Mrs Denise Heading v D & J Penny atf Penny Trading Trust T/A Bryce's Bakery

[2014] FWC 4772

[2014] FWC 4772

FAIR WORK COMMISSION

DECISION

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

Mrs Denise Heading
v
D & J Penny atf Penny Trading Trust T/A Bryce's Bakery
(U2014/431)

COMMISSIONER STEEL ADELAIDE, 16 JULY 2014

Termination of employment - Jurisdiction - Whether applicant dismissed.

Overview

[1] This is an application by Mrs Denise Heading (the applicant) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act). The respondent is The Trustee for Penny Trading Trust trading as Bryce’s Bakery. This decision is in respect to the jurisdictional objections raised by the respondent.

Relevant submissions

[2] The respondent initially pressed various jurisdictional objections but ultimately in the proceedings submitted that: the applicant was not dismissed within the meaning of s.386 of the Act in that the dismissal was not at the initiative of the employer. They assert that the applicant resigned her employment by the implication of her text message to the respondent and her action of seeking a separation certificate from the respondent’s accountant.

[3] Further that the applicant agreed that she was, on her return to work from annual leave, to be a casual employee and that the employment relationship continued without termination and therefore no dismissal occurred. Further that hours of work were not offered initially at the time of the applicant’s return to work but that did not mean they would not be offered consequently.

[4] The respondent contends that if the Commission finds there was a dismissal in this matter, such dismissal occurred on 3 January 2014 and the applicant did not lodge the application until 14 February 2014, outside the twenty-one day statutory limit. The Commission should be so guided in this respect by the matter of Mihajlovic v Lifeline Macarthur. 1

[5] The applicant submits that clearly a dismissal occurred in that there was a conversion by the respondent of the applicant’s contract from part-time to casual. That casual employment in itself has no ongoing obligation on the part of the employer to provide employment. Thus they have terminated an employment relationship to one where they assert, they can at their discretion, choose to provide or not provide work.

[6] That the applicant was advised that her part-time employment would end after she had taken holidays and in fact that it took effect after her holidays. The applicant was a part-time employee, due to go on annual leave. She did not consider she had a choice. She took such leave without interruption and hence was a part-time employee when on such leave. Therefore the dismissal took effect at the conclusion of her leave and the application is within the statutory timeframe.

[7] The respondent ultimately did not provide any hours of work to the applicant as a casual or otherwise after her holidays. She was simply told “there are no hours for you.” The respondent therefore repudiated her part-time contract of employment.

[8] The applicant asserts that she did not agree to the conversion to casual employment and that on the evidence she was sent home and told she would be a casual when she returned. She further asserts the respondent also inferred that hours would be available to the applicant on her return to work. That did not occur.

[9] The issue of the text message by the applicant was in the context of a heated discussion that included the applicant’s daughter who was upset in support of her mother. The applicant was seeking to apologise for her daughter’s reaction to her situation. It was not in any way an indication of resignation. Similarly the separation certificate was sought and the applicant was directed to the accountant. It does not refer to a resignation but separation due to lack of work.

The law

[10] The Commission is instructed in this matter by the relevant case law in relation to s.386(1)(a) of the Act.

[11] In relation to the termination on the employer’s initiative involving a termination of the employment relationship, a full bench of the Australian Industrial Relations Commission (as it then was) in the matter of Searle v Moly Mines Limited stated:

“It is clear that the statutory test relates to termination of the employment relationship, not termination of the contract of employment.” 2

[12] As to the action of the employer causing the termination the full court of the Industrial Relations Court of Australia in the matter of Mohazab v Dick Smith Electronics Pty Ltd (No.2) found that:

“...a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship.” 3

[13] Their Honours further went on to state that:

“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.” 4

[14] The test for an employer repudiating the contract such as to render termination to be on the employer’s initiative was examined by a full bench of Fair Work Australia (as it was then known). Harrison SDP, Richards SDP and Williams C state in the matter of Elgammal v BlackRange Wealth Management Pty Ltd ACN 092 380 348 t/as Commonwealth Financial Planning:

“It is adequate for us to indicate that we accept that when considering whether an employer has repudiated the contract the test is not the employer’s actual intention, judged subjectively, but whether the conduct of the employer, judged objectively by reference to the effect on a reasonable person, evinced an intention to no longer be bound by the contract.” 5

The relevant evidence

[15] Both parties were represented. The applicant provided her evidence, the proprietors Mr Damian and Mrs Judith Penny provided evidence for the respondent as well as their accountant Ms Mosca and their son Mr Lincoln Penny.

[16] The Commission has had regard to all the evidence and considers all parties endeavoured to assist the Commission in their contributions.

The events leading to the separation

[17] Mr and Mrs Penny purchased the business Bryce’s Bakery from the former owner and took over the business on 3 March 2013. They had less than fifteen employees at the time of the applicant’s separation from the business.

[18] The applicant phoned Ms Mosca and asked for a separation certificate on 27 January 2014. Ms Mosca communicated with the respondent who appeared surprised but a certificate was provided to the applicant. The separation date was nominated as 24 January 2014 by the respondents and the reason filled in was “shortage of work.” The certificate referred to a past payment of accrued annual leave on 3 January 2014 to the applicant of $1056.00 on account of forty-three weeks service.

[19] The respondent’s evidence is that the former proprietor held a staff meeting on 1 March 2013 and advised employees that they were ‘eligible for employment with the respondents.’ The bakery closed that day and reopened under the direction of the respondents before the bakers started. 6

[20] The respondents did not offer new contracts of employment to the staff at that time or subsequently. The pay day was changed to a weekly incidence and the rates of pay were not changed. The respondents considered the hours of work were at their discretion.

[21] The employees some days later completed new tax declaration forms with the new employer. The employees remained on the previous rostered hours at this time. The applicant was working approximately twenty-three hours per week. The respondent did not issue payslips at this time but required signed time sheets from staff. The applicant was a recognised part-time employee engaged for a specified number of hours per week and worked on Mondays, Tuesdays, Thursdays and Fridays. 7

[22] The respondent asserts the applicant’s status changed from 3 January 2014, despite her going on annual leave from that date until 24 January 2014 and her next usual day of work being 28 January 2014. The applicant was paid as a part-time worker whilst on leave. The respondent asserts the applicant was informed on 3 January of the change. The respondent asserts they applied the change to the applicant’s hours because she was not always available and she was comparably unskilled on the production of coffee despite being offered training.

[23] The respondent intended to speak with the applicant about her hours as a casual, rates of pay and conditions but did not roster or provide hours to the applicant at the recognised time of her return from annual leave. They also did not communicate or speak to her during her annual leave despite the circumstances of her departure on leave.

[24] The applicant was informed by text on 25 January 2014 that she had no shifts that week and “to talk to Damian” (Mr Penny).

[25] The applicant called the respondent and there was an altercation between a relative of the applicant and Mrs Penny. The applicant subsequently apologised for this occurrence. Mrs Penny, though aware that the applicant did not have Mr Penny’s phone number, did not provide it to her.

[26] Mrs Penny states she did not subsequently know the applicant had left employment until she was advised of this by her accountant Ms Mosca.

[27] Mrs Penny contends that in a heated conversation between the parties on 3 January at the worksite that she advised the applicant “because of the hours issue we would like you to come back as casual” and she replied “OK,” hence she agreed to the change. 8The respondent accepts there was a transmission of business from the former owner and asserts that some employment provisions were paid out to employees by the former owner.9

[28] Subsequent to taking over the business Mrs Penny had observed some issues of concern in regard to the applicant’s performance. She asserts the applicant received four verbal warnings. On 3 January Mrs Penny determined because business was quiet that the applicant be sent home early. The applicant reacted because she perceived a cut to her hours being applied to her.

[29] Mr Penny asserts he intervened in this conversation and stated to the applicant that he would take care of the payment for the hours issue and Mrs Penny then advised the applicant that “you will return on casual hours.” 10

[30] Mrs Penny accepts the situation at that time was emotional and heated and claims the applicant had screamed at her. 11

[31] On 25 January 2014 Mrs Penny sent the applicant a reply text to a message from her enquiring about work hours. The text indicated to the applicant “no shifts for next week. Any queries concerning this matter need go directly to Damian” (Mr Penny). 12

[32] Mrs Penny denies telling the applicant in the phone call “don’t you get it there are no hours for you” and also to go to the accountant for the separation certificate. 13

[33] Mrs Penny asserts that staff were paid out their entitlements by the previous owner but does not know what was paid. Mrs Penny also asserts that on 25 January 2014 she told the applicant in frustration that “I just don’t think there is a position here.” 14

[34] It is therefore not in contention that the applicant was employed since 2007 and was transferred in the business sale. Some employment provisions being paid out by the previous owner and hence are not in contention. However in a transmission of business previous service is recognised by the new employer. 15

[35] The applicant asserts she felt intimidated in the conversation on 3 January 2014 when she was told she was going home early. The applicant protested her hours as she had previously been sent home early that week. The applicant asserts that on this occasion Mr Penny did not speak to her and Mrs Penny told her that when she came back from leave she would be a casual. The applicant said she replied “OK” to acknowledge what was being told to her. 16

[36] The applicant accepts she was to remain employed and on 25 January 2014 she called in to work and observed there were no hours on her roster. She later messaged Mrs Penny and received a reply text regarding “no hours this week” and for her to speak to Damian as previously mentioned above.

[37] The applicant later phoned Mrs Penny and again was told amongst other comments “don’t you get it, there are no hours for you.”

[38] Mrs Penny, in her statement, asserts she said to the applicant in this conversation “I just don’t think there is a position for you.” 17

[39] This was put to the applicant in cross examination by the respondent. 18 The applicant did not seem to accept this as being accurate at that time. In her statement the applicant asserts Mrs Penny said “Don’t you get it? There is no work for you.”19

[40] The applicant denies ever resigning from the business at anytime.

Consideration

[41] This matter concerns the existence or otherwise of a dismissal or termination of employment at the instigation of the respondent.

[42] It is not in contention that at the time the respondent took over the business of Bryce’s Bakery the applicant was translated in employment and became an employee of the respondent with continuous service in excess of seven years.

[43] The applicant was a permanent part-time employee proceeding on annual leave from the end of work on 3 January 2014. Her next normal rostered day of work after completion of annual leave would have been 28 January 2014. It is not in contention the applicant proceeded on annual leave and was paid annual leave pay.

[44] From a consideration of the evidence the Commission finds that the applicant was advised by the respondent on 3 January that she was to become a casual employee on her return from leave. The respondent parties, Mr and Mrs Penny differ in their evidence as to the factual conversation that is determinative as to whether the applicant was requested to become casual or was directed to be a casual. The applicant’s evidence is in this circumstance supported that she was told she was to be casual on her return.

[45] The respondent therefore has made a unilateral change to the contract of employment of a part-time employee without consultation or notice and in circumstances that were upsetting to the applicant in that she was to be sent home early to proceed on annual leave and she had contemplated she would in effect lose hours and pay.

[46] The evidence of the respondent is that the applicant by saying “OK” on the above occasion agreed to a change in her contract of employment and the change to casual employment on return from leave. The applicant denies doing so but asserts she was acknowledging the conversation. In the context of the facts that subsequently occurred the applicant did not pursue her work hours or any detail until after her annual leave and the respondent did not initiate communication with her at any subsequent occasion.

[47] On the evidence provided and the Commission’s general assessment of the parties I have concluded that the applicant did not indicate agreement in her response to the respondent on 3 January 2014. The applicant is unlikely to have accepted at that time such a surprising and unilateral change to her employment that had been continuous for several years to a status of casual with no detail as to the terms and conditions of that status.

[48] When the applicant returned from annual leave she sought information as to her hours of work available. The respondent’s inertia and lack of responsiveness to a long term employee indicates to the Commission that they had no intention of providing hours of work to the applicant and they did not do so. The applicant was not included in any rosters while on annual leave and after such leave.

[49] The comments made by Mrs Penny to the applicant on 25 January 2014 are significant and partly contentious. However in content they confirm the text message in regard to no hours being available to the applicant. They also confirm the position of the respondent that there was not a position for the applicant. They underline the respondent was not providing hour of work, either part-time or casual, to the applicant from 25 January and they also confirm that the respondent considered the employment relationship at an end.

Conclusion

[50] The respondent by their actions has unilaterally changed the applicant’s contract to that of a casual employee effective 25 January 2014 and has not supplied hours of work. The contention that the applicant continued to have an employment relationship as a casual by the respondent is rejected. Within the above factual scenarios it contemplates that a continuous service part-time employee can be unilaterally reduced to some status as a casual, not supplied with hours of work, hence no employment, and the respondent can rely as a defence that the employment relationship continues. The Commission finds that not supplying hours and considering the applicant to be casual is a pretence and a non-utilisation of the applicant to render her devoid of rights in the workplace. Just as the applicant’s contract of employment came to an end with their actions, the Commission finds the respondent repudiated the contractual relationship with the applicant and brought the relationship to an end when they failed to supply hours or communicate with their employee as to available work and conditions of employment. These actions constitute termination of employment by the acts of the employer.

[51] Accordingly the Commission finds the applicant was dismissed from her part-time employment from 25 January 2014. This application is therefore within time. The dismissal was at the instigation of the respondent and they repudiated the applicant’s contract of employment to a nullity with no work provided. The applicant accepted this repudiation.

[52] This matter is therefore within jurisdiction of this Commission and shall proceed to arbitration on the merits of such dismissal as has been identified.

COMMISSIONER

Appearances:

Mr K Gluche for the applicant

Mr A Duc for the respondent

Hearing details:

2014:

Adelaide

18 June

 1   [2014] FWCFB 1070

 2 (2008) 174 IR 21 at para 22

 3 (1995) 62 IR 200 at 205

 4   Ibid at 205-206

 5   [2011] FWAFB 4038 at PN [13]

 6   PN 140

 7   PN 216

 8   PN 512-518

 9   PN 379

 10   PN 332-339

 11   PN 541

 12   PN 542

 13   PN 571

 14   Exhibit R6 at para 21

 15   PN 677

 16   PN 723

 17   Exhibit R6 at para 21

 18   PN 744

 19   Exhibit A1 at para 36

Printed by authority of the Commonwealth Government Printer

<Price code C, PR553201>