Mr Jude Gonzalez v FQM Australia Nickel Pty Ltd

[2015] FWC 6910

[2015] FWC 6910

FAIR WORK COMMISSION

DECISION

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

Mr Jude Gonzalez
v
FQM Australia Nickel Pty Ltd
(U2015/7732)

DEPUTY PRESIDENT BULL SYDNEY, 14 OCTOBER 2015

Application for relief from unfair dismissal, ex tempore decision, jurisdictional objection, constructive dismissal claim, no dismissal at the initiative of the employer, application dismissed

[1] This decision reproduces in edited form the decision and reasons which were stated on transcript at the conclusion of the hearing conducted in relation to this matter on 30 September 2015.

[2] In this matter Jude Gonzalez (the applicant) claims that his resignation from the employment of FQM Australia Nickel Pty Ltd (respondent/FQM) was the result of a constructive dismissal. Mr Gonzalez submits that he had no alternative other than to resign as a result of the conduct of the respondent.

[3] The respondent, FQM argued that the applicant was not dismissed and elected to resign of his own initiative and that its conduct did not result in a constructive dismissal. On this basis, the respondent argues that the Fair Work Commission (the Commission) is without jurisdiction to deal with the application as there has been no dismissal at the initiative of the employer.

Background

[4] Mr Gonzalez was employed on a fly in fly out basis at the respondent’s Ravensthorpe nickel operations which is some 540 kilometres south east of Perth and a 45 minute one-way plane commute. Mr Gonzalez represented himself and Ms Rochelle Airey, a solicitor from HWL Ebsworth Lawyers, sought leave to appear on behalf of FQM. Ms Airey submitted that the Commission should grant leave for her appearance on the basis that her representation would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

[5] Ms Airey's submissions regarding the lack of Commission advocacy experience of the respondent's human resources staff would not of itself be sufficient for permission to be granted for representation by a solicitor. However in this case, the argument raised by the respondent is one based on a jurisdictional issue and I was satisfied that on this ground, the Commission would be assisted by Ms Airey's appearance and leave was granted pursuant to section 596(2) of the Fair Work Act 2009 (the FW Act).

[6] On 14 May 2015 Mr Gonzalez emailed Mr Shane Royston, Human Resources Manager for the respondent in the following terms:

“…I advise that in accordance with s.386, Fair Work Act 2009, an employee would be considered ‘dismissed’ if there is a significant reduction in his or her remuneration. In my case, if I accepted the 14/7 roster it would result in a significant reduction in my existing hourly rate and would affect my untaken paid annual leave entitlements.

By me not accepting your offer, this would be treated as employment having come to an end and result in a redundancy or ex-gracia (sic) payment.

To put it clearly, I am in dispute with the fact that FQM is demanding 34 extra shifts or 415 hours away from my family without remuneration. This is a fundamental change to my contractual arrangements. Thus, you would need to seek my consent by attempting to vary my contract.

Again, I state that you are forcing myself into a corner – either accept or resign.

As you are avoiding the issues relating to this matter, I have no choice but to resign effectively today and will lodge an adverse action claim against FQM. Please be aware that an adverse action claim is unlawful and payment in this jurisdiction is up-capped (sic).

Regards

Jude…”

[7] The respondent replied by email to Mr Gonzalez the following day, 15 May 2015, acknowledging Mr Gonzalez's resignation email and apologised for how he felt and also acknowledged his right to resign. The correspondence went on to state that a change in rosters across the board was necessary for the long-term viability of the employer and stated that the employer had made every effort to provide a flexible working arrangement so that he could spend more time with his son. The correspondence referred to Mr Gonzalez phoning his manager, advising that he was not returning to the work site to work out his notice period. The correspondence stated that, given the circumstances of the applicant, FQM was prepared to waive his notice period.

[8] The applicant was later paid his four weeks' notice period. 1

Submissions and evidence of the applicant

[9] Mr Gonzalez prepared written submissions and gave oral evidence; he was not subject to cross-examination by the employer. Mr Gonzalez was engaged by the respondent as a safety advisor and commenced on 7 May 2012. He was provided with a written offer of employment and a written contract of employment which he signed on 7 May 2012. Mr Gonzalez referred to receiving correspondence dated 21 April 2015 from FQM which outlined the respondent’s operational difficulties and the need to manage expenditure, reduce cost and still maintain profitability.

[10] For these reasons, a number of new rosters were offered to employees, which Mr Gonzalez submitted did not suit his personal circumstances. The reason being the fact that he is a single father with an alternate weekend custody arrangement for the care of his son. Mr Gonzalez stated that he had initially commenced on an 8 day on 6 day off roster and he was now being asked to work on a 14 day on 7 day off roster, which he considered was a demotion resulting in a lower hourly rate of pay as he was required to work longer hours without any additional remuneration.

[11] Despite having held a number of discussions with his employer, Mr Gonzalez believed that the employer had not sufficiently taken into account his personal circumstances and that his contract of employment could not be amended without his agreement, which had not been given. Mr Gonzalez submitted that the consultation period regarding change in his roster was only three days. As a result of questions from the Commission, Mr Gonzalez accepted that the consultation period was far longer than three days and that his initial working roster was 9 days on and 5 days off, which averaged 54 hours a week.

[12] In correspondence to the employer dated 29 April 2015, and following discussions with the employer the previous day, Mr Gonzalez pointed out a number of concerns he had with the proposed roster change, including:

● No additional remuneration for an increase in working hours,
● he took the job on the basis it had a family-friendly roster,

● flying in on Friday mid-afternoon and flying out late on Friday meant that he will never have a Friday night off,

● accepting that his contract allows for roster changes, this should be based on reasonable hours. Working an additional 35 shifts was not reasonable; and
● unless the roster changes are reasonable or a redundancy package is negotiated, he would have no other option than to enforce his legal rights.

[13] Mr Gonzalez expressed the view that the employer's financial predicament was not relevant to himself and that the employer needed to ensure that any alternate roster would be fair to him. Mr Gonzalez stated that he remained unemployed and had been unsuccessful in obtaining alternative employment, although no evidence of his attempts to find alternate work was produced.

Submissions and evidence of the respondent

[14] The respondent made submissions and tendered three affidavits from employees who were not required for cross examination. The employees were:

1. Marion Storey, Employee Relations Specialist;
2. Jody Webber, Health and Safety Superintendent; and
3. Shane Royston, Human Resources Manager.

[15] The crux of the respondent’s submissions was that the employer was under financial strain and urgent changes to the way it operated were necessary. This included the alteration of existing rosters and, where necessary, redundancies.

[16] The respondent's position was that in April 2015 they commenced a period of consultation with all 312 employees, including Mr Gonzalez, and advised that for the long-term survival of its business, operational changes, including changes to work rosters were required. Mr Gonzalez received the same correspondence as all other employees advising of the predicament faced by the employer.

[17] On 23 April 2015, further written correspondence regarding the changes to hours of work and rosters were forwarded to all employees. In Mr Gonzalez's case, he was advised that his roster would as of 1 May 2015 move to a 14 day on 7 day off configuration. Mr Gonzalez's salary, allowances and other conditions would remain unchanged.

[18] On 27 April 2015, Mr Gonzalez met with his manager and advised of his concerns with his new roster, and requested an increase in salary due to the increased hours worked, or in the alternative, a redundancy package. After considering Mr Gonzalez's concerns, he was offered an alternate 5 day on 2 day off roster to support his family requirements. It was further advised that redundancy was not an option as his position was still required to be performed.

[19] On 28 April 2015, Mr Gonzalez met with the then HR superintendent, Ms Storey and again advised he was not happy with the new 14 day on, 7 day off roster as this would have a negative impact on his family life and time spent with his son. He was asked to put his concerns in writing so that a flexible working arrangement may be considered. Mr Gonzalez reduced his concerns to writing in an email dated 29 April 2015.

[20] On 11 May 2015, a telephone meeting with the applicant was conducted where he was reoffered an alternate 5 day on, 2 day off roster to overcome the concerns that he had with a 14 day on 7 day off roster, which Mr Gonzalez stated would adversely impact on the time spent with his son.

[21] The 5 day on 2 day off roster would mean some organisational challenges for the FQM safety department as there would be a need to arrange weekend cover. Mr Gonzalez did not accept the 5 day on 2 day off, fly in fly out roster. This roster was again offered to Mr Gonzalez on 13 May 2015 via email and Mr Gonzalez responded that evening by email requesting a pay-out of his notice period plus redundancy pay. On 14 May 2015, the applicant was sent a letter confirming the offer of a 5 day on, 2 day off roster, and also allowing him to take some annual leave so he would not be rushed into a decision. Mr Gonzalez resigned the following day.

[22] By way of background, the respondent stated that 33 per cent of its employees live in or near Perth and travel to the site by air. When the site first commenced operation, employees worked a 14 day on 7 day off roster and were paid an annual salary for all hours worked, inclusive of all entitlements, which was the basis for the applicant's salary. In May 2012, rosters for fly in fly out employees were changed to a 9 day on, 5 day off roster after consultation with the workforce. This resulted in a reduction of hours; however there was no concomitant reduction in salary.

[23] Mr Gonzalez commenced on a 9 day on, 5 day off roster and in July 2012 changed to an 8 day on, 6 day off roster, which resulted in less hours being worked. There was no reduction in salary. In December 2014 there was a major incident at the Ravensthorpe nickel operation where an atmospheric leach tank collapsed, disrupting operations which led to 57 employees being stood down. Once the damage was repaired, 45 employees accepted voluntary redundancies effective from February 2015. The nickel operations were also affected by a substantial fall in the nickel price.

[24] The respondent submits that as a result of the required roster change, 34 positions have been made redundant. However, there were no redundancies in the health and safety team where Mr Gonzalez was employed. The employer submits that it made every effort to cater for Mr Gonzalez by offering him a 5 day on, 2 day off roster to enable him to be at home each weekend.

[25] While there was no increase in remuneration for any additional hours or shifts required to be worked above the 8 day on, 6 day off roster; the respondent states that the salary was initially based on a 14 day on, 7 day off roster. The 8 day on, 6 day off roster is no longer worked at the respondent's Ravensthorpe operation (where the applicant is based), and moving to a 14 day on, 7 day off roster allowed the employer to dispense with one aircraft and one less shift of employees. The respondent submitted that very few employees were upset about the roster changes and most were grateful that FQM were doing their best to maintain their positions with the company.

Relevant Legislation and Conclusion

[26] Section 394 of the FW Act provides that a person who has been dismissed may apply to the Commission for the granting of a remedy. With respect to the meaning of "dismissed", s.386 provides a definition. The relevant s.386(1) states:

“A person has been dismissed if the person's employment with his or her employer has been terminated on the employer's initiative.”

[27] Mr Gonzalez submits that his employment was terminated on the employer's initiative as he had to either accept a lower hourly rate or resign. The explanatory memorandum to the Fair Work Bill 2008 in respect of this section deals with the meaning of the term "dismissed" at item 1528. The reference to s.386 and the meaning of "dismissed" is discussed and it states:

“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 a person's employment with his or her employer was terminated on the employer's initiative see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).”

[28] Item 1528 is intended to capture case law relating to the meaning of termination at the initiative of the employer. The meaning of the phrase "terminated on the employer's initiative" has been considered in numerous decisions of this Commission and other statutory bodies. In P. O'Meara v Stanley Works Pty Limited 2(O’Meara) a Full Bench of the Australian Industrial Relations Commission discussed the relevant case law. At paragraph 19 of their decision is an extract from the decision of the Full Court of the Federal Court in Mohazab v Dick Smith Electronics Pty Ltd (Mohazab):

“[19] 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.”

[29] At paragraph 20 of O'Meara the Full Bench refer to the decision in Rheinberger v Huxley Marketing Pty Limited 3and in particularof Moore J, who was also one of the members of the Full Court in Mohazab, where his Honour stated:

“[20] However it is plain from these passages 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 had 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.”

[30] The Full Bench then go on to state at paragraph 23:

“[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 v ABB Engineering, require that there to 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” 4. 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.”

[31] In this matter, I am unable to find that there was any intention on behalf of the employer to bring the employment relationship to an end. The uncontroverted evidence provided in the course of these proceedings indicates that the employer wished to retain the services of Mr Gonzalez. However, as the authorities state, there needs to be an objective analysis of the employer's behaviour to ascertain whether the probable result would be that the employee had no effective or real choice but to resign.

[32] The evidence in this matter indicates that in April 2015, Mr Gonzalez enjoyed an 8 day on, 6 day off, fly in fly out roster. It was submitted by Ms Airey to average 46.5 hours per week; although in Mr Royston's affidavit he states an 8 day on, 6 day off roster averages 49 hours per week. Mr Gonzalez confirmed that this in fact averages 49 hours per week.

[33] Due to the respondent's dire financial circumstances, and in an effort to reduce its operation costs, new rosters were introduced. The 8 day on, 6 day off roster was replaced with a 14 day on, 7 day off roster which, in Mr Gonzalez's personal circumstances, was not ideal.

[34] Mr Gonzalez's contract of employment allows for a significant degree of change in rosters as contained at clause 8 of the contract which allows for FQM to vary rosters, days of work, start and finish times, to meet the needs of the business by providing 48 hours' notice. Further, clause 7 of the contract requires the employee to work reasonable additional hours as required. Mr Gonzalez was initially offered a 14 day on, 7 day off roster which averages 57 hours per week, while his 8 day on 6 day off roster averaged 49 hours.

[35] In an effort to accommodate Mr Gonzalez’s circumstances, he was offered a 5 day on, 2 day off roster which averaged 50 hours per week, a minimal increase in the hours he was previously working; although the number of shifts worked increased.

[36] Section 63 of the FW Act provides employees with a statutory right to refuse to work additional hours beyond 38 where they are unreasonable. In this case, Mr Gonzalez was provided with a roster option that made little difference to his average hours worked but increased the rostered shifts required to be worked. Section 62(3) is relevant only to additional hours worked, and not the roster pattern of employees.

[37] The 5 day on, 2 day off roster was offered to Mr Gonzalez, taking into consideration his family circumstances. It must also be acknowledged that Mr Gonzalez works in the mining industry where long hours are common and rosters are varied to suit operational needs. While it could not be said that any variation in rosters may not leave an employee with the probable result that an employee would have no effective or real choice but to resign, I do not find that this is the case in Mr Gonzalez's circumstances.

[38] Mr Gonzalez is mistaken in his view that the financial circumstances of his employer are of no concern to him and that FQM have an obligation to provide a roster to suit his particular personal needs. Mr Gonzalez did have a real choice, whether or not to accept the 5 day on, 2 day off roster (which ordinarily is for drive in drive out employees) that was offered to him as a way of accommodating his needs. This was at some disruption to FQM. While it could also be said that an increase in hours or shifts worked without a commensurate salary increase would offer no real choice for Mr Gonzalez but to resign, again I do not find that to be the case in his circumstances.

[39] The annualised salary of Mr Gonzalez was designed to accommodate some variation in hours worked, and I do not find that the change from an 8 day on, 6 day off roster to a 5 day on, 2 day off roster to be so unfair that, without an adjustment upwards to Mr Gonzalez's salary, which he requested, he would have no alternative other than to resign. The additional hours required to be worked under a 5 day on, 2 day off roster are minimal and, in accordance with the contract, are accommodated for in the established salary.

[40] Mr Gonzalez had a real choice which was to remain with FQM working under a varied roster to accommodate his personal needs. For his own reasons, he chose not to do so. The circumstances do not demonstrate that he is being terminated at the employer's initiative.

[41] Even if I had found that a constructive dismissal did exist, in determining whether the dismissal was unfair; it is clear that the employer had a valid reason for the dismissal and that it is well founded and not capricious. In taking into consideration the extended consultation period from 21 April until 14 May, and Mr Gonzalez's personal circumstances in offering him a varied roster different from other fly in fly out employees, I would be unable to find that there was any harshness, unreasonableness or unjustness involved in Mr Gonzalez’s dismissal.

[42] Having found that no dismissal at the initiative of the employer has occurred; the Commission is, in accordance with the submissions made by the respondent, without jurisdiction to deal with the application. The application is therefore dismissed.

DEPUTY PRESIDENT

Appearances:

Mr Jude Gonzalez on his own behalf

Ms Rochelle Airey; solicitor for the respondent

Hearing details:

Perth

2015

29 and 30 September

 1   See transcript PN401 to PN408

 2   PR973462

 3 (1966) 67 IR 154.

 4   Mohazab at page 205

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