Ms Leigh Smith v Everyone Wins Pty Ltd T/A Acton Mandurah
[2023] FWC 107
•10 MARCH 2023
| [2023] FWC 107 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Leigh Smith
v
Everyone Wins Pty Ltd T/A Acton Mandurah
(U2022/10014)
| DEPUTY PRESIDENT BINET | PERTH, 10 MARCH 2023 |
Application for an unfair dismissal remedy
On 13 October 2022, Ms Leigh Smith (Ms Smith) filed an application (Application) pursuant to section 394 of Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC) alleging she was unfairly dismissed by Everyone Wins Pty Ltd trading as Acton Mandurah (Acton Mandurah).
On 24 October 2022, Acton Mandurah filed a Form F3 - Employer Response to an unfair dismissal application asserting that Ms Smith resigned and was not dismissed from her employment (Jurisdictional Objection).
On 18 November 2022 the parties participated in a conciliation, but the issues in dispute could not be resolved.
Taking into account the parties wishes and circumstances, it was determined that a hearing rather than a determinative conference would be the most effective and efficient way to determine the Application. Consequently, the Application was listed for a hearing in Perth on 17 January 2023 (Hearing).
Directions for the filing of materials in advance of the Hearing were issued to the parties on 24 November 2022 (Directions).
Permission to be represented
The Directions invited the parties to make submissions as to whether the FWC should grant permission to the parties to be represented. A determination of this issue is necessary to ensure that the manner in which any hearing is conducted is fair and just.[1]
Both parties sought permission to be represented at the Hearing.
Having considered the submissions of the parties, leave was granted to both parties to be represented, pursuant to section 596(2)(a) of the FW Act, on the grounds that it would enable the matter to be dealt with more efficiently taking into account the complexity of the matter.
At the Hearing, Ms Smith was represented by Mr Patrick Mullally of Workclaims Australia (Mr Mullaly) and Acton was represented by Mr Stephen Farrell of SJF Work Advice Pty Ltd (Mr Farrell).
Ms Smith filed written closing submissions on 31 January 2023 and Acton Mandurah filed written closing submissions on 7 February 2023.
Evidence
The Directions required the parties to file their witness and documentary evidence in advance of the Hearing. Ms Smith filed two witness statements on her own behalf.[2] Ms Smith also filed a witness statement by her son Cameron Smith (Mr Smith).[3] Mr Smith was employed by Acton Mandurah as an assistant to Ms Smith.
Both Ms Smith and Mr Smith were cross examined by Mr Farrell at the Hearing.
Witness statements from the following witnesses were filed by Acton Mandurah:
- Mr Graeme Baxter (Mr Baxter) – Mr Baxter is the licensee and Director of Acton Mandurah.[4]
- Ms Emma Houghton (Ms Houghton) –Ms Houghton is the Administration Manager of Acton Mandurah. She is responsible for managing the team of administration staff who provide support to the real estate agents and property managers employed by Acton Mandurah. [5]
- Ms Paige Dobinson (Ms Dobinson) – Ms Dobinson is an Administration Assistant employed to provide administrative support to Ms Smith.[6]
Ms Houghton gave further evidence in chief at the Hearing and was cross examined by Mr Mullaney. Mr Baxter and Ms Dobinson were cross examined by Mr Mullally.
A Digital Court Book containing the submissions, evidence and authorities relied upon by the parties was jointly tendered by the parties and marked as the only exhibit.
In reaching my decision, I have considered all the submissions made, and the evidence tendered by the parties even if not expressly referred to in these reasons for decision.
Background
Acton Mandurah operate a real estate agency in Mandurah in Western Australia. Mr Baxter is licensee of the business and the Director.[7] Acton Mandurah employees 47 employees in sales, property management and administration roles.[8]
Ms Smith was first employed by Acton Mandurah between July 2012 and May 2015. She resigned after a dispute with a colleague led him to push her out of his office. She reported the incident to Mr Baxter and insisted that he extract an apology from her colleague. Acton proposed that she and her colleague attend a meditation session. Ms Smith declined to participate in the mediation session. Dissatisfied with the disciplinary action taken against her colleague she decided to resign. Mr Baxter says that he counselled the gentleman concerned about his conduct.[9]
Ms Smith commenced a second period of employment with Acton Mandurah in a full time capacity as a real estate sales agent on 20 April 2020.[10] Effective from 22 April 2020 the terms and conditions of her employment were as set out in to a written contract of employment (Contract of Employment). Her employment with Acton was also covered by the Real Estate Industry Award 2020 (Award).[11]
The Contract of Employment provided that she would be paid a monthly retainer plus a commission.[12]
Ms Smith’s duties were to attract venders of real estate properties to engage Acton Mandurah to sell their properties and once this was done to market and sell these properties.[13] When a property was sold and the ownership transferred from the vendor to the buyer Acton Mandurah would receive a commission for that sale and pay a portion of that commission to Ms Smith (Commission).
Where she was solely responsible for a sale Ms Smith was entitled to 50% of the commission received by Acton Mandurah. Where she was not solely responsible for the sale the listing representative would receive 70% of the Commission and the sales representative would receive 30% of the Commission. The Contract of Employment provides that Commission would be reduced by the following:
a.the amount of the gross retainer paid to the Employee;
b.the value of accrued annual leave;
c.paid personal leave;
d.payment in lieu of notice;
e.office phone charges;
f.mobile telephone allowances;
g.advertising expenses;
h.desk fees;
superannuation contributions;
j.motor vehicle allowance;
k.leave loading;
l.annual leave and paid personal leave accrued under previous contracts of employment and taken or paid out under the duration of this contract of employment;
m.franchise fees
n.GST.
Ms Smith’s salary at the time of her resignation was $940.90 per week plus Commission. She was also entitled to a motor vehicle allowance of $187.91 per week and a mobile telephone allowance of $25 fortnightly.[14] Her total earnings for the 2021-2022 financial year were $309,821 or $25,818 gross per month.[15]
The real estate agents and the property managers employed by Acton Mandurah are supported by an administration team which included Ms Sandra Barnes (Ms Barnes) and Ms Houghton. Ms Barnes is the Senior Sales Administrator and Trust Account Manager.
The majority of the staff including the administrative team are located on the ground floor of the office occupied by Acton Mandurah. Ms Smith’s office was located upstairs. The majority of the administrative staff work in an open plan area on the ground floor however Ms Barnes has her own office. Ms Barnes, Ms Houghton and several other members of the administration team are close friends and socialise together outside of the workplace.[16]
It appears from at least August 2021 the relationship between Ms Smith and Ms Barnes began to break down. The duties of Ms Barnes include ensuring that all administrative requirements were completed once a sales contract was signed. Ms Smith complains that delays in Ms Barnes completing this work jeopardised her sales and led to Ms Smith incurring additional costs. Ms Smith cites as an example an incident in which Ms Barnes refused to prioritise Ms Smith’s work over the work of other agents (Refusal Incident). Ms Smith also asserts that Ms Barnes provided her with inadequate payment summaries to enable her to determine if her commission was correctly paid. Ms Smith also complains that Ms Barnes made repeated clerical issues on tax invoices in relation to deductions from Ms Smith’s pay.[17]
Ms Smith says that her concerns with Ms Barnes arose so frequently that she often chose not to report them. However, Ms Smith says that on at least ten occasions in the twelve months prior to her tendering her resignation she reported her concerns to Mr Baxter. Mr Baxter does not recall each of these occasions. Ms Smith says that each time she complained Ms Barnes’ attitude towards her would deteriorate further and eventually expanded to other administrative staff including Ms Houghton. For example, Mr Smith says that he heard Ms Barnes speak about his mother in unflattering terms to other employees. Ms Smith recalls Ms Barnes gossiping about other employees as well.[18]
The relationship between Ms Smith and Ms Barnes further deteriorated in May 2022 as a result of an incident involving Ms Dobson (May Incident). Ms Dobson had commenced working with Acton as a receptionist. She was subsequently appointed as a personal assistant to Ms Smith and relocated to sit close to Ms Smith. On a number of occasions, to the annoyance of Ms Smith, she was asked to assist on reception. [19]
On the day in question Ms Dobson did not answer her telephone when Ms Smith endeavoured to contact her. When Ms Smith returned to the office, she discovered Ms Dobson not at her desk. Ms Dobson explained that on her way to collect some photocopying she had been asked by Mr Baxter to acquire coffees for a meeting. Ms Smith instructed Ms Dobson to return to her desk to perform her work.[20]
When Ms Dobson did not return to her desk shortly afterwards, Ms Smith went looking for her. Ms Smith found Ms Dobson at reception. Ms Smith instructed Ms Dobson to return to her desk. Ms Houghton and Ms Dobson say that the manner in which Ms Smith did so was angry and aggressive. Ms Dobson started crying and was comforted by Ms Dobson and Ms Barnes in Ms Barnes’ office.[21]
When Ms Dobson had not still not retuned to her desk a few minutes later Ms Smith again went to find her. Ms Smith located Ms Dobson in Ms Barnes office crying and again directed Ms Dobson to return to her desk. Ms Barnes intervened and told Ms Smith to leave Ms Dobson alone. Ms Dobson told Ms Smith that she would return to her desk once she had composed herself. An interchange occurred between Ms Barnes and Ms Smith during which Ms Smith swore at Ms Dobson.[22]
Ms Smith reported the incident to Mr Baxter and demanded that he extract an apology from Ms Barnes. Mr Baxter agreed to speak to Ms Barnes. Mr Baxter says that Ms Barnes reported to him that Ms Dobson was upset by the manner in which Ms Smith spoke to her and had sought refuge in Ms Barnes office and that she only intervened to protect the distressed Ms Dobson. Mr Baxter concluded that the incident was the result of a personality clash.[23]
Ms Smith alleges that as a result of the incident Mr Baxter agreed to move to sit closer to Ms Barnes so that he could supervise her behaviour but never subsequently did so.[24]
On 15 June 2022 an incident occurred in which Ms Smith was unable to receive an email from an external sender. Ms Smith asked a number of the administrative staff to resolve the issue however it was not until the following day the issue was escalated to the IT provider (Harcourt Email Incident).
In addition to Ms Smith’s complaints about Ms Barnes, Mr Baxter also received complaints from a number of other sales representatives about Ms Barnes’s performance. Consequently, on 13 July 2022 Mr Baxter met with Ms Barnes to discuss these complaints with her. Issues raised with Ms Barnes included:[25]
a.Paperwork not being completed correctly and in a timely manner.
b.Excessive use of personal mobile phone during work time.
c.Her deficient interpersonal skills with colleagues.
d.Carrying commissions owed to two other sales representatives into the new financial year without approval.
Mr Baxter says that over the next month he monitored Ms Barnes’ performance however he did not observe any significant improvement in her performance. In addition, further performance issues arose. As a consequence he arranged a further meeting with Ms Barnes on 24 August 2022. At that meeting Ms Barnes was placed on a formal performance improvement plan and warned that a failure to improve her performance would result in the termination of her employment. On 29 August 2022 Ms Barnes was issued with a formal written warning.[26]
Ms Smith asserts that Ms Barnes subsequently humiliated her by locating Ms Smith at a table which Ms Smith considered an undesirable location at an Awards night in August 2022.[27] Following the Awards night Ms Smith wrote to Mr Baxter asserting that she was one of Acton’s highest achievers and complaining that the location of her table did not befit her performance. In the same email Ms Smith informed Mr Baxter that she would not attend any team or group meetings until further notice.[28]
Mr Baxter responded to explain that the table placement had been determined by Acton head office. He acknowledged her contribution to the financial success of the business but noted that there were 25 other sales people plus an administration team that also contributed to the success of the business who were variously located on tables throughout the ballroom. In the same email Mr Baxter noted the steps he had taken to support Ms Smith both personally and professionally including providing her with two support staff, assisting her to buy a vehicle and providing a short term loan for her home purchase. He encouraged her to take leave if she was not feeling well and offered to meet with her at the office or else where if she wished to discuss her concerns further.[29]
Following a rebranding which occurred in September 2022 Ms Smith discovered that a marketing tool (of which Mr Baxter was the account holder but to which Ms Smith contributed financially) had been reconfigured during a rebranding exercise to direct leads to other Acton Mandurah real estate agents. Ms Smith complained to Mr Baxter:[30]
“I am extremely upset as I have been paying for suburb sponsorships for over 2 years and continue to do in various suburbs as you are aware. These have recently been updated by someone with the new ACTON Belle brand and does not have my scenic backgrounds for the suburb which were carefully worked / or my tagline anymore. When I click on the link for an appraisal it shows Nolene Ross in each suburb as per the screenshot below plus the information for the lead does not come to me so I don't know where it is going. It no longer goes to my elevated profile page that I pay for.
This is appalling and I trust it will be repaired immediately as I have paid for this. Who is going to fix the leads that have gone to others? I have invested heavily in this area.”
There is no evidence that the redirecting of links was done intentionally or with malice. Rather it appears that it occurred in the course of a legitimate rebranding exercise. Ms Smith concedes the problem was resolved within two weeks.
On 20 September 2022 Ms Smith sent a letter to Mr Baxter (Resignation Letter).[31] The Resignation Letter detailed her unhappiness with a number of matters including:
a.The conduct of the sales administrator Ms Barnes.
b.Mr Bryant’s response to her complaints about the conduct of Ms Barnes.
c.A policy banning personal branding.
The Resignation Letter set out the terms on which Ms Smith proposed to ‘amicably’ separate from the business. These were as follows:[32]
a.She would resign effective 26 September 2022.
b.She would have no direct dealings with Ms Barnes.
c.She would not attend any staff meetings or be rostered on duty.
d.The circumstances of her separation would remain confidential.
e.She be immediately paid $88,490 as commission on properties sold or under offer without deductions $31, 425 as commission for 9 unsold properties.
f.Acton facilitate the transfer of her sales history and testimonials on realestate.com.au.
She warned that if Acton Mandurah did not accept her offer her lawyer was “standing by to commence a General Protections action for constructive dismissal seeking a further sum of not less than $299,876. The ‘settlement’ proposal contained separation terms more beneficial than those to which she would otherwise be entitled to pursuant to the Contract of Employment.
Mr Baxter responded to the Resignation Letter on 21 September 2023 by email confirming his acceptance of her resignation and that her final working day would be Monday 26 September 2022.[33]
Acton Mandurah maintained a database recording vendor, client, potential client and vendor data (Database). Ms Smith says that she contributed data to the database upon commencement of and during her employment. As part of her separation negotiations Ms Smith sought that the records that she had been using be transferred to her and then deleted from Acton Mandurah’s database. Acton Mandurah did not agree to this.[34]
During the weekend before her resignation took effect Ms Smith ‘archived’ without the knowledge or consent of Acton Mandurah thousands of the Database records. This had the effect that the relevant records could not be used by Acton Mandurah for bulk or mass marketing. Furthermore the relevant records could only be individually searched and only if the searcher was aware of the client/buyer/vendor/potential client details.[35]
Ms Smith did not inform Acton Mandurah that she had archived the database records. Acton Mandurah only discovered that she had done so after her employment concluded.
In line with the Resignation Letter Ms Smith’s last day of employment was 26 September 2023.
Ms Smith submits that she was unfairly dismissed and seeks an order for compensation.[36]
Is Ms Smith protected from unfair dismissal?
An order for reinstatement or compensation may only be issued if Ms Smith was unfairly dismissed and Ms Smith was protected from unfair dismissal at the time of her dismissal.
Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period and one or more of the following apply:
a.a modern award covers the person;
b.an enterprise agreement applies to the person in relation to the employment;
c.the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the Fair Work Regulations 2009 (Cth) (FW Regulations), is less than the high income threshold.
For the purposes of Part 3-2 of the FW Act a person is an employee if they are employed by a national system employer. There is no dispute and I am satisfied that Acton Mandurah is a national system employer and Ms Smith is therefore a national system employee.
Depending on the number of employees employed by an employer the minimum employment period is either six or twelve months.
Ms Smith commenced employment with Acton on 20 April 2020. Ms Smith resigned from her employment with Acton effective 26 September 2022.[37]
I am therefore satisfied that, at the time of her resignation, Ms Smith was an employee who had completed a period of employment of at least the minimum employment period.
There is no dispute, and I am satisfied, that the Award applied to Ms Smith’s employment at the time of her resignation.[38]
There is no dispute and I am satisfied that Ms Smith is therefore protected from unfair dismissal.
Was Ms Smith unfairly dismissed?
Section 385 of the FW Act provides that a person has been unfairly dismissed if the FWC is satisfied that:
a.the person has been dismissed;
b.the dismissal was harsh, unjust or unreasonable;
c.the dismissal was not consistent with the Small Business Fair Dismissal Code (SBFD Code); and
d.the dismissal was not a case of genuine redundancy.
Was Ms Smith dismissed?
The term ‘dismissed’ is defined in section 386 as follows:
“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.”
Section 386(2) of the FW Act contains some exceptions which are not applicable to this Application.
According to the Explanatory Memorandum to the Fair Work Bill 2008:
“Clause 386 - Meaning of dismissed
1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person's employment with his or her employer was terminated on the employer's initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).
1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).
1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:
·where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or
·where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.”
In the Resignation Letter Ms Smith resigned from her employment with Acton Mandurah. Ms Smith asserts that she resigned in response to conduct by Acton Mandurah which gave her no reasonable choice but to resign as contemplated by sub section 386(1)(b).
In Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli[39] a Full Bench described the test to be applied as:
“…whether the employer engaged in conduct with the intention of bringing the employment to an end or whether the termination of the employment was the probable result of the employer's conduct such that the employee had no effective or real choice but to resign.... the requisite employer conduct is the essential element.” [40]
Ms Smith asserts that the following course of conduct amounted to a repudiation of her employment contract or was designed to force her to leave her employment.
“19.1The respondent through the Licencee Graeme Baxter did not action a long history of complaints made by the applicant about the conduct of the senior administration officer Ms Barnes, who was also in charge of the firm's Trust Account;
19.2Ms Barnes was openly hostile to the applicant, was demonstrably rude to her over a long period of time such that the applicant's continued presence in the office was extremely uncomfortable and likely to damage her mental health;
19.3Serious incidents referred to in her evidence as the Refusal Incident and the Harcourts 's Email Incident, together with her treatment at and leading up to the Awards Night all demonstrate very clearly that the respondent either by act or omission is behaving in such a way that either he intends the applicant to leave or the conduct objectively viewed leaves her with no choice but to leave;
19.4The respondent through Ms Barnes was obstructive with respect to the applicant's responsibilities under the Real Estate and Business Agents Act 1978 (REBA Act) particularly with respect to handling deposits and trust monies, all of which was the professional duty of the applicant potentially exposing her and the business to penalties and disciplinary processes; such conduct is repudiatory in nature as it neglects the applicant's legal obligations;
19.5The respondent's removal of the applicant' s leads through the real estate banners suburb sponsorship and re-directing them to other representatives in the business, upon this discovery on the 16th September 2022 the applicant truly believed she was being dismissed; this conduct also is repudiatory in nature as the applicant had paid personally for these advertisements;
19.6The direction by the respondent that the applicant should take leave of absence to overcome her stress resulting from the conduct of Ms Barnes when the respondent well knew that under her commission only contract, she would not be paid for such leave;
19.7The neglect of the respondent to engage with the applicant about an amicable exit from the employment relationship when Mr Baxter knew or ought to have known that the respondent's conduct was reprehensible at so many levels and was conduct which as a Licencee under the REBA Act he should not have condoned.”
It would appear that Ms Smith is an exceptionally hard working and driven real estate agent. However, her work ethic was not necessarily matched by all of those with whom she worked. As a result of her sales success Ms Smith rightly or wrongly believed she was entitled to a higher level of support and standing within the business than she perceived she received.[41]
Ms Smith believed her work should be prioritised over the work of other agents and managers. Mr Baxter’s view was that the work of all agents and managers was equally important and one agent or managers work should not be prioritised over all others.[42]
The evidence suggests that a significant portion of the behaviour of Ms Barnes complained about by Ms Smith was not targeted specifically at Ms Smith but rather was a question of poor or inadequate performance on the part of Ms Barnes in the discharge of her duties generally or a matter of under resourcing on the part of the business.[43]
While Ms Smith suggested that the delays she experienced were so great that she was exposed to the risk of penalties under the REBA Act the evidence of Mr Baxter is as licensee he would be liable for breaches of the REBA Act. He was therefore personally invested in ensuring that breaches did not occur and this was reflected in the fact the agency passed its annual audit each year.[44]
According to Mr Baxter delays in work completion were experienced equally by all the agents and managers due to the unexpectedly high volume of work. However, he says that none of those employees reacted in the way Ms Smith did, demanding that their work be prioritised over the work of others.[45]
Some of the conduct of Ms Barnes identified by Ms Smith as evidence of her being targeted or bullied appears to have been wrongly attributed by Ms Smith to Ms Barnes. For example, it appears that the allocation of tables for the Awards night was not determined by Ms Barnes or in fact anyone at Acton Mandurah. Contrary to the characterisation of the events as evidence of Ms Barnes bullying Ms Smith the evidence is that Ms Smith was not the only agent unhappy with the location of their seat. Ms Bryant a senior leader in the business was also unhappy with the location of her seat although it is not entirely clear how the location of table in a ball room could cause such offence and distress. [46]
Similarly in relation to incident in September 2022 involving the marketing tool there is no evidence that the redirecting of links was done intentionally or with malice. Rather it appears that it occurred in the course of a legitimate rebranding exercise. Ms Smith concedes the problem was resolved within two weeks.
Other events identified by Ms Smith as evidence of bullying by Ms Barnes appear on the evidence before me to reflect less than desirable workplace behaviour on the part of Ms Smith rather than Ms Barnes. For example, the incident involving Ms Dobinson in which Ms Smith caused Ms Dobinson to cry and then Ms Smith used profanities towards Ms Barnes when she intervened to protect Ms Dobson. The fact that Ms Dobson provided a farewell card to Ms Smith on her departure does not undermine Ms Dobson’s evidence that at times during her employment she found Ms Smith to be aggressive and angry. Such evidence is not mutually exclusive.
Clearly deficiencies existed in Ms Barnes’ work performance. The extent and cause of negative social interactions between Ms Smith and Ms Barnes are less clear.
Even on her own evidence Ms Smith is forthright in her views and expects high standards of performance:[47]
“I am outspoken when I observe unprofessional attitudes and offensive behaviour and I pay close attention to detail on compliance and risk management issues which I am known to call out …
As I achieved the sales mi1lestones and targets that are set for all salespeople. I was moved into a larger office and at different times had a personal assistant (PA) and a buyer's agent /BA) assigned to me. so that I could concentrate as much of my time as possible on securing new listings and negotiating sales...
Finding experienced people to fill these; roles became an ongoing challenge. Those initially assigned to me were either too inexperienced and or undisciplined.”
The only witness called by Ms Smith was her son. Clearly close to his mother, his evidence with respect to the conduct of Ms Barnes lacked particularity and, unsurprisingly, appeared coloured by his desire to support his mother. Acton Mandurah called three witnesses two of whom Ms Smith reported that she had, or did have positive relationships with in the past. Their evidence was consistent with a finding that Ms Smith contributed to the deterioration in workplace relationship between herself and her work colleagues.[48]
The evidence suggests that Mr Baxter did not fail to act in relation to complaints made by Ms Smith and others. In particular he commenced a process of performance managing the work performance of Ms Barnes which included the taking of disciplinary action against Ms Barnes in the form of issuing a written warning. He also says that he took other steps to address the performance deficiencies. Mr Baxter believed that the steps taken addressed the issues raised by Ms Smith. However as with her first period of employment Ms Smith was dissatisfied with the steps he took. She appears to have take the view in respect to both periods of employment that unless the disciplinary action taken mirrored what she determined should be imposed that the disciplinary action was inadequate.[49]
While Ms Smith asserts that the workplace culture was so toxic that it affected her mental health there is no medical evidence before me to support this assertion. Mr Baxter did not, as asserted by Ms Smith, ignore her reports of a deterioration of her mental state rather he offered her the opportunity to take personal leave. Ms Smith assertion that this was not a solution because the leave would be unpaid over looks her contractual entitlements to a weekly retainer and to paid personal and annual leave.[50]
In any event before Ms Smith’s resignation took effect she engaged in behaviour that formed a valid reason for her dismissal namely the unsubscribing of in excess of 4000 clients from the Acton Mandurah database.
The real estate industry is highly competitive, and the data contained on this database clearly had significant commercial value to both Acton Mandurah and Ms Smith as is evidenced by her efforts to retain the database as a term of her proposed separation from the business. I do not accept that either party believed that the data belonged to Ms Smith. If it did there would be no need for her to include access to the data as a term of separation.
The Employment Contract relevantly provides at clause 9:[51]
“9. CONFIDENTIALITY
9.1 For the purposes of this clause, ‘Confidential Information’ means:
(a) Any information disclosed to the Employee by or on behalf of the Agent or any Client;
(b) Any information which comes into the Employee's possession, or is generated by the Employee, in the course of this Contract, whether or not the information was originally supplied by the Agent;
(c) Any information relating to the Agent's dealings, financial arrangements, transactions, general affairs and financial position and other matters that do or may affect the Agent's financial position or reputation;
(d) Any information relating to our internal management, the structure of the Agent’s business, Client lists, client presentations, training materials, bcoaching materials, presentations, personnel, policies, strategies, market intelligence, plans, investments or aspects of the Agent's future operations;
(e) Any information specifically marked as confidential;
(f) Any intellectual property;
9.2 The Employee will;
(a) Use the Confidential Information solely to carry out the Employee's duties pursuant to this Contract and not for their own benefit or reward;
(b) Keep the Confidential Information secure and confidential at all times;
(c) Only disclose the Confidential Information
(i)to persons who need to know the Confidential Information to carry out the functions or obligations for the Agent; or
(ii)to persons who are authorised by the Agent to obtain the Confidential Information;
(d) Not copy, duplicate or otherwise reproduce any documents containing the Confidential Information except as necessary to fulfil the Employee's duties under this Contract; and
(e) Use the Employee's best endeavours to protect the confidentiality of the Confidential Information.
9.3 On termination of this Contract, the Employee will return to the Agent any originals and any copies or extracts of the Confidential Information. If the Employee has copied any Confidential Information to an electronic storage medium, the Employee will undertake to delete any such copy.
9.4 Following termination of the Contract the Employee will not:
(a) Use the Confidential Information in any way; or
(b) Disclose the Confidential Information to any person except where authorised in writing by the Agent.”
The following clauses of the Employment Contract relevantly provide as follows:[52]
“4.5 The Employee will not, except as authorised or required by his or her duties, destroy, copy or remove from the Agent's office any document or record pertaining to the Agent's business…
12.4 … the Employee may be dismissed without notice for serious misconduct … includes conduct that causes serious and imminent risk to: … the reputation, viability or profitability of the Agent’s business…
12.6 All books of account, records, papers, correspondence and other documents of the Agent or the Agent's business and any other property of the Agent that is in the possession or under the control of the Employee will be returned to the Agent whenever requested by the Agent and in any event immediately upon termination of employment…”
Nor do I accept that Ms Smith ‘archived’ the data “to make the data secure”. The data could still be accessed. Rather than securing the data she knowingly and purposefully reduced the utility of the data.
Acton Mandurah was unable to provide Ms Smith with notice that her conduct with respect to the Database formed a valid reason for her dismissal because it was unaware of her conduct before her employment terminated. Similarly, it was denied the opportunity to offer her an opportunity to respond, have a support person present or provide details of any mitigating factor Acton Mandurah ought take into consideration before dismissing her.
I do not accept that it can readily inferred from Mr Baxter’s evidence that he would not re employ Ms Smith that he wanted her to leave her employment. Rather it would appear to be consistent with the breakdown in the relationship which occurred when Ms Smith sought to negotiate a more favourable exit from the business than her contract permitted and when thwarted tampered with the highly valuable client database.
In fact the evidence is that Mr Baxter had throughout Ms Smith’s employment provided her with support and assistance. This included both professional and personal support including providing her with two support staff, providing financial assistance to buy a vehicle and providing a short term loan for her home purchase.
Other than her dissatisfaction with the nature of the disciplinary action he took against Ms Barnes and a change in policy with respect to branding she does not identify conduct by Mr Baxter evidencing an intention on his part to bring her employment to an end. To the contrary he encouraged her to take leave if she was not feeling fit for work and offered to meet with her at the office or elsewhere if she wished to discuss her concerns further.
Mere unhappiness or dissatisfaction within the workplace or workplace policies and procedures is not sufficient to establish that a person was forced to resign because of the conduct of the employer. There needs to be intention, on the part of the employer for the employment to end.
In Pawel v Advanced Precast Pty Ltd[53] a Full Bench of the Australian Industrial Relations Commission explained:
“It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee.”[54]
In addition, in ABB Engineering Construction Pty Ltd v Doumit[55] a Full Bench of the Australian Industrial Relations Commission said:
“Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination. The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. 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.”[56]
Fundamentally Ms Smith had a different view about her value to the business. Her work ethic and personality type clashed with some other employees. With limited human resource support Mr Baxter took steps to address the performance deficiencies and behavioural issues displayed by Ms Barnes. Ms Smith remained unhappy with Mr Baxter’s management style and the more egalitarian business policy to cease personal branding.
Ms Smith sensibly made a decision to separate with the business presumably to find another with which she would be better aligned. To separate was a decision made by Ms Smith it was not the only real choice she had. She could have taken up Mr Baxter’s invitation to discuss her concerns further.
It appears that she would have separated amicably if Mr Baxter was agreeable to her terms. Those terms provided for a separation package in excess of what Ms Smith was contractually entitled to. Her separation is akin to the example provided in Pawel v Advanced Precast Pty Ltd[57] of an employee denied a pay rise. Ms Smith was dissatisfied with the outcome of her negotiations for a better separation package. Acton Mandurah’s conduct was the principal contributing factor in her making the Application because it would not accept her proposed separation terms not the principle contributing factor in her separation.
I therefore find that the termination of Ms Smith’s employment was at her own initiative and not at the initiative of her employer. I also find that she was not forced to resign because of conduct, or a course of conduct, engaged in by her employer.
Ms Smith therefore was not “dismissed’ for the purposes of section 385 of the FW Act and is not therefore protected from unfair dismissal pursuant to section 396 of the FW Act. In these circumstances the FWC is unable to consider the merits of her application for a remedy from unfair dismissal. Ms Smith’s Application is therefore dismissed.
An order dismissing the Application will be issued with this decision.[58]
DEPUTY PRESIDENT
Appearances:
Mr P Mullally, for the Applicant.
Mr S Farrell, for the Respondent.
Hearing details:
2023
PERTH
17 January
Final written submissions:
Applicant’s final written submissions, filed 31 January 2023
Respondent’s final written submissions, filed 7 February 2023
[1] Warrell v Walton (2013) 233 IR 335, 341 [22].
[2] Digital Court Book (DCB) 54-78
[3] Ibid 130-132.
[4] Ibid 146-148.
[5] Ibid 150- 151.
[6] Ibid 574.
[7] Ibid 51.
[8] Ibid 145.
[9] Ibid 51, 54, 80.
[10] Ibid 26.
[11] Ibid 15, 26.
[12] Ibid 25-42.
[13] Ibid 15.
[14] Ibid 15.
[15] Ibid 52.
[16] Ibid 131.
[17] Ibid 57-62.
[18] Ibid 57-62.
[19] Ibid 65-66, 131-132.
[20] Ibid 65-66, 150, 574.
[21] Ibid 65-66, 150, 574.
[22] Ibid 65-66, 150, 574.
[23] Ibid 147-148.
[24] Ibid 65-66.
[25] Ibid 147.
[26] Ibid 147.
[27] Ibid 69-70.
[28] Ibid 105.
[29] Ibid 106.
[30] Ibid 107.
[31] Ibid 47-49.
[32] Ibid 48.
[33] Ibid 123.
[34] Ibid 150.
[35] Ibid 51-62, Transcript PN185-PN188.
[36] DCB (n 2) 52.
[37] Ibid 26.
[38] Ibid.
[39] [2017] FWCFB 3941.
[40] [2017] FWCFB 3941 at [47].
[41] Ibid 57,62.
[42] Ibid 57,62, Transcript PN107.
[43] Ibid 59, Transcript PN108-PN110.
[44] Transcript PN108-PN110.
[45] Transcript PN141-PN148.
[46] Ibid 104, Transcript PN100-101.
[47] Ibid 57.
[48] Ibid 58.
[49] Transcript PN102-PN106, PN136.
[50] DCB (n 2) 27-46.
[51] Ibid 36-37.
[52] Ibid 30.
[53] Print S5904 (AIRCFB, Polites SDP, Watson SDP, Gay C, 12 May 2000).
[54] Ibid [13].
[55] Print N6999, (AIRCFB, Munro J, Duncan DP, Merriman C, 9 December 1996).
[56] Ibid [22].
[57] Print S5904 (n 55).
[58] PR760213
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