Mao Wang v KDK Bathroomware Pty. Ltd. T/A KDK Bathroomware

[2018] FWC 27

[2018] FWC 27

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mao Wang
v
KDK Bathroomware Pty. Ltd. T/A KDK Bathroomware
(U2017/7710)

COMMISSIONER GREGORY MELBOURNE, 10 JANUARY 2018

Application for an unfair dismissal remedy – jurisdictional objection – whether applicant dismissed within the meaning of the Act – whether forced resignation – no dismissal at initiative of employer – application dismissed.

[1] Mr Mao Sheng Wang, also known as Mr Daniel Wang, commenced employment with KDK Bathroomware Pty Ltd T/A KDK Bathroomware (“KDK”) in July 2015 and worked with the business for almost 2 years until his employment ended in July last year. Mr Wang claims that it came to an end after he was effectively dismissed when presented with a letter of resignation that he was asked to sign.

[2] However, KDK has raised a jurisdictional objection to the application, namely that Mr Wang was not dismissed, and therefore he cannot bring an unfair dismissal application.

[3] Mr Wang appeared on his own behalf. Mr Honggang Ren (also known as Mr Gary Ren) and Mr David Mashiter from KDK appeared on its behalf. Both parties provided only limited evidence and brief submissions and neither sought to cross-examine the witnesses in regard to their evidence.

The Issue to be Determined

[4] Section 385 of the Fair Work Act 2009 (Cth) (“the Act), “What is an unfair dismissal,” relevantly provides:

“A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable”. 1

[5] Section 386, “Meaning of dismissed,” continues to provide:

“(1) A person has been dismissed if:

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

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.” 2

[6] KDK submits that Mr Wang resigned from his employment when he chose not to respond to an email forwarded to him on 6 July last year. However, Mr Wang submits that he was forced to do so because of the conduct engaged in by KDK, and therefore he has been dismissed. Given the jurisdictional objection raised by KDK the Commission must now determine whether Mr Wang was, in fact, forced to resign because of the conduct, or a course of conduct, engaged in by his former employer.

[7] If the Commission determines this issue in favour of Mr Wang then he will have been found to be a person who has been “dismissed,” and the matter will be relisted to deal with his substantive unfair dismissal application. However, if the Commission finds in favour of KDK, and Mr Wang has not been “dismissed,” then his application must also be dismissed.

The Evidence and Submissions

Mr Mao Sheng Wang

[8] Mr Wang states that he was first employed by KDK in July 2015 and carried out various office administration and warehouse duties. He was employed on a full-time basis and at the time his employment ended he was earning approximately $45,000 per year.

[9] On 6 July 2017, he received an email from the National Manager attaching what he describes as a “resignation letter,” 3 which he was asked to sign and return within three days, “otherwise the employer will assume that I accept it.”4 He claims that KDK was attempting to end his employment without actually dismissing him. He also states that in the three or four weeks leading up to this point there had been various attempts to force him to resign.

[10] The email and the accompanying resignation letter were attached to his original Form F2 unfair dismissal application. The email is from Mr Garry Ren and states:

“Hi Daniel:

The resignation letter as attached.

Please sign it off and come back to me. Also we need your print name and signature for the warning letter. All documents need to be back in 3 days. If we are not going to receive any answer in 3 day. It’s been assumed you accept them.

If you have anything unclear, please contact naoko or me in 2 days” 5

[11] The attached resignation letter is directed to Mr Saihui Tan, who is indicated to be a Director of KDK. It is dated 6 July 2017 and states:

“I am writing this letter as a notice of my resignation. I’m giving two weeks’ notice and will be leaving on _/ _/ _.

Due to the company structure changed, I am not quite workable for current position. I feel that the situation has become somewhat untenable. Also I have been planning to run my own business. I think it is now time to move on. However I leave feeling satisfied with the standards of my work and behaviour. And would like to thanks for the learning opportunities during my time here.

I will hand over all company belongings to the manager. I do hope that we can stay in touch as business colleagues.

I wish you and the team all the best.

Kind regards

Print name: Maosheng Wang

Signature:

Date” 6

[12] An undated warning letter regarding what was described as a “counselling/disciplinary interview held on 21 June 2017” 7 was also attached to the email. It also had a space at the bottom for Mr Wang to sign as an acknowledgement of having received the letter.

[13] Mr Wang also provided a brief witness statement which states:

“On 06/07/2017, I received an email from national manager with a “resignation letter” which written by employer attached and ask me to sign that “resignation letter” in 3 days, otherwise the employer will assume that I accept it.”

After I received the letter, I chose not to sign on that paper and start to take legal action and send the application to Fair Work Commission.

After I was dismissde, I tried to find a job that failed as I cannot explain clearly my current employment relationship with KDK bathroomware to the interviewer.” 8

[14] Mr Wang also indicated in response to various questions from the Commission that he provided a medical certificate to KDK on 1 July indicating he had food poisoning and would be off work until 4 July. He also felt that he was under a lot of pressure at work at the time to the point where he questioned whether he was in a position to be able to return. He then received the email on 6 July attaching the resignation letter and subsequently came to the view that he had been dismissed from his employment. He provided the following response to a question from the Commission about the nature of his dismissal:

“And in that email they said I need to sign the resignation letter in three days otherwise they’re going to assume everything on that letter is what I want. So I take that as a dismissal.” 9

However, he also indicated that he did not believe that he was able to return to work at that point in time because of the pressure that he felt he was under at work.

KDK

[15] KDK denies that Mr Wang was dismissed. It submits that he resigned with effect from 10 July and provides the following explanation in its written submissions:

“We sent e-mail to the applicant about the resignation letter. And mention the letter needs to be returned back in 3 day from 6th July. if the applicant has any question, he can contact us in 2 days, otherwise we assume it has been accepted by the applicant. However we did not receive any questions from the applicant in 3 days.” 10

[16] It also submits that on 28 June Mr Wang left a message indicating he had food poisoning and would not be at work. On 1 July it received a medical certificate indicating he would be off work until 4 July, however, he did not return to work after that time, and did not make contact with KDK from that point to provide any further explanation for his absence. KDK submits that it only became aware on 19 July that Mr Wang considered he had been dismissed from his employment when it received a copy of his unfair dismissal application from the Commission.

Consideration

[17] As indicated, the parties provided only limited evidence and brief submissions about the circumstances that led to Mr Wang’s departure from his employment at KDK after having being employed for just under two years. In addition, neither party made reference to the statutory provisions and case law that are relevant to the determination of this matter.

[18] The Full Bench in the matter of Kylie Bruce v Fingal Glen Pty Ltd (in liq) 11 also dealt with an application where the Applicant contended that she had been forced to resign because of conduct or a course of conduct engaged in by her employer, and therefore had been dismissed. The particular circumstances in that matter involved frequent late payment of wages and superannuation entitlements, and not being paid on time for a period of annual leave. In the course of its decision the Full Bench made reference to the relevant legislative provisions and case law in the following terms (references omitted).

“[11] The Senior Deputy President decided that the Applicant had not been unfairly dismissed because she had not been dismissed (see s.385(a) of the Act). The word ‘dismissed’ is defined in s.386 of the Act:

‘386 Meaning of dismissed

(1) A person has been dismissed if:

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

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

[12] According to the Explanatory Memorandum to the Fair Work Bill 2008,

‘Clause 386 - Meaning of dismissed

1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person’s employment with his or her employer was terminated on the employer’s initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).

1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).

1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:

•  where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or

•  where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.”

[13] The test of constructive dismissal in the context of the unlawful termination provisions of the Industrial Relations Act 1998 was considered by the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2) (Mohazab) and subsequently elucidated by Justice Moore in Rheinberger v Huxley Marketing Pty Ltd (Rheinberger). The commonly quoted statement of principle in Mohazab is that:

‘In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship’.

[14] It is important that this passage be read in the context of the judgment as a whole. It is clear that the requirements set out by the Full Court in the passage quoted are necessary, but not sufficient, to establish that employer action constitutes constructive dismissal.

[15] These principles of constructive dismissal have been applied to the unfair dismissal provisions of the Workplace Relations Act 1996 by Full Benches of the Australian Industrial Relations Commission in Pawel v Advanced Precast Pty Ltd (Pawel)and ABB Engineering Construction Pty Ltd v Doumit (ABB Engineering), and we accept the Applicant’s submission that those decisions are relevant to any consideration of s.386(1)(b) of the Act.

[16] In Pawel the Full Bench said that:

‘[13] It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee...’

[17] In ABB Engineering, the Full Bench said that:

‘Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer’s conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer’s conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.’

[18] The four authorities cited above were summarised by a Full Bench of the AIRC in O’Meara v Stanley Works Pty Ltd (O’Meara) as follows:

‘[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there... be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.’

[19] Subject to the comments below, we accept and adopt this as a summary of the principles applicable in determining whether an employee has been forced to resign because of the conduct of the employer within the meaning of s.386(1)(b) of the Act.” 12

[19] I also note that this decision was cited with approval in the subsequent Full Bench decision in Victorian Association for the Teaching of English Inc v Debra de Laps, 13 which also involved an issue of constructive dismissal.

[20] Based on this review of the relevant authorities I am satisfied that for Mr Wang to establish he has been “dismissed” it must be found to have been the act of his employer that resulted directly or consequentially in the termination of his employment, so that he cannot be said to have left voluntarily. The actions of the parties must also be considered on the basis of an objective analysis. I have sought to apply these principles to the determination of this matter.

[21] It appears from the limited amount of evidence provided by the parties in this matter that Mr Wang was having a difficult time in the period leading up to his departure from KDK. There is a suggestion that he received a warning in June about an alleged breach of company policy. Mr Wang also indicated that he felt under great pressure at work, and was concerned about his position within the business, and whether he was able to continue in his role. He was also experiencing some health issues.

[22] The following sequence of events appears to have occurred in the period leading up to the end of his employment. On 21 June a discussion took place about an alleged breach of company policy. On 28 June Mr Wang left a message at work indicating he was suffering from food poisoning and would not be at work. On 1 July he forwarded a medical certificate indicating he would be off work until 4 July. However, he did not return to work on 4 July and, in fact, did not return to work again after that time. He also did not make any further attempts to contact the business from that point.

[23] On 6 July KDK sent the email with the attached letters to Mr Wang. However, Mr Wang did not provide any response to this email. On 19 July he lodged his unfair dismissal application with the Commission, and a copy of that application was then forwarded by the Commission to KDK.

[24] I have no reason to doubt that Mr Wang was unhappy at work and felt that he had been placed under considerable pressure. He may well have been entitled to feel concerned about the way in which he was being treated at work. He may also have been correct when he concluded that KDK was trying to put pressure on him to resign, although it is difficult to come to any definitive conclusions about these matters, given the limited evidence provided by the parties in the proceedings.

[25] What is clear is that KDK sought to bring matters to a head when it forwarded the email to Mr Wang on 6 July. At this point he had been absent from work since 28 June, after initially advising that he was suffering from a bout of food poisoning. However, he also indicated in his responses to the Commission during the proceedings that he considered he had been placed in a position at this time where it was difficult for him to return to work, given the pressure he felt he was under.

[26] I am satisfied that it is reasonable to conclude that when KDK sent the email to Mr Wang on 6 July with the attached letters it was hoping this would result in him resigning from his employment. It provided two options to him in regard to his resignation. Firstly, he could sign and return the draft resignation letter it had prepared. Secondly, it indicated that if no response was received within 3 days it would assume that he had resigned.

[27] When it subsequently did not receive a response to the email it appears to have assumed Mr Wang had decided to take the second option, which meant by not responding he had resigned from his employment. KDK submits that it then made further efforts to contact him by phone to confirm his intentions, but it was unable to make contact. However, no evidence was provided to substantiate that this occurred. Regardless, KDK appears at this point to have concluded that Mr Wang had resigned from his employment.

[28] Mr Wang, however, has a different view and submits that he was left with no option but to resign, and therefore his resignation should be treated as a dismissal.

[29] The circumstances involved in this matter are clearly unusual and it is strange that the employment relationship appears to have come to an end without the parties communicating directly with each other. However, when all of the circumstances are viewed objectively I am not satisfied that KDK’s actions can be said to have resulted directly or consequentially in the termination of Mr Wang’s employment in the sense that he had no other option but to resign. For example, Mr Wang could simply have responded to the email by indicating that he was not resigning, and by clarifying his intentions in regard to when he would again attend at work. He could also have pursued some other form of action if he was concerned about the treatment he was receiving at work. For example, he could have pursued a workplace bullying application, given that he claims to have been bullied at work. He could also have initiated a dispute in regard to the actions of his employer. I am not suggesting that any of these options are necessarily straightforward or obviously apparent. However, they do emphasise that Mr Wang had other options in the context of the circumstances he found himself in.

[30] It is also noted that the warning letter was also forwarded to him with the email on 6 July with a request that he sign the letter as an acknowledgement of having received it. While this might well have added to the pressure Mr Wang felt he was under, the fact he was presented with the option of signing and returning the letter in order for it to be retained by KDK also suggests it was open to the option of him returning to work.

[31] I have already indicated that Mr Wang was obviously unhappy at work to the extent that he was uncertain about whether he could return after being off work for a period of time. However, I am also satisfied that there were various other options available to him at the time and, therefore, he cannot be said to be a person who was forced to resign because of the conduct or a course of conduct engaged in by his employer. It follows from this conclusion that Mr Wang is not a person who has been “dismissed” in accordance with the provisions contained in either ss.385 or 386 of the Act. His application must therefore be dismissed.

COMMISSIONER

Appearances:

M Wang on his own behalf.

H Ren and D Mashiter for the Respondent.

Hearing details:

2017.

Melbourne:

October 26.

 1   Fair Work Act 2009 (Cth) s 385.

 2   Fair Work Act 2009 (Cth) s 386 (1).

 3   Applicant’s outline of submissions, received 14 September 2017, at [6d].

 4   Ibid.

 5   Attachment to Form F2, email correspondence dated 6 July 2017 from Respondent to Applicant, lodged 18 July 2017.

 6   Attachment to Form F2, “Resignation Letter” dated 6 July 2017, lodged 18 July 2017.

 7   Attachment to Form F2, “Warning letter” undated, lodged 18 July 2017.

 8   Witness statement of Applicant, received 14 September 2017.

 9   Transcript at PN62.

 10   Respondents submissions regarding jurisdictional objection, received 4 September 2017, at [5b].

 11   [2013] FWCFB 5279.

 12   Ibid at [11] – [19].

 13   [2014] FWCFB 613.

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