Mr Craig Howes v Complete Removals.com Pty Ltd T/A Complete Removals

[2013] FWC 8852

[2013] FWC 8852

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Craig Howes
v
Complete Removals.com Pty Ltd T/A Complete Removals
(U2013/2488)

COMMISSIONER HAMPTON ADELAIDE, 11 DECEMBER 2013

Application seeking remedy for alleged unfair dismissal - written resignation provided - whether dismissal at the initiative of the employer - whether resignation forced by conduct of the employer - dismissal not demonstrated - absence of jurisdiction - application dismissed.

1. Background and case outline

[1] Mr Craig Howes has applied for a remedy arising from what he contends was an unfair dismissal by his former employer, Complete Removals.com Pty Ltd T/A Complete Removals (Complete Removals). The application has been made under s.394 of the Fair Work Act 2009 (the Act).

[2] Complete Removals provides furniture and parcel removal, and related services. It has operations in various States, including South Australia, where Mr Howes was employed.

[3] Mr Howes was employed from February 2008 until June 2013. The last 12 months of that service involved full-time employment.

[4] There is no dispute that Mr Howes was protected from unfair dismissal within the meaning of s.382 of the Act.

[5] Mr Howes tendered a written resignation to Complete Removals on 18 June 2013. This followed an earlier change in role for Mr Howes, from “second-in-charge” (a leading hand) in the Adelaide branch to being “back on the trucks”. Further, there was intervention by the Transport Workers’ Union of Australia (TWU) on his behalf in relation to that change and in connection with his sick leave entitlements. There had also been, prior to the written resignation, an “off the record” discussion with a “silent” director about Mr Howes’ circumstances, and a subsequent SMS text message from Complete Removals to all staff indicating it had been informed through the TWU representative that Mr Howes had resigned.

[6] Mr Howes contends that, in all of the circumstances, the sending of the text message is the conduct that ended the employment relationship and that the written resignation was forced by that and the related conduct of Complete Removals. He asserts that this was a dismissal within the meaning of the Act and that it was unfair. Mr Howes does not however seek to rely upon the earlier change in role as part of the conduct said by him to have forced the resignation. 1

[7] Complete Removals contends that there was no dismissal within the meaning of the Act. That is, Mr Howes resigned and this was not a forced resignation, and the conclusion of the employment relationship was not at the employer’s initiative.

[8] This application was lodged with the Commission on 26 July 2013, being some 17 days beyond the 21 day time “limit” established by s.394(2) of the Act. Complete Removals did not oppose 2 the Commission using its discretion to grant an extension of time as provided by s.394(3). It adopted that position whilst maintaining its strong objection to the application on jurisdictional grounds.

[9] I do have some reservations about the extension of time in this case, particularly given the nature of the evidence about the alleged representative error that is relied upon by Mr Howes. However, given the position of Complete Removals on that issue I would have granted that extension if required in circumstances where my ultimate findings on the jurisdictional question made that necessary.

2. The issues in dispute

[10] There are some factual matters in dispute, particularly those surrounding a discussion between Mr Howes and Mr Corey Smith, the Director and now General Manager of Complete Removals, on 12 June 2013. In addition, there is dispute as to the effect of the information provided by Mr Spring, an official of the TWU who advised Mr Howes and dealt with Complete Removals on his behalf, which led to the tendering of the written resignation.

[11] Mr Howes and Mr Smith provided witness statements and gave sworn evidence in this matter. Mr Spring provided a witness statement that was admitted by consent without being cross-examined. I note that there is some significant tension between the detail of the evidence of Mr Howes and Mr Spring.

[12] In the circumstances I have accepted the evidence of Mr Spring as outlined in his statement on face value.

[13] I have resolved the factual conflict between Mr Howes and Mr Smith having regard to my impression of their evidence and the overall probability and consistency of that testimony. I consider that Mr Howes was generally open and honest in his evidence however I have reservations about his evidence regarding the precise circumstances leading to the tendering of the written resignation. I also gained the distinct impression that Mr Howes was reluctant to detail the full extent of the advice given by Mr Spring particularly given the tension that exists in their stated position on some key facts.

[14] In terms of Mr Smith, he gave his evidence over the phone due to certain reasons, including the failure of the respondent to earlier lodge material in accordance with directions issued by the Commission. Notwithstanding the limitations of evidence given in that way, I found that his evidence was given openly, he did not quibble with issues that were not necessarily helpful for “his” case, and the sequence of events he outlined had an inherent sense of logic.

[15] Complete Removals did not call the manager who was involved in many of the key events. No reasonable explanation for this failure has been provided and in the circumstances I have drawn a negative inference to the extent that there is no evidence touching upon certain events. 3

[16] I will resolve the relevant factual disputes as part of my consideration of each of the relevant issues.

[17] Given the positions of the parties and the statutory framework, the key issues that need to be initially determined involve a consideration of the following:

● what is a dismissal for present purposes;
● what were the events leading to the provision of the written resignation; and
● whether as a result, Mr Howes was dismissed within the meaning of the Act?

3. What is a dismissal for present purposes?

[18] Given the positions contended by the parties, it is necessary for me to consider whether a dismissal has taken place within the meaning of the Act. Section 386 provides as follows:

“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.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[19] I note that Mr Howes has relied upon both s.386(1)(a) and the contention that a “forced resignation” took place so as to fall within the scope of s.386(1)(b) of the Act. The circumstances contemplated by s.386(2) and (3) are not relied upon by Mr Howes. 4

[20] The general legal principles applicable to a termination at the initiative of the employer are generally well settled. Stated succinctly, they include:

● A termination at the initiative of the employer involves the action of the employer as the principal constituting factor leading to the termination; 5

The employer must have engaged in some action that intended to bring the employment relationship to an end or had that probable result; 6 and

In determining the question whether the termination was at the initiative of the employer, an objective analysis of the employer’s conduct is required. 7

[21] In terms of whether conduct by the employer has forced a resignation so as to fall within s.386(1)(b) of the Act, the following related principles have been adopted by the Commission and its predecessors:

● A forced resignation is when an employee has no real choice but to resign; 8

The onus is on the employee to prove that they did not resign voluntarily. The employee must prove that the employer forced their resignation; 9

The employer must take action with the intent to bring the relationship to an end or that has that probable result; 10

The line distinguishing conduct that leaves an employee no real choice but to resign, from an employee resigning at their own initiative is a narrow one. The line, however, must be ‘closely drawn and rigorously observed’; 11 and

● An employer is generally able to treat a clear and unambiguous resignation as a resignation. However, where a resignation is given in the heat of the moment or under extreme pressure, special circumstances may arise. Further, the employer may have a duty to confirm the intention to resign if, during that time, they are put on notice that the resignation was not intended. 12

[22] The application of these concepts was recently considered by a Full Bench in Bruce v Fingal Glen Pty Ltd (In Liq) 13 and the following conclusions drawn:

“[22] In relation to whether on “an objective analysis of the employer’s conduct” the late payment of wages and failure to pay superannuation “was of such a nature that resignation was the probable result”, we note that the Full Bench in O’Meara was drawing from Rheinberger. In that case Justice Moore said that:

“However it is plain from these passages [in Mohazab] that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct”.

[23] The situation contemplated in this passage is one in which the act of an employer which led to an employee’s resignation was not intended to cause an employee’s resignation (as was the case in Mohazab), but “would, on any reasonable view, probably have that effect”. Rheinberger therefore qualifies the passage from Mohazab quoted above in two respects. First, an employer may be found to have constructively dismissed an employee notwithstanding that it did not engage in the relevant conduct with the subjective intention of forcing the employee to resign. Secondly, although it is an “important feature” of constructive dismissal, it is not sufficient 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”. There must also be either an intention to force an employee to resign, or else the conduct must be of such a nature that resignation was the probable result. The “limb” of the O’Meara test relating to resignation as a probable result of an employer’s conduct should be read in this light.”

4. The events leading to the written resignation

[23] Based upon the evidence before the Commission the following sequence of events unfolded.

[24] On 27 May 2013 Mr Howes had a day off, having left a voice mail message for Mr Mangelsdorf, the Operations Manager, to this effect the day before. There was also a discussion between them on 28 May 2013 about the lack of a medical certificate and the fact that the company would treat the absence as unpaid.

[25] On 5 June 2013, Mr Howes was advised by Mr Mangelsdorf that his role was to change from being the second-in-charge to that of being “back on the trucks”. Mr Howes considered that this was a demotion and was linked to the day off he had recently taken.

[26] There is little evidence going to the impact of the change in role, including the extent of any change in remuneration or benefits that would follow. It is probable that Mr Mangelsdorf raised the prospect of Mr Howes becoming a casual, in order to be paid at a higher rate to offset any reduction in wages. There is evidence that the earlier day off, and what was described by Mr Mangelsdorf as a restructure due to a dire financial situation, were also both raised during the meeting. Given that the “demotion” is not relied upon by Mr Howes for present purposes, it is not necessary to make detailed findings in that regard.

[27] Mr Howes made contact with Mr Spring and subsequently attended a medical practitioner who provided a medical certificate to cover an absence from Thursday 6 to Sunday 9 June 2013.

[28] Mr Howes met with Mr Spring on 6 June 2013, and they discussed the circumstances of the demotion, whether Mr Howes was in a temporary or permanent second-in-charge position, and his concerns that Mr Mangelsdorf was apparently attempting to get rid of him. They also discussed the right of the company to restructure, the potential application of redundancy payments depending upon the size of the business and the need to obtain an original employment contract if possible. The implications of casual rates, and the view that it would “be silly to throw away a full time job”, were also discussed.

[29] On 10 June 2013, Mr Howes advised the company that he would not be in at work until after the long weekend.

[30] On 11 June 2013, Mr Howes and Mr Mangelsdorf discussed the need for a medical certificate for the earlier absence on 27 May and whether in any event Mr Howes had any paid sick leave entitlements. A medical certificate covering the more recent absence was provided by Mr Howes following this phone discussion.

[31] On the same day, Mr Smith was apparently advised by an employee at the Adelaide branch operations of Complete Removals that Mr Howes intended to resign. Mr Smith was also aware that Mr Howes was unhappy as a result of the change in his position. At that time, Mr Smith was a Director of Complete Removals but did not play an active role in the management of the business. He did however originally employ Mr Howes and considered that Mr Howes was an asset to the business.

[32] On 12 June 2013, Mr Howes spoke to Mr Spring about an apparent discrepancy in Mr Howes’ pay received the day before and the implications of his original employment contract which had by then been located. Mr Howes asked what he would be entitled to if he was dismissed and alternatively if he resigned. Mr Spring advised that he would receive only one weeks notice, given his length of full-time service and he would need to give a weeks notice if he were to resign. Mr Howes raised concerns about being required to work out his notice and that he thought he would be targeted. Mr Spring advised him that if he didn’t do anything wrong, he couldn’t be targeted in that manner. Mr Howes also raised the prospect that he would have to pay for the expenses incurred in gaining his truck licence, which had been arranged by Complete Removals (if he left the employment).

[33] Later on the same day, Mr Smith rang Mr Howes and discussed his concerns that Mr Howes was intending to leave the business and sought that any issues associated with the sick pay be resolved without the need to further involve the TWU. Mr Smith also encouraged Mr Howes not to leave the business and indicated that to do so would be a mistake and that he would support him through the present difficulties with a view to potentially having him reinstated as the “second-in-charge” in the future. The discussion also canvassed Mr Howe’s perspective on some of the problems with the management of the business. This was of interest to Mr Smith as he was at that stage operating without a hands-on role in its management.

[34] Mr Smith understood as a result of that conversation that Mr Howes was confirming his intention not to stay with Complete Removals. On balance, I find that this understanding was correct. It is also probable that Mr Smith communicated that understanding to at least one of the managers within the business.

[35] Mr Howes understood that the conversation with Mr Smith was intended by Mr Smith to be off the record, in the sense that he did not want to be seen as undermining the immediate management on the ground. On balance, I also find that this understanding was correct.

[36] On 13 and 14 June 2013, there were discussions between Mr Spring and Mr Mangelsdorf regarding Mr Howes annual and sick leave entitlements and the money allegedly owed in relation to obtaining the truck and fork lift licences which the company had arranged. When clarification of Mr Howes intentions was sought by Mr Mangelsdorf, Mr Spring advised that he understood that Mr Howes was sick and that he would return when he was fit.

[37] On 14 June 2013, Mr Mangelsdorf left a voice message with Mr Howes telling him to “man up” and attend the office for a meeting on Monday 17 June 2013 to discuss the transition back into the trucks. Mr Howes discussed this with Mr Spring, who indicated that he would seek to move the meeting to enable him to also attend. Later that day, Mr Spring advised Mr Howes that Mr Mangelsdorf had informed him that there was a mistake on the pay slips that overstated the amount of sick leave, and that Mr Howes would be liable for 50% of fees for the costs of obtaining a truck licence and the full value of a fork lift licence. Mr Spring also indicted that Mr Mangelsdorf has stated that if Mr Howes continued to ring in sick, he could be dismissed for insubordination. Mr Spring also advised Mr Howes that this could lead to his entitlements being jeopardised. The basis for these statements from Mr Spring is not clear on the evidence before the Commission.

[38] On 15 June 2013, Mr Mangelsdorf sent a group SMS to the staff of Complete Removals indicating that the company had been advised through the TWU representative that Mr Howes had resigned and that his (Mr Howes) position would be taken over by Mr Mangelsdorf.

[39] I add that the witness statement of Mr Spring does not specifically address the question as to whether any statement he may have made could have been interpreted in that manner by the company. His evidence does indicate that he advised Mr Howes that he had not resigned on his behalf and that if he (Mr Howes) was to resign, it would need to be done in writing. As outlined earlier, Mr Mangelsdorf did not give evidence in the matter. I accept that Mr Howes did not instruct Mr Spring to communicate a resignation to the company on his behalf at this point and it is probable that Mr Spring did not do so.

[40] On 17 June 2013, Mr Howes tried unsuccessfully to contact Mr Spring. In the afternoon, Mr Mangelsdorf left a voice mail on Mr Howes’ phone to the effect that he would be attending Mr Howes’ home to collect all company property.

[41] On 18 June 2013, Mr Spring and Mr Howes discussed the circumstances of the phone call and the other events. Mr Howes was advised that Mr Spring had not said anything to the company that would amount to a resignation and that he (Mr Howes) could pursue any underpayments. Mr Spring advised Mr Howes that the group SMS was not ideal but did not mean that he had been sacked. Mr Howes apparently understood that Mr Spring was advising in effect that he should submit his resignation in order to avoid putting his entitlements at risk. Mr Spring understood that Mr Howes wanted to resign given his concerns about how he might be treated and that this was later confirmed to him by Mr Howes.

[42] Later that day, after discussions with Mr Spring and taking some advice from the Legal Services Commission in terms of the required notice, Mr Howes prepared a written resignation in the following terms:

“Please accept this as my formal resignation letter from my position to be effective from 25 June 2013.

I would like to take the opportunity to thank Corey Smith for providing me with the opportunity to work for his company and wish him every success in the future.” 14

[43] Mr Howes provided the resignation letter, his uniform and copies of relevant documents to Mr Spring with a view to them being forwarded to Complete Removals on his behalf. This was arranged, given Mr Howes desire not to deal further with Mr Mangelsdorf at this time. Mr Spring also provided a copy of a Fair Work Ombudsman complaint form to Mr Howes.

[44] The written resignation and the company property were provided by Mr Spring on behalf of Mr Howes to Complete Removals on 20 June 2013.

[45] At no time after the receipt of the group SMS on 15 June 2013, did Mr Howes advise Complete Removals that he had not resigned as claimed in the SMS message. There is also no evidence that Mr Spring advised the company to that effect on his behalf. I will return to the implications of this factor, and the overall conduct of the parties, shortly.

5. Was Mr Howes dismissed within the meaning of the Act?

[46] Mr Lawrie, who appeared for Mr Howes, contends that the SMS message of 15 June 2013 on behalf of Complete Removals meant in effect that Mr Howes was no longer employed by the company and that this was much more than a threat of dismissal. Further, he contends that this began a chain of events that ultimately led to the resignation letter dated 18 June 2013 and should be considered to be the action that led to the dismissal. That is, Mr Howes did not voluntarily leave the employment as he was faced with the SMS message and what was claimed to be an inability to speak to his manager. In that context, he had no choice other than to resign.

[47] Mr Lawrie also contends that the written resignation could not bring about an immediate end to the employment contract given that it did not provide adequate notice. 15

[48] The contention about the effect of the written resignation does not sit easily with the balance of the submissions made on behalf of Mr Howes, particularly in relation to the effect of the SMS message. In any event, it is clear that the employment relationship was at an end following the provision of the resignation. The critical issue is whether the termination of the relationship was a dismissal within the meaning of the Act. As I understand the balance of the submissions for Mr Howes, there are in fact two alternative contentions. Firstly, that the SMS effectively concluded the employment relationship and in that sense, the termination was at the initiative of the employer. Secondly, the SMS in the context in which it occurred had the effect of forcing Mr Howes to resign.

[49] The first proposition cannot in my view be correct. Firstly, no party, including most importantly, Mr Howes treated the employment relationship as being at an end at that point.

[50] Secondly, if the conduct of the employer sending the SMS was to be a termination at the initiative of the employer, then two factors need to be considered; whether the conduct directly or consequentially resulted in the termination, and had the employer not taken this action, then the employee would have stayed in their current employment status. These aspects must however be viewed in the context of an objective consideration of the probable result required by the authorities. Further, it is important to take into account all of the circumstances in relation to the conduct.

[51] These circumstances included the fact that the apparent intention of Mr Howes to leave the employment had been discussed with Mr Smith on 12 June and the rather inelegant communication of the day before from Mr Mangelsdorf was apparently intended to encourage Mr Howes to come back to work.

[52] On balance, I am not satisfied that the SMS effectively concluded the employment relationship nor was the termination at the initiative of the employer. It is a narrow line that must be considered in these circumstances but the SMS cannot in my view be said to be the principal contributing factor or a sufficiently operative factor that ended the employment relationship.

[53] In relation to the alternative proposition, I would accept that conduct, including a course of conduct whereby an employer wrongly communicates an unsubstantiated resignation, could in some circumstances form the basis of a constructive dismissal. However to do so, it must be found that the employer either intended to force an employee to resign, or else the conduct must be of such a nature that resignation was the probable result.

[54] The intentions of the employer in this case must be found by considering its overall actions including those of Mr Smith. Even drawing inferences from the failure of the respondent to call Mr Mangelsdorf, there is insufficient foundation to conclude an intention to force Mr Howes to resign. Given that the demotion is not relied upon, the sending of the SMS, although unexplained in terms of its reference to the TWU having advised of the resignation, is consistent with management having an understanding after the conversation on 12 June, that Mr Howes was intending to leave.

[55] The approach from Mr Mangelsdorf to Mr Howes on 14 June 2013, although poorly executed, was also an attempt to have Mr Howes return to the workplace in his new role. Further, the subsequent request to return the uniform must be seen in the context that the Complete Removals understood that Mr Howes was leaving and there was no contrary advice from Mr Howes following the SMS, back to the company.

[56] However, the authorities make it clear that intention is not necessary and conduct that would have the probable result of a resignation being provided is sufficient. The SMS is the primary factor relied upon by Howes in his evidence although the following were also said to have contributed to the resignation:

● Management and some of the other employees did not want him back and that he would be assigned undesirable work; 16

The desire to keep his entitlements; 17

Management wanted to take away his uniform; 18 and

● It was not reasonable to approach Mr Mangelsdorf as he would merely shut down the discussion. 19

[57] I leave aside the earlier demotion, as although this may have added to the circumstances bearing upon this question, Mr Howes does not seek to rely upon that aspect.

[58] It is clear to me that based upon the evidence of Mr Howes, there were two overriding considerations. Firstly, the view Mr Howes formed that management and some of the other employees did not want him back and that he would be assigned undesirable work. Secondly, that the resignation would somehow assist to protect his entitlements. Both of these were apparently based upon, or heavily influenced by, the advice of Mr Spring.

[59] Objectively, the circumstances created by Complete Removals operating at the time did not force Mr Howes to resign within the meaning of the authorities. There were real and reasonable alternatives open to him including allowing the TWU to deal with the concerns about management and the most obvious step of advising management that he was not in fact seeking to resign if that was the case. It is evident to me that Mr Howes took what he understood the advice of Mr Spring to be; that is, he should resign fundamentally in order to protect his entitlements. This was the overriding and operative factor ultimately leading the end of the relationship.

[60] I have real reservations about certain elements of the conduct of Complete Removals touching upon this matter. However, the decision by Mr Howes to tender his resignation was a deliberate decision, made despite the availability of reasonable alternatives and after taking advice and checking about the extent of notice he was to provide. This may well have resulted from poor advice, however this does not mean that objectively, the written resignation provided by Mr Howes was forced or arose as the probable result of the conduct of the employer in this particular case.

6. Conclusions

[61] I am not persuaded that Ms Howes was dismissed within the meaning of the Act. On that basis, there is no jurisdiction to hear this application, even if the extension of time were to be granted.

[62] The application must be dismissed and an order to that end is being issued in conjunction with this decision 20.

[63] I should also note that my findings about the advice provided by Mr Spring are based on the evidence before the Commission. Given that Mr Spring was not called and was not therefore in a position to provide clarification about his evidence, including where tensions existed with the evidence of Mr Howes, these finding should be considered in that light.

Appearances:

E Lawrie of the Transport Workers’ Union of Australia for Craig Howes.

J Pitman of Morgan Conley Solicitors, with permission, for Complete Removals.com Pty Ltd T/A Complete Removals.

Hearing details:

2013

Adelaide

November 11.

 1   Transcript PN74 - PN77.

 2   Transcript PN27 - PN32.

 3   As contemplated in Jones v Dunkel (1959) 101 CLR 298.

 4   Transcript PN74 to PN77.

 5   Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 205.

 6   Searle v Moly Mines Limited [2008] AIRCFB 1088.

 7   O’Meara v Stanley Works Pty Ltd (2006) 58 AILR 100-528.

 8   Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 206.

 9   Australian Hearing v Peary (2009) 185 IR 359, 367 at [30].

 10   O’Meara v Stanley Works Pty Ltd (2006) 58 AILR 100 at [23].

 11   Doumit v ABB Engineering Construction Pty Ltd, 9 December 1996, AIRCFB Print N6999.

 12   Ngo v Link Printing Pty Ltd (1999) 94 IR 375 at [12].

 13   [2013] FWCFB 5279.

 14   Exhibit A2, Attachment K.

 15   Grout v Gunnedah Shire Council (1994) 125 ALR 355.

 16   Transcript PN155 to PN159.

 17   Transcript PN164 and PN180.

 18   Transcript PN167 and PN187.

 19   Transcript PN384.

 20   PR545590.

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