Isaac Ashton v 1770 Reef Pty Ltd
[2024] FWC 1651
•24 JUNE 2024
| [2024] FWC 1651 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Isaac Ashton
v
1770 Reef Pty Ltd
(C2023/8085)
| COMMISSIONER HUNT | BRISBANE, 24 JUNE 2024 |
Application to deal with contraventions involving dismissal – Respondent asserted Applicant had resigned his employment – termination at the initiative of the Respondent – jurisdictional objection dismissed.
On 21 December 2023, Mr Isaac Ashton made an application to the Fair Work Commission (the Commission) under s.365 of the Fair Work Act 2009 (the Act) to deal with a general protections dispute involving dismissal. Mr Ashton stated that he had been dismissed from his employment with 1770 Reef Pty Ltd (the Respondent) on 8 December 2023.
In its Form F8A – Response to general protections application, the Respondent objected to the application on the jurisdictional ground that Mr Ashton was not terminated on the employer’s initiative pursuant to s.386 of the Act.
Following the Full Court of the Federal Court decision of Coles Supply Chain Pty Ltd v Milford,[1] the Commission must determine whether Mr Ashton was dismissed before it can exercise powers under s.368 of the Act to deal with a dispute about whether Mr Ashton was dismissed in contravention of the general protections provision.
Legislative Provisions
Section 365 of the Act provides as follows:
“365 Application for the FWC to deal with a dismissal dispute
If:
(a) a person has been dismissed; and
(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.”
The meaning of “dismissed” is provided at 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 employer or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(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.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”
This decision deals only with the jurisdictional objection to be determined: that is, was Mr Ashton dismissed from his employment?
It is the Respondent’s position that Mr Ashton resigned from his employment verbally in December 2023, indicating his intention to conclude his employment with the Respondent in January 2024. The following letter was sent by the Respondent to Mr Ashton on 11 December 2023:
“Dear Isaac,
I am writing to acknowledge and accept your resignation from your position as Boat Manager and Head Skipper at 1770reef. We received your verbal resignation on December 8, 2023, where you communicated your immediate departure from your role.
Initially, during our discussion on 8/12/2023, we were hopeful for a smooth transition during your remaining time with 1770reef. However, in light of the serious allegations of sexual harassment involving you and other employees within the company, it has been determined that your presence on our boat, in the 1770reef offices, or on any other company properties would not be appropriate.
Please be aware that while you have stated an immediate departure from your position, we want to clarify that your notice period has been withdrawn due to the serious nature of these allegations. As such, your employment 1770reef is terminated immediately, and any change in this decision cannot be accommodated.
We take matters of workplace misconduct very seriously and are committed to maintaining a workplace that is free from harassment, discrimination, and any form of inappropriate behaviour. It is unacceptable for any employee to feel discomfort in their workplace due to employee misconduct, harassment or sexually explicit communications from a fellow team member or manager.
Furthermore, we require that any company property, including boat keys, computer anything thing else to do with 1770reef be returned directly to me at your earliest convenience. Your prompt attention to this matter is appreciated.
We request that you refrain from visiting any 1770reef premises or properties after your immediate departure and refrain from contacting current 1770reef employees. If you have any questions or concerns regarding this matter, please contact me.
We appreciate your understanding and cooperation.
Sincerely,
Mark Mergard
Manager
1770Reef”
The question before the Commission is whether Mr Ashton resigned from his employment, and if he did, was he forced to resign from his employment because of conduct or a course of conduct engaged in by the Respondent?
Hearing
The matter was heard before me on 21 March 2024 and 10 April 2024 by video using Microsoft Teams. Mr Ashton was granted leave to be represented by Mr Chris Ryall of Counsel, instructed by Mr Jamie McAlister of WGC Lawyers. The Respondent was represented by Mr Mark Mergard, Manager of the Respondent. The following people gave evidence and were cross-examined:
· Mr Ashton;
· Ms Jamison Scott;
· Mr Mergard;
· Mr Barrie Gates;
· Ms Lucy Carr; and
· Ms Indiana Curr.
Summary of Mr Ashton’s submissions and evidence
Mr Ashton’s outline of submissions
Mr Ashton refuted that he had voluntarily resigned from his employment, verbally or in writing, as asserted by the Respondent. He concedes that he threatened to resign if the Respondent did not cease bullying-type behaviour.
Mr Ashton submitted that the employment was terminated in a meeting with Mr Mergard and Ms Scott on 8 December 2023, where Mr Mergard raised his arms in a cross-like gesture. Mr Ashton submitted that this is corroborated by the evidence of Ms Scott where in her statement gives evidence that Mr Mergard terminated Mr Ashton’s employment by stating, “You’re done” and gestured an “X” with his arms.
In the alternative, if found that Mr Ashton resigned from his employment, Mr Ashton argued he was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent. That is, the Respondent’s persistent bullying-type behaviour and conduct at the meeting of 8 December 2023 was sufficient to force Mr Ashton to leave his employment, resulting in a constructive dismissal.
Mr Ashton submitted the jurisdictional objection should be dismissed and he should be permitted to proceed with his application.
Evidence of Mr Ashton
Mr Ashton holds a certificate of competency as a Ships Master Class <24 and as a Marine Engine Diver (engineer) Class MED2. These qualifications permit Mr Ashton to work as the skipper of any commercial vessel under 24 metres in length within the Australia exclusive Economic Zone (EEZ).
Since 2002, he has worked in the maritime industry. Prior to working for the Respondent, Mr Ashton worked for the University of Queensland for over five years. He was the boating and driving officer and skipper of the university’s research vessel.
In January 2019, Mr Ashton was offered and accepted employment with the Respondent to skipper its vessel, Reef Jet and later, the Ocra (the vessel). The Respondent runs daily charter cruises to Lady Musgrave Island out of the town of 1770. He stated that he was never provided with a formal written employment agreement but has worked in a full-time capacity as the skipper of the vessel. His duties included:
· driving and navigating the vessel during its charter activities;
· managing staff on the vessel; and
· arranging vessel maintenance.
Initially, Mr Ashton’s pay rate was determined by an agreed daily rate to arrive at a calculation of a full-time salary. He was also paid sick leave and holiday leave. All his payslips confirm he was employed in a full-time capacity and from at least March 2021, the payment of a salary.
Mr Ashton and Mr Mergard agreed that Mr Ashton would establish a side business to operate in conjunction with his employment. Mr Ashton provided to Mr Mergard a written proposal on 17 March 2022 which was later accepted. The side business, called 1770 Eco Dive, was to offer scuba diving as an activity during the vessel’s daily cruises. The agreement for 1770 Eco Dive includes the following:
“As 1770 reef already owns the dive tanks and compressor it remains 1770 reef’s responsibility to upkeep and maintain them.”
Mr Ashton considers that in early 2023, Mr Mergard’s behaviour towards him changed. Mr Ashton wasn’t sure if the Respondent had cashflow problems, however he noted that his requests for assistance with parts and maintenance for the vessel and for some of the diving equipment were ignored by Mr Mergard.
As the skipper of the vessel, Mr Ashton had ultimate responsibility for the safety of the vessel, crew and passengers. He held particular concerns about the reliability of the engine for the tender for the vessel. The tender is a rubber inflatable boat and is essential for the safety of passengers engaging in snorkelling and scuba activities.
Mr Ashton also had concerns about the maintenance of the main engines of the vessel. For several years, the vessel was in need of being slipped so maintenance and inspections could be performed but despite Mr Mergard’s promises, it never occurred.
Mr Ashton noted that the air conditioning also needed an overhaul. Mr Mergard would constantly change contractors because he had not paid the contractors that had been used previously.
Mr Ashton expressed his concern to Mr Mergard on multiple occasions over the course of his employment, however he was ignored.
Mr Ashton conceded that the vessel ran aground on one occasion when he was in charge. The incident occurred because of a gear box failure. The Australian Maritime Safety Authority (AMSA) required Mr Mergard to slip the vessel so it could be inspected. Mr Mergard would inform Mr Ashton that it was booked in and then when the dates came, he would say it was not possible. He would give Mr Ashton a new date, and the same delays would occur.
On 18 October 2023, Mr Ashton took his first holiday since starting with the Respondent. He was paid annual leave during the holiday. Upon his return to work, he noticed that Mr Mergard was very hostile towards him. In his absence, staff had not been following Mr Ashton’s standing instructions and there were several compliance issues such as operating the vessel without certified crew (which he brought up with Mr Mergard). Mr Mergard was very complacent about the issue and dismissed his concerns.
Shortly after Mr Ashton’s return from his holiday, he was admitted to hospital with pancreatitis. When he was recovering in hospital, Mr Mergard visited him. He had been administered morphine for pain and was feeling drowsy at the time. Despite his condition, he recalled Mr Mergard being aggressive and accused Mr Ashton of making arrangements to work for the Respondent’s opposition. Mr Ashton denied this allegation, and recalled saying he would cease working for the Respondent if Mr Mergard continued to abuse him.
On Mr Ashton’s return to work, he continued to raise the safety compliance issues with Mr Mergard. He said there were issues of maintenance with the vessel and the tender required a new outboard motor. Mr Ashton continued to request for details of when the vessel would be slipped.
Mr Mergard eventually informed Mr Ashton that he did not have the money to slip the vessel because he spent his money on another investment. This made Mr Ashton feel very stressed as he was concerned that if there was a safety incident, he would be held responsible as the skipper of the vessel. He felt he was at risk due to Mr Mergard failing to address his concerns.
Mr Ashton considered Mr Mergard’s aggressive yelling at him then ignoring him to constitute bullying behaviour.
On 6 December 2023, Mr Ashton received an email from Mr Mergard, reproduced below:
“Att Isaac,
Yesterday in our discussion you informed me that the air tanks that you are using are out of date, I have checked some of the tanks and I have confirmed that the dates are 9th Mth 2022 and 7th Mth 2022, I also went to the compressor after that , and as part of our discussion was about changing the filter it appears that the release valve is discharging to which I assume filter needs servicing of which would be your responsibility.
I am sure that your insurance would require you to have in date tanks and have the filter tested, it is my understanding that after we had the tanks tested at the start it was you as the operator of 1770 eco dive responsibility to keep all equipment/tanks compliant as per requirements with the relevant legislation for 1770 eco dive.
We are unable to let you operate until all issues are resolved and compliant as your current operation leaves us vulnerable to litigation in the event of any claims.”
Mr Ashton immediately sent the following email to Mr Mergard:
“Hi Mark
I was a bit surprised to receive the below email. As per our original agreement that I have put a copy of below, the maintenance and upkeep of both the dive tanks and dive compressor remained the responsibility of 1770 Reef. I have also asked on several occasions for this to be completed. The last time I asked you about it I also brought up the potential of purchasing more tanks before the xmas holiday, asking if you would like me to pay for them. You said you would look into it and never got back to me.
Even back when the diving started I asked for the compressor to be serviced and all lines checked for compliance, instead I serviced the compressor at my cost to make sure diving could start.
I understand if you feel the need to stop diving to mitigate any risk to 1770 reef until the needed compliance and maintenance is achieved and as I said in the meeting yesterday I am open to negotiations to assist to keep things going if your not in a position to keep the tanks and compressor in service. This puts me in a difficult position as I have a commitment to my employee. A commitment that constantly has me out of pocket as diving invoices are always paid so late. So I would obviously like to rectify this situation as fast as possible. As you obviously have a concern for the safety of myself, your employees and passengers it is worth noting that the maintenance of the dive tanks and compressor is not the only thing I have been requesting for some time. As discussed with both myself and Barrie while I was on leave our rescue tender keeps breaking down, not starting when needed and is a serious liability (for example).
Obviously there are many other items that have been discussed at length that the boat needs. But as I said earlier I am a bit surprised to hear your view on the dive equipment when this has both brought in a nice passive income for 1770 reef as well as decreased your wages and additionally added another activity to the tour to stay competitive with competition
I hope to hear your thoughts on this all soon, as although this pesky cyclone is going to cause us some grief this week, the holidays are here and I’m hoping we can work together to get the best outcome for all.”
On 8 December 2023, Mr Mergard called Mr Ashton into a meeting. Mr Ashton believed they were to discuss the repair and maintenance of the vessel and dive equipment. When Mr Ashton raised these issues, Mr Mergard became very angry. Mr Ashton asked Ms Scott to join the meeting with them hoping Mr Mergard would control his aggressive behaviour.
When Ms Scott joined the meeting, Mr Mergard changed the topic. He accused Mr Ashton of harassing two female crew on the vessel. Mr Ashton strongly denied this allegation, which made Mr Mergard angrier. Mr Mergard stood over Mr Ashton very aggressively, yelling “You’re done, you’re out of here.” While crossing his arm in an “X”.
Mr Ashton took this to mean that his employment had been terminated.
Mr Ashton described Mr Mergard’s behaviour during this meeting as very aggressive and so unstable to the point that Mr Ashton walked out of the office for his own safety.
A few days later, Mr Ashton received correspondence from Mr Mergard dated 11 December 2023 advising that Mr Mergard acknowledged and accepted his resignation. A copy of this correspondence is extracted in full at [7].
Mr Ashton understands that the Respondent is now disputing that he was a full-time employee or that he was terminated. As part of his evidence, Mr Ashton referred to a bundle of miscellaneous payslips from 2021 to 12 December 2023 confirming the name of his employer and his salary, and the 11 December 2023 correspondence which alleged he resigned from his employment. He particularly noted in the correspondence at paragraph 3, “…your employment with 1770reef is terminated immediately”. He noted that these documents confirm his employment was terminated.
When Mr Ashton took annual leave on 18 October 2023, he was paid by the Respondent during his time off. His payslip dated 25 October 2023 confirmed the payment of his wages but does not specifically refer to it as payment for annual leave.
Mr Ashton denies that he resigned from his employment at any stage during his employment, verbally or in writing. He believed that most of the allegations made by the Respondent are irrelevant to the issue of jurisdiction or to the termination of his employment. Aside from the allegations of sexual harassment, none of the allegations now raised by the Respondent were put to him before he considers his employment was terminated.
Mr Ashton noted that the substance of the Respondent’s allegations was made known to him through his lawyers via various statements on 22 February 2024. Mr Ashton denied the allegations. Mr Ashton stated that he tried to keep a vibrant, happy and fun culture on the vessel as the crew’s mood could be infectious and positively influence the passengers’ experience. The crew would often joke around to try and maintain that culture and some of the jokes, privately amongst the crew, were often crass and can be considered, by some, as inappropriate. However, Mr Ashton is of the opinion that it was always consensual as the jokes were reciprocated and he never received a complaint.
Ms Leticia Scott became Mr Ashton’s friend when she worked as crew on the vessel, and they shared a mutual love of scuba diving. Mr Ashton’s wife is friends with Ms Leticia Scott and was aware that Ms Leticia Scott and Mr Ashton met up when he was in the Philippines to go scuba diving together. Mr Ashton denied ever being intimate with Ms Leticia Scott. He does not believe he had cuddled Ms Leticia Scott. If he had, he would suspect it would have been to console her if she was upset about something.
Mr Ashton also refuted that he has, or ever had, an alcohol problem. He has never attended work under the influence of alcohol or consumed alcohol at work. As the skipper of a vessel, his blood alcohol content must be zero while he is in charge of the vessel. He is sure that if alcohol had ever been a problem during his employment, he would have been provided with a written warning. Mr Ashton, however, admitted he was charged with drink driving with a reading of 0.059 but that was nearly two hours after work had finished for the day.
Evidence given during the Hearing
In evidence given during the Hearing, Mr Ashton stated that he had informed Mr Gates that he might quit at the end of January 2024 if items for the vessel weren’t provided. Mr Gates can also skipper the vessel and he did so while Mr Ashton was on holidays.
Mr Ashton stated that for most of the time he and Ms Scott worked together, they had a testy relationship. He considered that when he and she realised that Mr Mergard was causing difficulties between them, they repaired their relationship.
In cross-examination, Mr Ashton stated that during the meeting of 8 December 2023, Mr Mergard stood up and put his hands into a cross. Mr Mergard was aggressive and animated. Mr Ashton said to him, “If you’re going to fire me, do it now!”
Evidence of Ms Jamison Scott
Ms Jamison Scott is the sister of Ms Leticia Scott.
Ms Scott gave evidence that on 6 December 2023 at 4:55pm, she was blind copied into an email from Mr Mergard to Mr Ashton regarding the 1770 Eco Dive operations ceasing immediately with the Respondent. On 8 December 2023, she was made aware by Mr Mergard that he was coming to the marina to have a meeting with Mr Ashton to discuss the 1770 Eco Dive operations that Mr Ashton undertook as part of business.
As far as Ms Scott is aware, Mr Mergard did not offer Mr Ashton a support person for this meeting and Mr Mergard did not take meeting notes.
At around 11:30am, the meeting commenced between Mr Mergard and Mr Ashton in a private office. At 12:00pm, Mr Mergard left the meeting to collect some printing from the Bookings Office. It was at this point Mr Ashton asked if Ms Scott would be a witness to the meeting.
Ms Scott joined the meeting and noted that Mr Mergard and Mr Ashton were discussing the workplace health and safety matter of appropriate snorkel supervision. Mr Mergard was clearly aggravated, raising his voice at Mr Ashton. The topic was then changed by Mr Mergard to accusations of sexual harassment by Mr Ashton towards female employees under Mr Ashton’s management. Mr Ashton denied the allegations.
Ms Scott recalled Mr Mergard claiming that two female employees made formal complaints regarding sexual harassment. Ms Scott referred to these employees as Employee A and Employee B. As far as Ms Scott is aware, no formal complaints have been made against Mr Ashton.
The sexual harassment allegations were pressed by Mr Mergard, noting that a former female employee (Employee B) had allegedly made complaints about Mr Ashton harassing her. Mr Ashton denied this.
It is Ms Scott’s evidence that at approximately 12:30pm, Mr Mergard terminated Mr Ashton stating, “You’re done” and gestured an “X” with his arms at Mr Ashton. Mr Mergard would not discuss Mr Ashton’s employment further.
Mr Ashton left the meeting and the premises.
Ms Scott encouraged Mr Mergard to reconsider his decision and how he had handled the termination. Mr Mergard then asked Ms Scott to contact Employee B and organise a meeting. At 12:38pm, Ms Scott called Employee B. Employee B was able to come in and said she had evidence against Mr Ashton, including text messages. Mr Mergard then phoned Ms Georgia Mergard, his daughter, who agreed that Mr Ashton’s employment should be terminated on the grounds of sexual harassment.
At 1:15pm, Employee B arrived at work and was interviewed by Mr Mergard. Employee B said that Mr Ashton had text messaged her outside of appropriate hours and asked personal questions that made her uncomfortable. Employee B, however, was unable to produce any evidence regarding sexual harassment by Mr Ashton.
At 2:00pm, Mr Mergard met with Employee A. In the meeting, Employee A said there had been an inappropriate comment made by Mr Ashton that was sexual in nature. However, it was during a conversation in which she had initiated regarding her sexual activity. Ms Scott formed the opinion that Employee A willingly shared inappropriate information with Mr Ashton.
On 11 December 2023, following Mr Ashton’s termination, Mr Mergard directed Ms Scott to issue both Employee A and Employee B the following letter:
“Dear [Employee's Name],
I am writing to express our appreciation for your decision to come forward with your recent workplace concerns. Thank you for taking the time to discuss the employee misconduct with myself and Jamison last week. Addressing matters such as these is pivotal in fostering an environment of respect and accountability.
We encourage any employees who may have experienced or witnessed harassment to come forward and report their concerns. We are dedicated to fostering a workplace culture that values inclusivity, respect, and professionalism. Please be assured that the confidentiality and privacy of those involved has been respected throughout this process.
I would like to reiterate that it is absolutely unacceptable for a manger or team member of 1770reef to make another member feel uncomfortable or unsafe in the workplace. We are very sorry this incident occurred, and want to create a space where all employees feel comfortable coming forward with concerns about their wellbeing or the misconduct of other employees in the workplace.
Since discussing the matters of employee harassment with you last week, we have since taken immediate action to ensure that Isaac Ashton has been removed from the workplace and all 1770reef properties. We have advised him not to contact any current employees of 1770reef.
We want to assure you that your well-being is our top priority. We are committed to creating a workplace where everyone feels valued and safe. Your willingness to share your concerns has played a crucial role in addressing this issue, and we encourage continued open communication.
Should you have any further concerns or if there's anything you would like to discuss, please feel free to reach out to myself, Jamison or Georgia [number]. Any concerns or feedback about the workplace is extremely valued, and we are here to support you in any way possible.
Thank you once again for your courage and commitment to maintaining a positive and secure workplace environment. We are grateful that you brought this matter to our attention.”
Ms Scott recalled that Mr Mergard had previously asked her to look into rumours he heard from other employees regarding an inappropriate comment made by Mr Ashton to a female employee (Employee A). The comment was vulgar and need not be repeated here. Mr Ashton agrees he made the comment. When Ms Scott interviewed Employee A, she noted the vulgar comment had been made to her and that whilst it had made her uncomfortable, she had actively participated and encouraged the conversation by also making inappropriate comments of sexual nature. She also shared unsolicited information about her sexual life with Mr Ashton on regular occasions. She made it very clear that she would not like to take the matter further or make a formal complaint.
Evidence given during the Hearing
In evidence given during the Hearing, Ms Scott stated that Mr Ashton had sent her a text on 8 December 2023 to request she attend the meeting with Mr Mergard that was underway.
In cross-examination, Ms Scott said that Mr Mergard did not stand up and threaten Mr Ashton. In re-examination, she agreed that Mr Mergard was very agitated. He said to Mr Ashton, “You’re done. You can go.” He then pointed.
Following what she considered to be the dismissal in the meeting of 8 December 2023, she said to Mr Mergard in a raised tone, “You handled that situation very poorly and should fix it.”
Ms Scott conceded that her relationship with Mr Ashton, when working together was tense but manageable. She was frustrated that Mr Mergard’s behaviour contributed to this.
Summary of the Respondent’s submissions and evidence
The Respondent submitted that Mr Ashton was not dismissed pursuant to s.386(1)(a) of the Act, asserting that Mr Ashton had informed Mr Mergard on multiple occasions he was going to leave on his own accord or initiative. The Respondent refuted it had initiated the dismissal.
The Respondent further submitted that Mr Ashton was not forced to resign due to conduct engaged by the Respondent. It is refuted that Mr Mergard initiated the dismissal or yelled at Mr Ashton, as asserted by Mr Ashton.
Evidence of Mr Mergard
It is Mr Mergard’s view that Mr Ashton had voluntarily resigned. He verbally indicated in December 2023 of his intention to conclude his employment with the Respondent by the end of January 2024. Mr Mergard considered Mr Ashton to be a casual employee with a daily rate of $420. Mr Mergard considered Mr Ashton’s lengthy notice to resign his employment to be a courtesy, however when Mr Mergard learned of the sexual harassment of his employees, he considered it was in the best interests of the Respondent’s employees for Mr Ashton to cease work immediately.
Mr Mergard cast doubt on the evidence given by Ms Scott, as she is the sister of Ms Leticia Scott. He considered that Mr Ashton had romantic interests in Ms Leticia Scott. He stated that there had been multiple sightings of them being intimate, including holding hands in the wheelhouse of the Respondent’s boat. He also considered that Ms Scott had been well aware of allegations of Mr Ashton’s sexual misconduct and had failed to appropriately deal with the allegations.
In relation to Mr Ashton’s dive business, Mr Mergard explained that it operated independently from his employment with the business. Despite Mr Ashton’s assertion, he consistently failed to fulfil his obligations under the agreement. Mr Mergard considered that Mr Ashton was not compliant with various legal requirements, notably regarding insurance, despite his assurances to the contrary. This failure posed significant risks to the Respondent.
In relation to Ms Scott and Mr Ashton’s evidence that Mr Mergard crossed his arms and said, “you’re done”, he clarified that this does not point to the conclusion that he had dismissed Mr Ashton as there were other allegations that he was investigating during the time of making this statement. It was acknowledged, however, that this action could be interpreted in many different ways, however he considers the low probative value of this evidence needed to be taken into consideration.
Mr Mergard conceded that Ms Scott asked him to reconsider allowing Mr Ashton to come back to work. Mr Mergard informed her that if they asked the female employees in and have a talk to them first, then they could make a decision. Following the respective meetings with the female employees on 8 December 2023, Mr Mergard was deeply unsettled by the information they had shared. Mr Mergard spoke with his daughter. He, his daughter and Ms Scott then agreed that it would not be a good idea for Mr Ashton to return to work for the Respondent.
Mr Mergard rejected that Mr Ashton was dismissed on 8 December 2023.
The remainder of Mr Mergard’s evidence is not relevant to the question before the Commission as it largely goes to information he says he learned following the discussion on 8 December 2023 and cannot be probative to whether Mr Ashton was dismissed on 8 or 11 December 2023.
Evidence given during the Hearing
In evidence given during the Hearing, Mr Mergard stated that during the 8 December 2023 meeting, he covered with Mr Ashton training, the gas bottles being out of date, and the sexual harassment claims. Mr Ashton denied texting the female employees out of hours. Mr Mergard did not regard himself as being agitated during the meeting, but rather, animated.
In cross-examination, he stated that during the meeting he said, “Well, go then.”
Mr Mergard denied making a cross gesture with his hands. He noted that Ms Scott had said that he had remained seated. He considers that if he had dismissed Mr Ashton in the meeting, Ms Scott wouldn’t have asked him to get Mr Ashton back.
Evidence of Mr Barrie Gates
Mr Gates worked with Mr Ashton for about four years. He is aware that Mr Ashton had given notice to leave the job before his holiday and he had talked about it quite a number of times before that.
Mr Gates had witnessed Ms Leticia Scott and Mr Ashton being fairly “touchy” with each other and Mr Ashton would kick everyone else out of the cabin in order to talk to Ms Leticia Scott alone. Mr Gates warned Mr Ashton about his behaviour. He considered that Mr Ashton favoured Ms Leticia Scott.
Mr Gates gave evidence in respect to what he had heard regarding the vulgar behaviour Mr Ashton had engaged in with Ms Carr and Ms Curr.
Evidence given during the Hearing
In evidence given during the Hearing, Mr Gates stated that Mr Ashton had informed him that he would be working through the Christmas period and would resign following the end of the school holidays.
Mr Gates spoke with Ms Scott four times about the alleged sexual misconduct, and he considered that nothing was done about it. He considered that the harassed female employees were fearful for their jobs. He noted that there was a strained relationship between Mr Ashton and Ms Scott.
Mr Gates now skippers the vessel, which is not his preference given his age and the kind of work he would like to perform.
Evidence of Ms Lucy Carr
Ms Carr gave evidence that Mr Ashton called each of the crew into the vessel’s wheelhouse alone to inform them that he had handed his resignation in for the end of school holidays in 2024.
She considered that there was special treatment and favouritism for younger, female crew. He would let these crew have free scuba dives as well as drive the vessel during transit and when exiting the lagoon.
Mr Ashton would engage in inappropriate comments and questions about their personal life, the weekend and dating. He would make sexual commentary and suggest sexual activity she should engage in. He filmed her unnecessarily while she was in a bikini. He invited her to his property to shoot guns and see his cows.
Ms Carr was worried that if he became aware of complaints made about him, he would give her less rostered hours and give her more difficult jobs when out on the boat.
Evidence given during the Hearing
In evidence given during the Hearing, Ms Carr stated that Mr Ashton had informed her that he had handed in his resignation and would work until the end of the January school holidays.
Ms Carr gave evidence that she met with Ms Scott regarding the sexual comments Mr Ashton had made to her. She informed Ms Scott that she considered it to be a conversation with Mr Ashton and she reciprocated. She didn’t want Ms Scott to do anything. She didn’t feel unsafe or threatened. She noted, however, that she never asked Mr Ashton to film her in a bikini.
In re-examination, she agreed that she was fearful she may lose shifts on the boat if she complained.
Evidence of Ms Indiana Curr
Ms Curr provided two statements in this proceeding.
At the time of making her statements, she was 19 years old. However, during the following incidents, she was 18 years old.
She commenced working for the Respondent in April 2023. Mr Ashton was her superior as the skipper of the boat.
Ms Curr stated she initially loved the role until Mr Ashton started to say weird things between June 2023 and October 2023. A few examples include:
· asking her if she would be a stepmother after talking about his daughter to her and if she was a “baby girl” kind of girl;
· telling her that she was hot and cute, and made comments about her appearances and the pants she would wear to work;
· ask if he could come over to her house so he could ride her horses;
· telling her that that she would be good at “riding dick” because she rides horses;
· begged her to come to his house to cut his hair as he knew she previously studied hairdressing;
· commenting on her tan lines while in a bikini swimming on the reef;
· taking photos of her in her bikini;
· texting her late at night and on days off about non-work related and personal things; and
· making disgusting sexual oriented comments to her and other young females on the boat.
Ms Curr explained that these comments made her feel very comfortable. She noted that other girls she worked with expressed the same discomfort regarding his inappropriate comments. Ms Curr demonstrated that she was not interested in Mr Ashton, and she soon was without regular shifts. She did not feel safe at work.
Evidence of Ms Wendy Baldwin
Ms Baldwin gave evidence that when Mr Ashton was hospitalised, she too was hospitalised, only three beds away from him. The ward was an open area with a nurse station in the middle. She could hear all of the conversations.
When Mr Mergard arrived, he greeted her and said he would speak to his skipper and then come back and speak with her. Mr Mergard informed her he was worried about Mr Ashton’s welfare.
Ms Baldwin did not hear Mr Mergard or Mr Ashton raise their voices or have any argumentative discussions. Ms Baldwin estimated that Mr Mergard was there for approximately 20 minutes and when he came back to Ms Baldwin, he was his normal, jovial self and did not appear stressed.
Consideration
Section 386 of the Act provides that a person has been dismissed in several circumstances, including when their employment has been “terminated on the employer’s initiative”. Such a situation refers to a termination that is brought about by an employer and which is not agreed to by the employee.[2]
When analysing whether there has been a “termination at the initiative of the employer” for the purpose of s.386(1)(a) of the Act, it is necessary for the analysis to be conducted by reference to termination of the employment relationship. It is not conducted by reference to the termination of the contract of employment in operation immediately before the cessation of the employment.[3]
Although applied under the previous Act,[4] the following approach of the Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd[5] in my view remains generally apposite to the consideration of s.386(1) of the Act:
“[21] In this Commission the concepts have been addressed on numerous occasions and by a number of Full Benches. In Pawell 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 the 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 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 the 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).
A more recent Full Bench reinforced the relevance of the above approach in Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli[6] in the following terms:
“[33] Notwithstanding that it was clearly established, prior to the enactment of the FW Act, that a ‘forced’ resignation could constitute a termination of employment at the initiative of the employer, the legislature in s.386(1) chose to define dismissal in a way that retained the ‘termination at the initiative of the employer’ formulation but separately provided for forced resignation. This was discussed in the Explanatory Memorandum for the Fair Work Bill as follows:
‘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.’
[34] It is apparent, as was observed in the decision of the Federal Circuit Court (Whelan J) in Wilkie v National Storage Operations Pty Ltd, that ‘The wording of s.386(1)(b) of the Act appears to reflect in statutory form the test developed by the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No. 1) and summarised by the Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd’ (footnotes omitted). The body of pre-FW Act decisions concerning ‘forced’ resignations including the decisions to which we have earlier referred, has been applied to s.386(1)(b): Bruce v Fingal Glen Pty Ltd (in liq); Ryan v ISS Integrated Facility Services Pty Ltd; Parsons v Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust.” (footnotes omitted)
Accordingly, the general principles to be applied in this case are well settled. Stated succinctly, they include:
· the question as to whether the resignation was forced within the meaning of the Act is a jurisdictional fact that must be established by the applicant;
· a termination at the initiative of the employer involves the conduct (or course of conduct) engaged in by the employer as the principal constituting factor leading to the termination. There must be a sufficient causal connection between the conduct and the resignation such that it ‘forced’ the resignation;
· the employer must have engaged in some conduct that intended to bring the employment relationship to an end or had that probable result;
· conduct includes an omission;
· considerable caution should be exercised in treating a resignation as other than voluntary where the conduct of the employer is ambiguous, and it is necessary to determine whether the employer’s conduct was of such a nature that resignation was the probable result such that the employee had no effective or real choice but to resign; and
· in determining the question of whether the termination was at the initiative of the employer, an objective analysis of the employer’s conduct is required.
Did Mr Ashton resign his employment?
On the evidence before the Commission, I conclude that Mr Ashton verbally indicated that he would likely finish up his employment with the Respondent at the end of the January school holidays, which would have been late January 2024. He did not put this in writing, nor was there any firm date set by him. He was entitled to continue working right through this period unless there was an intervening act.
On 6 December 2023, Mr Mergard essentially informed Mr Ashton that his side business of scuba diving would cease until safety measures could be put in place. Mr Ashton immediately replied, informing Mr Mergard of the Respondent’s responsibilities in respect of the activity, and making positive statements to encourage resolution of the issues.
When he was called into a meeting with Mr Mergard on 8 December 2023, I consider that he reasonably believed it was to try and resolve the ongoing safety issues. When the conversation became heated, he requested Ms Scott join him as a support person, and that is when the conversation switched to the allegations of sexual harassment.
I have had regard to the evidence of all three persons in the meeting and am satisfied that the actions and statements of Mr Mergard, in saying “You’re done” and using his arms as a cross, constituted a dismissal of Mr Ashton’s employment. It was at this point that the Respondent initiated the dismissal. Mr Ashton did not resign his employment. I do not consider it necessary to determine if Mr Mergard was standing or sitting when this occurred. I am satisfied that it occurred.
I do not accept Mr Mergard’s evidence that the statement made by him could have been about other matters. I accept Ms Scott’s evidence that it was said by Mr Mergard to communicate the dismissal of Mr Ashton’s employment, and Mr Ashton was correct when he understood it to mean that he had been dismissed. I accept Ms Scott’s evidence in spite of Mr Mergard’s submissions that the Commission should not. Ms Scott and Mr Ashton had a strained relationship for quite some time. I do not accept that she has fabricated any evidence in these proceedings.
Following Mr Ashton’s departure from the office and then the building, Ms Scott encouraged Mr Mergard to repair the damage done. I am satisfied that Ms Scott did this because she understood, correctly, that Mr Mergard had dismissed Mr Ashton. Mr Mergard then decided to call the young female employees in for an interview.
What Mr Mergard learned from interviewing the young employees was disturbing. He later spoke with his daughter and cemented his views that there was nothing to be gained by telephoning Mr Ashton.
The written communication to both Mr Ashton and the female employees on 11 December 2023 is telling. In the letter to Mr Ashton, it declares that Mr Ashton communicated an immediate departure from his role. If he had, in fact, done that on 8 December 2023, there would be no need to communicate to Mr Ashton that the employment is terminated immediately, and any change in the decision cannot be accommodated. There would, in fact, be nothing further to do.
The letter of 11 December 2023 declared that the employment was terminated, and Mr Ashton was prevented from attending any premises and restrained from contacting employees.
The communication by Mr Mergard to the female employees also confirms that the Respondent took positive steps to ensure that Mr Ashton did not return to the workplace, not that Mr Ashton had resigned his employment. The Respondent informed the employees that the Respondent had taken immediate action to ensure that Mr Ashton had been removed from the workplace and he was not permitted to contact employees.
If not for the actions taken by Mr Mergard on 8 December 2023, the employment would have continued for an unknown period of time.
Conclusion
For the above reasons, I have concluded that Mr Ashton has been dismissed because his employment has been terminated on the Respondent’s initiative. I conclude that this was communicated to Mr Ashton in the meeting of 8 December 2023, and confirmed in writing in the letter to him dated 11 December 2023.
Accordingly, the jurisdictional objection is dismissed, and the application will now proceed to conference before the Commission.
COMMISSIONER
Appearances:
C Ryall, Counsel instructed by J McAlister of WGC Lawyers for the Applicant.
M Mergard for the Respondent.
Hearing details:
2024.
Video using Microsoft Teams.
21 March.
[1] [2020] FCAFC 152.
[2] Khayam v Navitas English Pty Ltd T/A Navitas English [2017] FWCFB 5167 at [75]; see also Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200.
[3] Khayam v Navitas English Pty Ltd T/A Navitas English [2017] FWCFB 5167 at [75].
[4] Workplace Relations Act 1996 (Cth).
[5] [2006] AIRC 496 (PR973462).
[6] [2017] FWCFB 3491.
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