Ms Susan Kutty v Coast2Bay Housing Group Ltd

[2014] FWC 5481

[2014] FWC 5481

FAIR WORK COMMISSION

DECISION NO.2

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

Ms Susan Kutty
v
Coast2Bay Housing Group Ltd
(U2013/17493)

COMMISSIONER CAMBRIDGE SYDNEY, 12 AUGUST 2014

Unfair dismissal - jurisdictional objection - s.386 - employment not terminated on initiative of employer - application dismissed.

[1] This Decision involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was made by Susan Elizabeth Kutty (the applicant). The respondent employer is Coast2Bay Housing Group Ltd (the employer).

[2] This is the second Decision made in this matter. On 13 May 2014, the Fair Work Commission (the Commission) issued a Decision [2014] FWC 3147 which refused permission for the employer to be represented by lawyers or paid agents.

[3] The application was filed in Brisbane on 18 December 2013, and the employer filed a response on 22 January 2014. The application indicated that the date of that the applicant’s dismissal took effect was 6 December 2013. Consequently the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[4] Conciliation of the claim was conducted, by consent, at the commencement of the scheduled Hearing held on 13 May 2014. Conciliation was unsuccessful and the matter proceeded to arbitration which firstly dealt with the determination of the issue of permission for the employer to be represented by lawyers or paid agents. There was a short adjournment to the proceedings provided after the Commission issued the Decision [2014] FWC 3147 which refused permission for the employer to be represented by a lawyer or paid agent.

[5] The Hearing of the matter continued on 13 May, and included the jurisdictional objection raised by the employer which involved the question of whether the applicant was a dismissed employee. The Hearing also involved proceedings on the following day, 14 May 2014.

[6] At the resumption of the Hearing, the applicant was represented by her partner, Mr M Goulter, who called the applicant as the only witness to provide evidence in support of the claim. The employer was represented by its Chief Executive Officer, Mr Morrie Evans, who gave evidence as a witness himself and he adduced further evidence from two other witnesses.

Factual Background

[7] The applicant initially commenced employment with Breakthrough Community Housing Service Inc (Breakthrough)in 1999, and her employment transferred when that organisation merged with the employer in July 2011. The employer is a not for profit organisation which provides accommodation for underprivileged and disadvantaged persons in the Sunshine Coast and Moreton Bay local government areas north of Brisbane.

[8] The applicant was employed under a written contract made in July 2011 1 and which was underpinned by the Social, Community, Home Care and Disability Services Industry Award 2010. The applicant’s employment contract described her position as “Housing Manager, permanent, full time.” The applicant’s position has also been referred to as that of a Property Manager.

[9] At the time of the merger between Breakthrough and the employer, the applicant was one of three employees who worked from an office located at Caboolture. Following the merger, the applicant continued to work as a Property Manager based at the Caboolture office. The employer also operates another office located at Nambour, which is a little over 50 kilometres north of Caboolture.

[10] During 2012 and 2013, the employer identified some concerns with the work of the applicant which it largely attributed to different work practices and processes which the applicant had adopted whilst employed by Breakthrough. The employer sought to have the applicant change some of the work practices that she had developed during her years of work for Breakthrough. In 2013 the employer identified that the applicant had exceptional aptitude for a particular aspect of her duties which involved proceedings before the Queensland Civil and Administration Tribunal (the QCAT work). Consequently, in the latter part of 2013, the employer arranged to have a greater proportion of the applicant’s duties involve the QCAT work.

[11] In September 2013, the employer decided not to renew the lease for the Caboolture office premises and instead look for alternative, cheaper commercial premises in Caboolture. The process for obtaining cheaper alternative office accommodation in Caboolture required the closure of the Caboolture office and the relocation of the employees who worked from that location, including the applicant, to the Nambour office.

[12] On 28 October 2013, the employer’s CEO, Mr Evans, held a meeting with the employees at the Caboolture office and advised them of the closure of that office and their relocation to the Nambour office. The employer informed the employees at Caboolture office that the lease on the Caboolture premises expired on 22 December 2013, at which time the office would close. The applicant was advised that the employer sought to have her perform predominantly the QCAT work from the Nambour office.

[13] On 13 November 2013, the applicant arranged to drive to the Nambour office and speak with the employer’s Operations Manager, Ms Banfield, about some concerns that she had about the work that the employer envisaged for the applicant with her relocation from Caboolture to Nambour. The applicant raised concern as to whether the greater proportion of QCAT work combined with the relocation meant that she was being asked to take a different position and that therefore her existing position in Caboolture had become redundant. Ms Banfield rejected this characterisation of the proposed change to the role and work location of the applicant and advised the applicant that the role and relocation was covered by the applicant’s existing job description.

[14] Ms Banfield firmly rejected the suggestion that the applicant’s position was redundant. However, Ms Banfield was more receptive to concerns that the applicant raised about the travel costs associated with the relocation to Nambour. Ms Banfield said that the employer would not provide a vehicle for the applicant’s use but suggested that the Caboolture employees should consider car pooling or some other arrangement and get back to her with any proposal.

[15] During a staff meeting held on 20 November 2013, the applicant inquired further of Mr Evans about any arrangements that might reduce travel time and costs associated with the relocation from Caboolture to Nambour. Mr Evans told the applicant that the employer could not provide a motor vehicle to facilitate the commute to Nambour and he repeated the car pool suggestion as a means to reduce costs until such time as a new office in Caboolture had been arranged.

[16] On the following day, 21 November, the applicant sought legal advice and “...was advised to enquire about the process regarding a Constructive Dismissal Claim/Application under Section 394.”

[17] On 25 November, the applicant provided her written resignation to the employer in the form of an email sent to Ms Banfield which stated: “Good morning Lee, I hereby formally give notice of my resignation to Coast2Bay Housing Group with final date of employment being 06.12.2013. Regards, Sue Kutty”

[18] On 6 December 2013, the employer facilitated a “going away” party for the applicant which was held at the Nambour office.

The Applicant’s Case

[19] The applicant submitted that she felt that she was left with no choice but to resign based on the change and nature of the role involving unreasonably long travel hours. The applicant said that she had been treated differently and singled out by a senior staff member and she felt that this would continue at the Nambour office.

[20] The submissions made on behalf of the applicant asserted that the main problem was the car issue. These submissions asserted that the applicant was told that she was working from a different location, would not be provided with a car, and there was no negotiation from the employer about these changes.

[21] The applicant said that she had been forced to resign. The applicant had obtained other employment on the Wednesday following the date that her resignation took effect. The applicant did not seek reinstatement but the application indicated that the remedy sought was “Redundancy/compensation”.

The Employer’s Case

[22] Mr Evans, who appeared for the employer, made verbal submissions opposing the claim on the basis that the applicant was not dismissed from her employment. Mr Evans said that the employer had endeavoured to retain the applicant as an employee. He said that at no time had the employer sought to push the applicant out of her employment.

[23] Mr Evans submitted that the departure of the applicant created a problem for the employer. Mr Evans said that the employer had to subsequently recruit a replacement property officer to fill the position previously occupied by the applicant.

[24] Mr Evans further submitted that the employer had believed that the changed role of the applicant which involved the performance of more QCAT work was something that had been embraced by the applicant. Mr Evans also said that the employer was not in a position to provide the applicant with a car to facilitate her travel to the Nambour office. However, Mr Evans stressed that the relocation to the Nambour office was only a temporary arrangement pending the employer securing an alternative office location at Caboolture.

[25] Mr Evans also said that the employer was extremely disappointed that the applicant had made the decision to resign. He said that the employer was keen to retain the applicant in the organisation particularly performing the QCAT work which he undertook in a manner which was very productive for the employer. Mr Evans said that the employer had no desire to terminate the employment of the applicant and would take her lack at any point in the future should you choose to return to the organisation.

Consideration

[26] Section 385 of the Act stipulates that the Commission must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:

(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.

[27] In this case there was a jurisdictional objection raised in respect to that element contained in subsection 385(a) of the Act, specifically whether the applicant was a person who had been dismissed. The question of whether or not a person has been dismissed from employment involves mixed findings of fact and law. Further, section 386 of the Act prescribes a meaning of “dismissed”. Relevantly sub-section 386(1) of the Act is in the following terms:

“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.”

[28] In this instance the applicant provided a written resignation from her employment in the form of an e-mail communication dated 25 November 2013. The applicant has asserted that she was forced to resign from her employment because of conduct, including a course of conduct, engaged in by the employer. These circumstances are often described as a constructive dismissal in that it is asserted that it was the desire of the employer to have the applicant resign from employment and that action of the employer essentially compelled the applicant to resign.

[29] There is a significant amount of case law authority on the question of constructive dismissal. One case which is often referred to is that of Mohazab v Dick Smith Electronics (No2) 2(Mohazab) which succinctly summarised the concept of constructive dismissal as follows:

“However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.” 3

[30] In Mohazab, the Full Bench of the Court also referred to another authority in the case of Allison v Bega Valley Council  4 (Allison). The following extracts from the decision in the Allison case is particularly helpful for application in the present circumstances:

“Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?”

and

“In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee...”

[31] In the present case, the relevant actions of the employer involved the decision to implement some changed circumstances surrounding the role and location of the employment of the applicant. The evidence has established that the changed role of the applicant involving more QCAT work was not something strongly objected to by the applicant. Instead, the applicant was most concerned about the additional costs and inconvenience to her associated with the relocation from the Caboolture office to Nambour.

[32] There were a number of readily apparent aspects of the employer's decision to relocate the applicant's place of work from Caboolture office to Nambour which were suggestive of that action being taken without any intention that it should cause the resignation from the applicant's employment. Firstly, the evidence established that the underlying rationale for the move from Caboolture office to Nambour was to find a more cost-effective arrangement for office premises in Caboolture. Secondly, the relocation impacted all of the staff at the Caboolture office and as such did not “single out” the applicant. Thirdly, the relocation was for an unspecified but temporary period and it was anticipated that once suitable alternative office accommodation could be found in Caboolture the relocation would, in effect, be reversed. Fourthly, the timing of the relocation was directly associated with the end of the lease of the Caboolture office, and not otherwise influenced by any issue related to the applicant.

[33] These aspects of the employer's action involving the relocation of the applicant’s place of employment are strongly suggestive of action taken for proper business purposes and without any ulterior motive aimed at inducing the resignation of the applicant as occurred on 25 November 2013. Further, although the total additional travel time might be in the order of 75 - 90 minutes per day, such an alteration to the terms of employment would seem to be reasonable, particularly if adequate notice of the change was given, and that the alteration was temporary and anticipated to be reversed once alternative office accommodation in Caboolture was secured.

[34] However, the applicant did raise objection to the additional costs and inconvenience associated with the relocation to Nambour. The employer rejected the applicant’s suggestion that a vehicle might be provided to accommodate the travel to Nambour. The employer made suggestions regarding carpooling for three employees who would be temporarily relocated and although this did not appear to appeal to the applicant, the employer invited the applicant to suggest any alternative propositions.

[35] Importantly, the applicant did not make any further suggestions to mitigate the additional travel costs and inconvenience associated with the relocation to Nambour. The employer provided believable evidence that it would have been prepared to continue to negotiate arrangements that might have assisted the applicant with the relocation.

[36] In the absence of any further suggestion or other information from the applicant, the employer simply had no way of knowing that the applicant’s concerns regarding the relocation were of such magnitude and gravity as to stimulate her resignation. Indeed, the written resignation via email on 25 November made no mention that it was motivated by or connected with concerns regarding the relocation to Nambour.

[37] The employer understandably believed that the resignation of the applicant was freely given and without connection to her relocation concerns. In such circumstances it is simply not plausible or reasonable to contemplate that the actions of the employer were in any way intended to bring about the termination of the applicant's employment.

Conclusion

[38] The determination of this matter has involved a contest about whether or not the applicant was a person dismissed from employment. Upon application of the relevant tests and an analysis of the evidence involving the circumstances of the termination of employment, it has been established that the resignation of the applicant was not caused by conduct, or a course of conduct, on the part of the employer.

[39] Unfortunately, the applicant has appeared to misconstrue the concept of constructive dismissal and she has attempted to artificially elevate some concerns about changed terms of employment without properly communicating and attempting to fully resolve those concerns with the employer. A constructive dismissal is not established by a resignation founded upon unhappiness with changed employment circumstances, particularly if such changed circumstances appear to be reasonable and comprehended by the general terms, stated and implied, of the contract of employment.

[40] As a matter of fundamental fairness, the applicant was obliged to inform the employer that her concerns about relocation were of such significance that her continued employment was in jeopardy. If, after having been alerted to the potential for resignation from employment, the employer made little or no attempt to resolve or otherwise mitigate the issues, only then could the concept of constructive dismissal be potentially enlivened.

[41] Consequently, the applicant was not a person dismissed from employment and the jurisdictional objection as advanced by the employer must be upheld. The application is dismissed as it is without jurisdictional foundation. An appropriate Order [PR554187] shall be issued accordingly.

COMMISSIONER

Appearances:

Mr M Goulter, on behalf of the applicant;

Mr M Evans, on behalf of the employer.

Hearing details:

2014.

Brisbane:

May: 13 & 14.

 1   Exhibit 2 - Attachment “C”.

 2 Mohazab v Dick Smith Electronics Pty Ltd (No.2), (1995) Industrial Relations Court of Australia, 62IR 200.

 3   Ibid @ page 207.

 4 Allison v Bega Valley Council, (1995) Full Commission of the Industrial Relations Commission of NSW, 63IR 68.

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