should be considered as being sufficient to constitute the termination of his employment.
[25] Mr Ardley’s evidence continued to indicate that on 7 September he “submitted an involuntary resignation to which the company readily accepted.” 5
[26] He also said he suffers from an ongoing medical condition which first began to impact on him in March 2014. He said the effect has been to create anxiety and tiredness, together with an inability to concentrate for any length of time, requiring him to take regular breaks. He said he believed this condition has been aggravated by the unfair treatment he received while working for Gardner Homes. He also attached two medical certificates compiled by his treating GP, Doctor Neville King, to his witness statement. The first, dated 4 September 2015, states as follows:
“This is to certify that I had known the above named as a patient for several years.
I have given him advice today that, due to his ongoing mental health issues, he should stop working in his current role.
Hoping this is of assistance.” 6
[27] The second medical certificate dated 27 August 2015 contains information about the medications Mr Ardley has been prescribed for his medical condition.
Consideration
[28] The parties both provided evidence about the circumstances leading up to the end of Mr Ardley’s employment with Gardner Homes after he had worked for the business for more than five years. However, neither party provided detailed submissions about the relevant statutory provisions and case law that should guide the determination of this matter.
[29] The Full Bench in the matter of Kylie Bruce v Fingal Glen Pty Ltd (in liq) 7 also dealt with an application where the Applicant contended she had been forced to resign because of conduct or a course of conduct engaged in by her employer, and she had therefore been “dismissed.” The circumstances in that matter involved frequent late payment of wages and superannuation entitlements, and not being paid on time for a period of annual leave. In the course of its decision the Full Bench made reference to the relevant legislative provisions and case law in the following terms (references omitted):
“[11] The Senior Deputy President decided that the Applicant had not been unfairly dismissed because she had not been dismissed (see s.385(a) of the Act). The word “dismissed” is defined in s.386 of the Act:
‘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.’
[12] According to the Explanatory Memorandum to the Fair Work Bill 2008,
‘Clause 386 - Meaning of dismissed
1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person's employment with his or her employer was terminated on the employer's initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).
1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).
1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:
- where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or
- where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.’
[13] The test of constructive dismissal in the context of the unlawful termination provisions of the Industrial Relations Act 1998 was considered by the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2) (Mohazab) and subsequently elucidated by Justice Moore in Rheinberger v Huxley Marketing Pty Ltd (Rheinberger). The commonly quoted statement of principle in Mohazab is that:
‘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’.
[14] It is important that this passage be read in the context of the judgment as a whole. It is clear that the requirements set out by the Full Court in the passage quoted are necessary, but not sufficient, to establish that employer action constitutes constructive dismissal.
[15] These principles of constructive dismissal have been applied to the unfair dismissal provisions of the Workplace Relations Act 1996 by Full Benches of the Australian Industrial Relations Commission in Pawel v Advanced Precast Pty Ltd (Pawel)and ABB Engineering Construction Pty Ltd v Doumit (ABB Engineering), and we accept the Applicant’s submission that those decisions are relevant to any consideration of s.386(1)(b) of the Act.
[16] In Pawel the Full Bench said that:
‘[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...’
[17] In ABB Engineering, the Full Bench said that:
‘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.’
[18] The four authorities cited above were summarised by a Full Bench of the AIRC in O’Meara v Stanley Works Pty Ltd (O’Meara) as follows:
‘[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... 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.’
[19] Subject to the comments below, we accept and adopt this as a summary of the principles applicable in determining whether an employee has been forced to resign because of the conduct of the employer within the meaning of s.386(1)(b) of the Act.” 8
[30] I also note this decision was cited with approval in the subsequent Full Bench decision in Victorian Association for the Teaching of English Inc v Debra de Laps 9, which also involved an issue of constructive dismissal.
[31] I am satisfied based on this review of the relevant legislation and well-established authorities that for Mr Ardley to establish he has been “dismissed” it must firstly be found that his resignation resulted directly or consequentially from the actions of his employer, Gardner Homes, so that he cannot be said to have left voluntarily. Secondly, the actions of both parties must be viewed on the basis of an objective analysis. I have applied these principles to the determination of this matter.
[32] There is no dispute that in early 2015 Mr Ardley was effectively demoted from his position as a Construction Supervisor to the role of Maintenance QA Supervisor. His salary was reduced by $10,000 as a consequence of this change. However, there is no agreement about why this occurred. Gardner Homes submits it was as a consequence of issues to do with Mr Ardley’s work performance in the role of Construction Supervisor. It submits that while he had initially performed well in the role his performance steadily declined from a point early in 2014. It submits it subsequently sought to work with him to deal with these performance issues, but with limited success. However, in the light of his previous good service it submits it proposed the new role as a way of keeping him in employment.
[33] Mr Ardley has a different view. He takes issues with the submissions and evidence about his work performance, although he did acknowledge in cross-examination there was apparently a performance management process in place in the latter half of 2014. He also submits he has a medical condition that has been exacerbated by the pressures and stresses of his work.
[34] His letter of resignation also indicates it was his demotion and the reduction in salary that left him with “no other option but to resign.” 10 However, he concludes by indicating he is required to leave his employment immediately because of his medical condition, and is not able to work out his period of notice. The letter also attached a copy of his medical certificate obtained 2 days earlier which, as already indicated, stated in part “due to his ongoing mental health issues, he should stop working in his current role.”11
[35] Having reviewed the evidence and submissions I have come to the following conclusions in regard to the matters I consider relevant to the determination of this application. Firstly, I am not satisfied the evidence indicates Gardner Homes embarked on a deliberate strategy, or a “course of conduct,” designed to cause Mr Ardley to resign from his employment. The evidence does indicate it decided he was no longer suited to work in the role of Construction Supervisor because of issues to do with his work performance, but it also indicates it then made a genuine effort to find another role for him, albeit at a reduced salary.
[36] It also appears Mr Ardley had some options in that he could have remained in the Construction Supervisor role until mid-2015 when it was likely that position would no longer exist. However, he reluctantly decided to take on the new role, apparently with the view that while still employed he had a better chance of finding work elsewhere.
[37] I also consider it is significant that Mr Ardley then worked in the new role for several months. It is acknowledged he was clearly unhappy about the decision to offer him a different role, particularly given the reduction in salary, and he again took up to these concerns with the Directors in July, seeking to have his salary restored to its previous level. However, the fact he was prepared to take on the changed role, and to continue in that position for several months, suggests the change was not something that immediately left him with no option but to resign. In addition, it is difficult to understand how Mr Ardley’s concern about the financial burden imposed upon him by the impact of the salary reduction would be alleviated by him resigning, in the absence of having another job to go to.
[38] However, the final and most important consideration concerns the medical condition that has unfortunately impacted on Mr Ardley more recently. In this regard I have a degree of sympathy for Mr Ardley as the evidence indicates that in the initial period of his employment with Gardner Homes his work performance was generally satisfactory, if not better. However, it appears that from a point in late 2014 it began to deteriorate. While there is no evidence to confirm why this occurred it does appear the issues to do with his work performance were related to the medical condition that was beginning to impact on him.
[39] Regardless of these considerations it does appear that it was ultimately these medical issues that led to Mr Ardley finally deciding to resign from his employment. While his letter of resignation indicates he was providing “an involuntary resignation effective immediately,” and it then continues to detail some of the events that occurred from November 2014, it appears it is the medical advice he received three days earlier, and confirmed in the medical certificate from his General Practitioner, that was ultimately the catalyst for his decision to resign. At that stage he had already been absent from work for a period of around three weeks because of these health issues.
[40] In conclusion, I refer again to the tests to be applied in determining this matter that have been established by the authorities referred to previously.
[41] First, if Gardner Homes had not taken the action it did, would Mr Ardley have remained in the employment relationship or did that action leave him with no option but to resign? I have concluded in response that Mr Ardley cannot be said to have been left with no option but to resign because, in fact, he did not resign following the decision to move him to another position. Instead he remained in employment with Gardner Homes for more than six months, although it is acknowledged he continued to be unhappy about what he considered to be a significant demotion coupled with a reduction in salary.
[42] The authorities have also established that all of the circumstances must be examined, including the circumstances giving rise to the termination, the seriousness of the issues involved, and the respective actions of both parties. As indicated already I am satisfied that in all the circumstances Mr Ardley’s medical condition, and its impact on him, is of particular relevance in the determination of this matter. I am satisfied, in conclusion, that if not for the state of his health he would likely still be employed by Gardner Homes, and it was these health issues that were the principal reason for his decision to resign.
[43] It follows that I am not satisfied Mr Ardley is a person who resigned from his employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his employer. Therefore, Mr Ardley is not a person who has been “dismissed” under s.386 of the Act. It follows that his application must be dismissed.
COMMISSIONER
Appearances:
Mr M. Alkan from HR Experts appeared on behalf the Applicant.
Ms A. Fitzgerald of Counsel appeared on behalf the Respondent.
Hearing details:
2015.
Melbourne:
18 December.
1 Fair Work Act 2009 (Cth) at s.385
2 Ibid at s.386
3 Exhibit GHB1 at attachment KG-4
4 Submissions of Applicant as to Extension of Time, at para 12
5 Ibid at para 12
6 Ibid at Attachment B
7 [2013] FWCFB 5279
8 Ibid at [11] – [19]
9 [2014] FWCFB 613
10 Above n.iii
11 Above v.i
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