It is quite common for an employer to contend in an unfair dismissal case that the employee resigned and for the employee to contend that he or she did not. This is how the matter sometimes plays out as legal principles in that context in the Fair Work Commission. In this case the Commission determined that the employee had reason to believe there had been a dismissal even if the employer did not intend that.
“Was the Applicant dismissed?
[34] Subsection 386(1) of the Act defines what constitutes a dismissal for the purpose of Part 3-2, which relevantly concerns Unfair Dismissal. That subsection provides:
(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.
[35] Under s 386(2) of the Act, there are exceptions regarding when a person has been dismissed. However, those exceptions are not relevant to this case.
[36] The definition of dismissal in s 386(1) of the Act has two elements, both of which have been subject to consideration. The first traverses ‘termination on the employer’s initiative’ and the second, ‘resignation in circumstances where the person was forced to do so because of conduct or a course of conduct’. This bifurcation was explained by the Full Bench in Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli 36 as follows:
[47] Having regard to the above authorities and the bifurcation in the definition of “dismissal” established in s.386(1) of the FW Act, we consider that the position under the FW Act may be summarised as follows:
(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 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.
[37] When examining whether the Applicant was dismissed, the relevant period in the first instance is that falling after 16 February 2020. It is evident that the Applicant did not resign by words expressed. Therefore, the starting point is whether the Respondent terminated the Applicant’s employment at its initiative (s 386(1)(a)).
[38] In City of Sydney RSL & Community Club Limited v Mrs Roxana Balgowan the Full Bench considered the operation of s 386(1)(a):
[10] It seems clear…that the concept of constructive dismissal is to be accommodated by s.386(1)(b) and that concept is not subsumed in s.386(1)(a).
[11] Section 386(1)(a) seems plainly to be intended to capture the case law determining the meaning of termination (of the employment relationship) at the initiative of the employer. In Mohazab the Court considered that the expression “termination at the initiative of the employer” was:
“. . . a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘‘termination of employment.’’” (references omitted)
[39] It is evident that the Applicant did not receive a letter of termination. In fact, she was informed by the letter of 23 March 2020 that she had been stood down under s 524 of the Act. However, while the Respondent asserts that the Applicant was not dismissed, I am unable to reach that same conclusion.
[40] The Respondent’s communication on 22 April 2020 advised the Respondent’s employees that the Respondent only had resources to ‘retain full-time staff and some casual managers’. Perhaps the choice of words was unfortunate, and the Respondent was simply attempting to convey that the affected employees would not be ‘retained’ such that they would be receiving Jobkeeper. However, it is open to see on an objective level how the Respondent had confused its employees regarding its communication. Tendered into evidence was a post dated 22 April 2020 that had been extracted from Deputy. A person asked:
…if we are no long being “retained” does this now mean we are effectively unaffiliated with the company and officially unemployed even when we re [sic] open? – just looking for a bit of clarity in that regard, thanks
[41] Ms Pedulla responded to the posts on Deputy – encouraging employees to email her directly. The Applicant clearly took up that opportunity to seek clarification. Ms Pedulla’s subsequent email to the Applicant on 23 April 2020, again reiterated that the Respondent did not have ‘the financial resources to retain all staff and do the Jobkeeper payment’. 37 That same communication continued:
If our bank provides us finance we will, otherwise we can not retain all staff and must scale down. The staff who will be retained have been informed and we will inform you if our financial position changes and we can place everyone on Jobkeeper. 38
[42] It was uncontentious that the Applicant did not receive an email informing her that she had been retained. While the email dated 23 April 2021 continued that the Applicant would be informed if the Respondent’s financial position changed such that all employees could be placed on Jobkeeper – when the Applicant asked whether she would have been an eligible employee but for not having been ‘retained’ – the simple response was ‘you weren’t employed for the whole 12 months as Jobkeeper requires then you wouldn’t be’. The Respondent deflected – either deliberately or inadvertently from responding to the assertion ‘due to not being retained’.
[43] I consider at this point, namely as of 23 April 2020, it was open to the Applicant to consider her employment relationship terminated at the Respondent’s initiative. It was not a termination of employment that was brought about by ill intent. The Respondent’s financial circumstances clearly necessitated a rapid downsizing, whereby only those employees who were employed at head office, or were managers or relief managers, were retained. The business could not, according to Ms Pedulla, afford to make the upfront payment for the remainder of its employees and then seek reimbursement through the Jobkeeper program.
[44] The Respondent’s action was the principal contributing factor that led to the termination of the employment relationship with the Applicant. It had unequivocally informed the Applicant that ‘staff who will be retained have been informed’, she was not so informed. I am satisfied that as of 23 April 2020, the Applicant had been dismissed.
[45] It is observed that both Applicant and Respondent argued, to suit their purpose, that the Applicant’s receipt of Deputy posts during periods of absence indicated that she remained an employee. I do not accept the proposition. Rather than being a reflection that the employment relationship remained afoot, I think the preferable position is that the Respondent’s management simply lacked diligence in removing employees off the Deputy platform once they had departed the business.”
Passage from Lawler v Grand Theatre Company Pty Ltd T/A Grand Cinemas Pty Ltd (2021) FWC 3144 delivered 23une 2021 per Beaumont DP