The harshness of “repudiation” in unfair dismissal laws

Where an employee repudiates his or her employment obligations, for example by not attending work for a material time, which can objectively be regarded as a “renunciation of the employment contract or a fundamental obligation under it”, the employer may “accept” the repudiation by treating the employment as having come to an end irrespective of the intentions of the employee and the employee will not be regarded as having been dismissed. This harsh legal reasoning will prevail irrespective of the intentions of the employee who may be prevented from meeting his or her employment obligations through no intention or fault.

“Jurisdiction – was Mr Ali Qureshi dismissed?

 

[114] Mr Ali Qureshi cannot have been unfairly dismissed unless he was dismissed (s 385(a)).

[115] The FW Act requires a dismissal to have occurred as a jurisdictional fact. A mere allegation that a person has been dismissed will not establish this as fact.[25] “Dismissal” for these purposes (and other purposes of the FW Act) is defined in s 386(1). It provides:

“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.”

[116] There is no suggestion that Mr Ali Qureshi resigned or was forced to resign. Section 386(1)(b) does not fall for consideration.

[117] If Mr Ali Qureshi was dismissed by Spotless, the dismissal will need to have been a termination of employment “on the employer’s initiative” (s 386(1)(a)).

[118] Termination for these purposes means termination of the employment relationship and not necessarily a particular contract of employment.[26] Depending on the circumstances, termination is capable of referring to either the employment relationship or an employment contract, or both.[27]

[119] As noted by a full bench of the Commission in Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli,[28] s 386(1)(a) was intended to capture past case law relating to the meaning of ‘termination at the initiative of the employer’. According to that case law, this arises where the action of the employer is the principal contributing factor leading to the termination of the employment relationship.[29]

[120] Having raised the jurisdictional issue, Spotless bears the onus of establishing that Mr Ali Qureshi was not dismissed.

[121] It is well established that repudiatory conduct, of itself, does not bring rights and obligations under a contract to an end. Only where the party who is the subject of the repudiatory breach accepts that repudiation will the contract be brought to an end.[30]

[122] Was Mr Ali Qureshi’s conduct repudiatory?

[123] In NSW Trains v James a full bench of the Commission summarised the concept of repudiation:[31]

“The High Court has described repudiation as referring to conduct of a party ‘which evinces an unwillingness or an inability to render substantial performance of the contract’ or ‘which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations’. ‘Repudiation of a contract is a serious matter and is not to be lightly found or inferred’. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.” (citations omitted)

 

 

[124] I fully take into account that Mr Ali Qureshi did not intend to fail to attend for work and that he made reasonable efforts when in remand to notify Spotless. It was circumstance and not intent that gave rise to the breach of his obligation to turn up for work.

[125] However, the question of whether there has been repudiation of a contract of employment is determined objectively. It is unnecessary to show a subjective intention to repudiate. It is a question of fact not law.[32]

[126] Mr Ali Qureshi failed to attend multiple rostered shifts without approval and without prior warning or timely explanation. The obligation to turn up to work at the appointed place and time was an essential feature of his employment as a security officer. The employer had no insight into the reason for his non-attendance. The employer took reasonable steps to alert Mr Ali Qureshi to his obligation on each occasion he missed a shift. After an absence of six shifts, I am satisfied that the failure to attend for work as rostered so struck at the heart of Mr Ali Qureshi’s employment obligations that it objectively signified an inability (although not an intention) to render substantial performance of the contract.

[127] I conclude that the conduct by Mr Ali Qureshi was repudiatory.

[128] I note that it is also arguable, though by no means certain, that the contract of employment ended via the contractual doctrine of frustration; that is, an external event beyond the control of either party in which neither party could be objectively said to have intended to end its operation. Employment ending by frustration does not amount to dismissal on the employer’s initiative. For two reasons however, I do not make this finding. Firstly, the issue was not argued before me. Secondly, it is unnecessary to do so given that I have found (below) that the contract ended by acceptance of repudiatory conduct.

[129] It is not in dispute that the employment ended as a consequence of Spotless’s letter of 18 April 2023 in which the employer alleged repudiatory conduct by Mr Ali Qureshi and accepted that alleged repudiation.

[130] Thus, at least in one sense, the contract terminated at the employer’s initiative.

[131] Was this acceptance of the repudiatory conduct a dismissal within the meaning of the FW Act?

[132] Mr Ali Qureshi submits that it was a dismissal. In essence, Mr Ali Qureshi submits that if his conduct was repudiatory (which he denies) then as there was no obligation on Spotless to accept the repudiatory conduct and as it chose to do so then, on its initiative, the employer brought the employment relationship and the employment contract to an end.

[133] Whilst (given his unrepresented status) Mr Ali Qureshi did not put it in these terms, he essentially argues that it is artificial to conclude, as Spotless submit, that after the last rostered shift he failed to attend (10 April 2023) there remained a continuing employment contract but no continuing employment relationship. He points to the employer’s letter of 11 April 2023 which stated that if there was no response within forty-eight hours it “will have no option but to consider terminating your employment”. He says that there is no reason to interpret this as a reference only to the employment contract and not the employment relationship.

[134] This line of argument seeks to distinguish the long line of cases which establish that where a party engages in repudiatory conduct it is the conduct of the party responsible for the repudiatory breach which causes the employment relationship (though not the contract) to end and not the party accepting the repudiation.[33] It is said that these cases are distinguishable because they deal with the contractual right to terminate for breach whereas unfair dismissal laws deal with a statutory definition. In support, it is said that when examining the statutory remedy courts have noted that “applying the common law principles relating to termination of the contract of employment may not yield the correct answer in any given case”.[34]

[135] Whilst this submission has some superficial attraction, for three reasons it is rejected.

[136] Firstly, there is nothing in the language of s 386, the FW Act as a whole or in its explanatory memorandum which suggests a legislative intent to vary or set aside established principles concerning termination on account of repudiatory conduct. Absent specific legislative direction, it would not be consistent with the object of providing a “fair go all round”[35] to interpret s 386 such that a party committing a repudiatory breach could invoke a statutory cause of action against the innocent party. The legal maxim that ‘hard cases make bad law’ is apposite. The law should not be strained to manufacture a particular outcome even on the unusual facts presented in this case.

[137] Secondly, the conclusion urged by Mr Ali Qureshi is not the current state of the law. The relevant position was summarised by a full bench of the Commission in the 2018 Abandonment of Employment case:[36]

“[21] “Abandonment of employment” is an expression sometimes used to describe a situation where an employee ceases to attend his or her place of employment without proper excuse or explanation and thereby evinces an unwillingness or inability to substantially perform his or her obligations under the employment contract. This may be termed a renunciation of the employment contract. The test is whether the employee’s conduct is such as to convey to a reasonable person in the situation of the employer a renunciation of the employment contract as a whole or the employee’s fundamental obligations under it. Renunciation is a species of repudiation which entitles the employer to terminate the employment contract. Although it is the action of the employer in that situation which terminates the employment contract, the employment relationship is ended by the employee’s renunciation of the employment obligations.” (footnotes omitted)

 

 

[138] It is well established that decisions of full benches and superior courts should be applied by single members of the Commission for an orderly and just system of law to operate.[37]

[139] Section 386 is in the same terms in 2023 as it was in 2018 when the full bench made the aforementioned pronouncement.

[140] Applying the established approach, although it was the action of Spotless which terminated the employment contract with Mr Ali Qureshi, this was not a dismissal within the meaning of s 386 because the employment relationship had by then already ended due to Mr Ali Qureshi’s renunciation of his obligation to attend work when rostered.

[141] Thirdly, even if the statutory definition in s 386 was considered in isolation from established case law, it cannot be said that it was conduct by Spotless that was the principal contributing factor which resulted in the termination of employment. The principal contributing factor was that Mr Ali Qureshi did not attend for work when rostered by Spotless across six rostered shifts.

[142] There was no termination “on the initiative of the employer” within the meaning of s 386(1)(a).

[143] For these reasons, I do not find that Mr Ali Qureshi was dismissed by Spotless.

 

 

Conclusion on jurisdiction

 

 

[144] This being so, Mr Ali Qureshi could not have been unfairly dismissed because he was not dismissed.

[145] The jurisdictional challenge by Spotless is upheld. The application fails for want of jurisdiction. It must accordingly be dismissed.

[146] For these reasons it is not necessary to determine whether ending Mr Ali Qureshi’s employment was harsh unjust or unreasonable, or, if so whether any remedy should be ordered.

[147] However, in the event that this conclusion on jurisdiction is wrong and it is found that there was a termination on the employer’s initiative and thus a dismissal, and out of respect for the cases put, I proceed to consider the merits of the claim.”

 

Passages from Muhammad Ali Qureshi v Spotless Services Australia Limited [2023] FWC 2411 delivered 19 September 2023 per Anderson DP