Date of dismissal and fair work cases

Determining when the termination of employment of an employee takes place can sometime be a critical factor to the outcome of an unfair dismissal case. Not only are there very stringent time limits on the right of a former employee to pursue an unfair dismissal case but protection from unfair dismissal also depends upon length of service. Here are some of the principles.

Extract from

“Approach to determining when a dismissal took effect

[6] A dismissal does not take effect unless and until it is communicated to the employee who is being dismissed. 1 An employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).2 In certain circumstances which are not relevant in this case, a dismissal can be communicated orally. Where the communication is in writing only, the communication must be received by the employee in order for the dismissal to be effective.3

[7] A notice of termination may still be valid even if it is stated to take effect subject to a condition, such as a future date, provided that:

  • the notice clearly expresses the condition
  • the condition has been satisfied, and
  • the employee is in a position to know that the condition has been satisfied. 4

[8] Where payment in lieu of notice is made the dismissal usually takes effect immediately. 5

[9] The provisions of the FW Act in relation to unfair dismissal are concerned with the ending of the employment relationship. As Deputy President Saunders observed in Nathan Jackson v Mahmoud Hasan Abulamoun: 6

“[40] Because the question of whether an employment relationship continues to exist is a question of fact, it is necessary to consider all the relevant circumstances to determine whether there has been a communication of a dismissal by words or conduct. The range of facts or factors which may need to be examined to answer the question of whether an employment relationship has ceased to exist by reason of the communication of a dismissal by words or conduct will be determined by the circumstances of a particular case, and may include, without limitation, whether the employee is being paid a wage or other benefits or entitlements, whether the employee is attending or performing work for the employer, whether the employee is being rostered to work or offered work, whether, in the case of a business employing casuals, the employer is rostering other employees to do work in the same role as the applicant in a particular case, whether the employer is exercising, or has the ability to exercise, control over the execution of work by the employee, whether either party has communicated to the other party a decision to terminate the relationship, and the terms of the employment contract.

[41] The question of whether an employment relationship has ceased to exist does not depend upon the parties’ subjective intentions or understandings. Rather, it depends upon what a reasonable person in the position of the parties would have understood was the objective position. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.”

[10] While Jackson concerned the question of whether there had been a dismissal, the observations are also relevant to matters to be considered in determining when a dismissal took effect.

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Consideration

[21] In my view, the evidence clearly establishes that the Applicant’s dismissal took effect on 14 October 2021. The Respondent’s submission to the contrary, relying on the decision of Wilcox J in Siagian v Sanel Pty Limited 7, is misconceived. Given the submission of the Respondent’s representative that I should apply that case in accordance with the Commission’s Unfair Dismissal Benchbook, and the suggestion that I had failed to do so after giving my oral reasons for rejecting the Respondent’s argument, it is necessary that I explain what was established in that case and that I have followed it. It is also necessary to explain why that case does not assist the Respondent’s argument.

[22] In Siagian v Sanel, the parties agreed that the Respondent had terminated the applicant’s employment but differed as to whether the termination took effect before or after the commencement of certain provisions of the Industrial Relations Act. The Respondent (Sanel) asserted that the termination of employment took effect on 29 March 1994 and the Applicant (Mr Siagian) asserted that it took effect on 15 April 1994. The significance of the date the termination took effect, was that certain provisions of the Industrial Relation Act 1988, which commenced operation on 30 March 1994, and Mr Siagian could not make a claim pursuant to those provisions if the termination of his employment was effective on 29 March 1994.

[23] The facts as recorded in the judgement of Wilcox J were that on 29 March 1994, Mr Siagian was informed that he was being “let go” and a manager of the Company handed him a piece of paper setting out computations headed “Statement of earnings on termination” and a cheque for an amount comprising his wages up to 15 April 1994 and accrued entitlements. Mr Siagian was not provided with a letter advising of the termination of his employment, but was escorted to his office to pack his personal belongings, was required to return the key to the Company’s premises and was escorted to his vehicle after being informed that his employment was terminated.

[24] One of the arguments advanced on behalf of Mr Siagian was that the notice given on 29 March 1994 was effective to terminate his contract of employment, but the employment did not come to an end until the date to which the payment was made – 15 April. Leaving aside the question of the distinction between the termination of the contract of employment and the employment relationship, which was considered by the Court and is not presently relevant, Wilcox J observed that the conduct of the Respondent’s manager in delivering the cheque, escorting Mr Siagian from the premises and repossessing his key, “admit of no ambiguity” and effectively terminated the employment relationship.

[25] With respect to the argument that employment did not end until the date to which the payment to Mr Siagian was made, Wilcox J observed that the term “payment in lieu of notice” is ambiguous and cited the judgement of Waite J in Leech v Preston Borough Council 8 to the effect that the expression is regularly used throughout industry in two different senses. The first is when it is used to describe the payment to an employee whom it is proposed to dismiss summarily of a lump sum representing compensation for the wages or salary which the employee would have received if given the notice to which the employee is entitled by law. The second is when the term is used to tell an employee that he or she is being given the full period of notice to which the employee is entitled by law but is at the same time excused from any duty (and refused any right) that he would otherwise have under his employment contract to attend at the workplace during the notice period. In the first case, the employee’s employment terminates upon the date of payment of the lump sum. In the second case, the employment extends until the expiration of the period for which the payment was made. To this analysis I would add that there are also cases where an employee is informed that employment is to end at the expiration of a notice period and the employee is required to work during that period. After observing that the question whether a payment in lieu of notice immediately terminates the employment is always one of fact, Wilcox J stated:

“It seems to me that, in the absence of evidence of a contrary intention, it should usually be inferred that the employer intended the termination to take effect immediately. This conclusion not only reflects the more accurate meaning of the phrase ‘payment in lieu of notice’; it accords with common sense. An employer who wishes to terminate an employee’s services, and is prepared to pay out a period of notice without requiring the employee to work, will surely usually wish to end the relationship immediately. If the employee is not to work, there is no advantage to the employer in keeping the relationship alive during the period for which payment is made; and there is the disadvantage that the employer will be burdened with employment related costs, such as workers’ compensation insurance, payroll tax, liability for leave payments etc. The employer also incurs the risk that some new burden will be imposed in respect of the employment during the period.

I see nothing in the present case to suggest that Sanel intended that its employment relationship with Mr Siagian should continue until 15 April. The statement of account given by Mr Bryant to Mr Siagian was headed ‘Statement of Earnings on Termination’. His key was taken from him. Mr Bryant had no thought that Mr Siagian might be called back to work before the expiration of the period of notice. Mr Bryant supplied a separation certificate on 31 March, an action that would have been premature if the employment had not then terminated.”

[26] In the present case, the letter of 30 September 2021 advising of the Applicant of the termination of her employment, clearly states that the Applicant’s employment will end two weeks later, on 14 October 2021. I do not accept that the Applicant should have known, based on the information in that letter, that her employment had been terminated, with immediate effect. The fact that the Applicant was asked to verify which dates she claimed as personal leave, in order to clarify the payment of her entitlements on termination, or that she asked for personal leave to be paid during the notice period, does not establish that the Applicant knew that her employment had ended on 30 September 2021.

[27] The email exchange on these matters occurred on 1 and 2 October – after the Respondent asserts that the employment had ended. None of the email responses from the Company in relation to leave state to the Applicant that her employment had ended on 30 September 2021. Nor do I accept that the SMS exchange on Tuesday 28 September 2021 supports the Applicant’s employment being terminated with effect from 30 September. It is obvious that the SMS exchange occurred before the termination letter was sent to the Applicant. While the SMS exchange may have given the Applicant reason to be concerned that the Respondent was considering terminating her employment, it is not relevant to when the termination took effect.

[28] Whether or not the Applicant was on personal leave at the time of the termination letter being sent to her or had provided medical certificates for such period is also irrelevant. The termination letter specifically states that the Applicant’s employment will not end until 14 October 2021 and it is hardly surprising that she would have provided medical certificates for part of this period, particularly when she had also made a claim for workers’ compensation. Further, the statement in the Applicant’s email of 2 October 2021 that she was on personal leave recommended by her GP until the termination letter was received, does not establish that the Applicant knew that her employment had been terminated with effect from 30 September 2021. That statement simply indicates that once the termination letter was received, the Applicant was being paid in lieu of notice, and whether she was on personal leave was irrelevant.

[29] That the Applicant did not make herself available for work in the period from 8 October until the notice period expired on 14 October does not establish that her employment ended on 30 September. The Respondent had the right to excuse her from work while paying her for the notice period and the Applicant was entitled to assume that it had done so, in circumstances where the date her employment would end had been clearly communicated as 14 October 2021. I also note that the Applicant had medical certificates indicating that she did not have capacity to work from 7 October until 24 October 2021, a period that extended beyond the notice period. Further, the Respondent did not pay the Applicant for her notice period until 7 October 2021 and her accrued entitlements were not paid until 14 October 2021, the date that she had been informed would be the effective date of her dismissal. Contrary to the Respondent’s submission, these payments to the Applicant would not have alerted her to the possibility that her employment had ended on 30 September 2021.

[30] Finally, the Applicant tendered advice from the Department of Home Affairs, dated 30 September 2021, stating that the Department had been informed that the Applicant’s employment would be ceasing on 14 October 2021. The email from the Department of Home Affairs was received by the Applicant on 30 September 2020, the same date as the Applicant received the letter from the Respondent advising that her employment would end on 14 October 2021. The terms of the email make it clear that this advice was not provided to the Department by the Applicant. It is more probable than not that the Respondent copied the Department into the Applicant’s termination letter, or at least provided the same advice as it had provided to the Applicant of the date the termination of her employment would take effect. The Respondent did not dispute that it had advised the Department of Home Affairs of the termination of the Applicant’s employment or provided evidence of the advice it provided.

[31] In circumstances where the Department of Home Affairs believed, based on information provided by the Respondent, that the Applicant’s employment would end on 14 October 2021, it is entirely reasonable that the Applicant would understand that this was the case. The facts in this case bear no resemblance to those in Siagian v Sanel.

Conclusion

[32] For these reasons, I found that the termination of the Applicant’s employment took effect on 14 October 2021 and that the application was filed within the time required in s. 396(2). of the Act. It is not necessary to grant a further period for the application to be made. I am also of the view that if it was necessary to grant a further period for the application to be made, the conduct of the Respondent in advising the Applicant and the Department of Home Affairs that the Applicant’s employment ended on 14 October 2021, would weigh in favour of a further period being granted. This is because the Applicant had reasonable grounds to believe that her employment ended later than the Respondent asserts and it is an exceptional circumstance that an employer makes statements to an employee and a Government Department, with respect to the date that a termination of employment took effect, and then seeks to depart from those statements to defeat an unfair dismissal application.

[33] Accordingly, I dismissed the jurisdictional objection of the Respondent in relation to the application being made outside the time required in s. 396(2) and issued Directions for the hearing and determination of the merits of the application.”

Patrone v Unique Muscle Pty. Ltd. (2022) FWC 319 delivered 15 February 2022 per Asbury DP