Constructive dismissal case succeeds

It is comparatively rare for an employee to win an unfair dismissal case based upon an argument that the dismissal was “forced” upon the employee and thus a constructive dismissal and was relevantly unfair. Here is an extract from a recently Fair Work Commission case where exactly that was decided. The case is a very good example of the height of the bar in such cases.

“The approach to considering whether an employee has been dismissed

[94] The general approach to considering whether an employee has been dismissed is set out in the Decision of a full Bench of the former Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd 44 where it was stated that:

“[21] In this Commission the concepts have been addressed on numerous occasions and by a number of Full Benches. In Pawel v Advanced Precast Pty Ltd (Pawel) a Full Bench said:

‘[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. In the instant case the uncontested factual findings are that the applicant had for almost the whole of his employment performed welding duties; that there was no objective threat to his health and safety involved in the requirement that he undertake welding duties so long as it was not on a continuous basis and that the welding he was required to do was not continuous.’ ”

[95] The Full Bench in O’Meara also cited an earlier Decision of a Full Bench in ABB Engineering Construction Pty Ltd v Doumit 45 where it was observed that:

“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.”

[96] The Full Bench in O’Meara went on to observe that:

“In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.” (footnotes omitted)

[97] In Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli 46 a Full Bench of the Commission noted that:

“[33] Notwithstanding that it was clearly established, prior to the enactment of the FW Act, that a “forced” resignation could constitute a termination of employment at the initiative of the employer, the legislature in s.386(1) chose to define dismissal in a way that retained the “termination at the initiative of the employer” formulation but separately provided for forced resignation. This was discussed in the Explanatory Memorandum for the Fair Work Bill as follows:

‘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).

  1. 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).
  2. 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.’

[34] It is apparent, as was observed in the decision of the Federal Circuit Court (Whelan J) in Wilkie v National Storage Operations Pty Ltd, that “The wording of s.386(1)(b) of the Act appears to reflect in statutory form the test developed by the Full Court of the then Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No. 1) and summarised by the Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd” (footnotes omitted). The body of pre-FW Act decisions concerning “forced” resignations, including the decisions to which we have earlier referred, has been applied to s.386(1)(b): Bruce v Fingal Glen Pty Ltd (in liq); Ryan v ISS Integrated Facility Services Pty Ltd; Parsons v Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust.” (footnotes omitted)

[98] After citing these cases, Commission Hampton in Sathananthan v BT Financial Group Pty Limited 47 distilled the general legal principles into the following succinct and useful formulation:

  • The question as to whether the resignation was forced within the meaning of the FW Act is a jurisdictional fact that must be established by the applicant;
  • A termination at the initiative of the employer involves the conduct (or course of conduct) engaged in by the employer as the principal constituting factor leading to the termination;
  • The employer must have engaged in some conduct that intended to bring the employment relationship to an end or had that probable result;
  • Conduct includes an omission; 48
  • Considerable caution should be exercised in treating a resignation as other than voluntary where the conduct of the employer is ambiguous and it is necessary to determine whether the employer’s conduct was of such a nature that resignation was the probable result such that the employee had no effective or real choice but to resign; and
  • In determining the question of whether the termination was at the initiative of the employer, an objective analysis of the employer’s conduct is required.

Whether the Applicant was dismissed in the present case

[99] In oral submissions, it was conceded for the Respondent that the site level practices in the present case fell short of its high standards. In my view, that submission is an understatement. There was a significant shortfall in both site level and corporate HR practices evident in this case. Ms Taylor, who is the Group Manager Talent Acquisition and Workforce Planning for Teys provided a written statement to the Commission, and swore to its truth. In that statement and her sworn evidence, Ms Taylor said that the only record of a formal complaint made by the Applicant was a complaint made on 10 September 2019 about the use of a racist term by a Vietnamese employee. In cross-examination, Ms Taylor conceded that before making this statement and swearing to its truth, she had not examined HR records at site. Had Ms Taylor examined those records, she would have seen notes made by Ms Poole in which the Applicant made allegations about Mr Pillejera and Ms Nguyen.

[100] The Allegations made by the Applicant about Mr Pillejera were serious and deserving of investigation. The notes made by Ms Poole of a discussion with the Applicant on 10 September 2019, recorded that as recently as the night before the discussion, the Applicant alleged that he had been bullied by Mr Pillejera in relation to going to the toilet during his shift. Ms Taylor managed to review the Applicant’s HR records in relation to him being given a warning, and it is surprising that she could not ascertain whether there were any other relevant records before making her statement. When Ms Poole’s notes were called for during the hearing of this matter, it took no more than ten minutes for them to be produced. The conduct of Ms Taylor evidences the general failure by the Respondent to deal reasonably with the Applicant, and in particular to properly consider and investigate the complaints he made.

[101] Ms Poole’s failure to deal reasonably with the Applicant is even more significant than that of Ms Taylor. Ms Poole made statements to the Commission which she must have known were incorrect. Ms Poole said in her reply statement 49 that the Applicant did not make any mention of any issues or complaints relating to Mr Pillejera either when he came to HR with Mr Bigirimana or at any other time. The notes Ms Poole took of her meeting with the Applicant on 10 September 2019, evidence that this statement is at best incorrect, and at worst, untrue. I also note that in her first statement50, Ms Poole said that she clearly remembered the events of the week of 10 September because her grandfather was critically ill and passed away on 12 September. I also note that Mr Herbst made similar comments to that of Ms Poole and contended that the Applicant had not made any complaint about Mr Pillejera. While the veracity of this assertion was not put to Mr Herbst, because he gave evidence before Ms Poole, it is significant that Ms Poole’s notes are contrary to Mr Herbst’s evidence.

[102] Ms Poole’s notes indicate that in addition to his complaint about Ms Nguyen, the Applicant alleged that Mr Pillejera was close to Ms Nguyen and did not report her conduct and that Mr Pillejera was timing the Applicant when he went to the toilet and was not doing this to other employees. The notes also indicate that the Applicant nominated another employee who had been subjected to distressing comments about his race from Ms Nguyen. There were also notes made by Ms Poole of an interview with the employee nominated by the Applicant, which confirmed that the employee alleged Ms Ms Nguyen had made such comments.

[103] Ms Poole’s notes also evidence her failure to properly discuss the allegations with Ms Nguyen. The notes further evidence the total failure of Ms Poole to put the Applicant’s allegations to Mr Pillejera and to otherwise deal with those allegations. The allegations the Applicant made about Mr Pillejera were not discussed at all with with Mr Pillejera. Indeed, at the point this matter was heard, there has still been no investigation with respect to Mr Pillejera’s conduct and he continues to be employed as a supervisor.

[104] In short, Ms Poole’s notes establish the failure of Teys to appropriately investigate and deal with serious allegations made by the Applicant about his treatment by a supervisor and a co-worker who had a training role. It is of significant concern that Ms Poole would give evidence to the Commission in which she makes statements adverse to the Applicant’s case, which are directly contradicted by her own notes. It is also of significant concern that these notes would never have come to light, other than through cross-examination of Ms Poole by Counsel for the Applicant.

[105] I am also of the view that the manner in which Ms Poole dealt with the Applicant when he attended the HR Office on 29 August 2019, left much to be desired. Ms Poole knew that the Applicant and Mr Bigirimana had waited for some time in the HR Office that morning to speak to her. While I accept that Ms Poole was busy dealing with other employees, the Applicant should not have had to make eye contact with Ms Poole for her to make time to speak to him about his reasons for attending the HR office on that day.

[106] Notwithstanding my concerns about the conduct of Ms Poole, and the truthfulness of her evidence to the Commission, for the purposes of determining the jurisdictional objection I consider that the conduct was negligent, careless or incompetent, rather than being conduct engaged in with the intention of bringing the Applicant’s employment to an end. I am also of the view that the conduct of Mr Herbst in relation to the Applicant’s complaints was careless, negligent or incompetent. Notwithstanding that he attended the meeting at which the Applicant raised complaints about Mr Pillejera and Ms Nguyen, Mr Herbst also maintained that the complaint had only related to Ms Nguyen, contrary to Ms Poole’s notes of the meeting.

[107] I have therefore considered the question of whether the Applicant was dismissed within the meaning of s.386 of the Act, on the basis that the resignation of the Applicant will be a dismissal, only if I objectively consider that the actions of Ms Poole and Mr Herbst had the probable result of ending the Applicant’s employment, and that the Applicant had no effective or real choice but to resign.

[108] After considering all of the circumstances, including the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee, I am satisfied that this was the case. My reasons for reaching this conclusion are as follows. The Applicant’s first language is not English and he has difficulty communicating in English. To the best of his ability, the Applicant made serious complaints about the conduct of his supervisor Mr Pillejera, and Ms Nguyen. Given that Mr Pillejera was the subject of the complaints, and the Applicant’s view that he has a close relationship with Ms Nguyen, it is unsurprising that the Applicant did not raise his complaints with Mr Pillejera. Instead, the Applicant raised them with Mr Herbst.

[109] Appropriately, Mr Herbst referred the matters to the HR Office at the site. Mr Herbst was at the meeting with the Applicant on 10 September and should have considered the Applicant’s complaints in totality instead of simply those aspects which related to Ms Nguyen. Similarly, Ms Poole should also have identified that the complaint was not simply about Ms Nguyen. Further, the manner in which Ms Nguyen was dealt with was manifestly inadequate. Ms Poole’s notes indicate that the discussion was limited and essentially Ms Nguyen received little more than a rap on the knuckles in relation to a serious allegation, which should have been substantiated given that the Applicant’s version of events was corroborated by Mr Senghor. Mr Herbst said that Ms Nguyen was given a final warning, when she received nothing more than a verbal warning.

[110] The manner in which the Applicant was advised of the outcome of his complaint, was also manifestly inadequate. Quite simply, the Applicant deserved better than to be spoken to about such a serious matter in his work area, after being taken off a machine on which he was working. The Applicant should have been spoken to about the outcome of his complaint in the HR Office so that he was afforded the courtesy of knowing that it was taken seriously. Thereafter, consideration should have been given to the fact that the Applicant was so distressed, that he took a day of personal leave on 12 September. The Applicant told Mr Herbst that he was upset by the incident and needed to take time off. Further, the fact that the Applicant returned from that personal leave day and sought an additional two week period of leave to rest and look after his health, should have been a red flag indicating that he continued to be distressed by the events he had reported, and was not satisfied with the outcome. In short, the relationship between those events and the need to take a period of leave for health reasons, should have been obvious to Ms Poole and Mr Herbst, even if I accept their evidence about what the Applicant said when he sought the leave and that he answered their questions about whether it was related to the complaint about Ms Nguyen in the negative.

[111] The blasé manner in which the Applicant was dealt with at this point is entirely inconsistent with Teys’ policy statement that the Company does its best to ensure that employees will always love working for Teys. Ms Poole and Mr Herbst could and should have done more at this point to inquire into the reasons for the Applicant’s illness or to ask him whether he needed support from the employee assistance program which Ms Poole gave evidence about. This would have been an obvious and relatively simple step for Ms Poole or Mr Herbst to have taken, particularly in light of the Applicant’s statement that things were going on in his head that he needed to sort out.

[112] Further, Ms Poole and Mr Herbst knew that not only had the Applicant been subjected to conduct (at least by Ms Nguyen) that breached Company policies, but the perpetrator had received only a verbal warning. Further, the Applicant had been informed that the resolution was that he would be left in a reporting relationship with the alleged perpetrator of bullying (Mr Pillejera) and in the same work area as Ms Nguyen, in circumstances where his complaint about Mr Pillejera had not been acknowledged, much less investigated.

[113] I am also of the view that when the Applicant returned to work and expressed a wish to resign, Ms Poole and Mr Herbst could and should have done more to assist him and to provide other options, in light of the recent events about which they were aware. The Applicant could have been offered a further period of leave or access to the Employee Assistance Program. The fact that the Applicant did not ask for leave is not to the point. Given that both Mr Herbst and Ms Poole knew of the incident with Ms Nguyen and the Applicant’s complaint about Mr Pillejera, the could and should have provided additional support. It is also the case that both Mr Herbst and Ms Poole knew that the Applicant had originally requested two weeks of leave and had been granted only one week. Further, both Mr Herbst and Ms Poole knew that the Applicant’s first language is not English and Mr Herbst knew that he was a good worker.

[114] I do not accept that the Applicant had the option of applying for a further period of leave. He had already asked for two weeks and been granted only one, and his serious complaint had not been properly dealt with. He had suffered a distressing incident at work and notwithstanding that Mr Herbst and Ms Poole may not have been aware of the serious mental health issue that the Applicant was dealing with at the time he resigned, it is not in dispute that he stated that he needed to care for his health and that his resignation was health related. I accept that in all of the circumstances confronting the Applicant, he had no real option other than to resign.

[115] I do not accept that the Company can rely on any failure of the Applicant to “escalate” his complaint in accordance with the complaints procedure. Firstly, there is a lack of clarity about the procedure. The most recent iteration indicates that complaints are required to be made in writing. Although a term of the enterprise agreement which covered the Applicant would over-ride such a requirement, that is not to the point. An employee in the position of the Applicant should not be expected to compare a workplace policy and an enterprise agreement to establish inconsistency about a procedure.

[116] Even if I accept the Applicant’s evidence that he understood that he was not required to put his complaint in writing in order to escalate it, the facts of the matter are that the Applicant made a complaint about his supervisor to a manager (Mr Herbst) and then to a HR officer (Ms Poole). Despite taking notes which established the breadth of the complaint, Ms Poole failed to deal with all matters raised by the Applicant. Ms Poole failed to articulate the complaint at the point it was made, and contrary to her notes, persisted with that failure in her evidence to the Commission. It was not until Ms Poole’s notes were put to her in cross-examination that she conceded that her evidence about the Applicant’s complaint was wrong. I do not accept that the Applicant could have reasonably been expected to escalate his complaint in the face of an apparent inability on the part of Teys’ management to document and deal with the full extent of the complaint.

[117] There is also force in the Applicant’s comment under cross-examination that he did not know the identity of the General Manager of the Company. There is no evidence of any explanation to employees about the organizational structure of Teys in relation to complaints and how to make contact with managers who are not based at the site at which the employee works. While Teys has documented its complaints procedure and disseminated it to employees, the procedure has little practical meaning for an employee who has exhausted the levels of management at the site at which he or she is working. There is no evidence of contact details being provided for higher levels of management or any practical information for employees about the steps they may take to escalate a complaint beyond the site. In circumstances where a complaint is made by an employee with limited communication skills and command of the English language, there is no capacity to escalate a complaint. The most that can be said about Teys’ procedure is that it looks good on paper. In my view, the Applicant in the present case took all reasonable steps to raise his complaint and to escalate it to managers at the Beenleigh site, and was not dealt with reasonably by Ms Poole and Mr Herbst.

[118] Accordingly, I am satisfied and find that the Applicant’s employment ended at the initiative of the employer because of a course of conduct that, on an objective basis, had the probable result of bringing the employment relationship to an end. This was more than a case of an employee leaving an unpleasant work environment. The Applicant has limited English language skills which made reporting conduct he had been subjected to, difficult. The complaints procedure was of little use to the Applicant. The Applicant was suffering from depression at the time and there is evidence that this was caused to some extent by the manner in which he had been treated at work. The employer failed to deal reasonably with the complaint and the response of Mr Herbst and Ms Poole was manifestly inadequate in light of the seriousness of the complaint.

[119] Teys management did not take reasonable steps which could have avoided the Applicant’s resignation. He sought a two week period of leave to deal with health issues in close proximity to a distressing incident at work and was granted one week. When he resigned citing health issues, he was not offered further leave or information about other support or assistance that Teys claims to make available to its employees. When considered on an objective basis, the Applicant’s assertions about the unreasonable manner in which he was treated were valid, and he had no option but to resign because of that treatment.”

Muhinyuza v Teys Australia Beenleigh Pty Ltd (2020) FWC 2996 delivered 27 July 2020 per Asbury DP