The following introductory observations to an unfair dismissal decision of the Fair Work Commission contain a number of fundamental principles to be determined in many unfair dismissal cases.
“Dismissal
[5] The question of when a person has been dismissed is governed by s 386 of the Act. It relevantly provides:
“(1) A person has been dismissed if:
- the person’s employment with his or his employer has been terminated on the employer’s initiative; or
- the person has resigned from his or his employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or his employer.”
General principles
[6] The expression termination “on the employer’s initiative” in s 386(1)(a) is a reference to a termination of the employment relationship and/or termination of the contract of employment1 that is brought about by an employer and which is not agreed to by the employee.2
[7] In circumstances where the employment relationship is not left voluntarily by the employee, the focus of the inquiry under s 386(1)(a) is whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.3
[8] Section 386(1)(b) of the Act concerns the resignation of an employee where the resignation was “forced” by conduct or a course of conduct on the part of the employer. The question of whether a resignation did or did not occur does not depend on the parties’ subjective intentions or understandings.4 Whether an employee resigned depends on what a reasonable person in the position of the parties would have understood was the objective position, based on what each party had said or done, in light of the surrounding circumstances.5
[9] The test to be applied in determining whether a resignation was “forced” within the meaning of s 386(1)(b) 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 result of the employer’s conduct such that the employee had no effective or real choice but to resign.6 The requisite employer conduct is the essential element.7
[10] It is necessary to consider all the relevant circumstances to determine whether there has been 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, and whether either party has communicated to the other party a decision to terminate the relationship.
[11] 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.8 “
McMaster & Rawson v Darton Warners Bay Pty Ltd [2024] FWC 2318 delivered 30 August 2024 per Saunders DP