Ms Suman Verma v Sun Health Foods Pty Ltd

[2013] FWC 9520

[2013] FWC 9520

FAIR WORK COMMISSION

DECISION

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

Ms Suman Verma
v
Sun Health Foods Pty Ltd
(U2013/10411)

COMMISSIONER WILSON MELBOURNE, 4 DECEMBER 2013

Application for relief from unfair dismissal.

[1] Ms Suman Verma was employed by Sun Health Foods Pty Ltd as a factory supervisor 1 for over 26 years. Her unfair dismissal application records her as having commenced employment in November 1986 and having finished employment on 7 June 2013.

[2] It is evident from Ms Verma’s length of service that she has completed the minimum employment period. Ms Verma’s evidence of earnings is that her average weekly income was $1339, based on total earnings of $60,254.94 in the 2012 – 13 financial year in the period up to 21 May 2013 2.

[3] The conjunction of these two factors means Ms Verma is a person protected from unfair dismissal.

[4] The employer’s uncontested evidence is that at the time of Ms Verma’s termination of employment, Sun Health Foods employed “only a dozen people” employees, including its Managing Director 3. Sun Health Foods is therefore a “small business employer”, at the time Ms Verma left its employ. The Fair Work Act 2009 (the Act) defines a “small business employer” in s.23 to be one that employed “fewer than 15 employees at” a particular time.

[5] Relevant to this initial consideration are the following provisions of s.385 and s.386 of the Act;

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

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.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.

[6] Section 396 of the Act requires certain matters to be considered before the merits of an application are considered;

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[7] Notwithstanding the requirements of this section, there is another preliminary issue that requires determination, which is more conveniently dealt with before turning to the elements of s.396. The preliminary issue is whether, for the purposes of s.385, Ms Verma has been unfairly dismissed, and the determination of that question requires an examination of whether Ms Verma has been dismissed.

[8] If she has been dismissed, the further question arises of whether her dismissal was inconsistent with the Small Business Fair Dismissal Code. The circumstances of Ms Verma’s termination of employment are such as to not give rise to a consideration of whether it was a genuine redundancy (which is otherwise the last remaining element for consideration in s.396).

[9] Ms Verma’s application records the following fundamental complaint about the circumstances of her termination of employment;

“Forced resignation following course of conduct including unwarranted changing work arrangements, unwarranted warning, threat to dismiss unless the applicant accepts a pay cut”. 4

[10] Ms Verma claims her resignation was forced for the purposes of s.386(1)(b) of the Act. That is, she claims she resigned from her employment, being forced to do so because of conduct, or a course of conduct, engaged in by her employer Sun Health Foods.

[11] Sun Health Foods submitted that Ms Verma resigned her employment when she handed a resignation letter to the company’s Managing Director, Mr Theodore Andriopoulos, on 24 May 2013. The company contends Ms Verma is not a person who has been dismissed, and is therefore not someone who can be considered to be unfairly dismissed.

[12] The admitted and relevant evidence on these matters is limited, comprising the evidence of Ms Verma, Mr Andriopoulos and several short documents.

[13] Sun Health Foods sought to table written statements from five of its other employees. The tendering of these statements was objected to by Ms Verma’s representative. None of the authors of the statements were called to give evidence and, in any event, the content of statements do not sufficiently go to the events leading to Ms Verma leaving her employment to have probative value. I therefore do not rely on the material which they contain.

[14] In determining whether Ms Verma was dismissed from employment with Sun Health Foods within the meaning of s.386, I make the following findings of fact;

• On or around 20 May 2013, Mr Andriopoulos handed Ms Verma a warning letter 5, which said the following;




“Subject of warning : It has been noted that you have been late at starting work on time over the last few months as required. This is a first warning for your lack of commitment in carrying out your responsibilities as Supervisor.

You are advised to consider your responsibilities and perform duties as required.” 6

• There is insufficient evidence for me to make a finding that the warning letter was justifiably issued or not.



• On 21 May 2013, Ms Verma was involved in a conversation with the company’s accountant, Sunil, who she alleges told her that Mr Andriopoulos “wants you to take a pay cut”, “[b]ecause you are not doing your job properly”. When Ms Verma said she was not going to take a pay cut she alleges “Sunil said, ‘In that case he is going to terminate you.’” 7



• Ms Verma complained to her union, the AMWU Food Division, about the issuing of the warning letter and her belief she had been told to take a pay cut or be dismissed 8.



• I accept that Ms Verma made this complaint to her union.



• While I accept that Ms Verma made a complaint to her union about her belief, there is insufficient evidence before me to make a finding that what was said, if anything, to Ms Verma in relation to this alleged threat.



• On Friday 24 May, Ms Verma worked as usual and, after work had finished met as arranged with two union officers. They went to the company’s reception area and sought to meet with Mr Andriopoulos who came to see them. There was a brief discussion between all concerned, which is recorded in Ms Verma statement as follows;




“53. On the Friday, 24 May 2013, I worked as normal until 2.50pm.

54. I had prepared a resignation letter. After work I waited in the car to meet with Mary Churcher. Mary and Chris Spindler, also from the union, came. We went to see Theo.

55. Theo was standing in foyer; Mary asked why the times of work had changed.

56. Theo said the company needed me to do this time and start this time now.

57. Mary asked me, “You told Suman is she was not going to take a pay cut you were going to get rid of her.”

58. Theo said, “Oh I didn’t say that. Did I say that to you?”

59. I said, “No you didn’t but you told Sunil to tell me. Call Sunil. He’s in the next office.”

60. Theo said, “He can’t come, he is busy. If you have a complaint give it to us in writing.”

• In relation to this meeting, I note that within Ms Verma’s witness statement is a document purporting to be notes prepared by her union recording a meeting on 24 May 2013 between Ms Verma, Mr Andriopoulos (Sun Health Foods Managing Director) and the union. These notes refer to the union complaining that Ms Verma had been “told her pay was to be cut” 9. I note that the author of the document was not called to give evidence.



• Mr Andriopoulos rejects the proposition that the “pay cut” allegation was discussed in the meeting. 10



• Towards the end of the meeting on 24 May, Ms Verma handed Mr Andriopoulos a resignation letter 11. The letter was not introduced into evidence, and it apparently recorded an incorrect resignation date.



• The letter was handed to Mr Andriopoulos by Ms Verma in front of two union officers. There is no evidence they remonstrated with her about doing this.



• Sometime after the meeting on Friday 24 May, Sun Health Foods’ accountant, Sunil, told Ms Verma the date in the letter she had given Mr Andriopoulos was incorrect 12. As a result Ms Verma prepared a corrected resignation letter and provided it to Mr Andriopoulos through Sunil13 on either Monday 27 or Tuesday 28 May14. The revised letter reads as follows;




“Friday, 24 May 2013

Dear Mr Andriopoulos,

I wish to formally inform you of my decision to resign from Sunhealth Foods, commencing my notice period on Monday 27th of May 2013. My last day of employment will be 7^th of June 2013.

Yours sincerely

Suman Verma” 15

[15] Ms Verma’s submission is that she was forced to resign because of the compound of several factors and events;

• She had been given an unjustified warning;



• A manager is alleged to have told her she needed to take a pay cut or be dismissed;



• After this alleged threat she thought she was being “bypassed” 16 and “marginalised”17



• She resigned “[b]ecause I knew that [Mr Andriopoulos] was going to push me out of the door eventually” 18 and so she wanted to be the one to leave, but on her terms19.

[16] Noting there is insufficient evidence for me to find these factors or events took place as alleged, or that Ms Verma’s characterisation of them is correct, it is also the case that even if they are correct, there is insufficient evidence to connect these factors or events with Ms Verma’s decision to submit a letter of resignation on not one, but two occasions.

[17] Instead the evidence indicates that Ms Verma;

• was sufficiently confident and assertive to raise her complaints with her union and to ask them to attend with her a meeting with Mr Andriopoulos;



• had prepared a letter of resignation before the meeting took place 20; and



• provided the resignation letter and then, after realising it contained an incorrect date, provided a second resignation letter a few days later.

[18] The evidence also records that the duration of the meeting with Mr Andriopoulos was short 21 and that he denied the allegations put to him by the union22.

[19] While the Act recognises that a termination of employment at the initiative of the employer includes those circumstances when an employee has no effective or real choice but to resign 23 there is an onus on the applicant employee to prove they did not resign voluntarily and that the employer engaged in conduct, or a course of conduct which forced the employee to resign. However, an employee in such situation does not need to prove that the employer intended to force the employee to resign24.

[20] The Full Bench has held that;

“[23] 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.” 25

[21] The objective analysis of the employer’s conduct is to be weighed carefully;

“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”. 26

[22] The circumstances of Ms Verma’s employment are that her working relationship had apparently been deteriorating for some time. That deterioration resulted in the issuing of a warning to Ms Verma and accusations made to her about her timekeeping. Words of an uncorroborated nature were spoken to her by Sunil, which led her to believe she was being asked to take a pay cut. However, on the other side is that no demonstrated action was taken by the employer to cut her pay or to do anything further to threaten her with dismissal. Mr Andriopoulos denied the allegations, and took no action that was reported to the Commission in these proceedings to give life to what Ms Verma alleged.

[23] I also take into account that Ms Verma provided her resignation letter calmly and without reported emotion. I also take into account there is no evidence of words being spoken in the meeting that would reasonably have precipitated a resignation. Prepared earlier, the letter was handed over in the meeting of 24 May because she wanted to leave on her terms and not be dismissed. However, at that time, there was no threat of dismissal.

[24] This also was not a resignation “in the heat of the moment”. There is no evidence of a heated situation, and once she was alerted to a factual error in her letter of resignation, Ms Verma calmly made the correction and asked for the original letter to be replaced with another. She asked for this to be done at least one and possibly two working days after the original letter was provided by her. Viewed objectively, there were no heated words spoken at the time of Ms Verma’s resignation; and there was a reasonable period of time between the first and the second resignation letters during which Ms Verma could have expressed a change of heart, but chose not to 27. Finally, Ms Verma’s first resignation letter was provided to Mr Andriopoulos in the presence of her industrial representatives.

[25] As a result of the foregoing, I am not persuaded Ms Verma’s termination of employment was anything other than a resignation. She was not forced to provide it as a result of conduct, or a course of conduct, engaged in by the employer.

[26] As result I must find that Ms Verma has not been unfairly dismissed, because she was not dismissed.

[27] Because of this finding it is unnecessary for me to consider either whether Ms Verma’s termination of employment was inconsistent with the Small Business Fair Dismissal Code or whether it was harsh, unjust or unreasonable.

[28] An Order dismissing Ms Verma’s application for relief for unfair dismissal is issued at the same time as this decision.

COMMISSIONER

Appearances:

Mr G. Dirks for Ms Verma

Mr T Andriopoulos for Sun Health Foods Pty Ltd

Hearing details:

2013.

Melbourne:

November 14.

 1   Exhibit A2, para 2

 2   Exhibit A2, para 2

 3   Transcript, PN 198

 4   Suman Verma, Form F2, Application for Unfair Dismissal, item 2

 5   Exhibit A2, para 34 and Attachment SV2

 6   Ibid, Attachment SV2

 7   Ibid, para 36 - 39

 8   Ibid, para 41

 9   Ibid, Attachment SV3

 10   Transcript, PN 252

 11   Exhibit A2, para 61

 12   Transcript, PN 148

 13   Transcript, PN 151

 14   Transcript, PN 162 - 163

 15   Document MFI-1

 16   Exhibit A2, para 47

 17   Ibid, para 50

 18   Transcript, PN 123

 19   Transcript, PN 125 - 126

 20   Exhibit A2, para 54, transcript PN 123

 21   Transcript, PN 252

 22   Ibid

 23 FW Act, s.386(1)(b); see also Mohazab v Dick Smith Electronics Pty Ltd (No 2), (1995) 62 IR 200, at 206

 24   Australian Hearing v Peary, (2009) 185 IR 359, 367 [30].

 25   O’Meara v Stanley Works Pty Ltd (2006) 58 AILR 100 [23].

 26  ABB Engineering Construction Pty Ltd v Doumit Print N6999, 9 December 1996 (Munro J, Duncan DP and Merriman C).

 27   See Ngo v Link Printing Pty Ltd (1999) 94 IR 375 [12]

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