Tracie Schmutter v Hendrickson Asia Pacific Pty Ltd
[2023] FWC 2840
•27 OCTOBER 2023
| [2023] FWC 2840 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Tracie Schmutter
v
Hendrickson Asia Pacific Pty Ltd
(C2023/4900)
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 27 OCTOBER 2023 |
Section 365 application – no dismissal – application dismissed
Tracie Schmutter has made an application under s 365 of the Fair Work Act 2009 (Act) for the Commission to deal with a general protections dispute involving an alleged dismissal. She contends that Hendrickson Asia Pacific Pty Ltd (Hendrickson) contravened various provisions of Part 3-1 by dismissing her for proscribed reasons. Hendrickson objects to the application on the jurisdictional basis that Ms Schmutter was not dismissed.
Section 365 of the Act states that if a person has been dismissed and alleges that the dismissal was in contravention of Part 3-1, the person may apply to the Commission to ‘deal with the dispute’. Generally speaking, the Commission does not have a determinative function in relation to applications made under s 365. It will conduct a conciliation conference and, if satisfied that all reasonable attempts to resolve the matter have been or are likely to be unsuccessful, it will issue a certificate that allows an application to be made in an eligible court. However, if a respondent raises a jurisdictional objection, the Commission is required to determine it (see Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152). I conducted a jurisdictional hearing on 25 October 2023.
Ms Schmutter gave evidence that on 31 March 2023, she sent the director of human resources, Janet Kupka, a complaint about the conduct of Andrew Martin, vice president of international operations. In April 2023, she was told that Hendrickson would hire an external investigator to examine her complaint. On 27 June 2023, she received a document from the investigator which sought her response to certain matters, and on 30 June 2023, she sent the investigator her comments. On 20 July 2023, Ms Schmutter had a meeting with Ms Kupka and Dean Zimmerman, vice president of human resources, to discuss the outcome of the investigation. Mr Zimmerman told Ms Schmutter that her complaint had been found to be largely unsubstantiated, and asked her what she wanted to do. Ms Schmutter said that it was not up to her. She said that she knew Mr Martin valued loyalty, and that she thought he would not want to work with her anymore because of her complaint. Mr Zimmerman said that he would talk to Mr Martin. Later that day, Ms Schmutter felt unwell and went home. On 22 July 2023, she submitted a medical certificate for the period ending on 30 July 2023.
Ms Schmutter said that on 23 July 2023, she discovered that her VPN access, which enabled her to work remotely, had been disconnected. She said that in her experience Hendrickson would disconnect an employee’s VPN access towards the end of the final day of their employment. She suspected that Hendrickson had decided that she would not be returning to work. Mr Mitsel later told her that her VPN access had been disconnected on 21 July 2023.
Ms Schmutter said that on 24 July 2023, Mr Martin sent a message to staff advising that the ‘Christmas in July’ event, which she had been organising, would be postponed, and that she was surprised that she had not been consulted about this. That evening, Ms Schmutter had a second meeting with Mr Zimmerman and Ms Kupka. Ms Schmutter’s evidence was that Mr Zimmerman told her that Mr Martin did not want her on his team, and that she believed that this meant she could no longer work for Hendrickson. In her witness statement, Ms Schmutter said that Mr Zimmerman then told her that the company wanted to offer her a choice of retirement or resignation, and if she resigned, she would receive 5 weeks’ pay plus a severance payment of 12 weeks’ salary. In her reply statement, Ms Schmutter said that Mr Zimmerman ‘expressed’ that there was no option for her other than to retire or resign, in the context of Mr Martin not wanting her on his team. Ms Schmutter said that there was no suggestion of her being moved to another position, and that although she did not want to resign, given Mr Martin did not want to work with her, she told Mr Zimmerman that she would negotiate an appropriate separation package, but would not accept a severance payment of only 12 weeks.
Ms Schmutter said that on 25 July 2023, she discovered that she no longer had access to the Oracle, Payforce or Kronos programs, which she required for her work. Later that morning, she was asked to provide an update on current workers’ compensation claims and recruitment activity. She took this as another sign that she would be dismissed. That evening, Mr Zimmerman sent Ms Schmutter a proposed deed of release, but she did not sign it as it contained the 12 week severance payment that she had already rejected. The next morning, she was told that her work email access would be cut off.
On 26 July 2023, Ms Schmutter’s solicitors wrote to Hendrickson, stating that the company’s conduct amounted to a repudiation of her contract of employment and that she had been constructively dismissed. The company’s solicitors replied, denying that Ms Schmutter had been dismissed, and proposing an adjustment to Ms Schmutter’s role to account for ‘conflicts arising from the investigations’ into her complaint. The proposal was that the human resources function would be restructured into two positions; a more strategic and high level HR management role reporting to Mr Martin, and a more day to day role including payroll, general contract management and related tasks. Ms Schmutter would continue for the time being in her current role and assist in designing the restructure of the HR function. She would be able to apply for either or both roles once they were created. Alternatively, if Ms Schmutter did not wish to continue her employment, the company would pay her 19 weeks’ pay, and up to $5000 in outplacement services. The letter stated that the company was willing to negotiate on either option. Further correspondence passed between the lawyers. No agreement was reached.
Ms Schmutter contended that she had been dismissed on the initiative of the employer within the meaning of s 386(1)(a) of the Act. She said that the company’s conduct amounted to a repudiation of her contract of employment, which she had accepted. She said that the repudiation and the dismissal occurred on 24 July 2023 when she was told by Mr Zimmerman that Mr Martin did not want her on his team and that she had to retire or resign. Ms Schmutter submitted that the disconnection of her VPN, her work email, and other work platforms was inconsistent with the continuation of her employment. She said that the cancellation of her work event and the requests for status reports were further indications of the repudiation, as was the fact that on 2 August 2023, the company placed a job advertisement for a recruitment officer, recruitment being one of the functions for which she was responsible. Ms Schmutter said that the offer of an alternative role made by the company’s lawyers was not a genuine one, and that by this time she had already been dismissed.
Mr Zimmerman gave evidence that at the meeting on 20 July 2023, he told Ms Schmutter that the investigation had concluded that most of her allegations were unsubstantiated but that there were problems with trust and communication among the Australian management, and that the company would be taking steps to address this. Ms Schmutter replied that she was shocked at the outcome. Mr Zimmerman asked her whether she was prepared to work on the communication and trust issues, and she replied that it was not up to her, and that Mr Martin would not want this. Mr Zimmerman’s evidence was that he asked Ms Schmutter several times whether she believed she would be able to continue in her position because she would need to work with Mr Martin, but she did not respond. Mr Zimmerman said that he told Ms Schmutter that she should take time to consider the outcome of the investigation and come back to him or Ms Kupka if she had any questions or concerns.
Mr Zimmerman’s evidence was that at the meeting on 24 July 2023, he asked Ms Schmutter again whether she was able to continue to work with Mr Martin and to work through the issues of trust and communication. She replied that Mr Martin valued loyalty and that she did not think that he wanted her on his team. Mr Zimmerman replied that he was sorry she felt this way and asked whether that meant that she felt unable to work with Mr Martin. She did not reply. Mr Zimmerman denied saying to Mr Schmutter that Mr Martin did not want her on his team. He said that he told Ms Schmutter that the company needed to know whether she wanted to come back to work, and if not, it could offer her other options. Ms Schmutter asked what would happen if she did not return to work. Mr Zimmerman then said that she could resign or retire, and the company would pay her 5 weeks in lieu of notice and 12 weeks’ pay. He told Ms Schmutter that she was not required to resign. However, she would need to continue to work with Mr Martin. The company then negotiated with Ms Schmutter through her lawyers. Mr Zimmerman said that at no point did the company dismiss her.
Simon Iyer, Hendrickson’s director of finance, gave evidence that on 26 July 2023, Mr Zimmerman instructed him to restrict access to Ms Schmutter’s work email because of the fact that the company was now negotiating with her regarding her employment. The restriction would remain in place pending the outcome of negotiations. He said that Ms Schmutter’s email account has remained active and she is still listed as an employee on computer and payroll systems. He said that she retains the use of her mobile phone and company laptop.
Ms Kupka’s evidence was that she attended the meetings on 20 and 24 July 2023 with Mr Zimmerman and Ms Schmutter. Her account aligned with that of Mr Zimmerman. In particular, she said that during the meeting on 24 July 2023, Mr Zimmerman did not tell Ms Schmutter that she had to retire or resign, and that neither she nor Mr Zimmerman said words to the effect that Mr Martin did not want her on his team. Ms Schmutter had asked what would happen if she was not able to work with Mr Martin, and Mr Zimmerman replied that this would be considered a resignation and her entitlements would be paid out. She also said that Mr Zimmerman told Ms Schmutter that she did not have to resign. Ms Kupka said that at no point did the company dismiss Ms Schmutter or indicate that it intended to do so.
Hendrickson contended that it had not dismissed Ms Schmutter. She had not been forced to resign, nor had she in fact resigned. The company had made it plain to her that she could choose to continue in her role or negotiate a separation if that was her preference. It took no steps to end her employment. Mr Zimmerman had been perfectly clear that she was not required to resign. The parties had then negotiated on the terms of a possible separation agreement but none had been reached. Ms Schmutter’s access to her work email and other systems was suspended because she was considering leaving the company and was negotiating a separation. This did not mean that the company had dismissed her or was thinking about doing so. Access would be restored if and when she chose to return to work. The company had continued to pay her. She had remained an employee. Hendrickson submitted that its jurisdictional objection to Ms Schmutter’s application should be upheld.
Consideration
I make the following factual findings on the balance of probabilities. First, I find that at the meeting on 24 July 2023, Mr Zimmerman did not say to Ms Schmutter that Mr Martin did not want her on his team. It was Ms Schmutter who raised the notion that Mr Martin might not want to work with her because he valued loyalty. She may have believed that this was the case. But Mr Zimmerman did not tell her any such thing. He denied doing so and I believe him. Mr Zimmerman was a credible witness. He answered questions directly and made concessions. He gave a detailed and persuasive account of events, which I accept. His evidence was corroborated by Ms Kupka who was also a credible witness.
Secondly, I find that Mr Zimmerman did not say or contextually ‘express’ to Ms Schmutter that she was required to resign or retire. I accept Mr Zimmerman’s evidence that Ms Schmutter asked him what would happen if she could not work with Mr Martin, and that he replied that if that were the case, she would have to resign or retire. It may be that Ms Schmutter was thinking of this remark when she said that Mr Zimmerman indicated that she had to resign or retire. In any event, I find that Mr Zimmerman made it clear to Ms Schmutter that she was not required to resign and that if she continued in her employment she would need to work with Mr Martin. I find that he asked her several times whether she would be prepared to do so and that she did not answer him. Mr Zimmerman’s evidence aligns with that of Ms Kupka.
Thirdly, I accept Mr Zimmerman’s evidence that during the meeting on 20 July 2023, he said that the investigation had concluded that there were issues with trust and communication within the Australian management and that the company would be taking steps to address those issues in the future. Here too Ms Kupka’s evidence was to the same effect. I do not accept Ms Schmutter’s evidence that these words were not spoken. Ms Schmutter said that she was upset at this meeting. This may have affected her perception or recollection of what occurred. I do not believe that Ms Schmutter has given false evidence. Rather, I do not accept that her version of events is correct, where it conflicts with that of Mr Zimmerman and Ms Kupka.
Fourthly, I accept Ms Schmutter’s evidence that she told Mr Zimmerman that she was prepared to negotiate an appropriate separation package. In light of this, it is difficult to see how Ms Schmutter could have thought that she was required to leave her employment. Plainly, her separation was to be negotiated. She required that any separation be on appropriate terms. She would not be accepting a 12-week severance.
Fifthly, I accept Mr Iyer’s evidence that on 26 July 2023, Mr Zimmerman instructed him to restrict access to Ms Schmutter’s systems pending the negotiations surrounding her employment. This was not a circumstance indicative of a repudiation of her contract. Ms Schmutter was not at work. She was on personal leave, supported by a medical certificate valid until 30 July 2023. She did not return to the office after that time. Further, from 20 July 2023, there was a reasonable basis for Hendrickson to doubt whether Ms Schmutter would return to work because she had refused to answer Mr Zimmerman’s question as to whether she would be able to work with Mr Martin.
The fact that Ms Schmutter was asked to provide updates to the company on certain human resources matters was a routine matter. It did not suggest that the company had dismissed her or would do so. Ms Schmutter’s lawyers raised in their correspondence with the company the placement of an advertisement for a recruitment role, and suggested that this was evidence that she had been dismissed. But a recruitment officer could not reasonably be thought to replace a human resources manager.
Ms Schmutter said in correspondence to Hendrickson that its offer of an alternative role was not a genuine one and was merely a response to her adverse action claim. I disagree. I find that the company’s proposed course of action, if Ms Schmutter’s preference was to remain in her employment, was genuine and perfectly sensible. Neither of the alternatives set out in the letters from the company’s lawyer involved a dismissal. The first would see her continuing in her current role – she would be involved in the redesign of human resources, which would occur later. The second involved an agreed separation, not a termination of employment.
I find that it was not unreasonable of Henrickson to expect Ms Schmutter to continue to work with Mr Martin, given that Mr Zimmerman had asked her numerous times to say whether or not she was able to do this and she did not reply. She did not say that this was impossible, unfair, or inappropriate for some reason. She did not say anything about the matter.
In her reply statement, Ms Schmutter said that Mr Zimmerman did not provide her with any reassurance that she would be given a safe workplace and did not offer any counselling or conciliation with Mr Martin. But Ms Schmutter did not ask for any of these things. There was no reason for Mr Zimmerman to raise these matters when Ms Schmutter would not respond to his question about whether she would work with Mr Martin. Ms Schmutter said that the company had made no effort to contact her and had not asked her why she had not returned to work. But from late July her solicitors had made clear to the company that she considered herself to have been dismissed. Ms Schmutter said that she was never given an option to come back to work. I reject this. She did not need to be given an option that she already possessed. She had taken personal leave. When that ended, she could have returned to work as normal. Her electronic platforms would need to have been reconnected. I accept Ms Kupka’s evidence that they would have been.
I note that the company’s F8A response document described the factual background in a way that in some respects differed from the evidence of company witnesses. For example, the F8A stated that the company understood that Ms Schmutter did not believe she could work with Mr Martin, and that it would not be appropriate to have individuals working together if there had been a breakdown of trust. At the hearing, the company’s position was simply that Ms Schmutter had not said whether she was willing to work with Ms Martin. But the F8 and F8A are not formal pleadings. They are summaries of the parties’ positions. The content of the F8A does not cast doubt on the accuracy or reliability of the evidence of Mr Zimmerman, Ms Kupka and Mr Iyer.
Section 386(1) states that a person has been dismissed if the person’s employment with his or her employer has been terminated ‘on the employer’s initiative’ (s 386(1)(a)) or the person has resigned but was ‘forced to do so’ because of conduct or a course of conduct engaged in by the employer (s 386(1)(b)). It follows from my findings that the company did not dismiss Ms Schmutter within the meaning of s 386(1)(a). I reject the factual premise of the contention. Mr Zimmerman did not tell Ms Schmutter that Mr Martin did not want her on his team, nor did he tell her that she had to resign or retire. Ms Schmutter had a choice: she could remain in her employment, in which case she would continue to report to Mr Martin, or she could separate from the company on terms to be agreed. Ms Schmutter refused to say whether she was willing to work with Mr Martin. She was clear however that her separation would need to be on appropriate terms and that she would not accept a 12 week severance. Ms Schmutter was able to negotiate any separation from the company. She did not have to leave. The parties proceeded to discuss a separation but did not reach an agreement. Ms Schmutter’s employment was not terminated on her employer’s initiative.
Hendrickson did not repudiate Ms Schmutter’s contract of employment. It did not evince an intention no longer to be bound by it, or take action that struck at the heart of the contract. The suspension of access to systems was an understandable intervention in the circumstances. It could and would be reversed if she returned to work. The narrowing of access to the shared drive and the cancellation of the work event that Ms Schmutter had organised were minor and irrelevant matters. The requirement that Ms Schmutter work with Mr Martin was not unreasonable, and she did not object to it, or indicate that she would not or should not work with him. The evidence does not sustain a conclusion of constructive dismissal.
Ms Schmutter does not rely on s 386(1)(b), but for completeness I record my conclusion that Ms Schmutter was not forced to resign because of conduct or a course of conduct engaged in by Hendrickson. Rather, she decided to treat her employment as having been terminated by the company when this was not in fact the case.
Conclusion
Ms Schmutter was not dismissed. She was therefore not a person eligible to make an application under s 365 of the Act. The Commission has no power to deal with her dispute. The jurisdictional objection is upheld. Ms Schmutter’s application is dismissed.
DEPUTY PRESIDENT
Appearances:
C. Serpell of counsel for the applicant
A. Crocker of counsel for the respondent
Hearing details:
2023
Melbourne
25 October
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