Unfair dismissal and changes of workplace and hours

A unilateral directive or instruction by an employer to an employee to change his or her place of work and/or hours of work may, in the absence of a clear and expressed right to do so under a contract of employment, be grounds for a constructive unfair dismissal, as is clearly evident in the following passage from a recent unfair dismissal decision of the Fair Work Commission.

“A Forced Resignation – Constructive Dismissal

[47] In this instance there was no suggestion that the respondent employer was a small business or that the termination of the applicant’s employment involved a case of genuine redundancy. However, the employer raised a jurisdictional objection in respect to that element contained in subsection 385 (a) of the Act, specifically whether the applicant was a person who had been dismissed.

[48] The determination of the question of whether or not a person has been dismissed from employment involves mixed findings of fact and law. Further, s. 386 of the Act prescribes a meaning of “dismissed”. Relevantly, subsection 386 (1) of the Act is in the following terms:

“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.”

[49] In this case the applicant clearly resigned. The resignation of the applicant was conveyed in a letter from her solicitor which indicated that the resignation was described to be a constructive dismissal, as it was provided in response to the conduct of the employer. These circumstances are contemplated by the provisions of subsection 386 (1) (b) of the Act which establishes that if an employee is forced to resign because of conduct engaged in by the employer then the resignation is held to be a dismissal.

[50] In order to determine whether the resignation of the applicant was forced because of conduct engaged in by the employer, the factual matrix that provides the context in which the resignation was given must be carefully analysed so as to determine whether the applicant had no other realistic option than to resign. The term constructive dismissal is used to describe inter alia, circumstances where an employee resigns but that resignation was the intended, desired or likely result of the conduct of the employer, and the employee had no other realistic option but to provide the resignation.

[51] The most common circumstance of a forced resignation involves an employer presenting the employee with an ultimatum of “resign or you will be dismissed”. However, there are many other situations that involve more subtle actions taken by an employer which can provide an employee with no other realistic option but to resign, and such resignation would be comprehended by subsection 386 (1) (b) of the Act, and described as a constructive dismissal.

[52] There is a considerable amount of Case Law authority on the question of constructive dismissal. One case which is often referred to is that of Mohazab v Dick Smith Electronics (No.2) 1 (Mohazab) which succinctly summarised the concept of constructive dismissal as follows:

“However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.” 2

[53] In Mohazab, the Full Bench of the Court also referred to another authority in the case of Allison v Bega Valley Council  3 (Allison). The following extracts from the Decision in the Allison case is particularly helpful for application in the present circumstances:

“Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer’s conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?”

and

“In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee particularly where the dynamics within a factual situation may change.”

……………………………………………..

The Legal Aspects

[66] In addition to the factual matrix that surrounded the resignation of the applicant, it is also necessary to consider certain legal aspects of the transfer directive.

[67] A directive to work from another location would be something that would usually be comprehended by the written, verbal or implied terms of the contract of employment. The applicant signed a contract of employment document on 10 April 2019, which inter alia, contained the following:

“Location

You will be employed at 125 Francis Street, Bondi or elsewhere as reasonably directed by the employer.”

[68] Ordinarily, an employer would be entitled to issue a directive to an employee to require them to work from another location and the employee would be obliged to accept that directive. However, the individual circumstances of each case would need to be examined in order to determine whether the directive to work from another location was reasonable and comprehended by the contract of employment.

[69] In most instances, if the directive involved a work location that was a significant distance from the existing work location, such that the alternative work location could not be reasonably comprehended by the contract of employment, there would then be no obligation on the employee to comply with the directive. A relocation directive that involved additional travel time for an employee would usually be comprehended by the contract of employment unless the additional travel time was, because of the personal circumstances of the employee or other factors, established to be excessive.

[70] As a general proposition, a relocation directive such as that issued to the applicant which involved a move in work location between the Sydney suburbs of Bondi and Narwee, and where the contract of employment document specifically included mention of the potential for work relocation, the distance involved in the transfer directive would not be unreasonable nor contrary to the terms of the contract of employment. However, the transfer directive issued to the applicant involved a number of aspects in addition to the distance factor.

[71] The transfer directive also involved an alteration to the ordinary hours of work of the applicant as were stipulated in the contract of employment document executed by the applicant on 10 April 2019. The contract of employment document also contained the following:

“Hours of Work

Your ordinary hours of work will be 24 hours each week, between the hours of 7:00am and 6:00pm, plus any reasonable additional hours that are necessary to fulfil your duties or as otherwise required by the employer. (Alteration of hours of employment can be negotiated and a mutual agreement made by employee and employer).”

[72] There was a regrettable absence of any contemplation of negotiation in the approach adopted by the employer. There was clearly no mutual agreement about the alteration to the applicant’s ordinary hours of work. Although the distance involved in the transfer directive might ordinarily be held to have been reasonable and comprehended by the contract of employment, various other aspects of the transfer directive including the alteration to the applicant’s hours of work, were clearly contrary to the stated terms of the contract of employment and thus without legal foundation.

[73] The evidence has also established that the transfer directive and the manner in which it was conveyed by Ms Giannetto, was conduct that breached both the consultation and part-time employment provisions of the Award. The evidence of the meeting of 19 December 2019, when Ms Giannetto issued the transfer directive to the applicant, involved conduct on the part of Ms Giannetto which on any objective assessment, would have been likely to have breached Award or other regulatory requirements.

[74] Unfortunately, the transfer directive involved conduct on the part of Ms Giannetto that displayed a manifest absence of compassion, respect, caring, dignity, or kindness. The absence of these characteristics was particularly surprising in the context of an operation that involved the provision of childcare services. The communications from the employer to the applicant following the meeting of 19 December, were consistent with, and reflective of, the approach taken in the meeting, and meant that the applicant had no realistic alternative other than to resign.

[75] In this instance, a careful analysis of the factual matrix of the circumstances that gave rise to the resignation of the applicant has established that the conduct of the employer was intended to produce, or likely to result in, the resignation of the applicant. Upon further analysis, there were no aspects of the contract of employment which operated to provide for any legal or other justification for the actions of the employer. Consequently, the applicant was forced to resign from her employment because of the conduct engaged in by the employer. Therefore, the applicant was dismissed in satisfaction of the terms of subsection 386 (1) (b) of the Act.”

Phair v Active Kids Pre School Centre of Excellence Pty Ltd (2020) FWC 4034 delivered  5 August 2020 per Cambridge C