What is a dismissal for unfair dismissal law?

These passages from an unfair dismissal case deal with the legal issue whether an employee was dismissed or not, which sometimes not as easy as one might think.

“Dismissal

[30] The Ice Cream Shack contends that Ms Gimbert was not dismissed within the meaning of the Fair Work Act 2009 (Cth) (Act). It is appropriate to deal with this jurisdictional issue before any consideration of the merits of the application.

[31] 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:

(a) the person’s employment with her or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from her or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by her or her employer.”

General principles

[32] A dismissal does not take effect until an employee is aware that they have been dismissed or the employee has at least had a reasonable opportunity to become so aware. 3

[33] It is necessary to consider all the relevant circumstances to determine whether there has been a communication of 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, whether the employer is exercising, or has the ability to exercise, control over the execution of work by the employee, 4 whether either party has communicated to the other party a decision to terminate the relationship, and the terms of the employment contract.

[34] 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. 5

[35] The expression “termination at the initiative of the employer” in s 386(1)(a) is a reference to a termination of the employment relationship and/or termination of the contract of employment 6 that is brought about by an employer and which is not agreed to by the employee.7

[36] 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. 8

[37] Where the conduct of an employee amounts to a renunciation of the contract of employment, it is the conduct of the employee that terminates the employment relationship. 9

[38] 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. 10 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.11

[39] 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. 12 The requisite employer conduct is the essential element.13”

Gimbert v TG Ice Cream Shack Pty Ltd (2022) FWC 2521 delivered 20 September 2022 per Saunders DP