Steven Sellings v Lantrak Personnel Pty. Ltd. T/A Lantrak

[2015] FWC 8139

[2015] FWC 8139

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Steven Sellings
v
Lantrak Personnel Pty. Ltd. T/A Lantrak
(U2015/7770)

COMMISSIONER GREGORY MELBOURNE, 15 DECEMBER 2015

Application for relief from unfair dismissal.

Introduction

[1] Mr Steven Sellings commenced employment with Lantrak Personnel Pty Ltd (“Lantrak”) in May 2008 and worked with the business until 30 April 2015 when he resigned from his employment. He submits he resigned because he was forced to do so because of the conduct engaged in by his employer. At the time he was employed in the position of Business Development Manager.

[2] Lantrak has raised a jurisdictional objection to the application, namely that Mr Sellings was not dismissed, and therefore cannot bringing an unfair dismissal application. This decision deals with that jurisdictional objection.

[3] Mr Sellings appeared on his own behalf. Mr Gary Liemant, one of the joint CEO’s at Lantrak, appeared on its behalf.

The Issue to Be Decided

[4] Section 385, “What is an unfair dismissal,” of the Act relevantly provides:

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

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable” 1.

Section 386, “Meaning of dismissed,” continues to relevantly provide:

(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.”

[5] There is no issue between the parties that Mr Sellings resigned from his employment. However, the issue to be determined, given the jurisdictional objection raised by Lantrak, is whether he was forced to do so because of the conduct, or a course of conduct, engaged in by his former employer.

[6] If the Commission determines this issue in favour of Mr Sellings then he will have been found to be a person who has been “dismissed,” and the matter will be relisted to deal with his substantive unfair dismissal application. However, if the Commission finds in favour of Lantrak, and Mr Sellings has not been “dismissed,” then the application must also be dismissed.

The Evidence and Submissions

[7] Lantrak provided a brief written statement indicating Mr Sellings was employed in the role of Business Development Manager on a salary of approximately $120,000 per annum. It simply stated, “Steven voluntarily resigned from his position as Business Development Manager on the 30^th April 2015.” 2 It also provided witness statements from Mr Gary Liemant, Mr Mark Liemant, Ms Laura McCabe, and Mr Dominic Ring.

[8] Mr Gary Liemant is one of the joint CEOs at Lantrak. He said Mr Sellings received a base salary of $120,000 and also worked under a bonus structure of $30,000 per annum or $2500 per month. He said this bonus was discretionary and based on his performance in the areas of major projects, materials online, as well as assisting the sales team and developments.

[9] He said it was decided in March 2015 to require weekly reports to be provided by all of his direct reports/Managers in order to ensure effective communication within the business. This was to be organised by the HR Manager, Ms Laura McCabe, and she was instructed to follow up with all involved to ensure their reports were provided within the appropriate timeframe.

[10] Mr Liemant said he had subsequent discussions with Mr Sellings about the requirement to provide reports and his failure to complete them. He also said that on 12 April he received a call from Mr Sellings about the incentive payments and advised him that all staff bonuses were discretionary. However, he agreed to pay the incentive for that month, but advised Mr Sellings his performance needed to improve in order to receive the incentive in the following months.

[11] The statement indicated that on 27 March a meeting was held with the Business Development team, including Mr Sellings. The meeting discussed the new requirements regarding the reporting structure, as well as other issues to do with the business strategy. Mr Liemant said Mr Sellings then indicated on 7 April he wanted to have a further discussion about his role prior to completing the weekly report. However, as a consequence of his failure to complete the report, and his continued declining performance, Ms McCabe was instructed that the incentive payment for the month of March was not to be paid to Mr Sellings.

[12] He said a further discussion then took place with Mr Sellings on 16 April in which he made clear to him that his role still involved business development, and how important this role was to the business. He said Mr Sellings was also told he was an asset to the business and had a definite future at Lantrak. It was also agreed a new position description would be developed over the next few weeks. He said Mr Sellings was also told the incentive payment was based on performance, and he had received the payments previously, in part, as a continuation of the goodwill extended to him due to certain personal financial issues. He said he then had a further discussion with Mr Sellings on 17 April, which he described as a very positive meeting in which Mr Sellings indicated he was completely on board with the strategy the business was pursuing.

[13] He also said that at the conclusion of this meeting Mr Sellings made comments to the effect that he could be a bit stubborn at times, but now understood what the business was trying to achieve and it was time to get going.

[14] However, Mr Liemant said he then received a phone call from Mr Sellings on 30 April advising him that business development “was no longer for him” and he wanted to resign. 3 Mr Liemant said he was extremely shocked by this decision and asked Mr Sellings if he was sure about it. It was then decided to pay out his notice period because of the seniority of the role and the information Mr Sellings was privy to. He also said the role has now been filled by another employee and is in no way redundant.

[15] He also indicated in cross-examination that he failed to understand why Mr Sellings’ departure was not considered to be a resignation as he had rung “out of the blue” indicating he was resigning in circumstances where the business wanted him to remain “on board.” 4 He also said that while there were performance issues, there had been no discussion about the role being made redundant, or any desire to terminate Mr Sellings’ services.

[16] Mr Mark Liemant is the other joint CEO at Lantrak. He also made reference to the meeting on 16 April with Mr Sellings in which the importance of his role within the business was discussed. He also said he was told he was an asset to the business and his role still involved business development. He confirmed it was agreed a new position description would be created over coming weeks, and Mr Sellings was asked to catch up again in a week with some ideas to help the team. He was also told his bonus was based on performance and he had only ever received those bonus payments each month because of the extended goodwill provided to him. He also said he believed the meeting concluded on a positive note.

[17] Ms Laura McCabe is the HR Manager with Lantrak. Her witness statement confirmed she was requested to create a weekly format for all direct reports to Mr Liemant to enable weekly reporting. She then sent reminder emails to employees on the due date.

[18] She said that on 10 March Mr Sellings came to see her and indicated he was not happy about completing the weekly reports. He also said he would not be managed and did not want to provide an explanation about what he was doing each week. She said she responded by indicating he was still in the role of Business Development Manager, however, the additional bonus payments were a discretionary entitlement, dependent upon performance. She said Mr Sellings responded by indicating his role had been made redundant and he was entitled to a redundancy payment. She said she then sent an email to him outlining what was required in order to be able to accurately assess his monthly bonus payment. She said she was then instructed by Mr Liemant to pay the incentive bonus for the previous month as a goodwill gesture.

[19] She said she was subsequently advised by Mr Liemant that Mr Sellings’ incentive payment for the month of March was not to be paid. She also said that following a further meeting on 17 April she was advised to develop a position description for Mr Sellings over the next few weeks, and he was now “on board” in terms of the business strategy. However, on 30 April Mr Sellings resigned from his position. She also said the vacant position of Business Development Manager has now been filled by another employee as the role is still required to be performed.

[20] Mr Sellings provided a witness statement, together with a number of attachments. His statement, firstly, makes reference to various email exchanges with Ms Laura McCabe in March to do with provision of weekly reports, and the non-payment of his incentive payment that month. He said he then discussed this matter with Mr Gary Liemant, a joint CEO at Lantrak, who indicated he had no knowledge of the non-payment, and it was subsequently paid on 13 March.

[21] Mr Sellings said he was then asked to attend a meeting on 27 March with Mr Liemant and other senior staff in which Mr Liemant indicated it had been decided to restructure the Sales Team and the reporting lines, as well as dividing the State into two territories. Mr Sellings said he was asked to focus on the eastern part of the State as part of these new responsibilities. In his oral submissions he stated that after reviewing what had been discussed in the meeting he concluded his role had completely changed and the restructure did not actually appear to be producing anything.

[22] On 7 April he said he then had a further discussions with Mr Liemant about his role, and shortly afterwards received an email indicating his monthly incentive payment had been included in his payslip. However, just under an hour later he received a further payslip indicating the incentive payment had not been included.

[23] He said he then made contact with “Fair Work” to discuss his situation and indicated his role had been changed and payments to him were being withheld. He said that on the basis of the information he provided it was indicated in response his role could be redundant. (Mr Sellings subsequently advised, in response to a question from the Commission, that the reference to “Fair Work” involved the Fair Work Ombudsman, rather than the Fair Work Commission. 5)

[24] His statement continued to indicate that over the next few days he sought to have further discussions with Mr Liemant, and on 16 April he was invited to a meeting with both of the joint CEOs, Mr Gary Liemant and Mr Mark Liemant. He said his proposed new role was discussed in some detail, and it was also agreed the incentive payment arrangements would remain unchanged, and the April payment would be made immediately. It was also agreed they would have a further discussion on the following day.

[25] He said he then had a further discussion with Mr Gary Liemant on the next day, who said he would prepare a revised position description for him to consider. However, on 23 April after receiving his payslip he again found no incentive payment had been made. In addition, at that point he had not received the revised position description.

[26] His written statement concluded by indicating,

“Thursday 30/04/2015 After much deliberation and talking with my wife I resigned my position giving 4 weeks’ notice so that we would at least be able to pay our bills. I discussed this with Gary Liemant and he asked that so long as I was contactable he was okay for me to not work out my 4 weeks’ notice period. I also contacted Dominic Ring to let him know what needed to be attended to immediately and where all the files were located in my office and computer. I was contacted by Laura soon after to bring my car and company property back to the office and that she would receive it and settle up which happened about 2.00pm as my wife could not pick me up until this time.” 6

[27] In cross-examination Mr Sellings acknowledged the incentive payments were a bonus payment, but he described them as “a fixed bonus because there was no measurables on it,” 7 and it was paid regardless of performance. He also acknowledged he was happy with the position reached in the discussions with Mr Liemant on 16 and 17 April, however, the fact he was not subsequently provided with the revised position description, or the April incentive payment, changed that situation. He also acknowledged that when he rang Mr Liemant 13 days later to indicate he was resigning he did not make any further mention of the position description or the incentive payments, but said this was because he did not want to have that conversation with Mr Liemant again. He also denied Mr Liemant asked him in that conversation whether there was anything further that could be discussed after he indicated he was resigning. He also denied he had indicated to another employee he was looking to be made redundant.

Consideration

[28] The parties both provided evidence about the circumstances that preceded Mr Sellings’ departure from his employment at Lantrak after having worked for the business for more than seven years. However, neither party provided submissions regarding the statutory provisions and case law that are relevant to the determination of this matter.

[29] The Full Bench in the matter of Kylie Bruce v Fingal Glen Pty Ltd (in liq) 8 also dealt with an application where the Applicant contended that she had been forced to resign because of conduct or a course of conduct engaged in by her employer, and therefore she had been dismissed. The particular circumstances in that matter involved frequent late payment of wages and superannuation entitlements, and not being paid on time for a period of annual leave. In the course of its decision the Full Bench made reference to the relevant legislative provisions and case law in the following terms (references omitted).

“[11] The Senior Deputy President decided that the Applicant had not been unfairly dismissed because she had not been dismissed (see s.385(a) of the Act). The word ‘dismissed’ is defined in s.386 of the Act:


‘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.’

[12] According to the Explanatory Memorandum to the Fair Work Bill 2008,

‘Clause 386 - Meaning of dismissed

1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person's employment with his or her employer was terminated on the employer's initiative. This is intended to capture case law relating to the meaning of 'termination at the initiative of the employer' (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).

1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).

1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:

• where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or



• where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign."

[13] The test of constructive dismissal in the context of the unlawful termination provisions of the Industrial Relations Act 1998 was considered by the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2) (Mohazab) and subsequently elucidated by Justice Moore in Rheinberger v Huxley Marketing Pty Ltd (Rheinberger). The commonly quoted statement of principle in Mohazab is that:

‘In these proceedings it is 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’.

[14] It is important that this passage be read in the context of the judgment as a whole. It is clear that the requirements set out by the Full Court in the passage quoted are necessary, but not sufficient, to establish that employer action constitutes constructive dismissal.

[15] These principles of constructive dismissal have been applied to the unfair dismissal provisions of the Workplace Relations Act 1996 by Full Benches of the Australian Industrial Relations Commission in Pawel v Advanced Precast Pty Ltd (Pawel)and ABB Engineering Construction Pty Ltd v Doumit (ABB Engineering), and we accept the Applicant's submission that those decisions are relevant to any consideration of s.386(1)(b) of the Act.

[16] In Pawel the Full Bench said that:

‘[13] It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. 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. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. 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...’

[17] In ABB Engineering, the Full Bench said that:

‘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.’

[18] The four authorities cited above were summarised by a Full Bench of the AIRC in O'Meara v Stanley Works Pty Ltd (O'Meara) as follows:

‘[23] 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... 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.’

[19] Subject to the comments below, we accept and adopt this as a summary of the principles applicable in determining whether an employee has been forced to resign because of the conduct of the employer within the meaning of s.386(1)(b) of the Act.” 9

[30] I also note that this decision was cited with approval in the subsequent Full Bench decision in Victorian Association for the Teaching of English Inc v Debra de Laps,  10 which also involved an issue of constructive dismissal.

[31] I am satisfied based on this review of the relevant legislation and authorities that for Mr Sellings to establish he has been “dismissed” it must, firstly, be found to have been the act of his employer that resulted directly or consequentially in the termination of his employment, so he cannot be said to have left voluntarily. Secondly, the actions of the parties in the circumstances must be viewed on the basis of an objective analysis. I have applied these principles to the determination of this matter.

[32] It is clear from the evidence that Mr Sellings was concerned about the implementation of changes made by senior management in the early part of this year. He, along with other senior staff, were told they were now required to provide weekly reports to the joint CEOs. It was also made clear to Mr Sellings that a monthly bonus payment of $2,500 he had been regularly receiving each month, for the past 22 months, was now not to be paid as a matter of course, but was instead a discretionary payment linked to his satisfactory performance.

[33] The evidence also indicates Mr Sellings sought to take up these issues in discussions with Mr Gary Liemant in the days that followed. On 12 April the two men had a discussion on the telephone and it was agreed the bonus payment for the month of March would be paid. A further meeting then took place on 16 April to discuss the future direction of the business and Mr Sellings’ role in that context. The bonus payment entitlements were discussed as well. It was also agreed a new position description would be developed for Mr Sellings, and a further discussion then took place on the following day about these issues.

[34] However, on 30 April, 13 days after that earlier discussion, Mr Liemant received a phone call from Mr Sellings informing him that after discussion with his partner the role at Lantrak was no longer for him and he was resigning from the business. The evidence also indicates Mr Sellings did not seek anything further from Mr Liemant in those discussions before informing him of this decision. It also appears Mr Sellings did not provide any further reasons for his decision. Mr Liemant’s evidence also indicates that he asked Mr Sellings about whether he was sure about his decision, although Mr Sellings denies this statement was made.

[35] Mr Sellings states he came to his decision after the payslip he received on 23 April again indicated the monthly bonus payment was not included in his salary for the previous month, and because he was still to receive the revised position description that was to be sent to him after the discussions on 16 and 17 April.

[36] I have reviewed the evidence in this matter in the light of the relevant legislative provisions and case law. I have had particular regard to the following factors in coming to a decision about whether Mr Sellings was forced to resign from his employment when the circumstances are viewed objectively “because of conduct, or a course of conduct engaged in by his or her employer.”

[37] Firstly, there is no evidence to suggest Lantrak wanted to get rid of Mr Sellings. He appears to have been a valued employee, who had been employed in a senior role over an extended period. His role was certainly being impacted by the changes being implemented within the business, but Mr Sellings was not alone in this regard. The evidence also indicates the joint CEOs were genuinely surprised by the phone call from Mr Sellings on 30 April informing Mr Liemant he was resigning. The evidence also indicates the role is still a required one and has since been filled by another person following the departure of Mr Sellings.

[38] Secondly, the evidence indicates there was an ongoing process being worked through to deal with the issues of concern to Mr Sellings. These concerns had emerged from the information initially provided to him by the HR Manager in March of this year. Indeed, some of his concerns at that time appear to relate to the fact the information was provided to him by the HR Manager, rather than by one of the joint CEOs. However, he did then raise his concerns with Mr Liemant, and attended a further meeting on 27 March with other senior staff in which the business restructure was discussed in more detail.

[39] He subsequently sought further discussions with Mr Liemant and met again with both he and Mr Mark Liemant on 16 April. He had a further discussion with Mr Gary Liemant on the following day. It was agreed in those discussions that a revised job description would be provided to him, and the incentive payments would be made. However, Mr Sellings was frustrated by the time taken to provide the revised job description, and his April pay information indicated the monthly bonus had not been included for the previous month, despite his understanding it would be paid.

[40] However, despite these issues I am satisfied the process of working through the concerns Mr Sellings had were not at an end. It was clearly open to him enquire about the delay in providing the revised job description, and to enquire about why previous commitments about the bonus payment were not being honoured. I am not satisfied he had exhausted all avenues in regard to those issues at the time he tendered his resignation.

[41] The ongoing payment of the incentive bonus was obviously a significant issue. It represented an amount of $2,500 per month, which is clearly a significant amount. However, Mr Sellings was on a six figure plus salary so he was still in receipt of a substantial salary entitlement and the bonus payments were only a proportion of that total amount. In addition, despite the fact the incentive payment had been provided to Mr Sellings on a regular basis for what appears to be a period of 22 months, and they were now confirmed as a discretionary payment conditional on performance, the evidence also indicates it was expected Mr Sellings would achieve the performance targets and the bonus would continue to be paid. In addition, as indicated already, the discussions about this issue were ongoing.

[42] Finally, I am not satisfied that the evidence points to a conclusion that Mr Sellings had been pushed to a point where he had no option but to resign. Mr Liemant’s evidence is that the only rationale Mr Sellings provided for his decision to resign in the telephone discussion on 30 April was that a business development role was no longer for him. Mr Sellings’ evidence also appears to indicate he wanted to gain access to his accrued entitlements and therefore decided to bring his employment to an end. He also took time to consider his decision in a way that does not suggest it was a spontaneous reaction from someone who believed they had been backed into a corner, with only one option left.

[43] It is also noted that Mr Sellings places some reliance on his discussions with the Fair Work Ombudsman in support of his submissions that the changes introduced in the business had made his role redundant. Obviously, the Commission is not privy to what was discussed in these conversations, however, any views or advice provided in response by the Ombudsman’s office are only ever going to be based upon the information provided to it, which may not necessarily reflect the complete picture.

[44] In conclusion, when the circumstances involved in this matter are viewed objectively I am not satisfied that the actions of Lantrak can be said to have resulted directly or consequentially in the termination of Mr Sellings employment in the sense that he had no other option. While it is clear Mr Sellings was unhappy about some of the changes being implemented in the business, I am satisfied there were various options open to him in response and, therefore, he cannot be said to be a person who was forced to resign because of conduct, or a course of conduct, engaged in by his employer.

[45] Having come to this conclusion it follows that Mr Sellings is not a person who has been “dismissed” under the provisions contained in ss. 385 or 386 of the Act. His application must therefore be dismissed.

COMMISSIONER

Appearances:

Mr Sellings appeared on his own behalf.

Mr Gary Liemant, joint CEO of Lantrak, appeared on behalf of the Respondent.

Hearing details:

2015.

Melbourne:

13 October.

 1   Fair Work Act 2009 (Cth) at s.385.

 2   Respondent’s Outline of Arguments: Merits at Question 3

 3   Exhibit L1 at para 21

 4   Transcript at PN60

 5   Ibid at PN210

 6   Exhibit S2 at page 7-8

 7   Transcript at PN223

 8   [2013] FWCFB 5279

 9   Ibid at [11] – [19]

 10   [2014] FWCFB 613

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