Miss Carol Morley v Intelitec Pacific Pty Ltd T/A Inerva
[2015] FWC 3168
•7 MAY 2015
| [2015] FWC 3168 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Miss Carol Morley
v
Intelitec Pacific Pty Ltd T/A Inerva
(U2014/14157)
DEPUTY PRESIDENT ABEY | HOBART, 7 MAY 2015 |
Decision Application for relief from unfair dismissal - constructive dismissal - application not granted
[1] Ms Carol Morley (applicant) has lodged an application for an unfair dismissal remedy under s394 of the Fair Work Act 2009 (the Act). The applicant contends that circumstances of her employment termination from Intelitec Pacific Pty Ltd T/A Inerva (respondent) amounted to a constructive dismissal.
[2] The respondent has raised a jurisdictional issue contending that the applicant resigned from her employment.
[3] The applicant relies on s396(1) of the Act which relevantly reads:
“(1) A person has been dismissed if :
...
(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.”
Evidence
[4] During the hearing sworn evidence was taken from the following witnesses:
Carol Jane Morley, applicant
Sean Williams, Managing Director, Inerva
Penelope Williams, Executive Manager, Inerva.
David Loiterton, Sales Manager, Inerva.
[5] In addition a number of documents were tendered into evidence.
Background
[6] From the evidence I am satisfied that the essential facts are either largely uncontested or in the alternative, capable of being resolved on the balance of probabilities. On this basis the background to this dispute is summarised as follows.
[7] Inerva is a software vendor exclusively serving the Australian aged care market. In November 2014 the company employed a total of 13 staff in management, support, sales and software development roles. Ten of the staff are based in Tasmania.1
[8] Ms Morley commenced employment with Inerva in April 2011 as a Support Officer. In May 2012 she was promoted to National Support Manager.
[9] In October 2013 Ms Morley was asked and agreed to take on additional sales duties. This was a consequence of Mr Williams withdrawing from the sales role and placing the business on the market.
[10] In February 2014 two sales related staff were appointed, reporting to Ms Morley. The business was taken off the market. One of these appointments came to an end shortly thereafter.
[11] In May 2014 Ms Morley was appointed General Manager.
[12] From the evidence it seems that the corporate plan at the time was to seek a full-time sales executive from within the aged care industry. In the meantime Ms Morley continued with some sales activity although it seems clear that she was anxious to bring this to an end as soon as possible in order to concentrate on development and support work.
[13] Despite some concerns relating to company operations and management, Ms Morley was relatively satisfied with her role. She said:2
“However, that aside, the day to day situation in the Launceston office was very positive and overall I was very happy to be working at Inerva. With each promotion I received a pay rise and, superannuation and sustainability aside, I was content.”
[14] The matters of concern to Ms Morley are summarised below.
Superannuation
[15] Ms Morley stated that the Company regularly failed to make superannuation payments. The respondent acknowledged the obligation to pay superannuation, and attributed the late or non-payment to cash flow issues. At the time of termination, significant superannuation contributions were owed to Ms Morley and presumably other staff. In the case of the applicant, the matter had been referred to the Australian Taxation Office (ATO).
Company credit card
[16] Ms Morley said she was authorised to use the company credit card for travel related expenses. On occasions the card had been declined due to insufficient credit. This, Ms Morley said, led to considerable embarrassment and occurred despite requests in advance to management to ensure sufficient credit was available. The respondent said that management made every effort to ensure credit was available but acknowledged that on occasions it did not work. This situation was not limited to Ms Morley.
Investment in software and hardware.
[17] On a number of occasions Ms Morley had expressed concern as to the respondent’s reluctance to invest in software and hardware she considered essential to meet client commitments and the wellbeing and motivation of staff. The respondent’s evidence is that a moratorium on spending was necessary due to cash flow shortages and that it would be “reckless to spend on new computer equipment while basic employee entitlements were outstanding.”3
[18] The applicant said that her relationship with her employer dramatically changed for the worse in October 2014.
Events Post October 2014
[19] In October 2014 Mr David Loiterton was appointed as Sales Manager. A key difference was that Mr Loiterton was to report to Mr Williams, rather than Ms Morley. I am satisfied on the evidence that this appointment was genuinely welcomed by Ms Morley, even though she had some apprehension as to the financial capacity of the business to carry both a full-time Sales Manager and a General Manager.
[20] It was generally accepted that with the appointment of Mr Loiterton, the applicant would exit all sales activity, subject to an appropriate handover. The precise nature of this handover is not entirely clear, with Mr Loiterton stating he would welcome support and assistance for a period of time, including the applicant arranging ‘introductions’ in appropriate circumstances.
[21] On 30 October 2014 Ms Morley declined an opportunity to attend a conference in Tamworth due to work pressures. Her evidence is:4
“Sean phoned me following my email, was quite sarcastic and said I think we say this is the end of your time in sales, thanks for what you have done but you can go back to doing what you are good at. Again I had no argument with this proposition but was concerned by the tone. I also wanted to ensure there was a proper handover and that no leads “fell between the cracks”. As I had been involved in sales for over 12 months there were inevitably a number of ongoing potential opportunities that were likely to either make contact with me or expect that I would make contact with them. I stated this to both Sean in this conversation and later in a handover session with David and both said that was fine and I received communication from Sean reiterating the importance of keeping the CRM upto date and of keeping David apprised with any sales activity. I had absolutely no problem with doing this and had every intention of doing so. David also asked me to follow up on a potential lead on his behalf as he felt it inappropriate that he should do so and reiterated that any assistance I could give him over the initial few months while he was getting up to speed would be gratefully received. “
[22] According to Mr Williams, the following telephone conversation (also) occurred on 30 October:5
“Sean Williams: This is a good time to hand over all sales activity to David”
Carol Morley: I’m due to catch up with him tonight, we can make that a handover meeting.
Sean Williams: Yes please, you need to concentrate on operations now, no more sales work.”
[23] On 31 October Ms Morley had a “handover” meeting with Mr Loiterton. Later that day Ms Morley confirmed with Mr Williams that the handover meeting had occurred.
[24] On 18 November an incident occurred described by the applicant as follows:6
“Our phone system went down and was up and down for a couple of hours. During that time we lost a number of calls and I was unable to conduct a pre- arranged training session. When the phones were working again we received a number of support messages and received a sales enquiry, presumably because I was still included in the email “sales group”. I did not know if David and Carolyn had received the sales call, I suspected not as we hadn’t. I was also aware that they were in transit to Tamworth and might not have a chance to return the call anyway even if they did get the voice message in an email. When I listened to the recorded message I noted that it wasn’t clear who it was. I didn’t want to get involved in a long call with anyone at that time because I had rearranged the training session for later that day and I wanted to make sure I was free for the session. So I chose to call back the sales enquiry and glean some more detail, which I could then pass onto David, while other members of the support team dealt with the more lengthy support calls. I expected the sales enquiry to be a quick 5-10 minute call and if I had thought it would take longer I would not have made the call. As it turned out it took a little while to find out who the company was and in that time I realized that in fact I had met the lady before at a conference earlier in the year and as a result it wasn’t easy to finish the conversation quickly besides she asked a lot of detailed questions about implementation and Home Care functionality which David would not have been able to answer. During the call she asked for a rough cost and because the facility was a small 50 bed facility which fell into our standard pricing band I was comfortable with giving her the standard price. After speaking with the lady I recorded all the information in the CRM and emailed both David and Carolyn with the details. I subsequently responded to a further email from the lady but having received an acknowledgement from David I didn’t expect to have any further involvement because I expected he would shortly make contact himself. I gave the call no more consideration. “
[25] It turns out that the sales inquiry did go through to Mr Loiterton’s message bank service although Ms Morley was unaware of this at the time and suspected that it had not.
[26] Later that day Ms Morley received an automated message stating that her access to the CRM (sales data base) had been terminated.
[27] On 19 November 2014 the applicant received an email from Mr Williams concerning a proposal Ms Morley had put forward concerning development work for a client.7 Ms Morley said:8
“Sean’s response was curt, ignored the request for a commitment to purchase the software and insisted that he see the documentation and the quotation before it went to the client. The implication in the email was that he didn’t think I was capable of doing the work even though it was routine and something I am well used to and more than capable of doing.”
[28] Later that day the applicant received a formal written warning from Mr Williams expressed as follows:9
“RE: Disciplinary Warning
This letter is to serve as an official reprimand for your failure to comply with recent instructions to refrain from engaging in sales activity relating to the acquisition of new clients. I refer your handling of a sales enquiry from KOPWA yesterday.
It is a breach of your expected and entrusted managerial role.
I am also reminding you, it is of critical importance that you exercise dependable good judgment as an employee entrusted with management responsibilities. Because of your position, further diligence in carrying out your responsibilities is required in future.
Another breach in our confidence in your ability to carry out any of your expected managerial roles will result in additional disciplinary action up to and including the possibility of employment termination.
We have invested much into ensuring the rapid growth of this company including the appointment of experienced sales personnel. To be clear, your responsibility, as every employee, is to pass on sales enquiries directly to the Sales Manager, without further intervention.
If you are not comfortable with the growth of this company or your area, I encourage you to raise your concerns with me immediately.”
[29] Ms Morley’s evidence as to what followed is:10
“November 19th 2014 I received a formal written disciplinary warning in relation to my alleged breach of my employment condition in making the sales call and a clear threat that should l make a breach in the future my employment would be terminated. I was shocked to receive such a warning. I have never in my entire working life of 37 years received any such thing. As far I was concerned I had acted correctly, in accordance with what was expected of me and in the best interests of the company at all times. I took some legal advice the following day during my lunch hour and based on that advice thought seriously about my future at Inerva.
November 21st 2014 was pay day and I did not receive my salary. There was no explanation as to why I had not been paid. In the 40 odd pays I had received prior to this pay day my salary was, without fail, paid either early or on the due date so this was a highly unusual and worrying development. I was at this stage completely convinced that Sean was trying to force me to resign. I suspected that the company was not in a financial position to support both a Sales Strategy Manager and a General Manager and that Sean planned to get rid of me and take on the operational duties himself now that David could run the sales side. “
[30] It transpires that Ms Morley’s salary transfer was actioned at the bank on Saturday 22 November and would have appeared in her bank account on Monday 24 November. Mr Williams explained that because of daily transfer limits, staff pays were on occasions “batched” and paid on different days. On this occasion Ms Morley was one of three staff who were subject to the 22 November transfer. Nonetheless I am satisfied on the evidence that this was the first occasion that Ms Morley’s salary was late.
[31] On Saturday 22 November Ms Morley attended the office, removed her personal effects and sent the following email to Mr Williams.11
“I write in response to your letter dated 19th November 2014 and the official reprimand contained therein.
I have not received specific instructions to not speak with any potential clients and I am not aware of any company policy or procedure which outlines such a requirement. I have followed your instructions to document any conversation or correspondence with a potential client and to pass those details to the sales team. In doing so I believe I followed the guidelines I have been given. You have not given me an opportunity to explain the circumstances of the sales enquiry to which you refer or why I took the steps that I did.
By issuing a written official reprimand without any prior discussion, and without giving me an opportunity to explain my actions, you have breached the trust and confidence necessary for my employment to exist. In addition I note that I have not received payment for wages for the period ending November 20th 2014. Payment was due by 21st November 2014. As a result of this situation I consider myself to be the subject of a constructive dismissal and hereby give notice to leave the company with immediate effect.
I request immediate payment to be made in full for the outstanding wages.
I also request that, within 7 days of the date of this letter: you forward, to me, payslips relating to all pay periods since June 21st 2014 (despite repeated requests I have not received any payslips in the current financial year); make payment in full in respect of my outstanding Annual Leave entitlement; and make payment in full of the outstanding Superannuation guarantee contribution owed to me, together with interest (as you are aware I have received only one month’s contribution since July 1st 2013).
I have taken legal advice on this matter and I am advised that the next step will be to make a complaint to the Fair Work Commission Ombudsman. As you are no doubt aware a complaint to the Ombudsman may result in a full audit of Company records. I am also advised to lodge a claim with the Australian Taxation Office in relation to the unpaid superannuation in the event I do not receive full payment, with interest, within 7 days.”
Submissions
The Applicant
[32] The applicant contends that she was forced into tendering her resignation as a result of her employer’s actions, which taken together, amount to a constructive dismissal consistent with s386(1)(b) of the Act.
[33] The applicant submits that these actions were a deliberate campaign to force her to resign, and/or in the alternative, an attempt to build up a justifiable case to dismiss her. Ms Morley contends that she was being set up and damage limitation activities were being taken in anticipation of dismissal. These actions include:
● The issuing of a written warning without justification and without giving the applicant an opportunity to explain her conduct;
● Placing the applicant in a very awkward position in relation to payment of expenses;
● Undermining the applicant’s ability to effectively manage the staff by refusing to purchase essential equipment and not paying superannuation;
● Restricting Ms Morley’s discretion and ability to manage ad hoc development projects, and
● Late payment of salary only two days after the formal disciplinary warning.
[34] Ms Morley contends that the combined actions of the employer were aimed at forcing a resignation and together were the principal contributing factors leading to the termination of the employment relationship.
The respondent
[35] Mr Williams submitted that he had always maintained an excellent, open and close working relationship with Ms Morley and he had never, at any time, entertained an intention to dismiss or demote the applicant by any means. His evidence is:12
“Look, I'd like to say that Ms Morley was a first class operational manager and had been for years; well respected by the management and by our clients. We valued her contribution in her primary role as general manager. Yes, there was certainly no intention in November or any time before to see her leave the company in any way. Any suggestion that that was our intention is false. This company, in its 22 years, has never fired a long-standing employee. It never dismissed anyone that has made it through their probationary period. Ms Morley's resignation certainly came as a shock to us. It was certainly not our intention to cause any anxiety or grief or in any way discomfort to Ms Morley or anyone else. We were very, very surprised to hear that she resigned. Very saddened, in fact, by her resignation because we lost a real asset then and it's very unfortunate. The nature of her resignation without any warning was also quite damaging for the company given Ms Morley's senior position in the company; as a primary contact for most of our clients that we deal with. We were, yes, just surprised. That's really all I would like to say.”
[36] Mr Williams referred to a major tender submission dated 13 November 2014 in which Ms Morley is identified as one of the ‘Key Personnel’ to support the project.13
[37] Mr Williams acknowledged that Ms Morley had reasons to be concerned and frustrated with aspects of the business operations (eg superannuation, software investment, project risk control), but these issues were not isolated to M s Morley, and there was certainly no conspiracy to push her out of a job.
[38] Mr Williams said:14
“Yes, look, I agree it has been stressful and I also agree that Ms Morley was a valued and trusted employee. Not up until the end of October, but in fact until 22 November, until the day she clearly resigned. Yes, this is sad because it highlights the need for more open communication, I suppose. If the reprimand was jumping the gun or was too premature, then I think a resignation was doubly so.”
[39] Mr Williams submitted that Ms Morley had a number of other choices in the days following the reprimand, but none were taken up.
Conclusion
[40] The leading authorities in relation to constructive dismissal are Mohazab v Dick Smith Electronics Pty Ltd 15and O’Meara v Stanley Works Pty Ltd.16 The ‘elemental principle’ that emerges from these authorities is “whether the employer’s conduct intended or had the probable effect or result of bringing the employment of the relevant employee to an end, such that the employee effectively had no choice but to resign.”17 I now apply these tests to the evidence in the instant matter.
[41] There is no doubt that the applicant had good reason to be disappointed, disillusioned and perhaps even angry as to certain aspects of the Company management. I refer in particular to the repeated non-payment of superannuation and embarrassment encountered through insufficient credit on the corporate credit card. However these shortcomings were not directed specifically at the applicant, and to a greater or lesser extent, applied to some or all of the Inerva staff.
[42] Ms Morley was understandably disappointed as to the lack of investment in what she saw as essential software and hardware upgrades. However these are decisions clearly open to management, and whilst it might be a factor the applicant took into account in considering her future employment with Inerva, it is not in the category of leaving Ms Morley with no option but to resign.
[43] The email from Mr Williams dated 19 November 2014 concerning proposed development work was certainly abrupt and failed to answer the question concerning software investment. However in my view the email was otherwise unremarkable, although I understand why Ms Morley may have been offended by its tone. Again, taken alone, it is not a factor which left the applicant with no option but to resign
[44] The late payment of salary would normally be placed in the category of an irritation. Because of the timing, the late payment assumed an importance in the mind of the applicant which was disproportionate to its true significance. I note Mr William’s evidence as to ‘batching’ and that other employees were similarly affected. On the evidence I am unable to accept that the late payment was a deliberate component of a plan to drive Ms Morley from the business. I would however observe that if an error of this nature had to occur, the timing could not have been worse.
[45] This leaves the telephone incident on 18 November 2014 and the subsequent letter of reprimand.
[46] I am satisfied on the evidence that the only motivation of Ms Morley was to act in the best interests of the Company. She could not reasonably anticipate that the call would take longer than a few minutes or that the caller was someone she had previously met at a conference. At no stage did she try and hide the call or mislead Mr Loiterton or management, indeed, to the contrary. The very worst that Ms Morley could be accused of was an over enthusiastic response, and even that in my view would be unfair.
[47] It follows that in my view the written letter of reprimand was without justification and an entirely disproportionate response on the part of Mr Williams. It would seem from the evidence that Mr Williams was motivated more by a fear of losing Mr Loiterton rather than the behavior of Ms Morley. That said, was it an action that left Ms Morley with no option but to resign?
[48] I think not. The obvious response was for Ms Morley to push back and seek a discussion with Mr Williams, something that was effectively offered in the cover email to the letter of reprimand. Whilst I understand the applicant’s reluctance to pursue this course, it clearly was an option that was open, and if pursued, may have resulted in a different outcome.
[49] The resignation of Ms Morley in the circumstances was a most regrettable outcome. Whilst there were a number of events in close proximity between 18 and 22 November 2014, I am unable to accept on the evidence that this amounted to a course of conduct on the part of the employer that was calculated to force the resignation of Ms Morley. The evidence of the tender submission document dated 13 November 201418was persuasive in reaching this conclusion.
[50] I conclude that Ms Morley resigned from her employment by correspondence dated 22 November 2014.
[51] I uphold the respondent’s jurisdictional objection and dismiss the application for an unfair dismissal remedy.
DEPUTY PRESIDENT
Appearances:
Ms Carol Morley in person
Mr Sean Williams for the respondent
Hearing details:
2015
15 April
Launceston
1 Exhibit R1
2 F2 application, Accompanying notes
3 Exhibit R4 p3
4 Exhibit A2 para 5
5 Exhibit R4 p8
6 Exhibit A2 para 9
7 Exhibit R15
8 Exhibit A2 para 7
9 Exhibit A7
10 Exhibit A2 paras 10 & 11
11 Exhibit A8
12 Transcript p181
13 Exhibit R1
14 Transcript para 552
15 [1995] 62 IR 200
16 [2006] AIRC 100
17 Mendicinov Tour-Dex Pty Ltd [2010] FWA 9114 at [9]
18 Exhibit R1
Printed by authority of the Commonwealth Government Printer
<Price code C, PR567148>
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