This an extract from a recent decision of the Fair Work Commission which articulates the legal issues which are involved when determining whether the termination of an employee’s employment was a dismissal for the purposes of fair work laws.
“When is a person ‘dismissed’?
[35] The meaning of ‘dismissed’ is defined in s.386(1) of the Act which states:
(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.
[36] In Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli1 (Bupa), a Full Bench of the Commission examined the relevant authorities as to what constitutes ‘dismissed’ under s.386(1) which included the following:
(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 probably 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] In Lance Gunther & Michele Daly v B & C Melouney T/A Easts Riverside Holiday Park2 Deputy President Sams noted the following when considering whether the applicant was dismissed:
a. Jurisdiction can only exist where termination of employment at the initiative of the employer has occurred. ‘Initiative’ is relevantly defined in the New Shorter Oxford Dictionary as: “the action of initiating something or of taking the first step or the lead; an act setting a process or chain of events in motion; an independent or enterprising act.”
b. This definition was considered in Mohazab v Dick Smith Electronics Pty Ltd (Mohazab) where a Full Court of the Industrial Relations Court of Australia said, ‘… 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.’
c. In Mohazab, the Full Court also said:
‘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.’
d. A Full Bench of the AIRC in Stubbs v Austar Entertainment Pty Ltd said, ‘… to constitute termination at the initiative of the employer the termination must be the direct or consequential result of ‘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 …’[Rheinburger v Huxley Marketing, 16 April 1996 per Moore J].
Conclusion as to dismissal
[38] I am satisfied on the evidence that the Applicant did not resign for the following reasons:
a. To the extent there is a dispute about what was said in the phone conversation between the parties on 14 May 2024, I prefer the evidence of the Applicant. His actions after this conversation do not support a finding that he resigned at that time.
b. The text message relied on by the Respondent is ambiguous at best and is explainable for the reasons given by the Applicant in his evidence.
c. The Applicant continued to perform work between 14 and 16 May until he was directed by the Respondent to cease talking to staff or clients and not to access any work accounts. He would not have continued to work had he resigned.
d. I am not satisfied that the Applicant unilaterally changed his pay rate above that which had been agreed. I am satisfied that the agreement between the parties, consistent with their intention to be business partners, was that the Applicant and the Respondent would be paid the same amount. I am satisfied that the Applicant would not have resigned given his firm belief as to the agreement between him and the Respondent about becoming a partner in the business.
e. On 20 May the Respondent sought to have the Applicant confirm in writing that he resigned. The Applicant replied the following day in writing confirming that he had not resigned and had no intention of doing so. There is no evidence that the Respondent sought to clarify this position with the Applicant or reply asserting the Applicant had resigned on 14 May. This supports a finding that the Applicant did not resign.
f. Finally, I accept the Applicant had put significant work into building the business and entering into a partnership with the Respondent, and would not have simply walked away from this in circumstances where he felt he had already “paid his way” into the partnership.
[39] I am satisfied that this was a termination at the initiative of the Respondent and as a result I find the Applicant was dismissed within the meaning of the Act. I am also satisfied that he is otherwise a person protected from unfair dismissal. Accordingly, I now need to determine whether his dismissal was unfair……………………….”
Yates v Stephanie Muir Ridge [2024] FWC 2973delivered 11 November 2024 per Dean DP