Samantha Gurrier-Jones v OSM Australia Pty Ltd
[2024] FWC 3154
•14 NOVEMBER 2024
| [2024] FWC 3154 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Samantha Gurrier-Jones
v
OSM Australia Pty Ltd
(C2024/4780)
| DEPUTY PRESIDENT O’KEEFFE | PERTH, 14 NOVEMBER 2024 |
Alleged dismissal involving general protections – jurisdictional objection: employee not dismissed - jurisdictional objection dismissed.
Samantha Gurrier-Jones (the Applicant) has applied to the Fair Work Commission (FWC) under s.365 of the Fair Work Act 2009 (Cth) (the Act) alleging she was dismissed in breach of the general protections provisions of the Act by OSM Australia Pty Ltd (the Respondent). The Respondent objects to the FWC dealing with the application on the basis that it did not dismiss the Applicant.
Background
Briefly, the case involves a scenario where the Applicant had concerns about the role into which she was placed upon return from her parental leave, and the non-payment of her Short-Term Incentive bonus (STI) for the year ended December 2023. The Applicant’s case is that she should have been paid the bonus, which was potentially worth $22,050 and she claims that the role into which she was placed upon return from her personal leave was not the role to which she was entitled – being her pre-parental leave position.
In June 2023 the Applicant’s lawyers wrote to the Respondent claiming that there was a breach of contract due to non-payment of the STI and the failure to comply with the requirements of s.84 of the Act with respect to return to her pre-parental leave position. The Respondent denied any wrongdoing, claiming that the position specified by the Applicant’s lawyers as her pre-parental leave position was not her actual pre-parental leave position. It further claimed that the STI was - as per the terms of the Applicant’s employment contract – entirely discretionary.
Following this rebuttal, the Applicant’s lawyers wrote to the Respondent’s lawyers and set out the Applicant’s terms for resolution. The parties are at some level of disagreement over the effect of the wording of that letter. However, the result was that the Respondent’s lawyers wrote to the Applicant’s lawyers advising that they accepted her notification of termination of her employment. Thereafter the Applicant filed the application that gives rise to this decision.
Chronology of relevant events
The two central issues in the cessation of the Applicant’s employment were the role into which she was placed upon her return from maternity leave and the non-payment of her STI for the year ended December 2023. To assist in my analysis of the events that led to the cessation of that employment I have found it helpful to set out a chronology of those events, based on the evidence provided by the parties. Where there was some disagreement over the facts, I have noted this and the reason for my finding. The chronology is as follows:
11 April 2022: The Applicant was engaged by the Respondent as its Operations Manager.
21 May 2023: The Applicant informed her direct manager Mr Jeff Summers that she was pregnant and planning to take maternity leave from November that year.
7 June 2023: The Applicant met again with Mr Summers and at that meeting Mr Summers canvassed with the Applicant a move into a new role of Project Manager. This role was described as being one that held some potential benefits in terms of flexibility of work arrangements.
The Applicant agreed to that change. The Applicant’s evidence was that the change was due to take effect when she returned from parental leave. The Respondent’s evidence was that the Applicant was to take up the role as soon as possible and before she started her parental leave.
I have formed the view that the intention was for the Applicant to take up the role as soon as possible and that she did so. I note that in evidence was an email sent be the Applicant to colleagues on 17 July 2024 wherein she states in part:
“Lauren Watkins has joined us as Operations Manager, replacing myself, I won’t be leaving OSM, however I will be moving into a new Project Management (sic), before I go on maternity leave in November…”[1]
Also in evidence was a memo sent by the Applicant to clients of the Respondent confirming her move into a Project Management role, plus two emails from the Applicant – one later in July and one in September – where her email signature listed her as “Project Manager”. While I accept that the Applicant in all likelihood spent a good deal of her time between Mr Watkins’ commencement and her own departure on parental leave assisting first Ms Watkins and then Ms Jewson to learn the Operations Manager role, I am satisfied that she had in effect moved into the Project Manager role. Indeed, under cross examination by the Respondent, the Applicant conceded that when Ms Jewson commenced in the Operations Manager role her own role was Project Manager. I further note the unchallenged evidence of Mr Summers that neither Ms Watkins or Ms Jewson were engaged as parental leave relief but rather engaged to be the Operations Manager on a permanent basis.
Approximately Mid- Lauren Watkins commences as Operations Manager.
July
6 September 2023: The Applicant is informed that Ms Watkins will no longer be performing the Operations Manager role. The Applicant takes on the duties of the Operations Manager role while a replacement for Ms Watkins is sought.
2 October 2023: Ms Jewson commences as Operations Manager and the Applicant performs a handover.
13 October 2023: The Applicant’s last day of work prior to commencing parental leave.
10 January 2024: The Applicant sends a text to Mr Summers asking about the STI bonus. Mr Summers undertakes to speak to Mr Munyard - the Managing Director of the Respondent - and then advise the Applicant of the outcome.
16 January 2024: Having had no response to her text of 10 January, the Applicant again texts Mr Summers about the STI bonus but gets no reply. The Applicant confirmed in her evidence that prior to the sending of the letter from her lawyers, this matter was not raised again.
14 February 2024: The Applicant sends a text to Mr Summers asking about making an early return from parental leave on 22 April 2024.
15 February 2024: Mr Summers responds and says he will discuss it internally and get back to the Applicant.
19 February 2024: In response to a text from the Applicant, Mr Summers calls her and it is agreed that the Applicant will return from parental leave on 22 April 2024 and that she will work part time at four days per week.
22 April 2024: The Applicant returns to work. She has a meeting with Mr Summers at which she is advised that her role will be Workforce Planning Manager reporting to the Operations Manager Ms Jewson instead of himself, as had been the proposed arrangement for the Project Manager role. The Applicant objects to this change in reporting and her evidence given at hearing was that Mr Summers agrees to have the reporting line changed so that the Applicant would report directly to him.
The Applicant’s evidence is that she also regarded the Workforce Planning Manager role as narrower in scope than the Project Manager role and with less flexibility for working times. This was due to the role being more involved in day-to-day demands and operations.
15 May 2024: The Applicant meets with Mr Summers who advises her that she will receive a letter outlining the changes to her role. The Applicant’s evidence is that she complained that the job was not the role – being Project Manager - that had been discussed with her prior to her parental leave. She also reiterated her concerns regarding reporting lines, which had not been changed.
The Applicant received an email from Mr Summers after that meeting which set out the terms of her role as Workforce Planning Manager. The role provided the same remuneration and conditions as her previous roles as Operations Manager and Project Manager. In part, the letter stated as follows:
“Following recent changes and growth of the business, your Position will be amended from Project Manager to Workforce Planning Manager in order to assist the business with recruitment and planning the workforce which is as per your skills and experience in the industry.”[2]
31 May 2024: The Applicant’s lawyers write to the Respondent outlining concerns about the non-payment of the STI bonus and the change to her role and citing pregnancy discrimination as the reason. The Respondent’s lawyers write to the Applicant’s lawyers denying any breaches of contract or pregnancy discrimination.
19 June 2024: The Applicant’s lawyers write to the Respondent’s lawyers stating in part as follows:
“We are instructed to hereby demand:
1. Confirmation that our client is able to return to her pre-parental leave role of Operations Manager; and
2. Payment of our client’s STI payment.
If we do not have the confirmation and payment sought by 5pm on 21 June 2024 we have instructions to accept your client’s illegal conduct as terminating our client’s employment agreement in which case she will commence general protections proceedings”[3]
21 June 2024: The Respondent’s lawyers write to the Applicant’s lawyers stating – in part – as follows:
“In relation to the demands made by your client in Your Letter our instructions are as follows.
• The Operations Manager role that your client is now seeking, is not the pre-maternity leave role as asserted by Your Letter. Further, any part time role performed after a period of maternity leave by agreement with an employer cannot be considered the same as a full-time pre-maternity leave role.
• Your client has no entitlement to be paid an STI bonus, only to “participate in a Bonus Scheme’ pursuant to clause 3.7 of your client’s employment contract (Contract). The payment of any bonus to your client is completely discretionary. Any payment of a bonus to your client in a prior year does not create an entitlement or obligation to make a bonus payment to your client in any subsequent year (see clause 3.7 of the Contract).
• In the absence of a demonstrable damage and proven differential treatment on the basis of a protected attribute, your client’s claim of alleged unlawful discrimination will also fail.
OSM denies that it has engaged in any illegal conduct and will not agree to your client’s demands because it has complied with your client’s employment contract at all relevant times and will continue to do so. Accordingly, your client’s decision to terminate the employment contract effective 5.00pm (AWST) today is a decision made at her own initiative.
OSM has instructed us that it accepts your client’s notification of the termination of her employment, without provision of the required notice, which will end at 5 pm (AWST) today, 21 June 2024.”[4]
Submissions – repudiation of contract.
In her initial submissions the Applicant made two arguments to propose that her dismissal was at the initiative of the Respondent. She firstly addressed the concept of forced dismissal but also made submissions with respect to repudiation of contract. In essence, the original written submissions argued that if the FWC were to find that the letter of 19 June 2024 did indeed communicate an acceptance of the termination of employment, it did so by way of the Applicant accepting the Respondent’s repudiatory conduct.
This submission was, however, premised on the ground that the Applicant was entitled to be placed – post-parental leave – into the position of Operations Manager, which the written submissions argued was her pre-parental leave position. However, the Applicant did argue that in the alternative, if her pre-parental leave role was actually Project Manager, then she had been denied this position by virtue of having effectively returned her to the role of Workforce Planning Manager. It was submitted that this was a role that was substantively and fundamentally different to the role of Project Manager.
As such, the Applicant claimed that the Respondent had, by failing to return the Applicant to her pre-parental leave position and issuing a contractual variation, “breached and evinced an objective intention to no longer be bound by the Employment Agreement, the probable result of which was the end of the Employment Agreement.” Further, the test of whether this had occurred was not to examine the Respondent’s actual or subjective intention but rather to look to what a reasonable person would objectively regard as repudiatory conduct. The Applicant relied upon the findings in Elgammel v BlackRange Wealth Management,[5] Owens v Allied Express Transport Pty Ltd,[6] (Owens) and Barkla v G4S Custodial Services Pty Ltd[7] as support for these propositions.
At hearing, the Applicant advised that she was shifting the emphasis of her submissions such that repudiation became the primary ground of her argument. At hearing, she submitted that the repudiatory conduct was the involuntary variation of the Applicant’s position and the non-payment of the STI bonus. The letter from the Applicant’s lawyers on 19 June 2024 was said to be putting in motion the Applicant’s acceptance of that repudiation. In further submissions at hearing the Applicant traversed the findings in Owens and the appeal of that decision. In doing so, the Applicant also challenged the notion that her case ought to be distinguished from Owens because unlike the situation in that case there had been no actual variation to her employment. The Applicant submitted that although the remuneration had not changed there was nonetheless a practical change to the nature of her duties and reporting structure that had been implemented in spite of her not signing the variation letter.
The Applicant also drew my attention to the findings of the Full Bench in Allied Express Transport Pty Ltd v Owens where the Full Bench rejected the position put by the Company in that case that the employee had options to choose between. Given that one of the options paid significantly less than her current remuneration the Full Bench said that the employee effectively had no option and a reasonable person would then conclude that the Company did not intend to abide by the employee’s employment contract. As a consequence, there was a repudiation. The Applicant proposed that in her case, there was not even the illusion of choice as the move into the Workforce Planning Manager role was essentially presented as a fait accompli.
The Applicant also addressed the failure to pay the STI bonus. She submitted that the Respondent was relying heavily on the caveat contained within the STI bonus clause in her contract to the effect that any payment was discretionary. The Applicant directed my attention to the findings in Silverbrook Research Pty Ltd v Lindley (Silverbrook) for the proposition that such a reliance was misplaced. In that matter, President Allsop stated as follows:
“That the decision as to whether the respondent should receive the bonus was “entirely within the discretion of” the appellant should not be construed so as to permit the appellant to withhold the bonus capriciously or arbitrarily or unreasonably; it should not be construed so as to give the appellant a free choice as to whether to perform or not a contractual obligation. The relevant discretion should be understood against the proper scope and content of the contract. This was a bargained for bonus to be assessed against set objectives. Such a clause should receive a reasonable construction and not permit the appellant to choose arbitrarily or capriciously or unreasonably that it need not pay money the set objectives having been satisfied…
The discretion is to be exercised honestly and conformably with the purposes of the contract. There may be many circumstances in which it would be legitimate, and conformable with the purposes of the contract, not to pay the bonus. There may be financial stringency or misbehaviour by the respondent or some other consideration. It is unnecessary to explore the possibilities in detail. What, however, would not be permitted is an unreasoned, unreasonable, arbitrary refusal to pay anything, come what may. This would be a denial of the very clause that had been agreed.”[8]
The Applicant submitted that the requirements of the bonus clause were such that Respondent was required to assess her performance, and that of the Respondent itself, against objective criteria and to then exercise its discretion – and not in an unreasonable or capricious manner – to decide how much bonus to pay. The Applicant submitted that there was no suggestion that any of these tasks was undertaken and directed my attention to the evidence provided by Mr Summers at hearing. Specifically, it noted that Mr Summers had conceded that there had been no review or round out of the 2023 years, that there were no performance concerns at all with the Applicant and that other employees of the Respondent had received the bonus including himself.
The Applicant noted also that Mr Summers’ evidence regarding the bonus was incomplete and that he denied being a decision maker with respect to the bonus. As such he claimed to have no explanation of why the Applicant did not receive a bonus. The Applicant submitted that it had been open to the Respondent to call Mr Munyard the actual decision maker to answer questions and it had chosen not to, with no suggestion that he was unavailable. The Applicant submitted that it was therefore open to me to draw a Jones and Dunkel inference from Mr Munyard’s absence. In summary, the Applicant submitted that the Respondent had failed to perform an assessment of the Applicant’s performance and its decision not to pay the bonus should be regarded as arbitrary and capricious.
The Applicant also addressed the contention from the Respondent that in any case the failure to pay the bonus would not amount to repudiation given that the bonus was not central to the contractual arrangements. The Applicant submitted that the bonus was worth fifteen percent of her remuneration, being an amount of approximately $25,000. In her submission, the fact that this amount was not part of her base salary per se should not mean that it was not a core and critical part of the contract such that a breach of it could not amount to repudiation.
With respect to the issue of repudiation, the Respondent in its written submissions noted that its primary argument was that there was no dismissal within the scope of s.386(1) of the Act. However, it submitted that there had in any case been no repudiation of the Applicant’s contract. To support its position, the Respondent directed my attention to the summary of the doctrine of repudiation provided by the High Court in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (Koompahtoo). In that case, the High Court stated as follows:
“The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention to no longer be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations. The test is whether the conduct of one party is such to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. […] Secondly, it may refer to any breach of contract which justifies termination by the other party.”[9]
The Respondent submitted that there was no evidence of conduct by it which could convey to a reasonable person, that it intended to renunciate the Applicant’s employment contract either in its entirety or in some fundamental part. Rather, the Respondent had, until the Applicant gave her ultimatum, remained ready, willing and able to perform its obligations under that contract. In the Respondent’s submissions the decision to not accede to the Applicant’s demands – which it submitted were not grounded in contract or reality – did not demonstrate an intention not to be bound by the Applicant’s employment contract.
In further submissions at hearing, the Respondent contended that, with respect to the position held by the Applicant, there had in fact been no change. Rather, the Respondent had attempted to make a change to the Applicant’s role from Project Manager to Workforce Planning Manager but that this offer of changed employment had been rejected by the Applicant and thus never actually given effect. The Respondent submitted that there had been no change to the Applicant’s remuneration, no significant change to the duties actually performed and that the case for change was really centered around a change in reporting structures. The reporting lines within the Respondent’s operations was submitted to be a matter that was not fundamental term of the employment contract.
With respect to the STI bonus, the Respondent conceded that the bonus had not been paid, but submitted that again, the STI bonus was not a fundamental term of the contract. While the Respondent denied the non-payment was a breach, it proposed that if there was a breach it was a contravention of a warranty, rather than of a condition of the employment contract. The Respondent contended that the bonus should be considered a discretionary benefit rather than an essential term and thus a breach would not give rise to an ability to treat the contract as being at an end.
The Respondent then turned to the process by which the employment relationship came to an end – a process it contended began with the Applicant’s ultimatum regarding her position and the STI bonus. It submitted that the FWC should have regard to the conduct that took place at the relevant time, rather than accepting what it described as a “pivot” in the Applicant’s argument at hearing. In essence, the Respondent submitted that the claim made by the Applicant at the relevant time was to return to the role of Operations Manager, which was a role occupied by Ms Jewson and not a claim that the Respondent could be expected to meet.
The demand from the Applicant could thus be viewed as requiring that two conditions – one a condition that could not be met and the other purely discretional – be met in order to preserve the employment relationship. Additionally, the wording of the Applicant’s lawyer’s letter was such that the relationship automatically ended if those two conditions were not met by the appointed time. In summary, the Respondent submits that it did not engage in repudiatory conduct in failing to meet those two conditions because they were not required to be met. Further, it submits that it may be open to conclude that the Applicant’s own actions in demanding those two outcomes without any entitlement or she would end the employment might suggest that she herself had engaged in repudiatory conduct.
Finally, the Respondent addressed the issue of my drawing a Jones v Dunkel inference from the absence of Mr Munyard. It submitted that the reason for the non-payment of the bonus went to the heart of the merits argument about general protections, but that the jurisdictional hearing was confined to a determination of whether there had been a dismissal. As such, the Respondent had not felt it necessary to call Mr Munyard and as such it was not appropriate to draw a Jones v Dunkel inference.
Consideration
I think it is appropriate that before I discuss my findings, I make a comment about the industrial strategy employed by the Applicant’s lawyers in this matter, noting that those lawyers did not represent her at hearing. The Applicant was faced with – on the basis of the case she has argued – firstly the non-payment of a bonus and secondly being moved into a position that was not consistent with her pre-parental leave position upon her return from such leave. In both cases, there were avenues to pursue those grievances available to her that did not rely on placing the future of her employment in jeopardy. Complaints could have been made with respect to each of those two discreet issues in a variety of ways without the prospect of the ending of her employment ever being threatened or even arising. Instead, her lawyers appear to have advised or allowed her to engage in a very high stakes game where the potential – and indeed eventual – outcome was the ending of her employment. I make no criticism of the Applicant herself for taking this course of action, but I must confess to being astounded that a legal practitioner regarded this as an appropriate way to deal with the Applicant’s concerns – particularly in the first instance.
Having said that, I must now consider carefully the effect of what transpired and what it suggests about the ending of the Applicant’s employment. In the first instance, I propose to look at the issue of the position to which the Applicant returned after her parental leave. I am satisfied that the Applicant left on parental leave occupying the role of Project Manager, albeit that she may have spent a good deal of time immediately prior to such leave performing Operations Manager work due to the inexperience of new appointees to that role. Nevertheless, those appointees were appointed to the role of Operations Manager on a permanent basis, and not as parental leave relief, which suggests to me that the intention of both parties was always that the Applicant would move into the Project Manager role.
Given this, what is to be made of the Respondent’s clear intention to have the Applicant work as Workforce Planning Manager upon her return from parental leave. In the first instance, I am not persuaded that I should accept the Respondent’s submission that the change was only proposed and not given actual effect because the Applicant did not sign the new contract. It appears that the role of Planning Manager was one that was not rigidly defined and that prior to commencing parental leave the Applicant was probably engaged more in assisting the Operations Manager than as Project Manager. Given this, there may have been some question as to the exact duties that may have been required of the Project Manager at the time the Applicant returned from parental leave.
However, while such duties may not have been clearly defined, it does appear to me that the Workforce Planning Manager role did have clear duties that were required to be performed, and it was those duties that the Applicant did perform on her return. As such, I do not accept that there was no change. However, the issue that I believe needs to be considered is the relevance of that change. In the first instance, there was no change to the Applicant’s remuneration, save that – consistent with her request – she was only working part time.
The issue of the reporting lines is, in my view, not particularly relevant. Even if there was a change in the reporting lines, I do not think this is a significant change to the role. While the Applicant may claim it is suggestive of a lessening in her status, I am not persuaded in the circumstances that this is the case. The Respondent’s management structure, based on the organisational chart that was in evidence, is quite small and does not appear to be as rigidly hierarchical as one might find in a large company or government bureaucracy. As such, I do not accept that the change in reporting lines is such as to represent a change that would amount to a repudiation of an employment contract. Finally, I also note that the Applicant’s original employment contract provides that the employee’s reporting lines may change from time to time.[10] There may be some argument as to the applicability of this contract, as it applies to a former position. However, I note that there was no new contract issued for the Project Manager role meaning that potentially the terms of the previous contract which are not relevant to the specifics of the new role might still be said to apply.
Nor am I persuaded in this instance by the notion of the change to duties. Given the somewhat flexible nature of the Project Manager role, it is open to conclude that at least some if not all of the duties performed in the Workforce Planning Manager role could have been performed – at least for a time – by the Project Manager. In other words, the first project for the Project Manager might have been to oversee workforce planning. The general approach of courts has been that variations to duties may constitute a change in the role and mean that in effect a new set of contractual arrangements is being applied. In each case it is a matter of fact as to whether the change is sufficiently significant to represent such a change. However, I am not persuaded that the duties – particularly given the lack of a definitive job description for the Project Manager – of the Workforce Planning Manager constitute such a change.
The Applicant also argued that there was not as much flexibility in working hours in the Workforce Planning Manager role as had been suggested there would be for the Project Manager. However, there is no suggestion that the hours required in the role were more than those required in the Project Manager role as that role was envisaged. There is also no evidence that the Applicant had encountered any difficulties with the working hours as they were presumably – again save for the part time element – similar to what she had worked throughout her time with the Respondent.
Finally, with respect to the process of the ending of the Applicant’s employment, I accept the submission of the Respondent that the FWC should look to what actually happened at the time, rather than how the issue is presented at hearing. The Respondent was asked to return the Applicant to the role of Operations Manager - a position that she did not hold prior to departing on parental leave. What the Respondent did on receipt of the ultimatum from the Applicant’s lawyers was to refuse to comply with a demand that it was not legally obligated to meet. As such, no matter how the repudiation claim with respect to the Applicant’s position might be framed, I find it must fail. If the repudiation is to be said to be the change from the Operations Manager role, the claim fails on factual grounds. It the repudiation is said to be the change to the Workforce Planning Manager role, it fails for the reasons set out at paragraphs 25 to 28 above. If the repudiation is said to be the Respondent’s failure to accept the Applicant’s demands in circumstances where it was not obliged to meet them, again the claim fails.
I then turn to the issue of the non-payment of the bonus. Here I draw a different conclusion. From the material submitted and the evidence given, I make the following findings about the bonus. In the first instance, given that employees including Mr Summer received the bonus, I have concluded that the Respondent met whatever company KPIs had been set and therefore the Applicant could not be denied the bonus on that ground. I note this is also the case if the Respondent had not even set any company KPIs given other employees received the bonus.
I also find that the process of administering the bonus was somewhat fluid. The bonus was apparently not such that there was intention to apply a rigorous and scientific assessment of the Applicant’s performance when determining if she should receive the bonus. With respect to her performance, it is clear that there were no annual set KPIs for the Applicant by which she could in any case be judged to determine if she qualified for the bonus. Despite this, there is no suggestion that she would not be considered for the bonus because there were no KPIs set.
I also observe that there had been no concerns whatsoever raised with the Applicant about her performance and she was therefore entitled to conclude – for the purposes of the bonus at least - that no such concerns existed. Given that, it was reasonable for the Applicant to expect that she would be paid the bonus. I also observe from her messages with the Respondent that she had factored the payment of the bonus into her discussions with Centrelink regarding parental leave payments.[11]
I do not accept the notion from the Respondent that the STI bonus should be regarded as a peripheral or non-essential part of the contract. Although different figures were proffered at hearing, I find that the bonus was worth fifteen percent of the cash component of the Applicant’s salary, which I find to be $147,000.00. The bonus is thus worth $22,050.00. I regard this as a significant sum of money, a significant part of the remuneration package for the job and a sum to which the Applicant had quite understandably believed she was entitled.
I should also address the notion that I should draw a Jones and Dunkel inference from the fact that no-one who was a decision maker on payment of the bonus was called to give evidence. I note the Respondent’s submissions that this was because the reason for non-payment was regarded a matter for the merits argument on the general protections breach rather than for the determination of the status of the dismissal. I find this a rather curious argument. The Respondent was clearly alive to the notion of forced dismissal – being where the employer behaves in such a way as to give the employee little option other than to resign. It was clearly the case that the non-payment of the bonus formed part of the Applicant’s argument about forced resignation, at least in the first instance in its written submissions.
Given this, I would have thought that the reason for non-payment of the bonus was an issue with which the Respondent might have engaged. If the Applicant had no entitlement to the bonus because she did not qualify then surely this was a relevant part of the Respondent’s defence – “we have not acted unreasonably in denying you the bonus because based on the following criteria you do not qualify”. Not paying an employee a bonus for which they do not qualify is hardly poor behaviour. On the other hand, not paying an employee a bonus for which they do qualify is behaviour in a different category.
The Respondent might be tempted to – and did – argue that this is not relevant because the bonus was entirely discretionary. To this I would say that I adopt without hesitation the approach taken in Silverbrook. Discretion should not be applied in a capricious, arbitrary or unreasonable manner. If an employee qualifies for a bonus by meeting whatever criteria are required then it is only in rare circumstances that the employee would not be paid, even if discretion is reserved in their contract. To have a situation where an employee qualifies but is not paid when other employees are paid is to have a situation that is going to raise the ire of the employee who misses out and lead – particularly in the absence of any compelling explanation - to assumptions of capricious behaviour.
In this matter I have decided to err on the side of caution. As such, I will accept that the absence of a witness who could provide insight into the reason for non-payment of bonus was a decision made by the Respondent’s representatives based on a particular view of the actual matter at issue and I will not draw a Jones v Dunkel inference. However, I summarise my findings on the non-payment of the bonus as follows.
The bonus is a significant part of the Applicant’s remuneration package. I do not accept that it is merely an ancillary term, but rather I find that it is a fundamental term of the Applicant’s employment contract. There is no reason offered as to why the bonus was not paid in a situation where there were no KPIs to assess, other employees received the bonus and the Applicant was entitled to have a reasonable expectation that it would be paid. Clearly, a decision was made not to pay the bonus. I make no assessment of what motivated that decision. However, I cannot accept it was because the Applicant did not, using the criteria set out in her contract, qualify for the bonus and I do not accept that it was reasonable to rely on the discretion conferred by the contract.
I am thus left to assess, consistent with Koompahtoo, what a reasonable person standing in the Applicant’s shoes would make of the non-payment of a $22,050 bonus (representing fifteen percent of cash salary) in circumstances where there is no apparent reason for the non-payment and other employees received their bonus. I find that such a person would say that the Respondent had demonstrated that it did not intend to be bound by a fundamental part of the employment contract. In so finding I conclude that the Respondent has engaged in behaviour that amounts to repudiation of the Applicant’s employment contract. Such repudiation was accepted by the Applicant but the termination of her employment was at the initiative of the Respondent. The FWC therefore has jurisdiction to deal with the Applicant’s s.365 application and a conference to discuss settlement will be listed and the parties advised of the details.
DEPUTY PRESIDENT
Appearances:
A White of Counsel for the Applicant.
J Parkinson of Counsel for the Respondent.
Hearing details:
2024.
Perth (by video):
October 25.
[1] Court Book page 159
[2] Court Book page 106
[3] Court Book page 108
[4] Court Book page 110
[5] Elgammel v BlackRange Wealth Management [2011] FWAFB 4038 at [13]
6 Owens v Allied Express Transport Pty Ltd [2011] FWA 1058 at [58]
7 Barkla v G4S Custodial Services Pty Ltd [2011] FWAFB 3769 at [24]
[8] Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [5] and [6]
[9] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2002) 233 CLR 115 at [44]
[10] Court Book page 72 section 2 paragraph 1
[11] Court Book Page 100
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