Ms Marwa Elgammal v BlackRange Wealth Management Pty Ltd ACN 092 380 348 T/A Commonwealth Financial Planning
[2010] FWA 7845
•24 NOVEMBER 2010
Note: An appeal pursuant to s.604 (C2010/5901) was lodged against this decision - refer to Full Bench decision dated 30 June 2011 [[2011] FWAFB 4038] for result of appeal.
[2010] FWA 7845 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Marwa Elgammal
v
BlackRange Wealth Management Pty Ltd ACN 092 380 348 T/A Commonwealth Financial Planning
(U2010/9231)
SENIOR DEPUTY PRESIDENT HAMBERGER | SYDNEY, 24 NOVEMBER 2010 |
Application for unfair dismissal remedy - termination of employment - whether constructive dismissal or resignation by the employee.
[1] On 27 May 2010, Ms Marwa Elgammal (the applicant) filed an application to Fair Work Australia (FWA) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act).
[2] In her application, Ms Elgammal alleged that her employment was terminated on 14 May 2010 by the respondent, BlackRange Wealth Management Pty Ltd T/A Commonwealth Financial Planning (BlackRange) and accordingly sought relief. The respondent maintained that Ms Elgammal abandoned her position and voluntarily resigned from her employment. The applicant contended in the alternative that, if what occurred amounted to a resignation, she was constructively dismissed within the meaning of s.386(1)(b) of the Act.
[3] The matter was conciliated without settlement on 24 June 2010 and subsequently referred to arbitration and heard before me on 7 October 2010.
[4] At the hearing, the applicant, represented by Mr Ayache, gave evidence on her own behalf. The respondent was represented by Mr Zilka. The following witnesses gave evidence on behalf of the respondent:
- Mr David Nimmo, owner and director of the respondent;
- Mr Robin Goodburn; and
- Ms Maya Wengkang, employee of the respondent.
Background
[5] Ms Elgammal commenced full time employment as a Para Planner/Administrative Assistant with the respondent (at the time trading under its former business name, Fortitude Wealth Management Pty Ltd) on 6 June 2005.
[6] In March 2010, following the respondent’s decision to outsource the “Para Planning” role to an external licensee, Ms Elgammal was offered Ms Wengkang’s position to allow her to continue her employment with BlackRange, given that she had been the longer serving employee of the two. As a result, Ms Wengkang’s employment was made redundant, effective 14 May 2010.
[7] Following the restructure, on 1 April 2010, Ms Elgammal’s position of employment with the respondent changed to Client Services Manager. Although the parties disputed whether Ms Elgammal received a formal contract in relation to her new role, it was conceded that the parties had discussed a verbal contract agreeing upon the following terms: 1
- salary of $65,000.00, plus superannuation and commission up to a maximum of $1,000.00 per month,
- maximum commission payable where 10 sales appointments made for BlackRange per week (i.e. about 40 appointments per month),
- hours of work from 7:45am to 4:45pm, Monday to Friday (i.e. 8 hours of work per day).
[8] The uncontested evidence of both parties was that Ms Elgammal and Mr Nimmo had enjoyed a good working relationship for approximately five years prior to the end of her employment. In cross-examination, Ms Elgammal spoke positively about Mr Nimmo, specifically that he had been accommodating of her family circumstances and allowed her to work flexible hours, provided that her hours of work were completed.
[9] The evidence of Mr Nimmo, which the applicant disputed, was that Ms Elgammal’s punctuality had increasingly become an issue in her employment. He said that he had noticed a recurring pattern of lateness to work and leaving work earlier than what was expected under her contract. Given this, the express inclusion of a start and finish time in the contract was important in demonstrating the respondent’s attempt to ensure that, in downsizing the business to one employee, Ms Elgammal would be available to cover specific hours of work each day, particularly whilst Mr Nimmo met with clients. Whilst Ms Elgammal downplayed the seriousness of this issue, her evidence was that she was required to start work at 7:45am pursuant to the terms of her contract.
The alleged termination
[10] The evidence of Ms Elgammal relating to 14 May 2010 was as follows: 2
“38. ...
(a) 6:50am: I sent message to David to the effect of: “Dave I’ll be dropping of (sic) Chanel at school at 7:40 then I’ll be in. Had falling out with mother in law.”
(b) 6:51am: David replies: “So what.”
(c) 6:52am: I replied: “See you soon.”
(d) 8:20am: I contacted David on his mobile and we had a conversation in words to the following effect:
I said: “Hey Dave I’m just parking the car, have you had your second coffee yet?”
David said in an abrupt tone: “Don’t worry we have a 9am with Rob.”
I said: “Are you Angry (sic)?”
He said: “Yes I am Marwa. If you can’t do your hours and be here when you are supposed to be, I will cut your pay next month to $3,800.00.”
I said: “Are you serious? I had to get my daughter to school so I can come to work.”
He said: “I don’t care what the excuse it. You can piss off like Maya. I need someone that can be in the office at 7:45am. If you can’t do these hours I will cut your pay to $3,800.00 or you can piss off.”
He mentioned the bonus he had paid me and felt that I was taking advantage of it. I note that I am not paid in advance and received the bonus for meeting the monthly target for the month of April-May.
I said: “Are you serious?”
He said: “Yes.”
I become (sic) very upset at this point. I did not want him to hear that I was crying and I said:
“I will call you back David” and I shut the phone.”
[11] Ms Elgammal’s account during the hearing supported the evidence previously deposed in her affidavit. Conversely, Mr Nimmo appeared to have difficulty recollecting the incident and at times, his oral evidence contradicted statements previously supplied to this tribunal. In such circumstances, I prefer the evidence of the applicant in relation to this incident where it conflicts with that of Mr Nimmo.
[12] Ms Elgammal alleged that the respondent had terminated her employment at this point, by virtue of his threat to the applicant that, “If you can’t do these hours I will cut your pay to $3,800.00 or you can piss off”. Ms Elgammal said that as she had a responsibility to care for her young daughter, it was not possible for her to guarantee that she would be at work without fail, at 7:45am each day. Therefore, in accepting the threat by the respondent that she would not be paid unless she arrived to work on time to be a termination of her employment, Ms Elgammal returned home.
[13] The applicant went on to say that at approximately 9:10am, she sent a further and final SMS message to Mr Nimmo. Both parties agreed that that message contained words to the following effect: 3
“I’ll post you my work key. 45 min late and you want to threaten me. You told me to piss off. I’ve been working so hard and reached my targets and that’s why you paid me extra. Organise with Robyn what needs to be done for my entitlements.”
[14] Mr Nimmo’s evidence is that at this point he expected the applicant to return to work. Following the receipt of Ms Elgammal’s SMS message, he attempted to contact the applicant by telephone on two occasions. However, Ms Elgammal did not answer these phone calls.
[15] Ms Elgammal did not contact the respondent until 17 May 2010. On that day she sent two emails to Mr Nimmo. The first of these was sent at 12:12pm. It read:
“David
Following our verbal discussion on Friday 14/05/2010 to which you advised me that you did not care what the excuse was and to “piss off” like Maya if I was unable to do the hours of 7.45am to 4.15 (regardless if I do my work or not) and to expect that next months salary will be cut to $3800, I now consider that my employment with your company has been terminated effective 14/05/2010.
Could you please forward me a letter of termination outlining the reason for my termination and advise when I can expect to be paid out my entitlements.”
[16] The second was sent at 1:30pm:
“Further to my email I did not specify a time frame for you to respond, I ask that you reply by 6pm today otherwise I will take the no response to mean that you have terminated my employment with Commonwealth Financial Planning effective 14/05/2010.”
Legislative framework
[17] Section 386 of the Act 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.”
[18] The Explanatory Memorandum to the Fair Work Bill 2008 states with regard to this provision:
“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 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.”
[19] The case law relating to the meaning of ‘termination at the initiative of the employer’ was considered by a Full Bench of the Australian Industrial Relations Commission in P. O’Meara v Stanley Works Pty Ltd (O’Meara) 4. The Full Bench stated:
“[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”
Was there a dismissal?
[20] The applicant contends that her conversation with Mr Nimmo on the morning of 14 May 2010 terminated her employment relationship with the respondent. All her conduct after that conversation is consistent with her holding this view. The question the tribunal has to resolve however is whether her view is consistent with an objective analysis of the facts.
[21] My interpretation of the evidence can be summarised as follows. None of the evidence supports a finding that Mr Nimmo had any intention of terminating the employment of Ms Elgammal. However, he did have an underlying concern at a lack of punctuality on her part. This would have been aggravated by the knowledge that his only other employee had been made redundant and was ceasing employment on 14 May 2010. When Ms Elgammal arrived at work on the morning of 14 May 2010 she was over half an hour late. She rang Mr Nimmo from the car park and implied that she was going to get a cup of coffee (by offering to get one for him). At that point, he is curt with her and reminds her that they have a meeting with Mr Goodburn. Ms Elgammal then asks him whether he is angry.
[22] Mr Nimmo responds with an outburst which at most implies that if the applicant continues to be late for her work either she should leave the respondent’s employ, or accept a reduction in pay. This outburst is made in the heat of the moment with little, if any, consideration, during a telephone conversation which, according to the applicant’s evidence, lasted for approximately 2.5 minutes. That conversation was brief and informal; neither party had any reasonable opportunity to engage in a rational and considered discussion in relation to Ms Elgammal’s employment and/or her allegedly relaxed attitude to punctuality.
[23] At no stage during the communications between the parties, did Mr Nimmo specifically state that he was terminating the employment of Ms Elgammal. Rather, he threatened to cut her payto $3,800.00 if she did not arrive to work on time, otherwise she could “piss-off”.
[24] The respondent made submissions in relation to the significance of the amount of pay that was referred to in Mr Nimmo’s threat to the applicant. Given that it is clear that this was a flippant remark made with minimal consideration, the submissions of the respondent are only helpful to the extent that they appear to roughly represent the value of the applicant’s net salary without commission. On this basis, I accept that it is probable that at most the threat indicated that Mr Nimmo did not intend to cut the applicant’s pay entirely, but rather, only pay her at her base salary without commission.
[25] Subsequent to this conversation, Ms Elgammal told her employer that she would call him back and ended the call. However she did not call Mr Nimmo back. Instead she sent a final message advising him that she would return her work key and requested her entitlements to be arranged.
[26] Mr Nimmo then attempted to call Ms Elgammal. However she chose not to answer this phone call. Ms Elgammal then failed to return to work. She also did not contact her employer, until the email correspondence was sent on 17 May 2010.
[27] Ms Elgammal’s employment had not been terminated; rather, regrettably, she was the recipient of an impulsive and offhand threat by an employer who was clearly frustrated that his soon to be sole employee had arrived to work late (and moreover appeared quite unconcerned about this fact). I find that Ms Elgammal resigned from her employment.
[28] I am not satisfied that Mr Nimmo’s conduct, seen in its proper context, compelled Ms Elgammal to resign from her employment with the respondent. While Ms Elgammal was understandably upset by Mr Nimmo’s comments, they were far from indicating that it would be impossible for the two of them to continue to work together. A reasonable course of action for the applicant to have taken would have been to ask for a proper and dispassionate discussion about reconciling her difficulties in getting to work on time and the needs of the business.
[29] It is in these circumstances that I am unable to find that the applicant was terminated at the initiative of her employer, or that the resignation of employment constituted a dismissal within the meaning of s.386(1)(b) of the Act. The application is therefore, dismissed.
SENIOR DEPUTY PRESIDENT
Appearances:
Mr M Ayache, for the applicant.
Mr E Zilka, for the respondent.
Hearing details:
2010.
Sydney.
7 October.
1 Exhibit E1, p5; Transcript PN438-439
2 Exhibit E1, p5-6
3 Exhibit E1, p6
4 (2006) PR973462, 11 August 2006, per Giudice J, Watson VP and Cribb C.
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