Paul Harris v Pages Hire Centre NSW Pty Ltd T/A Pages Event Equipment
[2010] FWA 8863
•24 NOVEMBER 2010
[2010] FWA 8863 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Paul Harris
v
Pages Hire Centre NSW Pty Ltd T/A Pages Event Equipment
(U2010/9648)
COMMISSIONER BISSETT | MELBOURNE, 24 NOVEMBER 2010 |
Application for unfair dismissal remedy - termination at the initiative of the employer.
[1] This is an application by Mr Paul Harris (the Applicant) for relief from unfair dismissal under s.394 of the Fair Work Act 2009 (the Act).
[2] Mr Harris says his employment was terminated on 11 June 2010.
[3] The matter was subject to conciliation but was not settled at that stage.
[4] The Applicant was represented by Mr Pinchen and the Respondent by Mr Boros.
Statutory provisions
[5] The Respondent says that the Applicant’s employment was not terminated by the employer but that the Applicant resigned. The Applicant submits that he was forced to resign because of the conduct of the employer.
[6] In order to determine if the Applicant has been unfairly dismissed I must first determine if he has been dismissed within the meaning of the Act.
[7] The Act states:
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.
Background
[8] Mr Harris commenced working for the Respondent in April 1998 in Sydney.
[9] In February 2007 Mr Harris was offered a position in Melbourne following his request for a transfer to the Melbourne office. In August 2007 Mr Harris moved to Melbourne with his family (at the expense of the Respondent).
[10] The Applicant says that the move was always permanent. 1 The Respondent says that the basis of the move to Melbourne was not necessarily permanent and that it reserved the right to return Mr Harris to Sydney if his move to Melbourne ‘did not work out’.2
[11] On 19 April 2010 the Respondent met with Mr Harris and advised him (in writing) that his position in Melbourne no longer existed and that, as per the agreement the Respondent says it had with the Applicant, ‘we will offer you your former position [in Sydney] and not change your condition[s] of employment or benefits...You may contact Leon when you are ready to relocate and he will organize the transport of your furniture.’ 3
[12] The letter to the Applicant of 19 April 2010 also stated that the Applicant was ‘now on long service leave effective from today 19/04/10 until 14/06/10. You will report to Sydney to take up your former position on the 15/06/10.’ 4
[13] Mr Harris’ evidence is that ‘the actions of the Employer [sic] were designed to force me to resign. On the 11th of June 2010 I resigned’. 5 In his letter of resignation to the Respondent Mr Harris says ‘I feel that your actions constitute a constructive dismissal and therefore I have been forced to leave.’6
[14] Mr Harris says that relocating back to Sydney was such an onerous requirement that he had no choice but to resign. He submits that he was forced to resign because of the conduct of the employer. He has therefore been dismissed and claims this dismissal is unfair.
The evidence
The Applicant
[15] Mr Harris’ evidence is that when he came to Melbourne he thought he would be undertaking a sales role similar to that which he had performed in Sydney. When he arrived in Melbourne in late 2007 he found he was undertaking the management of projects, 7 including the Australian Open. He says that for the first seven months he was in Melbourne he spent 75% of his time project managing and 25% of his time chasing new sales.8 In June 2008 Mr Harris temporarily took over the National General Manager role which ‘distracted [him] once again from [his] core role of sales acquirement and retention.’9
[16] Whilst Mr Harris agrees that he only sold $800,000 of business in the 2008 calendar year he says this increased to $1.6 million in the 2009 calendar year. 10
[17] Mr Harris (along with other staff) took a pay cut in March 2009, due to the downturn in business caused by the global financial crisis. 11 Mr Harris agreed however that the amount forgone was repaid to staff on 1 December of that year and salary rates were returned to their previous level.12
[18] In April 2009 Mr Harris received an email from the Respondent advising that the Respondent wanted him, Mr Harris, to return to Sydney. The email was generated in part because of an apparent failure of Mr Harris to remove quotes from sales figures. The email also stated that the Respondent would ‘discuss this on Tuesday and we will make plans for your return to Sydney, sorry I cannot let the Melb situation get worse than it is already. Accept it Has [sic] not worked and it is time to return to Sydney. We agreed to give it ago [sic] and well it is just not working...’ 13
[19] Mr Harris says he took over the role of operations manager in October 2009 when the occupant of that position resigned, although ‘it wasn’t officially but no-one else was capable or able to manage the operations that we had.’ 14 From this point until the end of his employment, Mr Harris says he worked in the sales, marketing and major projects manager’s role.15
[20] Mr Harris informed the Respondent in December 2009 that he was selling his house in Sydney. 16
[21] On return from his leave in January 2010, Mr Harris says he was given a written warning with respect to performance issues. The warning stated that:
[y]our performance since relocating to Melbourne has been extremely disappointing. You have not maintained relationships with the existing clients the company had, even though you were relocated to Victoria for that sole purpose. As of today you are on 3 months notice that your employment will be terminated if you do not follow the criteria below:
...
Paul, your lack of sales activity has collapsed the established business in Victoria which had an annual turnover of $4m 2 years ago. We entrusted that business to you, to grow and maintain and you have occupied yourself in areas that are not your prime purpose, due to this we now have less clients.
If you do not agree to the above then your resignation will be accepted effective immediately. 17
[22] Mr Harris agreed that the performance measures in the letter were not onerous. 18
[23] Mr Harris’ evidence is that he sought to meet the targets set out in the performance letter and ‘thought [he] was doing a good job’. 19 He reported daily to Mr Thatcher via email of his activities for the day as required, although he agreed he did not record his activities in his diary as per company procedure.20
[24] On 19 April 2010 he was contacted by the Respondent and advised that he was being transferred back to Sydney and being placed immediately on long service leave. He was required to hand over his laptop, mobile phone, keys, passwords and lift access pass. 21 Mr Harris says he did not believe the Respondent really wanted him back in Sydney, otherwise he would not have taken his laptop and so on from him.22
[25] From 19 April 2010 until he submitted his letter of resignation, Mr Harris’ evidence is that he heard from no one at the company, although he did speak to some junior employees who were friends. 23 He believes he was cut off and given no support for the move to Sydney.24
[26] Mr Harris resigned on 11 June 2010 because he believed he was forced to do so.
[27] Mr Harris provided evidence of attempts he has made to mitigate his loss through applying for over 80 jobs.
The Respondent
[28] Mr Boros gave evidence for the Respondent that when Mr Harris came to Melbourne it was a temporary measure, although this was never put in writing. 25 Much of the work of the company, he says, is done on verbal agreements and understandings.26
[29] The pay cut in March 2009 referred to above was voluntary, 27 was repaid to staff in December of that year and was done to try and ensure staff did not have to be laid off.28
[30] When Mr Harris came to Melbourne it was expected that he would take control of the existing client base and nurture the relationships with those clients. He had no formal budget that he was expected to meet. 29
[31] The Respondent says Mr Harris was not required to project manage or take over the functions of the project manager who resigned his position in Melbourne. The duties of the project manager position ‘were basically taken back as we would do a remote job in Tamworth. Basically, the salesman goes through the process, takes the order, provides the brief. An operations or a construction employee or supervisor would be dispatched with the equipment to build it, erect it and pull it down.’ 30 As such, Mr Harris did not need to be on site project managing.
[32] Mr Boros agreed in his evidence that the performance letter of January 2010 did state that if Mr Harris did not accept the performance measures his resignation would be effective immediately. He stated that he is pretty direct and if he wants to achieve a result he words things to achieve that result. 31
[33] Mr Boros further gave evidence that the targets set in the January 2010 performance letter were the first time he had set actual targets for Mr Harris. 32 Mr Boros expected that Mr Harris would report against the targets in the company’s diary system. His expectation was that Mr Harris would follow through with his agreement (the signed performance letter in January 2010) without Mr Boros having to check up on him.33
[34] Mr Boros’ evidence is that Mr Harris only met 40% of the set targets in the January performance letter. 34
[35] Mr Boros’ evidence is that the requirement that Mr Harris return to Sydney was a demotion 35 (which would appear to be based on the Melbourne role being a ‘management’ role36) although Mr Harris would be performing the same work in Sydney as he had done prior to his move to Melbourne.37 Mr Boros agreed that Mr Harris was required to return his laptop, keys etc at the meeting on 19 April 2010 but said that these were required to enable contact to be maintained with clients and to enable emails and calls to be returned.38
Has Mr Harris been dismissed?
[36] Prior to considering the merits of Mr Harris’ application I must first determine if he has in fact been dismissed within the meaning of s.386 of the Act.
[37] The purpose of s.386 of the Act is to ‘capture case law relating to “termination at the initiative of the employer”’. 39
[38] In Mohazab v Dick Smith Electronics Pty Ltd 40(Mohazab) the Full Court of the Industrial Relations Court held that
a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. 41
[39] Further, they found it
unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p 3, referred to the situation of an employee who resigned because “he felt he had no other option”. His Honour described those circumstances as
“... a termination of employment at the instance [of] the employer rather than of the employee.”
And at p 5:
“I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.”
...
When an employee has no effective or real choice but to resign it can hardly be said that the termination of her or his employment is truly at the employee’s initiative. 42
[40] In Rheinberger v Huxley Marketing Pty Limited 43 Moore J said:
However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer’s conduct. 44
[41] In Doumit v ABB Engineering Construction Pty Limited 45 a Full Bench of the AIRC found:
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.
[42] In O’Meara v Stanley Works Pty Ltd 46 a Full Bench of the AIRC said:
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.
Consideration
[43] The authorities demonstrate the need for there to be a connection between the action of the employer, objectively analysed, and the resignation of the employee. The effluxion of time between those actions of the employer and the decision of the employee to resign, in my opinion, substantially weakens this causal link. In this matter, the actions of the employer that forced Mr Harris to resign occurred over seven weeks prior to Mr Harris actually submitting the letter in which he claims he has been constructively dismissed 47 (the resignation letter).
[44] When Mr Harris moved to Melbourne he understood the transfer to be permanent - he moved his wife and children to Melbourne. He sold his house in Sydney (three years after the move to Melbourne). Mr Boros believed the move was not permanent, even though the company paid for the move to Melbourne and paid the Harris’ first six months’ rent. That Mr Boros truly believed it was not permanent is borne out by his correspondence to Mr Harris on 11 April 2009, where he stated they should make plans for Mr Harris’ return to Sydney. The lack of anything in writing setting out the terms of the transfer to Melbourne in 2007 is deplorable. While it may be normal for Mr Boros to conduct business orally, this case demonstrates how badly things can go wrong when nothing is put in writing.
[45] Whilst Mr Harris was in Melbourne he appears to have had mixed fortunes with respect to what was expected of him while he was there. Certainly in some periods his sales appear substantial, but there is a level of disputation about these and with the non-removal of quotes from the system which then adversely affected Mr Boros’ capacity to properly plan based on anticipated cash flows. Mr Harris was adamant that he had a much more extensive role than he anticipated in Melbourne, although Mr Boros suggests that this was not as extensive as Mr Harris suggested. In any event specific targets were not set for Mr Harris until January 2010.
[46] Where there is a conflict in the evidence of Mr Harris and Mr Boros I prefer the evidence of Mr Boros. He was straight forward and did not seek to embellish the circumstances or events at all. As he himself said, when he wanted something he was forthright in stating it. I found him forthright in his evidence. Mr Harris I find did at times exaggerate in his evidence, particularly with respect to his responsibilities in Melbourne.
[47] On 19 April 2010 Mr Harris was told he was to return to Sydney and report to work on 15 June 2010. It was more than seven weeks after being told this that Mr Harris sent in his resignation letter.
[48] In his letter of resignation of 11 June 2010 Mr Harris lists the conduct which he says forced his resignation and which he took to be a constructive dismissal by the Respondent - the termination of his Melbourne position, requirement to relocate to Sydney, the decision to place him on long service leave, confiscation of his car, office keys, laptop etc and the silence over the 8 weeks since 19 April. This course of conduct (save the silence) of the employer had stopped on 19 April 2010.
[49] Mr Harris’ delay in sending in his resignation letter belies that he truly believed his move to Melbourne was permanent or that the conduct of the employer on 19 April 2010 forced him to resign. Had he known or believed his move to Melbourne was permanent, some reaction on 19 April 2010 when he was told he must return to Sydney would be expected. Had he considered that his employment was terminated by his employer at this time it is reasonable to expect he would have protested in some form or another at this time.
[50] Apart from the ‘silence’, the matters of complaint were all squarely in front of Mr Harris more than seven weeks earlier with no response from him. He did not leave the meeting on 19 April 2010 and resign then and there or state that he felt his employment had been terminated. He went home, apparently brooded over the requirement to return to Sydney and then decided seven weeks later, and four days before he was due to report to work in Sydney, that he had been constructively dismissed.
[51] During this seven week period Mr Harris did not contact ‘Leon’ as the letter of 19 April 2010 requested he do to arrange the relocation of his furniture. Whilst this may be taken as an indication that Mr Harris did not accept the relocation to Sydney, within the context of other actions of Mr Harris it is not persuasive in any sense.
[52] Further, during the period 19 April - 11 June 2010 Mr Harris applied for a large number of jobs. This was evidenced in the proceedings. 48 Mr Harris started applying for these jobs immediately following the events of 19 April. This tends to indicate that he had made up his mind that he would not return to Sydney and would seek alternative work in Melbourne. This being so he still did nothing to protest to the employer until 11 June 2010. The combination of applying for jobs and not advising the employer of his resignation or belief that he had been dismissed until more than seven weeks after the event does not, in my opinion, support a conclusion that the Mr Harris was forced to resign because of the conduct of the employer.
[53] I find that Mr Harris, in leaving a seven week gap between the time he was told he must relocate back to Sydney and his letter of resignation, cannot sustain a position that he was forced by the actions of the employer to resign. There is too much time between the actions of the Respondent and the reaction of the Applicant.
[54] Mr Boros believes he was doing no more than implementing the agreement he had with Mr Harris that Mr Harris would return to Sydney if it ‘did not work out’ in Melbourne. From a business perspective Mr Boros considered it had not worked out having Mr Harris in Melbourne. He had flagged in April 2009 that he would have to discuss with Mr Harris a move back to Sydney - though subsequently did not move him back at that point. Whilst the agreement on Mr Harris’ return to Sydney is disputed by the Applicant I do not find that the decision in April 2010 to return Mr Harris to Sydney was intended to bring the employment relationship to an end. Further I do not consider the requirement that Mr Harris return his lap top, keys etc to the Respondent to be actions designed to bring the employment relationship to an end. They are legitimate business tools provided by the business, necessary for them to continue to operate the business whilst Mr Harris was on long service leave.
[55] The capacity of Mr Boros to place Mr Harris on long service leave does raise questions but I note that Mr Harris did not raise any concerns with the Respondent that such an action may not be lawful until 11 June 2010.
[56] By the time seven weeks had passed, and having heard nothing to the contrary from the Applicant, the Respondent had reason to believe that the Applicant would report for work in Sydney on 15 June 2010.
[57] Whilst in general a requirement for an employee to move from Melbourne to Sydney may be considered such an onerous condition as to be seen as termination of employment at the initiative of the employer, my difficulty in this matter is that Mr Harris, by his silence for such an extended period of time, acquiesced to the decision of the Respondent. He gave no indication that the decision of the Respondent was not acceptable. It was not until much later that he then felt that he had no choice but to resign.
Conclusion
[58] For all of the reasons set out above I find that Mr Harris was not forced to resign by the conduct or course of conduct of his employer. He therefore was not dismissed within the meaning of the Act.
[59] Having found that Mr Harris was not dismissed I do not need to consider if he was unfairly dismissed.
[60] The application is dismissed.
COMMISSIONER
Appearances:
G. Pinchen, for the Applicant.
A. Boros, for the Respondent.
Hearing details:
2010.
Melbourne:
9 November.
1 Exhibit A1 paragraph 26.
2 Exhibit R1 paragraph 17.
3 Exhibit A1 attachment H.
4 Exhibit A1 attachment H.
5 Exhibit A1 paragraph 30.
6 Exhibit A1 attachment J.
7 Transcript PN27.
8 Exhibit A1 paragraph 7.
9 Exhibit A1 paragraph 8.
10 Exhibit A1 paragraph 11.
11 Exhibit A1 paragraph 12; Transcript PN 34.
12 PN150-1
13 Exhibit A1 attachment C.
14 Transcript PN39.
15 Exhibit A1 paragraph 16.
16 Exhibit A1 paragraph 18.
17 Exhibit A1 attachment E.
18 Transcript PN203-6.
19 Exhibit A1 paragraph 22.
20 Transcript PN212.
21 Exhibit A1 paragraph 24.
22 Exhibit A1 paragraph 27.
23 Transcript PN52.
24 PN52.
25 PN321-7.
26 PN328.
27 PN344.
28 PN350.
29 PN352.
30 PN360.
31 PN366, 368.
32 PN436.
33 PN438, 440.
34 PN440.
35 PN405.
36 Exhibit R1 paragraph 23.
37 Transcript PN416.
38 Exhibit R1 paragraph 26.
39 Explanatory Memorandum, Fair Work Bill 2008 (Cth) paragraph 1528.
40 (1995) 62 IR 200.
41 (1995) 62 IR 200,205.
42 (1995) 62 IR 200, 205-6.
43 (1996) 67 IR 154.
44 (1996) 67 IR 154, 160-1.
45 AIRC, N6999, (9 December 1996).
46 AIRC, PR973462, (11 August 2006).
47 Exhibit A1 attachment J.
48 Exhibit A2.
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