Unfair dismissal cases involving resignations

This extract from a very recent unfair dismissal decision of the Fair Work Commission constitutes a very good example of the legal principles which apply when an employee is asking the Commission in such a case to regard a termination of employment effected by a resignation as a dismissal.

“Was the Applicant dismissed? [14] Section 386 of the Act has created two clear grounds on which a claim could potentially proceed. In Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli (Bupa v Tavassoli), the Full Bench of the Commission explained that: “(1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the “heat of the moment” or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign. Although “jostling” by the employer may contribute to the resignation being legally ineffective, employer conduct is not a necessary element. In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer. (2) A resignation that is “forced” by conduct or a course of conduct on the part of the employer will be a dismissal within the second limb of the definition in s.386(1)(b). The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable (sic) result of the employer’s conduct such that the employee had no effective or real choice but to resign. Unlike the situation in (1), the requisite employer conduct is the essential element.”1 [15] The case of Mohazab v Dick Smith Electronics (No 2) is a foundational case in determining what is classified as a ‘forced resignation’. There it was stated: “In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.” 2 1 Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli [2017] FWCFB 3941. 2 Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200. [2021] FWC 6023 5 [16] In Bupa v Tavassoli, the Full Bench helpfully expounded on Mohazab in the following terms: “[31] The approach taken in Mohazab that a termination of employment at the initiative of the employer could be constituted by a “forced” resignation was followed in numerous decisions made in respect of the various iterations of the termination of employment scheme in the Workplace Relations Act 1996. These decisions most notably include Rheinberger v Huxley Marketing Pty Limited and O’Meara v Stanley Works Pty Ltd. In the former decision, the Industrial Relations Court (Moore J) referred to Mohazab and said: “However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer’s conduct.” [32] In the latter decision a Full Bench of the Australian Industrial Relations Commission said: “[23] … 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.” [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). [2021] FWC 6023 6 1529. 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). 1530. 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.” Consideration [17] I have had regard to the submissions and evidence given by both parties both in writing and at the hearing. It is not for me to decide at this stage whether the Respondent had sufficient concerns about the Applicant’s performance to warrant the implementation of the PIP. However, when that decision was communicated to the Applicant she became, understandably, upset and offended. She formed the view that the Respondent was trying to push her out of the business. Whether that is true or not does not impact the question I must ask myself, which is whether she was “dismissed” within the meaning of the Act on or before 9 July 2021, when she resigned by email. [18] Based on the evidence before me, I am satisfied the Applicant freely made the decision to resign on 9 July 2021. She may have been concerned that the implementation of the PIP could have eventually led to her dismissal. However, I accept Mr Khan’s evidence, that he had simply articulated to the Applicant what was involved in the PIP process and that, should there be insufficient improvement following two months, that disciplinary action up to and including termination might be considered by the Respondent. Even then, it was discretionary and not an absolute. Further, I accept that Mr Khan reassured the Applicant that in the two years he had been working with the Respondent no one had been terminated following the implementation of the PIP because with support, training and assistance, their performance had improved. [19] Had the Applicant resigned during the phone call of 1 July 2021 it could perhaps have been characterised as a resignation in the “heat of the moment”, given the Applicant’s understandably heightened emotions., However, the fact that the Applicant received the calculation of her entitlements on 6 July 2021 and then sent the Respondent an email on 9 July 2021 stating that she had resigned, persuades me that this is not such a case. [20] While I have no doubt that the Applicant was offended and upset by the allegations that she had not been performing sufficiently, based on the evidence before me, I am satisfied that her employment was not terminated by the Respondent. Perhaps it may have been sometime in the future if, as the Applicant perceived, they were trying to push her out (though the evidence before me did not presently suggest that). However, as at 9 July 2021, the Respondent’s conduct [2021] FWC 6023 7 was not such as to either have dismissed the Applicant or forced her resignation. Consequently, I am satisfied that the Applicant was not dismissed within the meaning of the Act. [21] Accordingly, I order that the jurisdictional objection is upheld. “

 

Ligrov v National Hearing Centres Pty Ltd T/A Amplifon (2021) FWC 6023 delivered 30 September 2021 per Lake DP