Kirsty Hill v Two Eights Australia Pty Ltd
[2022] FWC 3292
•14 DECEMBER 2022
[2022] FWC 3292
The attached document replaces the document previously issued with the above code on 14 December 2022.
The phrase “A day later (23 June 2022)” in paragraph [186] is removed and replaced with “Five days later (28 June 2022)”
Associate to Deputy President Anderson
Dated 16 December 2022
| [2022] FWC 3292 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Kirsty Hill
v
Two Eights Australia Pty Ltd;
William Dong; and
Ilga Horvat
(C2022/5163)
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 14 DECEMBER 2022 |
Application to deal with contraventions involving dismissal – jurisdiction – marketing manager – whether dismissed – whether contractual repudiation – whether forced resignation – dismissal not found – application dismissed
On 19 July 2022 Kirsty Lee Hill (Ms Hill or the applicant) made a general protections application to the Commission under s 365 of the Fair Work Act 2009 (FW Act) alleging contraventions of the FW Act associated with her alleged dismissal.
Ms Hill’s application names three respondents; her former employer Two Eights Australia Pty Ltd (Two Eights or the employer), who she alleges committed the contraventions; Mr William Dong, Managing Director (second respondent) and Ms Ilga Horvat, Human Resources Business Partner and Production and Purchasing Manager (third respondent) who Ms Hill alleges were involved in[1] the contraventions (collectively, the respondents).
The respondents were jointly represented. They oppose the application. They filed a response on 9 August 2022 raising a jurisdictional issue.
The jurisdictional issue is whether Ms Hill was dismissed. The respondents say that she resigned.
The decision of the Full Court of the Federal Court of Australia in Coles Supply Chain Pty Ltd v Milford[2] requires the Commission to determine a dispute about the fact of a dismissal under s 365 of the FW Act before the Commission can exercise powers conferred by s 368. It is thus necessary to determine the jurisdictional issue if Ms Hill’s application is to proceed further.
I issued directions on 2 September 2022.
By consent, I granted permission for the respondents to be represented.
I heard the jurisdictional matter by video on 14 November and 5 December 2022.
Ms Hill was assisted by a support person Mr Seymour-Wells who advised the Commission that whilst he has legal qualifications and had held a practising certificate in New South Wales, he does not currently do so. The respondents were represented by Mr Darams of counsel, on instructions from McCabes Lawyers.
At the commencement of proceedings, and without prior notice, Ms Hill sought an adjournment and advanced four grounds for doing so (a recent letter of demand by the employer concerning post-employment restraints; a desire to consider an October 2021 insurer’s report that she had recently received; a desire to discuss with her treating doctor a past certificate that is in evidence; and a latent desire to seek representation). For reasons advised, and after hearing the parties, I declined to adjourn the jurisdictional hearing.[3] In so doing, I indicated that Ms Hill could use the October 2021 insurer’s report in proceedings if she wished as I was satisfied that it had ostensible relevance. Ms Hill subsequently tendered the report which was admitted into evidence, by consent.[4]
Evidence
I heard evidence from Ms Hill on two lengthy statements (plus attachments) filed in her name.[5]
I heard evidence from Ms Horvat on a statement filed in her name, also with lengthy attachments.[6]
I admitted, by consent, a bundle of further documents filed by the respondents.[7]
Mr Dong observed proceedings, but did not give evidence.
Both witnesses were cross-examined.
Although background matters relevant to the jurisdictional issue are not in dispute, there are some disputed facts though the most significant differences relevant to the jurisdictional question are largely inferences to be drawn from uncontested facts.
Ms Hill gave evidence in a considered and non-argumentative fashion. She was generally confident in her recall. In cross-examination, she acknowledged aspects of the employer’s narrative whilst largely holding firm on her view of events and the inferences she drew from them. However, aspects of her evidence and in particular about her intention when authoring the 7 June 2022 letter and whether she then had an intention to return to work with Two Eights were inconsistent and unimpressive.
Ms Horvat was a conscientious witness who gave evidence in a measured though conversational manner. Her recall was clear and generally consistent with the documentary record, to which she occasionally referred to refresh her memory.
In resolving the limited factual differences necessary to determine the jurisdictional matter, I apply standard tools available to first instance decision-makers, which include plausibility of the narrative together with its consistency and coherence with surrounding circumstances and contemporaneous documents.
A considerable amount of documentary material before me is hearsay, for example in reports of the insurer or in statements by the insurer that reference opinions by medical practitioners or (in the case of exhibit A3, the insurer’s 27 October 2021 investigation report) which append statements by Mr Horvat and Mr Dong. No officer of the insurer was called, nor any medical practitioner, nor, as noted, Mr Dong. In those circumstances I give limited weight to hearsay material except where it is agreed or corroborated by direct evidence or inferences reasonably drawn from direct evidence.
Given the volume of oral and documentary material before me, I do not deal with every evidentiary dispute or submission lest these reasons be of undue length. However, I have taken all relevant material into account.
Facts
Two Eights
Two Eights is a fine wine producer based in New South Wales which trades as DMG Fine Wines. It has associated businesses connected to fine wine production, marketing and export.
The founder and Managing Director is Mr Dong, the second respondent.
It is not a small business within the meaning of the FW Act.
Until June 2021, Two Eights employed senior managers (including Ms Hill) who reported to a General Manager (Mr Smith) who in turn reported to Mr Dong. Mr Smith was dismissed in mid-2021. From that date, and pending the appointment of a new General Manager, senior managers reported to Mr Dong. A new General Manager was not appointed until 2022.
Ms Hill’s employment
In February 2020 Ms Hill was first employed in the role of Trade Marketing Manager. She commenced on 16 March 2020 under the terms of an employment contract dated 28 February 2020.
She reported to the then Marketing Manager, Ms Hayes.
Ms Hill satisfactorily completed a three month probationary period.
In January 2021 Ms Hayes gave notice of resignation and encouraged Ms Hill to apply for her role. Ms Hill did so.
Ms Hill was then offered and accepted the role of Marketing Manager under the terms of a contract dated 22 January 2021.[8]
Ms Hill commenced as Marketing Manager on 22 February 2021. As noted, she reported to Mr Smith, General Manager. She managed a small team of between four and six marketing employees. This included a replacement Trade Marketing Manager, once recruited.
In the four week period from 22 January 2021 to 22 February 2021 a handover occurred between Ms Hill and Ms Hayes which included interactions between Ms Hill and other managers.
Ms Hill felt unsupported and overwhelmed during the handover period and as she progressively undertook the work of the Marketing Manager.
In the period from March 2021 to July 2021 Ms Hill had interaction with Mr Dong, including communication by email and text from Mr Dong in evenings and occasionally on weekends, though she continued to primarily deal with Mr Smith and formally report to him.
Alleged underperformance
In mid-2021, Mr Dong formed the view that Ms Hill and the marketing team were underperforming, and that Ms Hill was struggling to complete projects, understand the wine portfolio, delegate work and prioritise time. Mr Dong informed Ms Horvat in general terms of his concerns. It was agreed that weekly meetings would be organised so that Ms Hill could better engage with other senior managers (including Mr Dong) to help address the perceived shortcomings.
On 7 July 2021 Ms Hill was asked to attend a meeting with Mr Dong. Mr Dong advised that Mr Smith had been dismissed and that Ms Hill would report directly to Mr Dong.
Mr Dong questioned whether Ms Hill was “up to the role” and whether she was working hard enough.
Mr Dong told Ms Hill that she should particularly work with Ms Horvat on her project management skills and with the chief winemaker Mr Dillon on brand matters.
Ms Hill was distressed and overwhelmed by Mr Dong’s criticism of her performance.
Ms Hill and Ms Horvat had multiple informal and friendly discussions about the stresses and strains she was experiencing in the role. Ms Horvat offered a measure of guidance whilst recognising the concerns of Mr Dong.
On 16 July 2021 Ms Hill told Ms Horvat and Mr Dillon that she considered that she had an excessive workload.
Annual reviews including of the marketing team managed by Ms Hill were scheduled for July 2021. Mr Dong and Mr Hill communicated in advance of the review. Mr Dong again told Ms Hill that overall he was still not happy with the marketing team and considered them underutilised rather than overworked, and needing clear direction and leadership.
Despite seeking guidance from Mr Dong and Ms Horvat, Ms Hill was unsure about the conduct of annual reviews for her team. Her own performance was not formally appraised.
On 17 August 2021 Mr Dong and Ms Hill had a meeting by video link. Mr Dong repeated criticism of the marketing team and Ms Hill’s leadership of it. Ms Hill again felt overwhelmed and unsupported by the various tasks and projects required of her.
On 30 August 2021 Mr Dong and Ms Hill had a regular weekly meeting. Mr Dong repeated criticism of the marketing team and of Ms Hill’s leadership.
On 3 September 2021 Mr Dong made requests and demands of Ms Hill by email concerning certain projects. Ms Hill considered that some of these demands and project activities involved overseeing marketing activities beyond her initial scope of work and were contributing to an excessive workload. Ms Hill responded by email referring to “unreasonable demands”.
One such project creating stress for Ms Hill was a contract with a supplier for marketing services (Whitehat Agency). Mr Dong required Ms Hill to negotiate an exit from the contract without cost to the company. He considered that the contract had been entered into via Mr Smith in conjunction with Ms Hill without his knowledge or authorisation. Mr Dong and Ms Hill exchanged emails about the matter in August and September 2021. Ms Hill felt overwhelmed by the requirement that she negotiate the exit and felt unsupported by Mr Dong who expected that she (not he) deal directly with the supplier. At one point, Ms Horvat agreed to attend such a meeting to support Ms Hill. In an email on 9 September 2021, Mr Dong told Ms Hill that “you and Mark agreed to it without my consent, you should take up the responsibility, I will not stop it but the company will not take any further action”. Ms Hill interpreted this as a threat of personal liability for the contractual sum.
By late September 2021 the dispute with Whitehat remained unresolved. By then Ms Hill had taken personal leave. In a 29 September 2021 email to senior managers (including Ms Hill) Mr Dong stated that “Kirsty was supposed to communicate with Whitehat to terminate the contract on the following basis…”. Ms Hill considered this a criticism of her performance and embarrassing for her relationship with other managers.
Personal leave
Following the 3 September 2021 communication with Mr Dong, Ms Hill again felt overwhelmed. That evening she discussed the matter with Ms Horvat. She took personal leave from 3 to 6 September 2021 on account of anxiety and stress.
On 7 September 2021 Mr Dong emailed Ms Hill expressing concern at her failure to contact him over the weekend on certain business issues, and stating that managerial staff were expected to work across seven days if necessary.
Ms Hill intended to work on 9 September 2021. However, in her absence Mr Dong had asked a marketing manager in a separate division (Mr Zhao) to oversee the marketing team. Mr Zhao made certain requests of Ms Hill. Mr Dong declined to speak to Ms Hill other than to communicate by email and instead instructed Mr Zhao to follow-up marketing issues with Ms Hill. Ms Hill felt downgraded and humiliated as a result. Late on 9 September 2021 Mr Dong emailed Ms Hill to the effect that he was unhappy with the way things were going and “would have to make a call”. Ms Hill interpreted this as a threat to her employment. She spoke to Ms Horvat the next day (10 September 2021).
From 10 September 2021 Ms Hill was absent on account of stress and anxiety. From that day, and until her employment ceased almost ten months later (28 June 2022), Ms Hill remained absent from the workplace.
Internal complaint against Mr Dong
On 23 September 2021 Ms Hill wrote to Ms Horvat making a grievance complaint alleging bullying and harassment by Mr Dong and Mr Zhao. Ms Horvat asked that the complaint be formally set out and, once formalised, would be investigated. Ms Hill did so the following day.
Ms Horvat commenced an internal investigation including conducting staff interviews and accumulating documents.
Workers’ compensation claim and absences
On 11 October 2021 a solicitor acting for Ms Hill lodged a workers’ compensation claim. It alleged a psychological injury arising from workplace stress and anxiety caused by unreasonable work demands, unreasonable working hours and alleged bullying by Mr Dong.
An external investigator (AHC Investigations) was appointed by the insurer (icare) to report on factual matters pending its decision on liability.
Mr Dong and Ms Horvat provided statements to the external investigator. Ms Hill, having already provided the insurer details to support her claim, relied on that material and did not seek to be separately interviewed. Those details aligned to the content of Ms Hill’s grievance complaint.
Ms Horvat put Two Eights’ internal investigation on hold as she considered that it overlapped with the external investigation by the insurer and did not need to be concluded whilst Ms Hill remained absent from the workplace.
Two Eights expressed the view to the insurer that its workplace conduct was reasonable management action and that Ms Hill’s workers’ compensation claim should not be accepted.
Whilst the workers’ compensation claim was being assessed by the insurer, Ms Hill remained absent from work. She was not paid after 30 September 2021 when she exhausted her personal leave balance. She was thereafter designated by the employer as being on unpaid leave.
Unknown to either Two Eights or Ms Hill, by a report dated 27 October 2021[9] the external investigator reported to the insurer. The report set out certain ‘factual’ matters, recommended that Mr Zhao also be interviewed, and declined to express a view on liability.
On 14 January 2022 the insurer accepted the workers’ compensation claim.
Ms Hill was back-paid workers’ compensation payments. She remained absent from work on account of stress and anxiety.
On 18 February 2022 the employer received from the insurer a copy of the external investigator’s report.
Return to work plan
An injury management plan, including a return to work plan, was developed by the insurer. Two Eights had input into that plan. As at 3 February 2022, the plan was to return Ms Hill “to work with your employer”.[10]
In light of further medical assessments, the return to work plan changed.
On 25 February 2022 Two Eights was advised by the insurer that Ms Hill had been certified as able to work forty hours per week but a work capacity decision was still to be formally advised by the insurer.
Via two emails on 3 March 2022, Two Eights was advised by the insurer that “the return to work goal is [a] new employer”. The insurer stated that medical advice had “advised since December [2021] to avoid working with previous employer/managers to avoid exacerbation of mental health”, had “confirmed it is not appropriate for her to return to her pre-injury employment” and that “as such she will be encouraged to be seeking suitable employment external to her employment with Two Eights”.[11]
The insurer continued, “in response to your question around maintaining her position with Two Eights this is a business decision and I am unable to comment on this…”.
A formal work capacity decision by the insurer was advised by email to the employer on 4 March 2022:[12]
“Kirsty is currently working with her Rehabilitation Provider to complete a Vocational Assessment to identify suitable employment options for Kirsty to return to work in a new workplace
…
Kirsty will have the 3 month timeframe to locate suitable employment and for continued financial payments however, if she is unable to find suitable employment within the 3 month timeframe, the claim will continue but only for medical treatment as determined to be reasonable and necessary.
…
With regards to Kirsty’s employment with Two Eights (Australia) Pty Ltd, we are unable to provide any comment or suggestion in your business decisions, however as Teagan has mentioned, the return to work goal is no longer for Kirsty to return to her pre-injury employment. Additionally, it is not for me to comment as to whether Kirsty is required to inform you or resign from her employment prior to engaging in new employment as this would be more associated with her contract of employment with you. Should you have any questions or concerns about the status of Kirsty’s employment with Two Eights (Australia) Pty Ltd, the best contact would be Fair Work Australia.” (emphasis added)
The return to work plan issued to the employer and Ms Hill by the insurer on 20 April 2022 repeated that the goal was a “return to work with a new employer”.[13]
The insurer ceased making weekly payments to Ms Hill from 20 May 2022.
Ms Hill remained absent from work.
On 23 May 2022 the employer received an email from Ms Hill attaching a certificate from her treating practitioner dated 20 May 2022 that she was “ft for pre-injury work” but to “avoid working with previous employer/managers to avoid exacerbation of mental health injury”, with a review date of 17 June 2022.[14]
The following day (24 May 2022) the employer received advice from the insurer to the effect that Ms Hill “will not be returning to employment as advised by her treating doctor, psychologist and independent psychiatrist”.[15]
After Ms Hill queried with the insurer the change to her workers’ compensation payments, on 3 June 2022 the insurer advised Ms Hill that workers’ compensation payments had been reduced as “you are fit to work at your full capacity”.[16]
Ms Hill preferred that the insurer communicate with her employer concerning the various return to work plans. She largely left that to the insurer as her evidence was that she felt that she would not be “welcomed back” and “was not prepared to engage…with my employer if they were not prepared to address my allegations seriously and ensure that I could come back into a safe working environment”.[17]
Arrangements during Ms Hill’s absence
During Ms Hill’s extended period of absence on personal leave and then workers’ compensation, Two Eights put in place temporary arrangements to cover her absence. It held open her position.
On 5 January 2022 positions of marketing managers in associated businesses of the employer were advertised and subsequently filled.
A new position, Business and Brand Manager, was recruited and that manager (Ms Lezama) was introduced to staff by email from Mr Dong on 21 March 2022. That email indicated that her role would be to “oversee the marketing team across all DMG businesses”.[18]
The employer’s intention was that if Ms Hill returned to work, she would report to Mr Dong via the new Business and Brand Manager.[19]
Ms Hill’s other business interests
Unknown to the employer, on 12 January 2022 Ms Hill registered a new business name ‘Noveau Monde Wine Marketing’ under an existing ABN, which was then registered for GST on 30 May 2022. Ms Hill registered the business for GST because she considered it a reasonable prospect that it may earn more than the threshold ($75,000) in a future financial year.
Also unknown to the employer, Ms Hill had two other operating businesses.
Swirl Sniff Sip was established by Ms Hill in 2017.
Cellar Somm was registered (according to Ms Hill’s evidence) in “around October/November 2021”. The business was premised on providing wine education services to private clients, for example at celebrations and events. It is more probable than not that this business was established after Ms Hill lodged her workers’ compensation claim.
According to Ms Hill’s evidence:
· In May 2022 Ms Hill obtained her first paid client via her Cellar Somm business. Prior to May 2022, Ms Hill provided services via Cellar Somm free of charge for friends and family; and
· At the end of May 2022 Ms Hill commenced negotiations with a third party to provide contract services via her Noveau Monde Wine business, and started providing those services (three days per week) in June 2022.
Letter by Ms Hill 7 June 2022
On 7 June 2022 Ms Hill wrote a twenty page letter (proofed by Mr Seymour-Wells) to Ms Horvat marked “Private and Confidential” and “Without Prejudice”, advising:[20]
· That she “remained unfit to work with the Company”;
· Asserting conduct “in breach of her employment contract” that constituted “repudiation”;
· Reserving “her right to accept the company’s repudiation and terminate the employment contract”;
· Stating that “I will not exercise this right until such time as the parties to the contract have had an opportunity to confer with each other in exit and settlement negotiations in an attempt to resolve this matter, should the Company be prepared to participate”; and
· Outlining “proposed exit negotiation and settlement terms” which included that Ms Hill “would require” payment of accrued leave and superannuation including whilst on workers’ compensation, payment of three months’ in lieu of notice, payment of a bonus for the 2020/21 year, payment for 531 hours of alleged overtime January 2021 to July 2021, and an unspecified sum of compensation (including the 20% of earnings not paid by the workers’ compensation insurer plus loss of opportunity to earn 2021/22 bonuses and future economic loss).
Ms Hill concluded her letter by stating that “my preferred method for the meeting is a telephone call with the Human Resources Manager Ms Horvat within seven (7) business days within receipt of this letter to commence exit negotiations and settlement terms on a mutual basis”.
On 10 June 2022 Ms Horvat advised a holding response, indicating that the company “was considering our position” and would “revert in due course”.[21]
On 20 and 23 June 2022 Ms Hill renewed her request for a timeline for a meeting. Further holding responses were sent by Ms Horvat on 22 and 23 June 2022.
Letter terminating employment
Five days later, on 28 June 2022 Ms Hill wrote to Ms Horvat a further twenty page letter (again proofed by Mr Seymour-Wells) alleging bullying, harassing, and deceptive and misleading conduct whilst employed. She terminated her employment in the following terms:[22]
“Grounds for termination of contract
By engaging in such conduct in breach of the Second Employment Contract, the Company has evidenced an intention not to be bound to the Second Employment Contract, and thereby repudiated it.
I accept the Company’s repudiation and hereby terminate the Second Employment Contract.”
Ms Horvat responded on 29 June 2022 by letter denying any repudiatory conduct.
Further communication on 7 July 2022 by Ms Hill and responses by Ms Horvat on 12 and 15 July 2022 repeated the assertion and counter denial of repudiation.
Commencement of proceedings
Ms Hill filed these proceedings in the Commission on 19 July 2022.
On 22 July 2022 Ms Horvat wrote to Ms Hill to the effect that the company had the right to claim damages against Ms Hill for not working out her notice period.
On 29 June 2022 and again on 12 July 2022 Ms Horvat wrote to Ms Hill asserting that she was still an employee of the company and that her position had remained open and vacant until she terminated her employment.
On 7 September 2022 the employer was advised by the insurer that it was closing Ms Hill’s workers’ compensation claim from 21 September 2022.
Submissions
Ms Hill
Ms Hill submits that the employer’s conduct was repudiatory such that it was conduct at the employer’s initiative which brought her employment to an end, and thus conduct that constituted a dismissal within the meaning of s 386(1)(a) the FW Act.
In support of this contention of repudiatory conduct constituting a dismissal, Ms Hill submits:
· That the employer’s conduct in the workplace was bullying, harassing and in breach of contract; and
· That the employer failed to investigate grievances she made in September 2021 and reactivated in June 2022.
Ms Hill submits that the bullying and harassing conduct was allegedly committed by Mr Dong but not exclusively so, and was particularly evident between June and September 2021. Its form included the imposition of excessive workloads, unreasonable demands (including to work outside of contracted hours), rude and insulting outbursts, and engaging other managers to undermine her position.
With respect to allegations against Ms Horvat, Ms Hill submits that she failed to provide workplace support and twice failed to investigate her grievance complaint.
Ms Hill submits that this conduct individually and collectively constituted repudiatory conduct. She submits that as a consequence of the repudiatory conduct, she accepted the repudiation by the employer with the result that her contract of employment terminated.
In the alternative, Ms Hill submits that even if the conduct was not repudiatory, it was unfair and unreasonable and had the effect of forcing her to terminate her contract of employment by resignation, and thus was a dismissal within the meaning of s 386(1)(b) of the FW Act.
Accordingly, Ms Hill submits that her application is within jurisdiction and must proceed to a conference under s 368 and, if unresolved, the Commission must issue a certificate to that effect enabling further proceedings.
Two Eights (and second and third respondents)
Two Eights submit that Ms Hill was not dismissed within the meaning of the FW Act or at all.
It submits that workplace conduct by the employer or its officers or employees concerning Ms Hill was not, individually or collectively, repudiatory conduct. It submits that it took reasonable management action conducted in a reasonable manner. In any event, it submits that the conduct, neither individually nor collectively, evinced an intention to terminate the employment relationship and thereby could not be a dismissal.
It submits that Ms Hill’s position had been kept open for nearly ten months following her absence on 10 September 2022, and remained open up to and including the date on which Ms Hill terminated her contract. The employer submits that it did so even once informed by the workers’ compensation insurer that Ms Hill was able to only return to work with a new employer but not with Two Eights.
The employer submits that Ms Hill’s letter of 7 June 2022 was a letter of demand for a settlement and exit package, not a request for a return to work or a request for re-activation of the September 2021 grievance investigation in advance of a return to work.
The employer submits that Ms Hill terminated her contract of employment because the employer had not acceded to her demand for an exit package and because she wanted to construct a dismissal in order to file legal proceedings.
The employer submits that Ms Hill had no intention of returning to its employment, and had in the months prior to terminating her employment, and once her workers’ compensation payments had ceased, commenced working in her private business interests which had not been advised to the employer.
The employer submits that it neither initiated the termination of employment nor forced a resignation.
As such, there was no dismissal. That being so, the general protections application fails for want of jurisdiction and should be dismissed.
The second and third respondents deny being knowingly concerned with repudiatory conduct, deny that they initiated or forced dismissal, deny being involved in any breach of workplace rights, and submit that claims against them similarly lack jurisdiction.
Consideration
Section 365 of the FW Act provides:
“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.”
Section 365 requires a dismissal to have occurred as a jurisdictional fact. A mere allegation that a person has been dismissed will not establish this as fact.[23] “Dismissal” for these purposes (and other purposes of the FW Act) is defined in s 386(1). It provides:
“386 Meaning of dismissed
(1)A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”
A full bench of the Commission in Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli set out the background to s 386:[24]
“[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 then 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)
Having raised the jurisdictional issue, Two Eights bears the onus of establishing that Ms Hill was not dismissed.
Termination at the employer’s initiative
I now deal with whether Ms Hill’s employment was terminated at the employer’s initiative.
Termination at the initiative of an employer arises where the action of the employer is the principal contributing factor leading to the termination of the employment relationship.[25]
It is not in dispute that the employment terminated as a consequence of Ms Hill’s letter of 28 June 2022. In that letter she alleged repudiatory conduct by the employer and that her employment terminated by operation of law when she accepted that repudiation.
Thus, at least in a direct sense, the contract terminated at Ms Hill’s initiative.
However, s 386(1)(a) contemplates circumstances where the employer has initiated the termination by repudiating a contract of employment and the employee accepts that repudiation.
In these circumstances, it is appropriate to deal with the repudiation issue at this juncture. The alleged conduct has potential application not just to the forced resignation issue under s 386(1)(b) (considered below) but also to s 386(1)(a).
Was the employer’s conduct repudiatory?
Where an employer unilaterally makes fundamental changes to an employee’s contractual arrangements, there may be a repudiation of a contract of employment capable of giving rise to termination of employment.
Whether there has been a termination of employment depends on the employee’s response to the repudiation. In response to repudiatory conduct an injured party may choose to affirm the contract and remain in the contractual relationship or accept the repudiation and bring the contractual relationship to an end.[26]
In this matter, Ms Hill accepted the alleged repudiation by leaving the employment and lodging an application under Part 3-1 of the FW Act.
In NSW Trains v James a full bench summarised the concept of repudiation:[27]
“The High Court has described repudiation as referring to conduct of a party ‘which evinces an unwillingness or an inability to render substantial performance of the contract’ or ‘which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations’. ‘Repudiation of a contract is a serious matter and is not to be lightly found or inferred’. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.” (citations omitted)
The question of whether there has been repudiation of a contract of employment is determined objectively. It is unnecessary to show a subjective intention to repudiate. It is a question of fact not law.[28]
In considering whether Two Eights’ conduct was repudiatory in nature, it is first necessary to identify the contractual terms between Ms Hill and the employer.
In this matter, that is readily established. It is not in dispute that the terms set out in the employment contract of 22 January 2021 were the terms governing Ms Hill’s employment.
In part, Ms Hill also relies on alleged breaches of the terms of the DMG Fine Wine Employee Handbook (Handbook).[29] Conversely, the employer submits that those terms were not contractual terms because Ms Hill’s contract provided that “the specific detail of the Employer’s policies do not from a term of your contract”. Further, cl 1.4 of the Handbook expressly provided that “this Employee Handbook does not form part of your contract of employment, unless expressly stated otherwise. However, in any event the Employee Handbook may be considered when interpreting your rights and obligations under your terms of employment”. There is no evidence of any express agreement to the contrary between the employer and Ms Hill.
I do not consider it necessary to determine whether terms of the Handbook were incorporated as contractual terms, as (for reasons that follow) I have not found substantive breaches of the Handbook that constitute repudiatory or unreasonable conduct. However, were I required to determine this issue, I would, in light of the express provisions in cl 6(b) of the contract and cl 1.4 of the Handbook, conclude that the Handbook was an aide to interpretation of contractual terms but not contractual terms itself that could give rise to a breach of contract and repudiation claim. The High Court has emphasised that the character of the relationship between parties is determined by reference to the rights and duties created by the written agreements which comprehensively regulate those relationships.[30] In this matter, that written agreement is the contract of 22 January 2021.
I now deal with the major categories of repudiatory conduct alleged by Ms Hill. For convenience sake, I do so by reference to the broad subject matters set out by Ms Hill in her grievance complaint of September 2021.
Excessive workload
Ms Hill submits that her workload was excessive.
As Marketing Manager, Ms Hill was employed as a senior manager. She was paid a six-figure sum commensurate of a senior manager.
The evidence supports a finding that Ms Hill’s workload was substantial and whilst ebbing and flowing, progressively expanded as the business required.
Ms Hill’s contract provided a position description of marketing manager.[31] That position description provided for an extensive range of responsibilities across six specified areas (brand strategy and business planning, portfolio management and new product development, brand campaign management, partnerships and sponsorships, handpicked experience and culture).
The contract did not specify levels of workload in either qualitative or quantitative terms.
Qualitatively, there is no evidence that tasks required of Ms Hill fell outside or were not incidental to the work of a marketing manager.
Ms Hill asserts that occasional visits she was asked to make with Mr Dong, together with another staff member, to high-end fashion and jewellery houses were stressful and unrelated to wine marketing. Whilst I agree that they were unrelated to wine marketing, the business of DMG was at the premium end of the market. Observing how other premium brands marketed themselves was not unreasonably considered by the employer to be of some value to the development of its marketing executives. It was not conduct by the employer in breach of contractual obligations, let alone repudiatory conduct.
Quantitatively, Ms Hill submits that an excessive workload was evidenced by unreasonable working hours required of her including evening and weekend communication by Mr Dong and occasional evening meetings or dinners.
I do not agree.
The evidence points to Ms Hill being sent emails or texts from time to time by Mr Dong on evenings and on weekends. The evidence also points to Ms Hill being responsive to these emails and texts but also stressed by them on account of her personal caring responsibilities for her son. Occasionally, she was responding to work issues into the late evening (around 10pm).
The evidence points to Mr Dong becoming frustrated with Ms Hill’s claims of excessive workload and at one point expressly telling her that as a senior manager she had a responsibility to work across any of seven days if that is what was required.
Whilst recognising that reconciling work and family pressures presented legitimate challenges for Ms Hill, the evidence of Ms Horvat also supports a finding that there was some give and take, including allowance for Ms Hill to regularly collect her son from school inside more regular business hours.
Relevant also is the fact that Ms Hill’s contract as marketing manager was not in the same terms as her earlier contract as trade marketing manager. The earlier contract specified hours of work to be Monday to Friday 9am to 6pm, whilst the latter contract expressly provided that “your hours of work are those reasonably necessary to fulfil the requirements of your role”.[32]
Considered overall, and taking into account the nature of Ms Hill’s position as a senior manager and the demands placed on her, and whilst recognising legitimate stresses generated by her workload, I do not find an unreasonable workload or a breach of Ms Hill’s employment contract on that account.
Bullying and harassment
Ms Hill makes various claims of bullying and harassment by Mr Dong and others.
These include unreasonable demands, verbal aggression, written threats and exclusionary behaviour.
I note that bullying is not, under the terms of both the FW Act and the Handbook, conduct that is reasonable management action taken in a reasonable manner.
I have found that substantial demands were placed on Ms Hill but that these were not inconsistent with her role as a senior manager. Some of the demands were made in quick succession and many overlapped resulting in Ms Hill having multiple issues on the go at the one time. Such is indicative of what is commonly required of a senior manager and there was nothing in Ms Hill’s contract that provided otherwise. Ms Hill was not employed to undertake project by project tasks. Considered overall, the demands were neither qualitatively or quantitatively unreasonable.
However, I do consider that Mr Dong on at least one occasion lacked sensitivity to the discomfort Ms Hill felt when, upon once being shown premium brands in a jewellery store (in the presence of another Two-Eights employee) Mr Dong placed a high-end bracelet on Ms Hill’s wrist. It was not unreasonable that Ms Hill felt uncomfortable and Mr Dong lacked insight into the fact that his actions may have had that effect. I do not however find the conduct to have been harassment.
On the other hand, I do not find any merit in Ms Hill’s complaint that she was, from time to time, required to identify high-end restaurants and book work functions in those restaurants. It was Mr Dong’s liberty to choose which level of restaurant he sought to entertain clients. It was within Ms Hill’s scope of responsibility to be required to arrange such functions. She was not being asked to fund the expenses. It was not inconsistent with Mr Dong marketing a premium wine product that he sought to impress in that manner. Whatever personal view Ms Hill had about expensive restaurants or expensive champagne, these were not unreasonable demands or requirements to perform work in breach of contractual obligations.
Ms Hill’s allegations of verbal aggression relate to occasions where she says that Mr Dong raised his voice in one-on-one meetings with her. Mr Dong did not give evidence in this matter, and it is plausible that Mr Dong, being frustrated with his view of underperformance by Ms Hill and her team, occasionally raised his voice as Ms Hill suggests.
A managing director raising their voice from time to time in frustration when speaking to a senior manager may be discourteous, but as disturbing as those moments were to Ms Hill, Mr Dong doing so was not in breach of contract.
Ms Hill alleges that Mr Dong made threats, particularly in writing.
I find that on occasions Mr Dong questioned Ms Hill and did so in a pointed manner by asking for example, “are you working hard enough?” and “are you up to the job?” and, on one final occasion before Ms Hill took personal leave, that he would need to “make a call” with respect to her employment. I accept that these occasions took Ms Hill aback and were intimidating to her. However, I do not consider that a managing director speaking frankly to a senior manager in those terms, whilst upsetting and potentially demotivating, was a breach of contract.
Ms Hill alleges a written threat was made to her with respect to the Whitehat contract. She alleges that Mr Dong’s email of 9 September 2021 was a threat of personal liability for a commercial contract. In that email, Mr Dong told Ms Hill that “you and Mark agreed to it [the contract] without my consent, you should take up the responsibility, I will not stop it but the company will not take any further action”.[33]
I do not consider this a threat of personal liability, nor a threat at all. In cross-examination, Ms Hill conceded that she was not being asked to assume liability for sums allegedly demanded by the agency.[34] The proper characterisation of this email, particularly when viewed in the context of related emails in days preceding, is that Mr Dong, in a pointed fashion, was telling Ms Hill to take responsibility for negotiating with Whitehat an exit from the contract on terms he had stipulated. Whether Mr Dong’s position was merited or not, the negotiation of a marketing contract dispute fell within Ms Hill’s responsibilities. The demand that she do so was not unreasonable or a breach of contract.
Lack of support
Ms Hill alleges a lack of support generally, and in respect to certain specific matters.
I find that soon after commencing Ms Hill felt vulnerable and overwhelmed in her role as marketing manager, including as early as during the transition period. This feeling of being under-resourced and under-supported continued and intensified as time progressed.
However, Two Eights provided a marketing team that varied between four to six persons to assist Ms Hill. It was her responsibility to manage that team, to allocate work, to prioritise and to take overall responsibility for the team’s output. Whilst Ms Hill sought additional numbers in her team to support her work, a position not uncommonly sought by managers, Ms Hill was not unsupported given the marketing team at her disposal.
I also find that when it first became apparent to Mr Dong in about June 2021 that Ms Hill and her team were struggling to meet his expectations, Two Eights put in place arrangements for additional support including weekly meetings and guidance from Ms Horvat and the chief winemaker (Mr Dillon).
I find that Ms Horvat in particular provided support to Ms Hill, including by being a sounding-board for Ms Hill’s frustrations with Mr Dong and feelings of being overwhelmed in the role. For example, when Ms Hill was told by Mr Dong that she needed to personally meet with Whitehat to deal with the contract dispute, and when it was apparent that Mr Dong would not be attending the meeting, Ms Horvat agreed to attend with Ms Hill to support her and present a more solid company presence.
An allied submission by Ms Hill is that although she was supported by Mr Smith prior to his dismissal, he was a General Manager who the employer subsequently considered to have underperformed. Ms Hill submits that being required to report to an underperforming General Manager was unreasonable and a breach of contract.
There is no merit in this submission. There is no evidence that the circumstances of Mr Smith being dismissed bore any relationship to his obligations to Ms Hill. Ms Hill’s evidence was that she had a good relationship with Mr Smith and felt supported by him.[35] This is at odds with her submission of unreasonable conduct in requiring her to report to Mr Smith. To the extent that Ms Hill was contractually required to report to the General Manager, this is what happened until such time as the General Manager was no longer employed. In the interim months that followed, she reported to the Managing Director. None of that was unorthodox or in breach of contract.
Whilst Ms Hill felt on many occasions that she was not supported or supported adequately, I do not find unreasonable conduct or breach of contract on that account.
I now consider two further forms of conduct alleged by Ms Hill to have been unreasonable or repudiatory.
Failure to investigate 24 September 2021 complaint
Ms Hill alleges that Two Eights failed to investigate her 24 September 2021 complaint and that this was both unreasonable conduct and a breach of contract.
Ms Hill made her complaint in writing as a workplace grievance on 24 September 2021, a fortnight after going on personal leave and two weeks before filing her workers’ compensation claim.
The evidence of Ms Horvat is that Two Eights commenced an investigation. I accept that evidence. Ms Horvat started interviewing staff and gathering documents.
Ms Hill’s assertion of breach or unreasonableness is thus not so much that her complaint was not investigated but that the investigation that had started was not concluded and that findings were not made.
Two Eights did not complete the investigation. It was put on hold once the workers’ compensation insurer commenced an external investigation. Ms Horvat formed the view that, given that the external investigation by the workers’ compensation insurer was to cover a similar subject matter of complaints, the internal investigation would unreasonably overlap with the external investigation and did not need to be concluded, at least whilst that investigation was being conducted and whilst Ms Hill remained absent from the workplace.
I do not consider the employer’s decision to put the internal investigation on hold whilst Ms Hill was absent from the workplace to have been unreasonable or a breach of contract.
Although the questions to be determined by the insurer and the employer differed, the factual subject matters being investigated by the insurer were largely the same as those made by Ms Hill in her internal complaint. Indeed, Ms Hill supplied the insurer with that very complaint and did not seek to be further interviewed by the investigator. Whilst the issues to be determined were different, the factual matters in the two investigations were common.
Nor do I consider it unreasonable or a breach of contract for Two Eights to have not resumed the investigation once the workers’ compensation claim had been decided by the insurer. By that stage (January 2022) Ms Hill had been absent from work for more than four months and there was no immediate prospect of her return to work. Further, in late February and early March 2022 it became apparent to the employer, based on advice from the insurer, that Ms Hill had been certified as unfit to return to the employer’s employment, and that her return to work plan was solely concerned with obtaining new employment with an employer other than Two Eights.
Further, Ms Hill’s evidence was that she made very limited contact with Two Eights in the ten months between going on personal leave in September 2021 and sending her letter of 7 June 2022.
In these circumstances, the employer did not act unreasonably let alone in breach of contract by suspending the internal investigation and not resuming it.
Failure to re-open internal investigation after 7 June 2022 letter
Ms Hill alleges that Two Eights acted unreasonably and in breach of contract by failing to re-open the internal investigation after it received her 7 June 2022 letter.
I do not agree.
I find that at the time of writing the 7 June 2022 letter Ms Hill had no intention or anticipation of returning to work with Two Eights. Her evidence was to that effect[36] (“No I didn’t. I didn’t…I was doing the right thing by ending my employment so I could take on other opportunities”) despite inconsistently asserting that she was willing to do so if her grievances were addressed.[37] This latter assertion was unimpressive and self-serving.
Aside from Ms Hill’s state of mind, the letter of 7 June 2022 speaks for itself. It was not a request for the investigation into her workplace complaint to be re-opened. It asserted (at 3.47) that her complaint had not been acknowledged or addressed but did so in the context of alleging repudiation, not requesting that the investigation be finalised or re-opened. Rather, the demand in the letter was quite unambiguously a demand for “an exit negotiation and settlement terms”, (including a monetary payment), laced with an undisguised threat of legal proceedings if one could not be negotiated. That the letter was marked ‘without prejudice’ is suggestive that it was an opening bid in a planned negotiation to secure a financial settlement on leaving the business.
Ms Hill relies in part on the covering email to the 7 June 2022 letter[38] to advance the contention that she was seeking a re-opening of her grievance complaint. The email is neutral in language. In it Ms Hill seeks dialogue “to discuss these matters, sometime within seven (7) business days”. There is no reference to seeking the grievance matter being re-opened; simply to “matters” in the 7 June 2022 letter. The covering email takes Ms Hill’s case no further.
In this context, Ms Horvat’s emails of 10, 22 and 23 June 2022 were not an unreasonable holding response, whilst the business took advice.
Five days later (28 June 2022) Ms Hill wrote another twenty page letter accepting an alleged repudiation and then followed through with her stated intention a fortnight later when filing these proceedings.
It was not unreasonable conduct by Two Eights, let alone a breach of contract, in not re-opening the internal investigation upon receipt of Ms Hill’s letter of 7 June 2022.
Conclusion on s 386(1)(a)
For these reasons, I do not find that Two Eight’s conduct was repudiatory nor, considered overall, unreasonable.
When considered objectively, the employer’s conduct was not, even in an indirect sense, the principal contributing factor leading to the termination of the employment relationship.
There was no dismissal within the meaning of s 386(1)(a) of the FW Act.
Forced resignation
I now consider whether Ms Hill was forced to resign because of conduct or a course of conduct engaged in by Two Eights.
If this was so, Ms Hill would have been dismissed within the meaning of s 386(1)(b) of the FW Act.
Whether an employee has resigned from their employment is a question of fact. A resignation can be oral or in writing.
Ms Hill’s letter of 28 June 2022 made no reference to resignation; rather it was a letter alleging repudiation and ending her contract of employment on the basis of exercising a legal right to accept a purported repudiation.
However, not having found repudiation, the letter could not have brought the employment to an end by the doctrine of repudiation.
Rather, the letter and the surrounding circumstances point clearly to Ms Hill intending on and from 28 June 2022 that her employment end at her initiative. Ms Hill had:
· no intention to return to the workplace;
· had been certified as not fit to return to Two Eights’ workplace;
· had commenced private business activities for fee in the month prior using her existing businesses and ones she established whilst on workers’ compensation; and
· intended to pursue legal action if Two Eights did not meet within timeframes she demanded for a negotiated exit payment and settlement sum.
I find that, in these circumstances, the letter of 28 June 2022 was a resignation capable of invoking the provisions of s 386(1)(b).
However, I do not find that the resignation was forced by the conduct or a course of conduct of the employer.
Having regard to the findings I have made, the employer’s conduct considered both individually and collectively was neither repudiatory nor, in an overall sense, unreasonable given Ms Hill’s contracted role as a senior manager.
Ms Hill had plenty of time to consider her position. She was absent from the workplace for almost ten months including for a final month after her workers’ compensation payments had ceased, and during which she commenced earning income via her private and undisclosed business interests.
The timeframes Ms Hill set for sending her letter of demand of 7 June 2022 and then her termination letter of 28 June 2022 were hers and hers alone. The employer had not brought to a head the issue of her continuing employment despite being aware that she was medically fit to work but not certified fit to work with the employer.
Ms Hill’s letter of 28 June 2022 was not rushed. It was lengthy, considered and advised on and proofed by an associate with legal skills.
I do not find that Ms Hill was forced to resign by the conduct or a course of conduct by the employer.
Rather, I find that Ms Hill’s employment with Two Eights was terminated by Ms Hill because, having no intention to return to the workplace, having been certified as not fit to return to the workplace, having commenced private business activities in the latter period of her employment, and once it became apparent to her that Two Eights was not responding to her demand for an exit payment and settlement sum, she terminated her employment contract in order to establish grounds to undertake legal proceedings alleging repudiation and to pursue her own business or other employment interests.
Conclusion
As Ms Hill was not dismissed by Two Eights under either s 386(1)(a) or s 386(1)(b) of the FW Act, her application fails for want of jurisdiction. There was no dismissal.
That being so, and upon the authority of the Full Court of the Federal Court of Australia in Coles Supply Chain Pty Ltd v Milford[39] further proceedings by the Commission cannot occur.
Application C2022/5163 is therefore dismissed. An order[40] giving effect to this decision is issued in conjunction with its publication.
DEPUTY PRESIDENT
Appearances:
Ms K Hill with Mr S Seymour-Wells, on her own behalf
Mr J Darams, of counsel and with permission, with Mr B Austin, Ms L Colless and Ms E Trevena on behalf of the Respondents
Hearing details:
2022
Adelaide (by video)
14 November, 5 December
[1] Section 550 FW Act
[2] [2020] FCAFC 152
[3] Transcript PN80-PN97
[4] A3 Report to icare Workers Insurance by AHC Investigations 27 October 2021
[5] A1 Statement 4 October 2022 attaching KH1-12 to KH1-21; A2 Statement in Reply 28 October 2022 attaching KH2-1 to KH2-31
[6] R1 Statement 4 October 2022 attaching Annexures A to U
[7] R2 Annexures 1 to 8
[8] KH1-2
[9] A3
[10] A4
[11] R1 Annexure I
[12] R1 Annexure J
[13] R1 Annexure L
[14] R1 Annexure M
[15] R1 paragraph 24(f)
[16] A1 paragraph 159
[17] Transcript PN 225
[18] KH1-19
[19] R2 Annexure 6
[20] R1 Annexure S
[21] R1 Attachment S
[22] R1 Annexure U
[23] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 at [54]
[24] [2017] FWCFB 3491
[25] Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200
[26] NSW Trains v James[2022] FWCFB 55 at [69] citing the High Court in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115, [43]-[58]
[27] [2022] FWCFB 55 at [125]
[28] City of Sydney RSL & Community Club Limited v Balgowan[2018] FWCFB 5 at [18]
[29] R1 Annexure C
[30] Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) v Personnel Contracting Pty Ltd (2022) 398 ALR 404; ZG Operations Australia Pty Ltd v Jamsek (2022) 398 ALR 603
[31] Schedule to KH1-2
[32] R1 Annexure A clause 8.2
[33] KH1-15
[34] Audio recording of hearing, 14 November 2022 at 3:17:59 – 3:18:16; transcript PN 531 – PN 532
[35] Transcript PN 557 – PN 558
[36] Audio recording of hearing, 14 November 2022 at 2:46:06 – 2:46:20; transcript PN 372
[37] Audio recording of hearing, 14 November 2022 at 2:47:37 – 2:48:42
[38] R1 Annexure S (final email in annexure)
[39] [2020] FCAFC 152
[40] PR748913
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