Mr Cris Douwes v Men of the Trees Inc
[2014] FWC 296
•14 JANUARY 2014
[2014] FWC 296 |
FAIR WORK COMMISSION |
DECISION AND REASONS FOR DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Cris Douwes
v
Men of the Trees Inc.
(U2013/13496)
COMMISSIONER CLOGHAN | PERTH, 14 JANUARY 2014 |
Unfair dismissal.
[1] This is an application by Mr Cris Douwes seeking a remedy for alleged unfair dismissal alleging that he was forced to resign due to “the conduct of his employer, Men of the Trees Inc”.
[2] Men of the Trees Inc submits that Mr Douwes resigned voluntarily without notice, and consequently was not dismissed or protected from unfair dismissal.
PROCEDURAL BACKGROUND
[3] On 11 September 2013, Mr Cris Douwes (Mr Douwes or Applicant) made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from Men of the Trees Inc (Employer or MOTT).
[4] The application is made pursuant to s.394 of the Fair Work Act 2009 (FW Act).
[5] The application was unable to be resolved at conciliation and was referred to me for arbitration on 11 October 2013.
[6] In response to the application, the Employer asserts that the Applicant is not protected from unfair dismissal because:
● he has not been dismissed in accordance with subsection 386(1) of the FW Act but resigned on 22 August 2013.
[7] On 25 October 2013, I provided procedural directions to the parties in which I advised that I would deal with the Employer’s jurisdictional objection by way of written submissions. A submission was received from the Employer to which the Applicant responded. The Employer subsequently responded to the Applicant’s submission.
RELEVANT BACKGROUND
[8] Mr Douwes commenced employment with the Employer on 19 November 2012 as a Project Coordinator.
[9] Mr Douwes was employed at the Perth City Farm (PCF) 64 hours per fortnight at $25 per hour.
[10] On 21 August 2013, the Employer’s Chief Executive Officer, Mr Morris, advised staff at the PCF of the MOTT Board’s decision not to divest PCF but that new management arrangements would be implemented. In addition, the Employer provided a memorandum and new contract of employment to staff which, in Mr Douwes’ case, reduced his hours of employment to 30 hours per fortnight; all other conditions, including the hourly rate of pay, would remain.
[11] While the proposed contract of employment has a commencement date of 21 August 2013, Mr Morris states that the new contract of employment had to be signed no later than 6 September 2013 which would be the commencement date of the modified hours of employment for staff. Mr Douwes states that, as the new contract of employment has a commencement date of 21 August 2013, “I took this to mean the arrangement was in effect as soon as I sign”.
[12] Mr Douwes claims he was asked by Mr Morris to sign the new contract of employment immediately.
[13] Ms van Hatten, who was at the same meeting as Mr Douwes, states that “...I think we were asked (verbally by Cliff Morris) to sign and return them [new contracts of employment] as soon as possible”.
[14] Ms van Hatten’s statement regarding when the new contracts of employment had to be signed appears to be consistent with another submission by Mr Douwes that “I was verbally instructed by Cliff [Mr Morris] to sign and hand the contract back over in the next couple of days”.
[15] Affected staff were asked to attend a workshop the following day (22 August 2013). At the staff workshop, the new management operator was announced and it was they who conducted the workshop. The workshop was for the purposes of making PCF operations achieve a more financially sustainable position.
[16] Shortly after the staff workshop concluded on 22 August 2013, Mr Douwes forwarded an email to Mr Morris at 4:40 pm which is headed “Resignation” and reads “this email is confirmation of my resignation effective immediately as of today Thursday 22nd of August 2013 as an employee of Men of the Trees.”
[17] The Employer submits “the employment agreement for Mr Douwes and four other staff members indicated that the hourly rates of pay would remain the same but hours worked would be reduced to 30 hours, with a 4 day working fortnight, commencing 6th September”.
[18] Mr Douwes responds that he agrees with the facts asserted by the Employer and adds as follows, “yes, this is what the new contract outlined, which made my position untenable. The GRO project could not be run on those hours alone, as no new business can, and Perth living expenses would not be covered with such few hours”.
RELEVANT STATUTORY PROVISIONS
[19] The word “dismissed” is defined in s.386 of the FW 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.”
[20] According to the Explanatory Memorandum to the Fair Work Bill 2008:
- 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.”
“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:
RELEVANT CASE LAW
[21] The principles of what is described as 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 1(Pawel)and ABB Engineering Construction Pty Ltd v Doumit2(ABB Engineering), and are relevant to any consideration of s.386(1)(b) of the FW Act.
[22] 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...” 3
[23] 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.” 4
CONSIDERATION
[24] It is not the Commission’s role in this application to determine whether PCF was financially sustainable or not. Further, it is not the Commission’s role to determine whether particular projects, including the one being carried out by Mr Douwes, can be undertaken within a certain number of hours. It is also not for the Commission to determine the appropriate allocation of project monies or, finally, whether particular projects are successful or not.
[25] Objectively, the Employer came to the view that it was financially unable to continue at PCF with the current part-time hours of employment for staff and accordingly advised them of a proposed reduction. Affected staff were advised on 21 August 2013 of this proposal with a commencement date of 6 September 2013. What the Employer was seeking to do was to change the contract of employment, as it related to the hours of employment but in all other respects, including the hourly rate of pay, the conditions of employment would remain the same.
[26] There is no suggestion by Mr Douwes that the Employer was seeking to terminate the employment relationship. On the contrary, it appears that the Employer was seeking for the affected employees to remain in employment albeit with reduced hours of employment.
[27] Mr Douwes’ submission is, in part, that because the Employer proposed to reduce his hours of employment, he was forced to resign. Mr Douwes agrees with the factual circumstances but contends that his continued employment was untenable, due to the reduced hours proposed for the project for which he was responsible, and his own financial circumstances.
[28] The Employer, on the basis of its financial considerations, has come to the conclusion that it needed to reduce the hours of its employees at the PCF. Mr Douwes does not dispute the facts but asserts that the hours relating to his particular project can and should continue and immediately after the staff workshop, resigned by email.
[29] Notwithstanding who is correct in relation to their view about the financial considerations of PCF and the hours required for Mr Douwes’ project, it is insufficient, in my view, to state, in effect, “...these are the actions of the Employer, I resigned, therefore, the Employer’s actions forced me to resign”. Such inductive reasoning would lead employees to self define the meaning of “forced to resign”.
[30] The conduct of the Employer has occurred within the context of an employment relationship. Consequently, it is necessary to objectively consider not only the conduct of an employer but also the actions of the other party in the employment relationship - the employee.
[31] Simply put, it is insufficient for an applicant to state that an employer sought to amend an employee’s contract of employment - the employee resigned - therefore, the employee has been dismissed due to the conduct of the employer.
[32] It needs to be borne in mind that, at the time of Mr Douwes’ resignation, the Employer had not imposed the change in hours of his employment. At the time Mr Douwes resigned from his employment, the conditions of his contract of employment remained the same as when he commenced employment. Mr Douwes, on the basis of what the Employer was proposing to do on 6 September 2013, resigned.
[33] Put shortly, the Employer had not unilaterally changed Mr Douwes’ contract of employment but had invited him to consider the proposed changes to this conditions of employment.
[34] At the time of resignation, the Employer had not breached Mr Douwes’ existing contract of employment.
[35] Mr Douwes clearly does not agree with the grounds upon which the Employer proposed a reduction in his hours of employment or that his particular project could be managed within the allocated hours. Further, Mr Douwes is unhappy with the process by which the new management of PCF was announced to staff, or what he considers the lack of transparency and good governance. However, this lack of good conduct, as he sees it, is insufficient, in my view, to conclude that the Employer conducted itself in a manner which was intended to force Mr Douwes to resign. While the Employer’s actions may have been less than perfect from Mr Douwes’ perspective, they were not done, on the submissions and documentation I have received, with the intent of destroying his employment relationship.
[36] Mr Douwes provides email documentation dated 30 August 2013 as part of his submission in which he expresses the following:
“The majority of staff also resigned at PCF due to the untenable position with staff hours being cut in half, resulting in the closure of a number of other projects...Importantly, MOTT seem to be in a lot of financial difficulty, and have been for some time now.
Personally, I know I cannot run the GRO project on two days per week or survive financially even enough to pay rent. The walk out by staff en masse was also attributed to our strong sense of loyalty to the farm, our programs, to each other and most importantly to the wider community.”
[37] Objectively, on the particular facts and submissions relating to this application, I am unable to come to the conclusion that the Employer set out, through its conduct, to destroy the employment relationship or force Mr Douwes to resign.
[38] Mr Douwes did not assert, nor could he submit, that the Employer was unable to seek to change the employees’ contracts of employment given its financial difficulties. Having proposed a new contract of employment, Mr Douwes could have in the period up to 6 September 2013, engaged with MOTT his particular concerns regarding the hours allocated to his project and various ways and means to maintain his current hours of employment. Mr Douwes chose not to engage with the Employer and explore these options but resigned without notice.
CONCLUSION
[39] For the above reasons, an objective analysis of all the circumstances leads me to the conclusion that Mr Douwes did not resign because he was forced to do so because of the conduct or course of conduct of the Employer. Mr Douwes resigned of his own volition on 22 August 2013. As a consequence of his employment not being terminated at the initiative of the Employer or being force to do so as a consequence of the conduct of the Employer, the Applicant does not meet the definition of “dismissed” pursuant to s.386 of the FW Act. Accordingly, the application must be, and is, dismissed as failing to meet the statutory requirements in s.385(a) of the FW Act. An order will issue to this effect.
COMMISSIONER
Final written submissions:
Applicant: 1 December 2013.
Respondent: 10 November 2013 and 24 December 2013.
1 AIRC Print S5904 (12 May 2000).
2 AIRC Print N6999 (9 December 1996).
3 AIRC Print S5904 (12 May 2000).
4 AIRC Print N6999 (9 December 1996). The print does not contain page or paragraph numbers.
Printed by authority of the Commonwealth Government Printer
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