Mr Nicholas Katin v St John Ambulance Australia (Western Australia) Inc

[2013] FWC 9084

[2013] FWC 9084

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

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

Mr Nicholas Katin
v
St John Ambulance Australia (Western Australia) Inc.
(U2013/2345)

COMMISSIONER CLOGHAN PERTH, 25 NOVEMBER 2013

Unfair dismissal.

[1] This is an application by Mr Nicholas Katin alleging that he was constructively dismissed from his employment with St John Ambulance Australia (Western Australia) Inc (SJAA).

[2] Mr Katin alleged that SJAA engaged in a course of conduct which left him with no option but to resign. SJAA submit that its conduct, objectively assessed, was reasonable and consistent with Mr Katin’s contract of employment. Furthermore, Mr Katin had a number of options available to him to pursue his complaints rather than resign. In conclusion, SJAA submitted Mr Katin’s resignation was voluntary and consequently he was not dismissed.

PROCEDURAL BACKGROUND

[3] On 16 July 2013, Mr Nicholas Katin (Mr Katin or Applicant) made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from his employment with St John Ambulance Australia (Western Australia) Inc (SJAA or Employer).

[4] The application was made pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[5] The application was not resolved at conciliation and was referred to me for arbitration on 23 August 2013.

[6] On 30 August 2013, I issued procedural directions for a hearing on 18 November 2013.

[7] At the hearing on 18 November 2013 the Applicant represented himself and gave evidence on his own behalf.

[8] The Employer was represented by Mrs K Reid of counsel. Evidence was given on behalf of SJAA by:

● Mr A Smith, Deputy Chief Executive Officer; and
● Ms T Sonnadara, Commercial Manager, First Aid Services.

[9] At the conclusion of the hearing, I reserved my decision. Having considered the evidence provided as a result of procedural directions, submissions, oral evidence and the authorities cited, this is my decision and reasons for decision.

RELEVANT STATUTORY FRAMEWORK

[10] It is not in dispute that Mr Katin’s application was made within the statutory timeframe pursuant to paragraph 394(2)(a) of the FW Act.

[11] What is in dispute, in the first instance, is whether Mr Katin was dismissed in accordance with the meaning of “dismissed” in paragraph 386(1)(b) of the FW Act, which is as follows:

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

[12] Should I find that Mr Katin was dismissed in accordance with paragraph 386(1)(b) of the FW Act, it is then necessary to consider whether he has been unfairly dismissed.

MR KATIN’S RESIGNATION LETTER

[13] Mr Katin’s resignation letter is dated 25 June 2013 and addressed to Mr Smith. The letter reads as follows:

“It is with some regret that I tender my resignation as Business Development Manager.

I am giving the required two weeks’ notice making my last day 8th July 2013. In the last few weeks my position has become untenable with changes to my conditions of employment without any consultation.

I have taken legal advice and will be filing for unfair dismissal at the Fair Work commission (sic) on the grounds of Constructive Dismissal.” 1

RELEVANT BACKGROUND

[14] Mr Katin commenced with SJAA on 10 January 2011 in the position of Business Development Manager, First Aid Services and Training Department (FAST).

[15] Mr Katin’s conditions of employment were regulated, in part, by a written employment agreement which included the provision that he report to the State Manager “or as the Employer may otherwise direct”. Further, the employment agreement provided that he would be based at the SJAA State Office, Belmont, Western Australia “or as otherwise directed by the Employer”.

[16] On or around 9 April 2013, Mr Massam, State Manager, FAST, ceased employment with SJAA.

[17] Following Mr Massam’s cessation of employment and the commencement of the recruitment process for his replacement, Mr Katin, Ms Sonnadara and two other managers in the FAST Department were required to report to Mr Smith, Deputy Chief Executive Officer.

[18] Mr Smith met weekly with Mr Katin and during these meetings established new agreed business objectives for the 2013/2014 financial year. These objectives were confirmed in an email from Mr Smith to Mr Katin dated 13 May 2013.

[19] Once the objectives were established, Mr Smith and Mr Katin continued to meet weekly and discuss progress towards establishing the business targets.

[20] On 10 April 2013, Mr Katin applied for the newly created position of Business Development Manager, Patient Transfer.

[21] On 28 May 2013, Mr Smith advised Mr Katin that he “was to temporarily report to Ms Sonnadara until the newly appointed State Manager, Jane Mahon, commenced on 15 July 2013” 2.

[22] On 30 May 2013, Ms Sonnadara met with Mr Katin. Ms Sonnadara set out her expectations during the period Mr Katin reported to her. Ms Sonnadara requested that Mr Katin attend the State Office in Belmont to carry out his duties and be directly engaged in the FAST strategy and objectives.

[23] On 21 June 2013, Mr Katin was informed that he was unsuccessful in his application for the position of Business Development Manager, Patient Transfer.

[24] On 25 June 2013, Mr Katin, at his request, met with Mr Smith at 11:00 am. Mr Katin advised Mr Smith that the purpose of the meeting was to negotiate his exit from SJAA for the following reasons:

● Mr Katin had been advised that Mr Smith wanted to “performance manage” him out of the organisation;

● that the Employer no longer wanted him to work for the organisation as exhibited by:

• his failure to receive a pay increase in 2013;



• being required to report to Ms Sonnadara on a permanent rather than a temporary basis in view of correspondence received on 10 June 2013 from the Chief Executive Officer (CEO);



• being unable to work under Ms Sonnadara’s management style; and



• being unable to work from home.

[25] Mr Smith denied that he was attempting to “performance manage” Mr Katin out of the organisation.

[26] Mr Smith stated that his preferred outcome was for Mr Katin to remain in the employment of SJAA and achieve the business targets already agreed upon.

[27] Mr Katin stated that he would reflect upon Mr Smith’s comments. Mr Smith foreshadowed his agreement to a further meeting to discuss the issues raised by Mr Katin.

[28] At 2:40 pm on the same day (25 June 2013), Mr Katin met with Mr Smith. At that meeting, Mr Katin referred to the earlier discussion and, despite Mr Smith’s comments, felt “actions speak louder than words” and he had decided to resign 3.

[29] Mr Smith expressed disappointment at Mr Katin’s decision. Notwithstanding Mr Smith’s expressed disappointment, Mr Katin handed his resignation letter to Mr Smith and the meeting concluded.

[30] On 1 July 2013, SJAA provided correspondence to Mr Katin thanking him for his services to the organisation and waiving the requirement for him to attend work for the remainder of his notice period.

APPLICANT’S CASE

[31] Mr Katin submits the “constructive dismissal” occurs where the employer behaves in a manner that leaves the employee with no option but to resign.

[32] The Applicant asserts that SJAA conducted itself in a manner intended to destroy the employment relationship by:

● requesting Ms Sonnadara to “performance manage” him with a view to terminating his employment;

● requiring him to report to Ms Sonnadara when previously they had both been at the same level within the organisation and both reporting to Mr Massam. According to Mr Katin “this amounted to an effective demotion” 4;

● alleging, without any evidence, that the Applicant performed work for his private photography business when he was supposed to be working from home and that he was resistant to direction;

● providing him with unreasonable directions which amounted to a significant diminution in his autonomy and responsibility. These directions were consistent with the Employer’s intention to “performance manage” him until he had no option but to resign.

[33] As a result of the Employer’s conduct, the employment relationship deteriorated to the extent that Mr Katin felt he had no option but to resign. Accordingly, Mr Katin was “constructively dismissed”.

EMPLOYER’S CASE

[34] The Employer submits that, objectively assessed, its course of conduct was not one where the probable result was that Mr Katin would have no choice but to resign.

[35] The course of conduct of which Mr Katin complains is ether denied or reasonable to facilitate the achievement of agreed business objectives.

[36] SJAA disputes that the relationship had deteriorated to such an extent that Mr Katin had no option but to resign. A number of options, other than resignation, were available to Mr Katin but he chose on 25 June 2013 to resign voluntarily.

REPRESENTATION

[37] Mr Katin’s application on 16 July 2013 was made and signed by a “solicitor for the Applicant”.

[38] On 31 July 2013, the Applicant’s legal representative sought an adjournment of the conciliation conference listed for 22 August 2013.

[39] At the conciliation conference on 13 August 2013, Mr Katin had legal representation. The Employer was represented by its Human Resources Manager.

[40] The application was not resolved at conciliation and Mr Katin’s legal representative advised the Commission that the Applicant requested that the matter be referred to arbitration. With the same notice to the Commission, Mr Katin’s legal representative ceased to act.

[41] In his letter of resignation Mr Katin advised the Employer that he had taken legal advice before submitting his resignation.

[42] Significant parts of Mr Katin’s submission are a direct lift from the legally prepared application. Furthermore, Mr Katin also refers, in his submission, to decisions of the Australian and New South Wales Industrial Relations Commissions.

[43] It is clear from the evidence that Mr Katin obtained legal advice or assistance before resigning in making the application and at the conciliation conference. Contrary to many unrepresented applicants, he is relying on a number of precedent cases in support of his assertion that he was constructively dismissed. In relation to precedent cases, he relies, in conclusion, on Denning MR in Western Excavating (EEC) Ltd v Sharp (1978) ICR 221 (Sharp).

[44] Mr Katin opposed SJAA being legally represented in the hearing on the grounds that: it is a large organisation with a “surplus” of $16m; it has a discrete Human Resources department which deals with workplace issues; the fact that he was represented at the conciliation conference is irrelevant, and as a person who has no experience in hearings before the Commission, it would be unfair for the Commission to grant permission for legal representation.

[45] I put it no higher than this, but Mr Katin has created the impression, by his own extended actions, that this matter is of such complexity and importance that legal advice and assistance is required. Having requested the matter proceed to arbitration, Mr Katin now opposes the Employer having legal representation.

[46] Having considered submissions of both parties, the circumstances and complexity of the matters raised, in particular, Mr Katin’s assertion that there was a repudiatory breach of his contract of employment by SJAA, I formed the view that, in terms of efficiency, leave should be granted to Mrs Reid to appear on behalf of the Employer pursuant to paragraph s.596(2)(a) of the FW Act.

CONSIDERATION

[47] Mr Katin alleges that the Employer conducted itself in a manner intended to destroy the employment relationship. In particular, Mr Katin refers to his meeting with Ms Sonnadara on 30 May 2013.

[48] In the meeting on 30 May 2013, Ms Sonnadara directed Mr Katin to cease working from home and attend the workplace during business hours unless visiting clients. Ms Sonnadara also requested him to advise her when he was visiting those clients. Finally, Mr Katin was requested to provide greater detail in his weekly reports, maintain all documentation relating to client sales and agreements and follow up strategies identified by Ms Sonnadara to increase clients and business opportunities 5.

[49] Mr Katin considers these “directions” as unreasonable and a significant diminution in his autonomy and responsibility.

[50] Every workplace comes with different types of managers and styles of managing.

[51] For those employees who work from home for a significant portion of their employment, they will argue, as Mr Katin did, he was more productive and gave him autonomy over his work time. However, Mr Katin needs to consider that the Employer also has priorities which, in this case, were to ensure that Mr Katin did not become disconnected from business imperatives and opportunities which arise by being physically together in the workplace.

[52] Mr Katin, in his written submission states that his previous supervisor before Mr Massam, and Mr Massam, advised him that he could perform part of his duties from home if he chose to do so. Mr Katin found the office environment not conducive to the efficient performance of his duties and consequently worked from home.

[53] In cross examination, Mr Smith gave evidence that no other person was working from home on a permanent basis. While there is scope within SJAA to approve working from home on an ad hoc basis, there have been no instances of a permanent arrangement 6.

[54] Being required to attend the workplace certainly reduced Mr Katin’s autonomy of work time, but I do not consider it an unreasonable direction of the Employer. I do not consider it unreasonable particularly when, it is written into his contract of employment and Position Description that his location of employment is the Belmont State Office of SJAA.

[55] When Mr Smith had Mr Katin report to him after Mr Massam ceased employment, he was unaware that Mr Katin was working from home, had no concerns about his performance and had no intention of performance managing him. 7 This oral evidence was not contested in cross examination.

[56] Ms Sonnadara’s written evidence is emphatic that she was not instructed by Mr Smith to performance manage Mr Katin or to performance manage him out of the organisation. This evidence was not disturbed in the hearing.

[57] With respect to Ms Sonnadara requesting Mr Katin to provide detailed reports and follow up business opportunities and strategies, I do not consider these directions to be unreasonable. While most employees do not like being micro-managed, essentially Ms Sonnadara was asking for more information concerning business strategies and opportunities. Importantly, I note that in Mr Katin’s 2012 Performance and Development Review dated 12 January 2013, he makes the comment, “there is obviously room for improvement, particularly as there is a requirement for more detailed reporting” 8.

[58] In summary, the directions of Ms Sonnadara were not exceptional. In my view, they fall within a band of reasonable managerial direction.

[59] Advising Ms Sonnadara, as his supervisor, of his whereabouts is also unremarkable. Many employees have different means by which the organisation knows where individual employees are. It is not only a matter of courtesy, but also an essential safety strategy especially in relatively large organisations. I do not consider the Employer’s actions unreasonable or a significant diminution of Mr Katin’s autonomy and responsibility.

[60] I now turn to the issue of whether Mr Katin was “effectively demoted”.

[61] Following the resignation of Mr Massam, all of his direct reports were required to report to Mr Smith. There is nothing unusual in such arrangements. Mr Katin reported directly and met weekly with Mr Smith for approximately seven (7) weeks.

[62] On 28 May 2013, Mr Smith advised Mr Katin that he was unable to meet with him that particular week. On 28 May 2013, due to operational reasons and a three (3) week overseas business trip, Mr Smith advised Mr Katin:

“With your objectives now better defined and a weekly activity report in place, I would like you to start formally reporting to Rathini [Ms Sonnadara] from this week including during the times we had set up each Thursday. It is very important that we are able to bring together your business development activities with the broader FAST work that Rathini is overseeing for me and this change in reporting lines will assist in that requirement. Rathini will remain your manager until Jane Mahon commences with us on 15th July after which your permanent reporting line will be determined by Jane. I will continue to receive updates and reports on your business development activities via Rathini in my regular meetings.” 9 (my emphasis)

[63] Mr Katin does not assert that he was “demoted” by the Employer. It would be wrong to make such an assertion. Mr Katin was not reduced to a lower classification such as “Team Leader”, “Consultant” or “Administrator”. Nothing changed with regard to his role, responsibilities or employment conditions. What changed was simply for a period up to at least 15 July 2013, and until Ms Mahon, the incoming General Manager determined otherwise, he would report to Ms Sonnadara.

[64] The Employer’s arrangement relating to Mr Katin was not an “effective” demotion; it was a temporary organisational arrangement. An arrangement which most probably occurs somewhere in Australia every week in the workplace. For this reason, I am unable to agree with Mr Katin that this action by the Employer was, in part, or cumulatively intended to destroy the employment arrangement.

[65] Mr Katin asserts, even though Mr Smith’s email is clear, he subsequently received correspondence from Ms Jeffery, on behalf of the CEO, that he now reports to Ms Sonnadara permanently. Further, this is confirmed in the contents of a “Change of Conditions/Position Form”. These documents by themselves do give the impression, as Mr Katin asserts, that the change in reporting arrangements was permanent and Mr Katin reports to Ms Sonnadara.

[66] However, the documents have to be read in the context of the email of 28 May 2013 sent directly to Mr Katin from Mr Smith. The Employer’s Human Resources Department appears to have treated the temporary reporting change as a routine administrative transaction without a knowledgeable appreciation of what actually had occurred. Having considered both documents in context, I am satisfied that the temporary reporting arrangements for Mr Katin were not displaced by the CEO’s correspondence or the Change of Conditions/Position Form. For these reasons, notwithstanding some sloppiness by the Employer’s Human Resources Department, I find that Mr Katin was not demoted or “effectively” demoted but subject to a temporary reporting arrangement which was reasonable in the circumstances.

[67] I now turn to Mr Katin’s assertion that his salary package remained unchanged following the Employer’s 2013 Salary Review. Mr Katin’s contract of employment states that his remuneration is subject to examination through the Employer’s annual salary review process. This was done. While the outcome did not meet Mr Katin’s expectations, that does not automatically lead to the conclusion that the Employer was trying to “performance manage” him out of the organisation. In cross examination, Mr Katin agreed that he received a remuneration increase of 10% in the 2012 Salary Review. In context, I am unable to conclude that the Employer’s actions were unreasonable or that it was intended to destroy the employment relationship.

[68] Mr Katin asserts that he was unable to work under Ms Sonnadara’s management style and this is demonstrable of the SJAA no longer wanting him to work in the organisation. The reality is that “the boss is the boss”. I sense that Mr Katin is critical of Ms Sonnadara because she required him to work in the Belmont State Office, requested him to advise her when he is leaving the Office, and finally, requiring more detailed reports. I have already addressed these issues above and note Mr Katin’s written evidence that:

“The weekly meetings with Ms Sonnadara were uneventful, apart from being asked what I had been working on and I continued to keep my concerns to myself.” 10

[69] While Mr Katin does not specify what his concerns are, he is holding Ms Sonnadara accountable for her management style but not prepared to communicate to her information which may be useful in abating those concerns. Having considered the evidence, I am unable to accept the proposition that Ms Sonnadara’s management style was a factor demonstrating that SJAA no longer wanted Mr Katin to work for the organisation.

[70] I now turn to the issue of whether Mr Katin had no option but to resign.

[71] Firstly, Mr Katin concedes that, on 25 June 2013, Mr Smith stated at the 11:00 am meeting that “it was all a misunderstanding and he [Mr Smith] wanted me to stay” 11. Mr Smith denied that the organisation wanted to “performance manage” him out of the organisation12.

[72] Mr Katin’s evidence is that, “I realised after a short amount of time that nothing had changed or was likely to change and after talking to my wife and my legal adviser I arranged...for another appointment [with Mr Smith] that same day” 13.

[73] Mr Katin could have taken the time to work through with Mr Smith the various “misunderstandings” but instead chose to resign and allege he was constructively dismissed.

[74] Secondly, Mr Katin’s contract of employment refers to the need to comply with policies which the Employer has in place. One such policy is entitled “Conflict Resolution”. The Conflict Resolution Policy outlines procedures to address and resolve conflict or grievances in the workplace. It is not necessary to detail the procedures but to state that complaints are treated confidentially and that employees are encouraged to resolve matters as soon as possible.

[75] Mr Katin chose not to engage in this written complaint/grievance/conflict policy, but resigned instead.

[76] Thirdly, if it was Ms Sonnadara’s management style that was a determinative factor in his reason why he resigned, Mr Katin could have waited until Ms Mahon took up her position as General Manager on 15 July 2013. Mr Katin could have put his case to her why the temporary reporting arrangement should be discontinued and the organisation structure revert to that which existed when her predecessor, Mr Massam, was in the position. Instead of adopting that course of action, Mr Katin chose to resign.

[77] I now turn to the law as cited by the parties.

[78] The onus is upon Mr Katin to establish that he was forced to resign because of the course of conduct engaged in by SJAA.

[79] Recently, the Full Bench of the Commission in Kylie Bruce v Fingal Glen Pty Ltd (in liq) [2013] FWCFB 5279 (Bruce) summarised the applicable principles of whether the course of conduct by an employer forced an employee to resign. It is not necessary to set out all of the necessary principles in paragraphs [13] to [18] of the decision. However, I consider it useful to refer to two authorities cited in paragraphs [17] and [18] of Bruce as follows:

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

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

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

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

[80] Mr Katin referred me to the Sharp judgementin which The Master of the Rolls, Lord Denning reviewed the case law relating to constructive dismissal and with which Lawton and Eveleigh LL agreed. In particular, Mr Katin quoted the following from the judgement:

“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment; or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract; then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instance without giving any notice at all or, alternatively, he may give notice and say that he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once.”

[81] The paragraph referred to by Mr Katin above in Sharp continues:

“Moreover, he must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract.”

[82] In my view, the Employer did not act in such a way which indicated that it no longer intended to be bound by its contract of employment. The Employer’s conduct was consistent with the contract of employment, Position Description, normal administrative arrangements and comments which the Applicant made in his 2012 Performance and Development Review. Further, on the evidence, between 28 May and 25 June 2013, Mr Katin continued working under the changed arrangements and, in fact, Ms Sonnadara gave broadly positive feedback to Mr Smith.

[83] In Sharp, Lord Lawton states:

“For the purpose of this judgement I do not find it necessary or advisable to express an opinion as to what principles of law operate to bring a contract of employment to an end by reason of an employer’s conduct. Sensible persons have no difficulty in recognising such conduct when they hoar (sic) about it.”

CONCLUSION

[84] In conclusion, I find that Mr Katin was not being “performance managed” out of the organisation. In find, for legitimate reasons, that the Employer implemented a temporary, not permanent, reporting structure. I find that the changes to Mr Katin’s working arrangements were reasonable and based on organisational requirements. In short, applying MR Denning’s test, the Employer’s actions were not sufficiently serious to amount to a significant breach of the essential terms of the contract of employment and which indicated it no longer wanted to be bound by the employment relationship. In fact, the opposite is true - the Employer wanted Mr Katin to remain employed by SJAA.

[85] Further, I find that Mr Katin had a number of options open to him rather than resign. However, he chose to resign.

[86] For the above reasons, an objective analysis of the circumstances, leads me to the conclusion that Mr Katin did not resign because he was forced to do so because of conduct or a course of conduct by the Employer. Simply put, on the facts presented, I find that Mr Katin resigned of his own volition on 25 June 2013. As a consequence of his employment not being terminated at the initiative of the Employer, the Applicant is not protected by the unfair dismissal provisions of the FW Act. Accordingly, the application must be and is dismissed as failing to meet the statutory requirement of s.385(a) of the FW Act. An order will issue to this effect.

COMMISSIONER

Appearances:

N Katin, the Applicant on his own behalf.

K Reid of counsel for St John Ambulance Australia (Western Australia) Inc.

Hearing details:

2013:

Perth,

18 November.

 1   Exhibit A4(11)

 2   Exhibit R2

 3   Exhibit R2

 4   Exhibit A1

 5   Exhibit A2

 6   Transcript PN447

 7   Transcript PN387, PN388 and PN394

 8   Exhibit A4(12)

 9   Exhibit R6

 10   Exhibit A5

 11   Exhibit A5

 12   Exhibit R2

 13   Exhibit A5

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