Mrs Sharon Parsons v Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust T/A Pope Nitschke First National

[2015] FWC 8090

[2015] FWC 8090 [Note: An appeal pursuant to s.604 (C2015/7649) was lodged against this decision - refer to Full Bench decision dated 11 March 2016 [[2016] FWCFB 375] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Mrs Sharon Parsons
v
Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust T/A Pope Nitschke First National
(U2014/13331)

COMMISSIONER WILSON MELBOURNE, 4 DECEMBER 2015

Application for relief from unfair dismissal.

[1] Sharon Parsons was employed as a real estate agent by Pope Nitschke Pty Ltd which operates a real estate business in Mount Barker, South Australia, and trades as Pope Nitschke First National.

[2] Ms Parsons’ employment with Pope Nitschke finished in October 2014 and, on 17 October 2014, Ms Parsons made an application for an unfair dismissal remedy to the Fair Work Commission (FWC). The matter has had a lengthy history. After a first conciliation in the matter was not productive, it was listed for hearing initially in January 2015. Further conciliation by an FWC Member was attempted on two further occasions in March and September 2015, however those endeavours were also not successful.

[3] Ms Parsons contends that a course of conduct by the Respondent meant that she was left “with no alternative but to resign her employment”. 1 It is then argued that, in all circumstances, this was a dismissal and an unfair one at that, with Ms Parsons seeking compensation as her relief for a finding of unfair dismissal.

[4] The course of conduct said to have been engaged in by the Respondent against Ms Parsons includes a direction for her to commence long service leave (LSL) from a date slightly more than 60 days after the giving of the notice. The notice, dated 7 August 2014, required her to take 109 days, or 15.6 weeks, LSL from 6 October 2014. 2 While such notice is permitted under the relevant legislation, the circumstances of Ms Parsons’ contract of employment are such that she believed she would have no new earnings, and therefore no income, during the period of leave, and that once she returned to work after the leave she would have no commission income for a considerable period as well.3

[5] For the reasons set out below, I find that Ms Parsons was not dismissed within the meaning of the Fair Work Act 2009 (the FW Act) and accordingly her application for unfair dismissal remedy must fail.

BACKGROUND

[6] Part of the dispute between the parties involves a question of how long Ms Parsons was employed by Pope Nitschke, or by an entity directly related to it.

[7] Ms Parsons contends that she was employed by a company named Korsten Pty Ltd, trading as Nitschke First National, in January 2002. 4 Her evidence is that she remained employed by that entity until 20 January 2006. Further, her evidence is that after January 2006 her employment continued with another company, being the Respondent in this matter, Pope Nitschke Pty Ltd. Ms Parsons’ evidence is that the two entities shared the same registered address and at least one common director, being Mr David Nitschke.5 She therefore regards herself as having been employed continuously since January 2002.

[8] For its part, the Respondent claims Ms Parsons was employed by it only since “around February 2006”. 6 Mr Nitschke’s evidence on the subject notes that the Respondent company was formed by him and another real estate agent, Mr Darren Pope, in February 2006 and that the business has traded as First National Pope Nitschke since that time.7

[9] It is unnecessary for the purposes of this matter, and for the reasons that follow, to resolve the conflict between the parties on the subject of the starting date of Ms Parsons’ employment.

[10] The conflict between the parties that lead to the end of Ms Parsons’ employment in October 2014 had been developing for some months and related significantly to the continued operation and contents of a Collective Agreement that applied to the workplace.

[11] The relevant agreement is the Pope Nitschke First National Employee Collective Agreement, 8 (the Collective Agreement) and was the subject in 2014 of an application for its termination supported by a number of employees bound to it, including Ms Parsons.9 That matter is referred to as the Agreement Termination Case. The application was contested by Pope Nitschke and was heard before Commissioner Hampton, who granted the application in a decision given on 8 September 2014, with the agreement being terminated with effect from 7 December 2014.10

[12] One issue in the Agreement Termination Case was the effect of the Collective Agreement payment to be made to employees during LSL.

[13] Ms Parsons was remunerated during her period of employment at Pope Nitschke entirely on the basis of percentage-based commissions earned in relation to sales she achieved.

[14] LSL is provided for in the Collective Agreement, with employees to be provided with “[w]hatever is specified in the applicable State legislation”, with certain modifications, namely the cashing out of leave, including for pro rata accrued leave, once seven years’ service has been completed, and a stipulation that leave, when taken or cashed out, will be “paid at your basic rate of pay. 11 While there is some level of uncertainty on the subject, the Collective Agreement prescribes that commission-only salespeople are entitled to LSL payments based on their “basic rate of pay” calculated in the same way as for annual leave. There is also uncertainty about what might be the “basic rate of pay”, with Commissioner Hampton noting that its meaning, in relation to annual and personal leave, was not immediately clear. 12

[15] Ms Parsons understood the terms of the Collective Agreement to mean that when she took LSL, and in the absence of an agreement by her to cash out the entitlement, she would be paid only the basic rate of pay, being calculated in the same manner as annual leave, which she understood to be a payment that would be ultimately debited back against her sales commission earnings. In effect, she understood this to mean that her remuneration with Pope Nitschke was entirely derived from sales commissions which could then be spread, through a debit and credit system, to periods in which sales commissions were not earned, such as during annual leave and LSL.

[16] The Agreement Termination Case was heard during July 2014, with further submissions on 3 September 2014 and the Commissioner’s decision was published on 8 September 2014.

[17] On 7 August 2015, Pope Nitschke wrote to Ms Parsons directing her to take LSL, with the direction being in the following terms;

“Ms S Parsons
[address]

RE: Long Service Leave

Dear Sharon,

As you have been an employee of First National Real Estate Pope Nitschke for a period of twelve years, you are entitled to 109 days (15.6 weeks) long service leave. In accordance with the Long Service Leave Act Version 1.1.2010, section 7 (3), this letter serves as 60 days notice that you are to take your long service leave commencing Monday the 6th of October 2014.

You are also entitled to receive payment in lieu of Long Service Leave, which we would be prepared to discuss with you.

Regards,

(signed)

David Nitschke & Darren Pope” 13

[18] Ms Parsons apprehended this direction would cause her significant financial difficulty, saying the following in her witness statement;

“54. Had I not sought other employment I would have had no income from at least 25 November 2014 until perhaps late May 2015.

55. Even returning after 15.6 weeks absence, new clients would then have to be found, the properties then listed, advertised, shown, sales negotiated, finance approved or conditions met and then settlement achieved before I would receive any income while having missed the key listing season. Mr Nitschke told a staff meeting on 17 September 2014 “Between now and the end of the year is a busy time to get your listings to carry you through January”.” 14

[19] Ms Parsons objected to the direction and, through an application dated 11 August 2014, sought the Commission deal with her objection in accordance with the dispute settlement procedure of the Collective Agreement. The relief sought by Ms Parsons, as indicated in the application form, was a request for a binding order on the Respondent that it withdraw its direction to proceed on LSL. In the alternative, Ms Parsons sought orders that would either have her paid an ordinary weekly rate of pay that would not be subject to the debit system or have the direction delayed until at least 90 days after the matter was dealt with by the Commission; or, in the further alternative, to have her paid in advance for the period of leave, with the calculation to be consistent with a manner set out within the Long Service Leave Act 1987 (SA) (the LSL Act). 15

[20] The Commission dealt with the matter in conferences held on 3 and 15 September 2014, also convened by Commissioner Hampton, however the conferences were inconclusive, with Ms Parsons’ evidence being that the Respondent argued that it could not be compelled to participate and did not. 16 Whether as a result, or unrelatedly, Pope Nitschke’s direction to Ms Parsons for the taking of LSL from early October 2014 stood unaltered.

[21] Ms Parsons alleges Mr Nitschke initiated a conversation with her on 12 August 2014, in which he made statements of a threatening nature to her, including that he didn’t “want to have anything to do with” her; that “[w]e are going to make it very difficult for you”; “[y]ou can go and tell Andrew Knox but I’m going to make it hard for you”; and “[y]ou need to think about leaving”. 17 Ms Parsons also says that when she explained why she had involved Mr Andrew Knox in the matter, who was her representative, from Cognisage Australia Industrial Relations, Ms Parsons claims Mr Nitschke swore at her saying she could have brought the matter to him or his business partner, Mr Pope.18

[22] Mr Nitschke denies speaking these words to Ms Parsons, or words to similar effect, and puts a different, more benign, perspective on the conversation – one in which he expresses annoyance that Ms Parsons had not spoken to him or his business partner about her grievances, but instead pursued a dispute notification. Mr Nitschke’s evidence is that he said to Ms Parsons that he was “disappointed in the way she had handled the situation because it was bad for our working relationship”. 19

[23] On 15 August 2014, Mr Andrew Knox, acting for Ms Parsons, drew the things alleged to have been said to Ms Parsons by Mr Nitschke to the attention of Mr Kidman of Crawford Legal, the Respondent’s solicitors, by way of written correspondence. 20

[24] Despite having been directed to take LSL from Monday, 6 October 2014, on 26 September 2014, Ms Parsons noticed she had been rostered normally on an internal roster, as if she would not be on leave.

[25] Monday, 6 October 2014 was a public holiday in South Australia and so for practical effect the parties have proceeded on the basis that the LSL direction would operate from Tuesday, 7 October 2014. 21 In any event, Ms Parsons attended for work as normal on Tuesday, 7 October 2014. Later that day, Mr Kidman drew the situation to the attention of Mr Knox with the following communication, which opens with a reference to the dispute resolution conference held before Commissioner Hampton on 15 September 2014;

“Ms Parsons' position at the conference was that the direction to take leave must be withdrawn. While my client was prepared to continue discussions with Ms Parsons and seek an agreement in relation to her terms of employment after 7 December 2014 that also encompassed a settlement of the long service leave issue, Ms Parsons insisted that the requirement to take leave be withdrawn. My client did not agree to that. At the end of the conference, you said that Ms Parsons had no alternative other than to seek an injunction against our client.

My client has proceeded on the basis that unless Ms Parsons took some other step to resist the requirement that she take long service leave, her leave would commence on 7 October 2014 as directed. Our client was entitled to proceed on that basis and Ms Parsons has taken no further steps to resist the requirement that she take long service leave. However, I am instructed that Ms Parsons attended work today. When questioned why she was at work when she was required to be on long service leave, Ms Parsons responded by saying that you informed her that the requirement to take leave has been withdrawn or rescinded.

There has not been any withdrawal of the requirement to take long service leave.” 22

[26] The correspondence sought a response by the end of the following day, 8 October 2014.

[27] The response from Mr Knox, on behalf of the Applicant, set out the following;

“As your client, of its own free will, chose to continue to roster our client for duty we are entitled to accept that roster as clear rescission of the notice issued to our client, under Section 7 (3) of the Long Service Leave Act 1987. Our client has clearly never wished to tab her long service leave at this time.

In any event, we accept the recision [sic] of that notice and bind your client to it.” 23

[28] The evident impasse between the two parties continued over the course of the week with each making allegations about the behaviour of the other. In relation to Mr Knox’s contention that the rosters circulated with the inclusion of Ms Parsons on it amounted to a rescission of the instruction to proceed on LSL, the solicitors for Pope Nitschke provided the following unequivocal advice to Mr Knox and thereby to Ms Parsons;

“My client does not accept the explanation that you provided for Ms Parsons attending work this week. I am instructed that the roster for work on the desk is ordinarily drawn up by the receptionist without reference to the directors and that she was unaware that Ms Parsons was scheduled to take leave. Quite simply, inclusion on the roster was an error and Ms Parsons ought either to have understood that or approached one of the directors for clarification. I make the point that if Ms Parsons had been rostered to work during, say, a period when she was scheduled to take annual leave, it would have been reasonable for her to infer a mistake rather than conclude that her leave had been cancelled without reference to her. In short my client finds the explanation that you have provided to be disingenuous. In that regard, I am instructed that it is not an explanation that Ms Parsons gave when Mr Pope spoke with her earlier this week.

To be very clear, there has been no withdrawal of the requirement to take long service leave either express or implied. The direction to take leave stands. Although my client does not accept the explanation that Ms Parsons provided, through you, for presenting at work, it will in the circumstances defer the requirement to take leave until Monday, 13 October 2014. She must commence leave that day although, if she prefers, my client will consider a “cash out” of the value of the leave. My client maintains that it is entitled to apply a debit in respect of the value of the leave.

I am instructed that if Ms Parsons does not accept the direction take leave, my client will view that as a serious disciplinary issue” 24

[29] In response to the correspondence and shortly after receiving it, Mr Knox communicated to Mr Kidman, for the Respondent, that Ms Parsons would not be forced into unpaid leave and that she would attend for duty as rostered. On 13 October 2014, Ms Parsons was provided with correspondence by Mr Nitschke and Mr Pope who advised her that if she considered the direction to take LSL to be unlawful or unreasonable, she had a responsibility to take constructive steps about her objection as an alternative to a plain refusal to accept it. The correspondence advised that the Respondent viewed seriously Ms Parsons’ refusal to accept the direction and take LSL, and as a result it would decide how to respond. The letter advised her that while the Respondent was considering its position, she was directed not to attend the office until further notice. It also set forth a proposal for Ms Parsons to consider while it considered its own position. That proposal was in the following terms;

“Proposal

As we understand, you have two concerns about the requirement to take leave. First, you are concerned about not being involved with selling activities during the period of leave. Second you are concerned about our expressed intention to apply a debit in respect of the value of leave according to our interpretation of the Collective Agreement that applies to our business.

In relation to the first of these concerns, we would agree to cash out the value of your leave if you request that. In relation to the second of your concerns, you could take your leave or cash it out while reserving your right to bring a legal claim based on any alleged breach of the Collective Agreement or the Long Service Leave Act that you believe has occurred. In other words, we would not treat the taking of long service leave or cashing it out as involving a concession by you in relation to your rights.

We ask for your response to our proposal by midday on Wednesday, 15 October 2014.” 25

[30] The reply to Pope Nitschke from Mr Knox, on behalf of Ms Parsons, pointed out that, by being instructed not to attend her place of work, Ms Parsons was denied the ability to work and earn an income. The correspondence sought that, the same day, Pope Nitschke rescind its direction not to attend work. 26 As an alternative, Mr Knox put forward that Ms Parsons ought to be allowed to work from home.

[31] Such proposition was not agreed to by Pope Nitschke, who refused to rescind its direction to Ms Parsons not to attend work. The company’s correspondence, dated 14 October 2014 also set forth that it would deem Ms Parsons to actually be on LSL from that point;

“Our client has not claimed that Ms Parsons ought to have taken action to restrain our client. At the conclusion of the conference before Commissioner Hampton, it was you who in very clear terms foreshadowed that there would be an application for an injunction. That was a very clear indication on behalf of Ms Parsons that the dispute about the direction to take long service remained unresolved and she intended to press her position in further legal proceedings. We do not accept that it was either necessary or appropriate for Ms Parsons to seek injunctive relief, nor that there would have been any reasonable basis for that. Our client’s complaint against Ms Parsons is that having clearly signalled that she wished to press her position, she did not do anything.

Our client does not rescind its direction to Ms Parsons not to attend work.

Now that it is clear that Ms Parsons does not wish to accept our clients proposal, nor apparently engage in any discussions, our client’s position is that Ms Parsons must now take her long service leave in accordance with the position set out in the writer’s email of 10 October 2014. We are instructed that our client will henceforth continue to proceed on the basis that Ms Parsons is on long service leave. So that there can be no uncertainty about the requirement to take leave, our client directs Ms Parsons to not undertake any work. In keeping with that direction, our client will not provide normal remote access to the computing system. Nor will our client provide the other items referred to at the end of your letter.

If there are any items of personal property that Ms Parsons requires, please let us now (sic).” 27

[32] On or around that point, being 14 October 2014, Ms Parsons formed the view that her employment by Pope Nitschke had come to an end. She had been told not to attend work and not to undertake work. She had been told that she was considered to be on LSL; and, on 16 October 2014, she received an email from Mr Pope seeking the return of various things that were the property of Pope Nitschke as well as advising her about her forthcoming pay situation. That email set out the following;

“Hi Sharon

Could you please as a matter of urgency returned to the office any files, keys or documentation
You may have at home for us to continue looking after these properties
In particular [address] and [address]

We can arrange for someone to pick them up if that is more convenient
Additionally pays have been done today and i will forward to you your payslip and our calculations
To LSL shortly

Regards,

Darren Pope
Director” 28

[33] On 17 October 2014, Ms Parsons made an application to the Fair Work Commission for an unfair dismissal remedy.

[34] The overall circumstances of this matter allow me to find that Ms Parsons’ employment ended between 14 and 17 October 2014. While her employment did not end through an explicit statement of resignation, the evidence leads to a finding, which I make, that Ms Parsons was not prepared to accept the LSL direction and withdrew from employment. There is not an explicit point or explicit communication in which she advised of her resignation. However, by at least 17 October 2014, when her unfair dismissal application was lodged, she regarded herself as having resigned. Her application used that term, referring to the date on which dismissal was notified as being 14 October 2014. Her subsequent conduct and submissions clarify that she understood she had resigned, albeit with Ms Parsons contending that a resignation on her part was necessary in order for her to secure other employment and income. 29 The balance of probabilities lead me to find that the employment relationship ended on 14 October 2014.

CONSIDERATION

[35] Section 386(1) of the FW Act allows that a dismissal includes a circumstance in which there was a forced resignation, and provides the following;

“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.”

[36] The principles of forced resignation, or constructive dismissal, have been extensively analysed in many cases, including by the Full Bench. Those principles require all of the circumstances of a termination to be examined, and not only the actions of the employer. The employer’s conduct must be weighed objectively and arising from that it “may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal”. 30

[37] In relation to what is meant by a termination at the initiative of the employer, the Full Court of the Industrial Relations Court of Australia found the following in an early case, Mohazab v Dick Smith Electronics Pty Ltd (No. 2) 31;

“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.”

[38] In considering such matters, the Commission must carefully consider what has occurred, with the Full Bench finding as follows;

“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.” 32

[39] In all though, a resignation that may be involuntary in and of itself may not be sufficient on “an objective analysis of the employer’s conduct” to be said to form a constructive dismissal;

“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 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.” 33

[40] The Full Bench developed on these matters in the matter of Bruce v Fingal Glen Pty Ltd (in liq) in which the following was said about the paragraph above from the earlier Industrial Relations Court matter of Rheinberger v Huxley Marketing Pty Ltd;

“[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”. 34

[41] I take the following from my analysis of the relevant authorities;

• The employer’s conduct must be weighed objectively, with the question to be asked being whether, on any reasonable view, the employer’s conduct would probably have the effect of prompting the employee’s resignation;



• A forced resignation may result from some action on the part of the employer intended to bring the employment relationship to an end or an action which would, on any reasonable view, probably have that effect;



• 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; and



• While an “important feature” of constructive dismissal, it is not sufficient that “the act of the employer results directly or consequentially in the termination of employment and the employment relationship is not voluntarily left by the employee”. 35

[42] The situation in which the parties to this matter found themselves prior to the Agreement Termination Case includes a dispute over the actual payment to be made to an employee of Pope Nitschke when they progressed on LSL. In the case of a commission-only salesperson, that dispute was compounded with a further dispute about whether or not the proper application of the Collective Agreement allowed for any such payments as were made to a person during the period of their LSL to be debited against commission payments earned by them.

[43] While those disputes have not been authoritatively determined by a Court the decision of the Commission in the Agreement Termination Case is at least partially instructive about the matters in dispute.

[44] The Commission’s decision was handed down on 8 September 2014, being a time after Ms Parsons was given a direction about LSL, but a time before her employment ended.

[45] The context to the decision includes the following considerations about the motivations for the application;

“[8] Mr Smart brings this application with the apparent support of 11 of his colleagues. They were represented in this matter, with permission, by Mr Knox, who is also their bargaining agent.

[9] Mr Smart contends that the Collective Agreement should be terminated given the uncertainties arising from the instrument and what he describes as a number of capricious terms. Amongst other matters, he relies upon the following contentions regarding the Collective Agreement:

• It is misleading in that it contains terms that are modified by the Act and the National Employment Standards (NES) however that is not clear to the employees and no clarification has been given to them by the employer;



• It contains no actual wage rates;



• The employer has not been acting consistently with the terms of the Collective Agreement in that some employees have not been given written letters of appointment and/or agreements for commission-only arrangements when these were required; and



• The Long Service Leave (LSL) provisions are contrary to the State LSL Act that forms part of the NES.

[10] Mr Smart also contends that the employer would not be disadvantaged by the termination of the Collective Agreement and the application of the modern award that would follow in that event. That is, the modern award minimum rates and the NES already in effect apply to the parties. Rather, he suggested, Pope Nitschke was attempting to cling onto an outdated “credit and debit” system for calculating commissions.

[11] The Collective Agreement was said to undermine the policy and scheme of the Act and Mr Smart contends that a move to the modern award as the basis for the future would provide both fairness and certainty for all parties.”  36 (underlining added)

[46] The Commissioner also referred to the relevant provisions of the Collective Agreement;

“[29] In relation to LSL, the Collective Agreement refers to the applicable State legislation but provides that the parties may agree to cash out LSL, including for pro rata leave after seven years. It does so in the following terms:

“17 Long service leave

17.1 You will receive the following entitlement to long service leave:

Whatever is specified in the applicable State legislation with the following modifications:

(a) We may agree in writing (sign and dated) for you to cash out long service leave including for pro rata leave once you have seven complete years of service

(b) If you take or cash out long service leave you will be paid at your basic rate of pay. Long service leave will not be payable on Commissions/incentives/bonuses. Cashing out long service leave means you lose the entitlement to take long service leave and you receive the cash in lieu. A commission-only salesperson’s basic rate of pay will be calculated as the same as for annual leave.”” 37

[47] In his decision, Commissioner Hampton identified firstly that a commission-only salesperson’s payment for LSL would be upon their “basic rate of pay”, calculated in accordance with certain mechanisms, but did not resolve the question of whether LSL payments could be debited from sales commissions. In relation to the first proposition, the Commissioner held the following; 38

“[66] I note that Clause 17 of the Collective Agreement states that LSL is not payable on Commissions/incentives/bonuses. It is apparent that at least at some earlier stage, Pope Nitschke understood that this meant that commission-only salespersons were not entitled to LSL. However, the better view, and the one now apparently being adopted by the employer, is that such salespersons are entitled to LSL based upon their “basic rate of pay”. On that view, clause 17 in relation to commission-only salespersons refers to the same basis of calculating payments as adopted for annual leave.

[67] This basis for annual leave payments is provided by Schedule 2.8(b) of the Collective Agreement and this in turn refers to the “formula in the regulations for piece workers”. That formula, in effect, is provided by the Workplace Relations Act Regulations 2006 and this also apparently requires the consideration of the average earnings over the preceding 12 months. In that regard, the definitions within the former regulations are very complex and require consideration of the various partially circular definitions of the terms applicable to piece workers within the WR Act itself. I note that the clearer provisions under the Fair Work Regulations 2009, that would apply in relation to annual leave and other direct NES entitlements for pieceworkers, would not appear to apply to the LSL calculation given the preserved terms of the Collective Agreement.” 39 (references omitted)

[48] The Commissioner’s finding in relation to the debiting of LSL payments from sales commissions was within the context of his decision to exercise the discretion within s.226 of the FW Act of whether it was appropriate in all the circumstances for him to terminate the agreement. He specifically took into account and made allowances for the fact that there would be a need for the parties to resolve this question, amongst others;

“[93] There are however factors arising from the circumstances of the parties that impact upon the discretion as to when the termination will take effect. That is, whilst not leading to a view that the termination would be contrary to the public interest or inappropriate, the need for the parties to deal with the consequences of the termination is such that a reasonably lengthy lead time for the termination would be appropriate. These considerations include most importantly, the requirement to renegotiate and/or confirm written commission-only remuneration arrangements that would operate under the terms of the modern award. This is not necessarily a straight forward exercise given the strongly held and divergent views about the operation of commission arrangements beyond the minimum commission-only payments required by the modern award. Further, some delay would permit the opportunity to negotiate a new enterprise agreement should that course of action ultimately be supported by the majority of employees.

[94] I accept the continuation of the Collective Agreement for a period extends the uncertainty. In terms of the impact of the delay upon the LSL arrangements, there is a dispute about the capacity to debit such payments from commissions. Whatever the Collective Agreement means on that count, and it is not clear, that matter can be determined and it is not unreasonable per se to permit the approved and preserved Collective Agreement terms to operate for a period given the consequences for all parties arising from its termination. Importantly, any continuing uncertainty needs to be balanced against the requirements for appropriate transitional arrangements for all parties subject to the Collective Agreement.” 40

[49] I draw from this, not only that the Commissioner was alive to the dispute between the parties about whether LSL payments could be debited from sales commissions, but also that he saw it as important for the parties to endeavour to resolve the differences on the subject.

[50] Also to be taken account of from the context of the Agreement Termination Case decision is that by the time the decision was handed down, the Applicant in this matter, Ms Parsons, had brought to the Commission her dispute under the Collective Agreement. That dispute had been the subject of an initial conference before the Commission on 3 September 2014, prior to the handing down of the Agreement Termination Case decision, with that date being coincidental with the last hearing date in the Agreement Termination Case. The dispute was further dealt with by the Commission on 15 September 2015.

[51] The evidence received in this matter indicates that the dispute about the debiting of LSL payments from sales commissions only intensified from the time of the LSL direction.

[52] The circumstances in which Ms Parsons found herself in the weeks and possibly months prior to the date on which her employment ended were undoubtedly unpleasant, but likely mutually so. However the question to be determined is whether or not there was a course of conduct engaged in by Pope Nitschke that causes it to be said that Ms Parsons was left with no alternative other than to resign.

[53] For the purposes of assessing Pope Nitschke’s conduct and whether, on any reasonable view, it would probably have had the effect of prompting Ms Parsons’ resignation, I consider that the conduct complained of appears to hinge on three matters: the LSL direction; the parties’ relationship and the discussion between Ms Parsons and Mr Nitschke on 12 August 2014; and Pope Nitschke’s participation in the dispute resolution proceedings before the Commission.

[54] The witness evidence in this matter came from Ms Parsons and Mr Nitschke.

[55] To the extent that there are differences in their evidence, I prefer that of Mr Nitschke.

[56] I give Ms Parson’s evidence less weight for several reasons.

[57] First, there was an apparent reluctance by her to comply in particular respects with an Order of the Commission to produce documents relating to her employment and earnings after leaving Pope Nitschke. The first two parts of the Order went to documents relating to endeavours to obtain employment after leaving Pope Nitschke. The explanation that there are no such documents potentially answers those parts of the Order. However the third, fourth and fifth parts of the Order go respectively to payments made since 14 October 2014; payslips since that date; and properties being marketed for sale by the Applicant. It was said in the hearing that documents relating to the payments and payslips received could not be located or were only available in summary form. 41 The Respondent indicated in the hearing that it would not press compliance with the fifth category.

[58] When Ms Parsons was directed, while giving evidence, to search during the lunch break for payslips from her current employer and provide to the Commission what was found, none were produced. Neither did she endeavour to provide any payslips to the Commission on the second day of the proceedings, albeit after she had finished giving evidence. I consider it unlikely that Ms Parsons has not been provided with any documents, beyond those she chose to tender, that would show her post-employment earnings, or how those earnings were calculated.

[59] Finally, I regard Ms Parson’s evidence about how she came to obtain employment with another firm on 29 October 2014, slightly more than 2 weeks after finishing with Pope Nitschke, as being rather circumspect, and likely deliberately so.

[60] In contrast to her evidence on these matters, there is a forensic level of detail before me from Ms Parsons about matters that occurred before leaving Pope Nitschke.

[61] In all, I regard Ms Parsons as lacking candour on these matters and being not particularly desirous of the Commission examining her employment after she left Pope Nitschke, or how or when she came to obtain that employment. Such management of her evidence on those matters reduces the extent to which her evidence on other matters can be relied upon.

[62] Mr Nitschke’s evidence does not suffer from these taints and so I accept and prefer his evidence.

The LSL Direction

[63] At the time that the LSL direction was given, on 7 August 2015, the Agreement Termination Case had not concluded. Shortly before the direction was given, on 31 July 2014, and in the course of providing submissions to the Commission for the Agreement Termination Case, solicitors for Pope Nitschke had submitted, somewhat ambiguously, the following about its future LSL payment intentions;

“58. In light of the decision in Canavan, the Respondent will (if the Collective Agreement continues) henceforward be paying the value of leave entitlements at the time when leave is taken.” 42

[64] Even at the point of his decision on 8 September 2014, Commissioner Hampton noted that the “proper operation of the status quo is not clear and is very much in dispute”. 43 There is nothing before me that would indicate the parties held a contrary view at that time.

[65] The reference to Canavan in the foregoing passage is a reference to the Full Bench decision in Re: Canavan Building Pty Ltd, 44 in which it was held that “pre-payment” of annual leave in a proposed enterprise agreement constituted cashing out of annual leave in a manner inconsistent with s.93 of the FW Act, thereby rendering the agreement incapable of approval.45 The Agreement Termination Case decision noted that the Collective Agreement operated subject to the National Employment Standards and that Canavan potentially had a significant effect because of what it had to say on the pre-payment of leave entitlements.46

[66] The evidence, and indeed the Commissioner’s decision in the Agreement Termination Case, points to a minimum understanding on the part of Pope Nitschke that during the period of her LSL it would need to pay Ms Parsons at her “basic rate of pay”, adopting the same calculation basis as per annual leave. 47 Similarly the evidence points to there being a minimum understanding by the Respondent that such payment would have to be paid to Ms Parsons irrespective of whether the Collective Agreement was terminated or not. Whether or not the payments made to Ms Parsons during a period of LSL would be subject to offsetting against sales commissions earned through the debit and credit system was, at the relevant time, one for resolution at some point in the future, if at all, with an answer being dependent either upon the judgement of a Court or possibly the product of enterprise agreement negotiations.

[67] The evidence points to there being a view on the part of Pope Nitschke that, at least in early August 2014, it apprehended that its industrial arrangements at that time enabled it to undertake such offsetting, but that at some point in the future it may be identified firmly that it could not. It is, in the context of all of the evidence in this matter, more likely than not that Pope Nitschke was motivated in its decision-making, and thereby its direction to Ms Parsons to proceed on LSL, to exercise what it perceived as its workplace right arising under the combined effect of the Collective Agreement and the LSL Act.

[68] The Respondent’s perception, unresolved at that time and apparently since, was that payments for LSL at the “basic rate of pay” could be offset against sales commission earnings. It also drew from the provisions of the LSL Act, which so far as is relevant, enables a direction to be given by an employer to an employee who has accrued a period of LSL to take that leave at 60 days’ notice, as well as enabling agreements to be made between employers and employees for payments to be made in lieu of LSL. 48 The provisions of the Collective Agreement provide for the LSL Act to continue to apply, other than where modified by the agreement. There is nothing within the Collective Agreement that would indicate a direction for the taking of LSL cannot be given, or that the effect of such direction is modified by the agreement.

[69] The relevant consideration becomes, in relation to this aspect of the potential course of conduct of Pope Nitschke, whether on any reasonable view its conduct would probably have the effect of prompting Ms Parsons resignation?

[70] In favour of the proposition that it would have prompted Ms Parsons’ resignation are the contentions that she puts forward firstly that she would receive no new earnings and therefore no income during the period of leave, and secondly that when she returned to work after the leave she would have no commission income for a considerable period as well.

[71] To resolve in favour of Ms Parsons, the first proposition is dependent on acceptance by the Commission that the employer was not within its rights to direct that she proceed on LSL whether at the time it issued the direction or potentially at any time.

[72] The context of the LSL Act includes both that a long serving employee should be rewarded with additional leave and that employees should be given the leave in one block, close to the time that the period of leave accrues. The policy of the LSL Act, unmodified by the Collective Agreement, is clear when it stipulates both that LSL should be granted by an employer to a worker as soon as practicable (taking into consideration the needs of the employer's business or undertaking) after the worker becomes entitled to the leave as well as preferring that LSL should be taken in one continuous period. 49 To the extent that the operation of the LSL Act is not modified, employees may be fined if they work during the period of leave and similarly employers may be fined if they employ persons who are at that time on LSL.50

[73] It is entirely foreseeable within the unmodified context of the LSL Act that there will be numerous occasions in which employees may be required to proceed on leave, even though they do not want to. This might include being required to take leave at times that are inconvenient to the employee (such as being at a time of year they do not want, or even in a year they do not want) as well as potentially being against their financial interests (such as for a person who is directed to take leave when that person instead was hoping to take a payment in lieu perhaps upon resignation or retirement). There is no policy in the LSL Act, or the Collective Agreement, that leave should be taken only at mutually agreed times.

[74] The Collective Agreement countenances payments in lieu of the taking of LSL where agreement is in writing, with there being no regulation of the circumstances in which agreement can be sought. Plainly, neither party needs to agree to an approach from the other to have LSL paid in lieu of the time being taken off as leave. The myriad circumstances in which leave is paid in lieu include those where it is mutually convenient for payment to be taken instead of the leave being given, as well as those in which one party wants to do so, but has to persuade the other to agree to payment.

[75] Within this context, it would be difficult to find that, by requiring Ms Parsons to commence on leave, that Pope Nitschke was doing anything other than exercising rights given to it by the combination of the LSL Act and its Collective Agreement. The possibility that Pope Nitschke was defending its interests, whether financially or legally, by issuing the direction to Ms Parsons, perhaps in anticipation of a later change to its understanding that the LSL payments that were made could perhaps be later offset against sales commission earnings through the debit and credit system is in itself also not an unreasonable action on the part of the company. Such change in its legal requirements might come shortly, or in several years, or never at all. At least at the time the direction was given, in August 2014, a month prior to the Commission’s decision in the Agreement Termination Case, but after the evidence had been given in the matter, Pope Nitschke was entitled to seek to protect its interests in accordance with its understanding of the then prevailing Collective Agreement, albeit with the attendant risk that its understanding may later be corrected, such as by a finding in a Court.

[76] The second proposition, relating to the likelihood that she would have no commission income for a considerable period after returning from leave, also does not resolve in favour of Ms Parsons since such feature is not unique to her employment. Instead it is likely to be a feature of the employment of any commission salesperson. Predictably, almost to the point of certainty, a salesperson remunerated to some degree through commission payments who takes leave of any kind would find a lag in payments once they returned to work. Although this may possibly be exacerbated in the case of a person who was a commission-only salesperson, in all likelihood it would be a feature of the employment of any person whose remuneration was at least partially contingent upon sales being achieved.

[77] The proposition was advanced at the time by Ms Parsons and during her evidence, that inclusion of her name on the internal roster in late September 2014 meant that Pope Nitschke had withdrawn its LSL direction. That proposition was emphatically and unambiguously answered by the Respondent at the time. I prefer Mr Nitschke’s evidence on the subject, which supports that it was a mistake from which the Respondent backed away as soon as it realised the error.

The parties’ relationship and the discussion between Ms Parsons and Mr Nitschke on 12 August 2014

[78] There is little doubt that the relationship between the parties deteriorated markedly through the period of August to October 2014. The evidence points to both parties, and their representatives, presumably acting upon instructions, assertively defending their respective interests. In a business as small as Pope Nitschke, it is inevitable that the level of mutual assertiveness created interpersonal difficulties.

[79] The conversation between Ms Parsons and Mr Nitschke on 12 August 2014, and the evidently contrasting versions about which each gave, is a product of that. While the evidence as to the accuracy of their respective versions of events does not definitively fall in favour of either, it does at the least point to a mutual antipathy. That is not unusual in workplaces generally, or indeed in workplaces as small as this.

[80] In forming my views about the nature of the parties deteriorating relationship, I have taken into account my preference on these matters for the evidence of Mr Nitschke, to the extent that there are differences between his evidence and that of Ms Parsons, for the reasons I have referred to earlier. His evidence is generally credible and thereby capable of acceptance, and especially so in relation to the 12 August 2014 conversation.

[81] Whilst the conversation was no doubt argumentative, and it may have cast a pall over the likely ability of either to continue working together, I am unable to find that the conversation rises to the point of there being unreasonable behaviour on the part of Mr Nitschke. The conversation, or argument, while a symptom of the conflict between the two, is not, in the context of all the evidence, sufficient for it to be said to be part of a course of conduct by the Respondent that would probably have the effect of prompting Ms Parsons’ resignation.

Pope Nitschke’s participation in the dispute resolution proceedings before the Commission

[82] Likewise the contentions put forward by the Applicant about the motivations of the Respondent in its engagement with the dispute notification made by Ms Parsons to the Commission are not sufficient for me to make a finding that Pope Nitschke’s actions formed part of a course of conduct that led to her resignation.

[83] The Applicant puts forward that Pope Nitschke did not engage with the conference for the reason that “the Respondent could not be compelled to participate and did not”. 51 However, she has not put forward anything that would suggest such was not a correct interpretation of its rights.

[84] Such exercise of rights on the part of Pope Nitschke is hardly remarkable. Ms Parsons had her own rights at that time that were not exercised, having apparently indicated at the end of the conference before the Commission on 15 September 2014 that she would contemplate an injunction, however one was never sought. 52

[85] Again, while these matters might be evidence of a deteriorating relationship between the parties, I am unable to find in this case, with its own facts and evidence, that an exercise by a party of their rights is part of a course of conduct that might lead to a person’s resignation.

[86] Finally, having reviewed the evidence of the discourse between the parties in the final few weeks of employment, I do not find anything which would indicate a course of conduct on the part of Pope Nitschke that might reasonably be said to have probably prompted a reasonable person to resign.

[87] By mid-September, or the start of October at the latest, the position of each was well-known;

• Pope Nitschke expected Ms Parsons to proceed on leave anticipating that it would pay her at her basic rate of pay and, in accordance with its understanding of the continuing Collective Agreement which would not terminate until 7 December 2014, it would seek to offset those payments against sales commission earnings through the debit and credit system.



• For her part Ms Parsons held a contrary legal view. She believed that the proper interpretation of the Collective Agreement was that not only should she be paid the basic rate of pay for the time that she was on leave but that such payments could not be then offset against sales commission earnings.



• Both parties were on notice from the Commission that the Collective Agreement would terminate in about two months’ time and that the Commission had been unable to resolve the question of payments to be made on LSL.

[88] During the months prior to 14 October 2014, Ms Parsons had alternatives available to her other than resignation.

[89] Those alternatives included filing a dispute with the Commission, which was done but ultimately did not produce a result beneficial to Ms Parsons. Ms Parsons’ options also included seeking injunctive relief from a Court, which apparently was contemplated but not undertaken. Her options also included proceeding on leave and being paid at the basic rate of pay and then contesting whether through a Court or elsewhere any endeavour on the part of Pope Nitschke to then later offset those payments against sales commission earnings.

[90] I accept that each of the options available to Ms Parsons had its own difficulties and uncertainties. However, those options provided an alternative to ending her employment with Pope Nitschke.

[91] In contrast, the alternative taken by Ms Parsons was to regard her employment as at an end, as I have found, on 14 October 2014, with her witness statement addressing her motive in this way;

“I had then no alternative but to resign in order to live if the Respondent forced me to absent myself from my work.” 53

[92] Ms Parsons acted on that alternative by seeking and gaining other employment as a real estate agent with another local firm, which she took up from 29 October 2014. 54

[93] As referred to above, Ms Parsons saw two harms to her of being on LSL – that she would be paid at the basic rate of pay, perhaps debitable against commission earnings at some later time, and that, because of her absence on LSL, she would suffer because sales would not be earned during the period, meaning that commission earnings would be lower for a time when she returned.

[94] In context, while choosing to secure alternative employment may have avoided the first of these concerns, it would not have avoided the second.

[95] Questions were put to Ms Parsons in cross-examination about whether she had any documentation regarding her new employer. She made no written application for employment, had no letter of offer or letter of appointment and does not receive regular payslips from her new employer. 55 The job came to her in the following way;

“How did you come into that employment then?---I spoke with a friend who works for Harcourts, Angus Campbell. I had explained the situation I was in at the time and put the phone down, and within minutes had a phone call from my boss saying that they would like to take me on.” 56

[96] In context, taking into account her evidence and a failure by Ms Parsons to produce to the Commission documents relating to her employment after 14 October 2014, it appears more likely than not that her lack of detail about her new employment was self-serving.

[97] This situation, coupled with the speed with which new employment was arranged, means I am unable to exclude either that it simply suited Ms Parsons to change her employment because the relationship was no longer viable, or even the possibility that arrangements for her new employment were commenced prior to finishing at Pope Nitschke.

[98] In any event, the evidence does not lead to the view of Ms Parsons being a person with no choice other than to resign, or that on any view the decisions taken by Pope Nitschke would probably have had the effect of prompting Ms Parsons’ resignation.

[99] I am satisfied that Ms Parsons had options available to her, and that she balanced the pros and cons of them, choosing in the end to finish her employment with Pope Nitschke, with the intention of soliciting other employment.

[100] For the foregoing reasons I am unable to conclude that Ms Parsons’ resignation from her employment was because she was forced to do so because of conduct, or a course of conduct, engaged in by Pope Nitschke. Accordingly I am not satisfied Ms Parsons was dismissed within the meaning of s.386 of the FW Act and so her application for unfair dismissal remedy must therefore fail.

[101] An order dismissing her application will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

Mr A Knox (paid agent) for the Applicant

Mr A Manos (of counsel) for the Respondent

Hearing details:

2015.

Adelaide.

19 – 20 October.

 1   Form F2 Application for Unfair Dismissal Remedy [3.29].

 2   Exhibit Parsons 2, Applicant’s bundle of documents, Attachment A1.

 3 Form F2 [3.29]; see also Exhibit Parsons 1, Witness Statement of Sharon Parsons, [54]–[55].

 4   Exhibit Parsons 1 [1]; see also Exhibit Parsons 2 Attachment A23.

 5   Exhibit Parsons 1 [4]; see also Exhibit Parsons 2 Attachments A21 and A22.

 6   Exhibit Respondent 1, Respondent’s Outline of Submissions, [3].

 7 Exhibit Respondent 2, Witness Statement of David Nitschke, [7]–[8].

 8   CAEN084452045.

 9 Exhibit Parsons 1 [6].

 10   [2014] FWCA 4876, at [95].

 11   Clause 17.1 Pope Nitschke First National Employee Collective Agreement.

 12   [2014] FWCA 4876, at [66] and [56].

 13   Exhibit Parsons 2 Attachment A1.

 14   Exhibit Parsons 1 [54]–[55].

 15   Exhibit Parsons 2 Attachment A10.

 16 Exhibit Parsons 1 [22].

 17 Ibid [28].

 18   Exhibit Parsons 2 Attachment A3.

 19   Exhibit Respondent 2 [37]–[38].

 20   Exhibit Parsons 2 Attachment A25.

 21   See, for example, Exhibit Parsons 2 Attachment A4.

 22   Exhibit Respondent 2 Attachment DN-6.

 23   Ibid Attachment DN-7.

 24   Ibid Attachment DN–9.

 25   Ibid Attachment DN–13.

 26   Exhibit Parsons 2 Attachment A5.

 27   Exhibit Respondent 2 Attachment DN–14.

 28   Exhibit Parsons 2 Attachment A13.

 29   Exhibit Parsons 1 [19]–[22].

 30   Doumit v ABB (1996) AIRCFB N6999.

 31 (1995) 62 IR 200, at 205-206.

 32   Doumit v ABB (1996) AIRCFB N6999.

 33   Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154.

 34   Bruce v Fingal Glen Pty Ltd (in liq)[2013] FWCFB 5279, at [23].

 35   Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200, at 205-206.

 36   [2014] FWCA 4876, [8]-[11].

 37 Ibid [29].

 38 Ibid [94].

 39   Ibid [66]–[67].

 40   Ibid [93]–[94].

 41   Transcript PN 57-62.

 42   Exhibit Parsons 2 Attachment A16.

 43   [2014] FWCA 4876, at [83].

 44   [2014] FWCFB 3202.

 45   Ibid, at [56]–[58].

 46   [2014] FWCA 4876, at [30].

 47 Ibid, at [66].

 48 LSL Act, s.7(3) and s.8(3a).

 49   Ibid, ss.7(1) and (2).

 50   Ibid, s.14.

 51 Exhibit Parsons 1 [22].

 52   Exhibit Parsons 2 Attachment A4; Exhibit Respondent 2 Attachment DN-6.

 53 Exhibit Parsons 1 [22].

 54 Ibid [46].

 55   Transcript PN 203–220.

 56   Ibid PN 204.

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