Rosario Bevacqua v Konstruct Interior Solutions Pty Ltd
[2023] FWC 2637
•16 OCTOBER 2023
| [2023] FWC 2637 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Rosario Bevacqua
v
Konstruct Interior Solutions Pty Ltd
(C2023/4339)
| DEPUTY PRESIDENT LAKE | BRISBANE, 16 OCTOBER 2023 |
Application to deal with contraventions involving dismissal – change in work hours – salary increase not provided – jurisdictional objection raised – no dismissal – jurisdictional objection upheld – application dismissed.
Mr Rosario Bevacqua (the Applicant) lodged a general protections application involving dismissal to the Fair Work Commission (the Commission) on 20 July 2023. The Applicant claimed that adverse action was taken against him by Konstruct Interior Solutions Pty Ltd (the Respondent) under ss.340, 343, 344, 351 and 352 of the Fair Work Act 2009 (Cth) (the Act). The Respondent raised a jurisdictional objection that the Applicant was not dismissed.
For the Applicant to be eligible to make a claim under s.365 of the Act, the Applicant will need to establish that he was dismissed in accordance with the definition in s.386 of the Act.
Background
The Applicant commenced employment with the Respondent on 22 May 2022, initially as Manufacturing Manager and later as Factory Manager. The Applicant was engaged on a full -time basis of 40-50 hours per week.
The Applicant submitted that he had approached Mr Dan Betts and Mr Jeremy Carney in early June 2023 to follow up on the agreed 5% increase on his salary after a year of employment, that was agreed at the time of his commencement, and asked if this would be backdated to 22 May 2023 the one-year anniversary of his commencement date. He submitted that he mentioned to the Respondent representatives that for the following 2 months he needed to attend to his health and therefore would only be able to work 38 hours a week instead of his usual 40-50 hours. The Respondent submitted that the Applicant had advised Mr Betts and Mr Carney that he would only be working 38 hours per week (with no suggested end date) and sought a 5% salary increase.
A meeting was arranged for 16 June 2023 to discuss these changes. The Applicant contended that at the meeting, the Respondent indicated that they would be changing his employment from a salary of $100,000 per annum to an hourly rate, reducing his hourly rate from $50.61 per hour to $42.70 per hour and effective immediately, his role as Factory Manager was replaced with the role of Production Manager.
The Respondent submitted that Mr Betts advised the Applicant that his demand for a salary increase to $105,000 per annum was rejected and that the Applicant was expected to work as per the contract of 40-50 hours to continue in his current role. If he was unable to continue to work the agreed hours, the Respondent proposed to reduce the Applicant’s hourly wage to $44.40497, which reflected the current annual salary based on 42 hours per week, an average working week.
The Respondent contended that the Applicant gave a verbal resignation in response to this offer. The Applicant submitted that this was a heat of the moment resignation which he withdrew immediately stating “I resign” followed with “I take that back. I need to talk with Lara.”
The Respondent submitted that they took this as a resignation however when the Applicant contacted Mr Betts via email on 18 June 2023, reiterating his position that he would be working 38 hours per week and was not prepared for this change to be reflected in his salary, the Respondent was comfortable that if the Applicant wished to return to work for the Respondent he could do so, provided the salary/wage were aligned to the hours to be worked.
The Applicant submitted that because Mr Betts and Mr Carney had advised that the salary and position change was to take effect immediately, the Applicant included in his email of 18 June 2023 “I do not consent to the reduction of my salary and although I will be coming to work on Monday this does not indicate an acceptance of any changes to my current salary.” On Monday 19 June 2023 the Applicant was told by Mr Betts and Mr Carney that they preferred him not to attend work while his email of 18 June 2023 was being reviewed. The Applicant worked half a day and went home by mutual agreement. On 21 June 2023 the Applicant end on unpaid sick leave, providing a medical certificate until 30 June 2023.
Several emails were exchanged between the parties between 20 to 30 June 2023. The Applicant submitted that he reached out to Mr Betts on 22 June 2023 to request that the reconciliation of his overpayment for his salary sacrifice car be paid out to relieve his financial stress of unpaid leave. The Respondent submitted that on 25 June 2023, they outlined 3 options for the Applicant to return to work:
(a) The Applicant work the hours specified in the contract, on which the salary was based
(b) They agree a revised salary to be based on the revised hours; or
(c) The Applicant work on an hourly wage so the pay reflects the hours performed.
On 29 June 2023, the Applicant advised the Respondent in writing that he would not be prepared to work on the basis of his current contract (of 40-50 hours per week) or on the alternatives offers by the Respondent, and would be returning his car and the keys to the factory:
“Based on your response, I will not be returning to work on those conditions and I will be pursuing an Adverse Action Claim with Fair Work. I will be returning the car to your workshop this weekend and putting all keys in the lockbox.”
The Respondent submitted that while not using the word “resignation,” the email is clear and was reinforced by the Applicant’s advice that he would be returning the keys to the factory (the vehicle which is necessary for the Applicant to perform the duties of his employment) and a salary sacrificed vehicle. In the alternative, the Respondent submitted that this amounted to a repudiation of the contract of employment which was accepted by return email from Mr Betts on the same day.
The Applicant submitted that the Respondent continued to contact him, demonstrating a continued employment relationship:
“Until the vehicle is sorted out we are unable to set the salary or reimburse any assumed amounts, rest assured any monies that are owed to you will be paid.”
“Please let us know whether you wish to proceed with the revised salary arrangement, or whether you are prepared to work in accordance with the original arrangement.”
The Applicant submitted that at no stage did he resign. He advised that he was not accepting the changes to his salary and position. He made this very clear. In his email on 29 June 2023 and again on 30 June 2023 clearly stated that he was not resigning. On 30 June 2023, Mr Betts responded:
“If you are not returning to work and unable to open up and lock up the factory, we will require the factory key and Gate fob returned so we can give them to somebody else. We will calculate and look into you payments and have them fixed up next pay run”
On 3 July 2023, the Applicant dropped off the keys as requested and provided a medical certificate stating he was unfit to return to work until 24 July 2023. Later that day, the Applicant sought legal advice and his representative contacted the Respondent including the following:
“Mr Bevacqua’s fitness to return to work will be assessed by his doctor on or about 24 July 2023. In the meantime, please provide a written assurance on behalf of the Company that it will ensure that it acts in accordance with its obligations to him, including but not limited to its obligations to him under the terms of the Fair Work Act 2009 and the WHS Act. In the event that the Company chooses not to provide that written assurance, Mr Bevacqua reserves his right to conclude that his employment is at an end at the initiative of the Company.”
On 20 July 2023 the Respondent replied to the letter stating that the Applicant’s employment ended on 29 June 2023. Upon receipt of this, the Applicant lodged his application.
Consideration
Section 365 of the Act requires a person to be dismissed to be eligible to make a General Protections application involving dismissal.
Section 386(1) of the Act relevantly provides that 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.
The Full Bench in Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli outlined the relevant authorities with respect to what it means for an employee’s to be terminated at the initiative of the employer.[1] In short, it is not sufficient to simply demonstrate that the employee did not voluntarily leave their employment.[2]
While it may be that some action on the part of the employer is intended to bring the employment to an end, it is not necessary to show the employer held that intention.[3] It is sufficient that the employer’s conduct, would, on any reasonable view, be likely to bring the employment relationship to an end.[4]
All the circumstances – including the conduct of both the employer and employee – must be examined.[5] In other words, it must be shown 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.”[6]
The Full Bench of this Commission in ABB Engineering Construction Pty Limited v Doumit (ABB) said, in relation to determining whether the ending of an employment relationship is a voluntary or forced resignation:
“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.”[7]
(emphasis added)
In Pawel v Australian Industrial Relations Commission,[8] the Full Bench noted:
“Mere "causation" or "motivation” will not satisfy the requirement that the termination be at the initiative of the employer.”
The Respondent also referred to Pawel in illustrating that refusing a salary increase does not instigate a position of forced resignation, and argued that this concept also applies to when an employee’s request for a change in their employment arrangement is rejected:
“…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… 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…”[9]
Furthermore, Senior Deputy President Richards in Hastie v Impress Australia Pty Ltd[10] said:
“The employer’s conduct (when it is not evidenced was intended to bring about the resignation directly) must be conduct that is in some way or in some manner oppressive or repugnant in the ordinary course, and/or else so impacted on the volition of the employee such that the resignation was a reasonable response to that conduct in all the circumstances.”
The Full Bench in NSW Trains v James [2022] FWCFB 55 at 161 states:
“The expression ‘significant reduction [in remuneration or duties]’ takes its ordinary meaning as being a reduction that is ‘important; of consequence’. Previous AIRC and Commission decisions give an indication of the magnitude of a reduction that may constitute a significant reduction. We also agree that whether a reduction in remuneration or duties is ‘significant’ is an objective test, having regard to all the circumstances."
In Knott v Mr Godfrey Mantle T/A MGH Employment & Training Pty Ltd (Mantle Group Hospitality) [2021] FWC 2498 at [33], Deputy President Young notes:
“a dismissal takes effect when the employment relationship has ended.[11] The termination of the employment relationship is a different concept from the termination of an employment contract.[12]”
In consideration of the case law above, the focus is on the employment relationship rather than the termination of the employment contract. Although the Applicant felt that he was forced to resign from his original role as he was not able to fulfil the original obligation of his salaried role, the revised offer was not at a level where it was a significant reduction of renumeration or duties where it meets the standard of constructive dismissal or forced resignation.
The Applicant states in his submissions that he was employed on a salary of $100,000 with an annual salary increase of 5% which was guaranteed to him. However, the Applicant omitted that he also guaranteed that he would work 40 to 50 hours a week, along with perform weekend work which he was not able to fulfil.
The Applicant wanted to reduce his hours to 38 hours a week because of health issues. The Respondent tried to accommodate the Applicant per his request with a reduction of hours, which resulted in changes of how the Applicant would be paid. The Applicant was no longer intending to work weekends or overtime which was reflective in the salary rate, but not in his hourly rate.
The Applicant stated on 23 June 2023:
“Please advise given the next steps and what (if any) position you have for me based on the fact that I will only be able to work 38 hours on the agreed salary of $105,000. If you are removing the agreed salary sacrifice arrangement, then I will need more time to organise another vehicle”.
The Applicant further stated on 29 June 2023:
“Based on your response, I will not be returning to work on those conditions, and I will be pursuing an Adverse Action Claim with Fair Work. I will be returning the car to your workshop this weekend and putting all keys in the lockbox.”
The Applicant advised the Respondent in writing that he would not be prepared to work on his current contract (of 40-50 hours per week) or on the alternatives offers by the Respondent and would be returning his car and the keys to the factory.
It was clear from this point that the Applicant did not intend to continue with the employment relationship. The medical certificates do not indicate a continuation of the employment relationship. The Applicant did not intend to return to work regardless of whether he would be fit for work unless the Respondent had provided the Applicant the original salary, the bonus, along with a reduction in hours.
I find that the Applicant was not dismissed as his role was still provided for him with one which accounted for overtime and weekend work, and one which accounted for the standard hours of work with no overtime or weekend work required. The Applicant did not want to accept either role therefore repudiating the employment relationship.
Conclusion
I find that the Applicant was not dismissed in accordance with s.386(1) of the Act. The jurisdictional objection is upheld, and the Application is dismissed. I order accordingly.
DEPUTY PRESIDENT
[1] Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli[2017] FWCFB 3941.
[2] Ibid.
[3] Ibid; see also Rheinberger v Huxley Marketing Pty Limited (1996) 67 IR 154, 160-161; see also O’Meara v Stanley Works Pty Ltd[2006] AIRC 496 (11 August 2006); Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200.
[4] Rheinberger v Huxley Marketing Pty Limited (1996) 67 IR 154, 160-161 cited in Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli[2017] FWCFB 3941 at [31].
[5] Whirisky v DivaT Home Care[2021] FWC 650at [77].
[6] Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200 and Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli[2017] FWCFB 3941 at [28].
[7] (1996) PRN6999.
[8] (1999) FCA 1660 at 58 (Pawel J).
[9] (1996) PRN6999 at [13].
[10] [2008] AIRC 102 at [48].
[11] Siagian v Sanel Pty Ltd [1994] IRCA 2; Metropolitan Fire and Emergency Services Board v Duggan[2017] FWCFB 4878 at [21].
[12] Visscher v Guidice and Others (2009) 258 ALR 651 at [53] to [5] per Heydon, Crennan, Keifel and Bell JJ; Metropolitan Fire and Emergency Services Board v Duggan[2017] FWCFB 4878 at [21]-[22]; Khayam v Navitas English Pty Ltd[2017] FWCFB 5162 at [31]-[50]
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