| [2017] FWCFB 3941 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT HATCHER |
|
Appeal against decision [2017] FWC 3200 of Commissioner Riordan at Sydney on 18 July 2017 in matter number U2016/14357.
Introduction and factual background
[1] Bupa Aged Care Pty Ltd t/a Bupa Aged Care Mosman (Bupa) has applied for permission to appeal and appealed a decision of Commissioner Riordan issued on 18 July 2017 1 (Decision). In the Decision, the Commissioner found that Ms Shahin Tavassoli had been dismissed from her employment at Bupa’s Mosman aged care facility and that the dismissal was unfair. He ordered that she be reinstated within seven days of the Decision, that her continuity of employment be maintained, and that she be compensated for income lost as a result of the dismissal. In its appeal, Bupa contends that the Commissioner erred both in finding that Ms Tavassoli had been dismissed within the meaning of s.386(1) of the Fair Work Act 2009 (FW Act) and in finding that the dismissal was unfair. On 25 July 2017, by consent and subject to certain undertakings, the Commissioner’s orders were stayed pending the hearing and determination of the appeal or until further order of the Commission.
[2] Ms Tavassoli commenced employment with Bupa as an Assistant in Nursing (AIN) in 2003. She is a refugee from Iran who has limited English language skills and is 55 years of age. Her dismissal arose from two incidents which occurred on the weekend of 13-14 November 2016. The incidents were covertly recorded by a fellow AIN, Mr Ranjit, on his mobile phone. In the first incident, in the course of a long conversation primarily involving a registered nurse, Ms Shirley Govender, as well as Ms Tavassoli and a resident, Ms Tavassoli sang a line from the song “Anything you can do I can do better” singing “I can do anything better than you.” As the discussion progressed, Ms Govender began discussing a shift during which some residents had died, and (it was alleged by Bupa) Ms Tavassoli laughed at this. The second recorded incident involved Ms Tavassoli, Ms Govender and another employee having a conversation in the TV room. During the conversation, resident’s buzzers could be heard going off, but the employees did not respond and continued their conversation.
[3] In the Decision the Commissioner made the following findings of fact concerning the circumstances of the termination of Ms Tavassoli’s employment:
“[15] Mr Ranjit showed his videos to Mr David Brice (Acting General Manager of the Mosman facility) and Ms Miriam Lyman (Care Manager) on 15 November 2016.
[16] On 16 November 2016, Ms Tavassoli was not rostered to work but attended a training session at the workplace in the afternoon. Mr Brice claims that he tried unsuccessfully to contact Ms Tavassoli twice in the morning to advise her not to attend the workplace. At approximately 2pm, Mr Brice went to the training room and asked Ms Tavassoli to step outside. I note that there was never any risk of Ms Tavassoli working with residents on this day.
[17] Mr Brice asked Ms Tavassoli to accompany him downstairs to have a “quick chat”. Ms Tavassoli repeatedly asked whether she has “done something wrong” as they walked downstairs. Mr Brice claims that he said “we need to have a discussion”.
[18] Surprisingly, Mr Brice escorted Ms Tavassoli out of the building, rather than to his office:
“29. When we reached the ground floor of the facility, Ms Tavassoli and I walked out the front of the home. There was no one around at this time. I said words to the effect of “I tried to call you to tell you not to come to training. There has been quite serious allegations made, and I’m waiting for some documentation to come through so I can discuss this with you. The documents should be here by around 3.45pm, so perhaps go and get a coffee in the meantime and come back then.”
30. At this time I was waiting for Ms Watson from the People Team to send through the final versions of the suspension letter and the letter that set out the allegations being made against Ms Tavassoli.”
[19] Ms Tavassoli has a different recollection of what transpired and alleges that Mr Brice was quite abrupt, advising her that he would not tell her what she had done wrong but continued to repeat the comment that it was “disgusting”.
[20] Ms Tavassoli sat outside the home for approximately two hours with no money, nowhere to go and no idea why she had been escorted off the premises.
[21] Whilst sitting outside on the footpath, deeply upset, Ms Tavassoli came to the conclusion that the allegation may involve a six pack of beer that had been offered to her by a resident. Ms Tavassoli testified that she did not want to be accused of being a thief or terminated for stealing due to her cultural background. As a result, when a colleague walked past her, Ms Tavassoli asked for her help to draft a resignation letter.
[22] Ms Tavassoli then re-entered the facility, handed Mr Brice her resignation letter – which contained a provision of 4 weeks’ notice. Mr Brice did not accept the resignation. Ms Lyman attended the meeting at approximately 4pm when Mr Brice, at Ms Tavassoli’s request, read out the letters from Bupa containing the allegations of misconduct, advising her of her paid suspension and the upcoming investigation of the allegations.
[23] Importantly, Mr Brice did not provide Ms Tavassoli with a copy of this correspondence.
[24] Ms Tavassoli claims that she did not fully understand the meaning of the correspondence however she did not want to participate in the proposed investigation. Ms Tavassoli pressed her resignation. Mr Brice advised that unless Ms Tavassoli changed the effective date of her resignation so that it had immediate effect, then she would still be required to participate in the investigation. Ms Tavassoli then scribbled out the 4 weeks’ notice and handed her resignation back to Mr Brice.
[25] The following day, on 17 November 2016, Mr Brice sent Ms Tavassoli a letter confirming acceptance of Ms Tavassoli’s resignation. On 18 November 2016 at 9am, Ms Tavassoli attended the home and attempted to rescind her resignation. Mr Brice refused the request.”
[26] Ms Tavassoli then allegedly said to Mr Brice: “your days are numbered”. Mr Brice reported this threat to the police. Relevantly, the only witness to this conversation records Ms Tavassoli saying “my days are numbered”.
[27] Ms Tavassoli filed her unfair dismissal claim on 1 December 2017. At the time of filing her first witness statement on 21 February 2017, 2 Ms Tavassoli had still not received a copy of the Bupa correspondence which contained the allegations, nor had she been shown the video which had been recorded by Mr Ranjit.”
[4] Ms Tavassoli then lodged her unfair dismissal application on 1 December 2016.
The cases advanced before the Commissioner and the Decision
[5] The first issue dealt with in the Decision was whether Ms Tavassoli had been dismissed. This was contested by Bupa, which contended that Ms Tavassoli had resigned from her employment of her own volition.
[6] Section 386(1) of the FW Act defines what constitutes a dismissal for the purpose of the scheme of provisions concerning unfair dismissal in Pt.3-2 of the FW Act as follows:
(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.
[7] The above provision operates subject to certain exceptions in s.386(2) which are not presently relevant.
[8] The case initially advanced on behalf of Ms Tavassoli by her legal representative before the Commissioner, as expressly stated in the written submissions lodged on her behalf dated 21 February 2017, was that she was dismissed within the second limb of the definition in paragraph (b) of s.386(1) - that is, the conduct of her employer forced her to resign. The submissions advanced the following propositions:
“...The evidence before the Commission from both sides is that it ‘suited’ the employer to have Ms Tavassoli leave. They ‘ambushed’ Ms Tavassoli on the day in question. Made her sit on the street, kept refusing to tell her what she was accused of other than to say ‘disgusting’ multiple times, and then dictated the naively put termination letter so as to dispense with her on the spot.
Ms Tavassolli had every reason to perceive that Mr Brice wanted her to gone [sic]. He actually had her re-cast her scribbled letter, so as to suit her employer.
She gave them what they wanted.” 2
[9] Although not expressly stated, the tenor of the above submission appears to have been that Bupa contrived events to bring about Ms Tavassoli’s dismissal, and thus forced her to resign. However Ms Tavassoli’s case became somewhat more equivocal in oral closing submissions before the Commissioner. On one view it was first advanced on her behalf that there was a dismissal within the first limb of the definition in paragraph (a) of s.386(1), that is a termination on the initiative of the employer:
“But I just make that point, that an initiative has to be taken on the part of the employer to terminate the employment. The initiative was, "It's disgusting" - our evidence - but, "Leave, don't come back." Then that has been cemented; that's been solidified. She wasn't coming back. He wouldn't have her back. He has lost confidence in her. Before he found her in the training room, "He had seen enough." That's his evidence, not ours: he had seen enough. So it was a termination of employment: it was not a resignation. The fact that she got flustered, thought someone had accused her of stealing beer - she has explained to me where that came from. There is no substance to it. No one has ever said anything about it except her. The fact that she has invented something in her mind is a very normal human reaction but she had been removed from the workplace and that is what is before this Commission.” 3
[10] However there was immediately an apparent reversion to the proposition that Ms Tavassoli had resigned, but only because she had no other choice (that is, she had been forced to by Bupa’s conduct):
“27 February, I'm sorry, was the date - so Ms Tavassoli's resignation: Ms Tavassoli had someone help her, according to her evidence, write out a resignation letter then wanted to go immediately but he said, "You have to go through the procedure." She changed the resignation letter because he told her she had to go through the procedure so that's changed the resignation letter. There is a lot of inference in - evidence in my friend's submissions that this indicates freedom and freedom and choice on the part of Ms Tavassoli. There was no freedom or choice. She chose how to leave. She didn't choose whether to leave and I think that is the evidence before the Commission.” 4
[11] No submission was ever advanced on Ms Tavassoli’s behalf that her resignation was legally ineffective to bring about the termination of her employment because it was made “in the heat of the moment” or during a state of emotional distress or mental confusion and thus could not reasonably be understood to be conveying a real intention to resign. On a fair reading of Bupa’s closing submissions, it is reasonably apparent that it was responding to a case which it understood relied on s.386(1)(b). 5 The following exchange between the Commissioner and Bupa’s counsel is notable in this context (emphasis added):
THE COMMISSIONER: But is there an issue then Mr Darams about the refusal of Mr Price to not accept - - -
MR DARAMS: Not at all. The resignation back? Not at all. This isn't a heat of the moment dispute between an employer and employee where there's an argument in the workforce and someone blows up for want of a better – that's not this case. Once the resignation is given, an employer is entitled to accept that resignation. Once it's accepted, that brings the employment relationship to an end. All of the cases speak at one with this, and it's that if that's a resignation, that's give and accepted, that's the end employment relationship. Once that's gone, there's no obligation on the employer to accept - - -
THE COMMISSIONER: I'm not suggesting there's an obligation, I'm just asking whether or not you'd like to make a submission in relation to the fact that her understanding of the situation was sufficiently complete to know what transpired. That she did not feel pressured into writing a resignation on a false promise.
MR DARAMS: No, on that last observation of the Commission, there was no evidence at all about that. In fact, in our submission the evidence points the other way. Ms Tavassoli decided, or was of the view for some reason that she had engaged in some conduct.
THE COMMISSIONER: Yes.
MR DARAMS: That's a different proposition. What the Commission has to determine only, is whether or not on 16 November, there was conduct by the respondent – a course of conduct that forced this resignation. That that's the focus of this question. Whether or not, two days later the employee comes back and says I want to withdraw my resignation, that's a separate issue altogether, not something that bears upon the question of on 16 November.
THE COMMISSIONER: Thank you. 6
[12] At outset of the Decision, the Commissioner identified that Ms Tavassoli had resigned from her employment, but was “claiming that she was constructively dismissed due to the false accusations about her conduct and the indignant treatment that she was subjected to immediately prior to her disciplinary meeting and resignation”. 7 In dealing with the question of whether there was a dismissal, the Commissioner began by referring to what he said was “The case law in relation to a constructive dismissal”.8 He first referred to three decisions about the circumstances when a resignation could be said to have been forced by the conduct of the employer: O’Meara v Stanley Works Pty Ltd9, Rheinberger v Huxley Marketing Pty Ltd10 and Kyle Bruce v Fingal Glen Pty Ltd11. However the Commissioner then referred to four cases which primarily dealt with a different question, namely whether words apparently indicating an intention to resign uttered “in the heat of the moment” could constitute an effective resignation from employment: Ngo v Link Printing Pty Ltd12, Barclay v City of Glasgow District Council13, Nohra v Target Australia Pty Ltd14 and Simpson v Mohammed Shahid Akram t/a Mad about Price15. The Commissioner then said:
“[35] The citations listed above lead me to the requirement to assess whether Ms Tavassoli’s resignation was infused with any “special circumstances”, as defined, which may result in her resignation being defined as being at the initiative of the employer...”
[13] The Commissioner referred to evidence going to Ms Tavassoli’s emotional state during her meeting with Mr Brice and Ms Lyman on 16 November 2016, including Ms Lyman’s evidence that she was crying and upset, as well as her lack of proficiency in English. 16 The Commissioner also referred to the circumstances in which Ms Tavassoli had been removed from the training meeting earlier that day and had written her letter of resignation, and also referred to evidence concerning the reason why Mr Brice had determined to accept the resignation and not permit Ms Tavassoli’s attempt to withdraw it on 18 November 2016.17
[14] The Commissioner then stated his reasoning and conclusion on the question of whether Ms Tavassoli had been dismissed as follows (footnotes omitted):
“[44] I find that Ms Tavassoli was extremely agitated and upset throughout the disciplinary meeting. I am convinced of this fact due to the undisputed evidence of Ms Lyman, whom I find to be a witness of credit. The fact that Ms Lyman was concerned about Ms Tavassoli’s capacity to drive herself home indicates that she was highly emotional.
[45] I find that Mr Brice’s refusal to accept Ms Travassoli’s rescission of her resignation to be procedurally unfair. Mr Brice refused this request because, after viewing the video, Mr Brice was of the view that Ms Tavassoli deserved to be dismissed and that she had lost his trust – even before an investigation had occurred.
[46] Ms Tavassoli’s evidence in the witness box confirmed, in my opinion, the views of both Mr Brice and Ms Lyman that Ms Tavassoli’s command of the English language is quite poor. It is evident that she struggles to comprehend or understand lengthy or complex questions. It is not in dispute that English is her second language.
[47] With this knowledge, I am concerned at the way that Mr Brice treated Ms Tavassoli on 16 November 2016. There was no logical reason to remove Ms Tavassoli from the training meeting that she was attending on her day off, especially when Mr Brice was not yet ready to proceed with the disciplinary meeting. To then escort Ms Tavassoli from the premises and advise her not to come back for two hours, without providing a valid reason for the process, was unconscionable conduct on the part of Mr Brice. As a result, Ms Tavassoli’s mind traversed into the realm of confusion and self-condemnation in an attempt to justify the actions of her long term employer.
[48] I find that Ms Tavassoli’s resignation was provided in circumstances that could be defined as being “special circumstances” as identified above. Mr Brice should have taken additional steps to ensure that Ms Tavassoli understood the circumstances of the investigation and the effect of her resignation. Ms Tavassoli should have been provided with copies of the letters and sent home to discuss them with her family. It is simply not satisfactory to say that Ms Tavassoli resigned of her own free will when Bupa knew of Ms Tavassoli’s poor language skills and her emotional state. For Mr Brice to suggest an amendment to the resignation letter creates the scenario that the termination becomes one at the invitation of the employer.
[49] If Mr Brice had not intervened to advise Ms Tavassoli to amend her resignation so that it had immediate effect, then Ms Tavassoli would have undoubtedly been dismissed at the same time as Ms Govender and had her unfair dismissal claim dealt with accordingly.
[50] As a result, I am satisfied that Ms Tavassoli’s resignation satisfies the test summarised in O’Meara. I find that Ms Tavassoli was constructively dismissed.”
[15] The Commissioner then turned to the question of whether Ms Tavassoli’s dismissal was unfair. In doing so, the Commissioner took into account all of the matters specified in s.387. In relation to the question of whether there was a valid reason for the dismissal based on Ms Tavassoli’s conduct, the Commissioner found that her singing of the line from the song “Anything you can do” was not intended to be disrespectful, that she had not laughed in response to Ms Govender’s account of the death of residents on a shift, that she was on a break when the buzzers went off and was not required to respond to them, and accordingly that there was no valid reason for her dismissal. 18 In relation to s.387(b) and (c), the Commissioner found that Ms Tavassoli had been denied procedural fairness19, and in relation to s.387(h), the Commissioner regarded as relevant the following matter:
“[77] ... Mr Brice should have accepted Ms Tavassoli’s attempt to rescind her resignation. Based on her emotional state and language deficiency, I regard the timeframe from the time of her resignation late in the afternoon of 16 November 2016, incorporating the correspondence from Bupa accepting her resignation on 17 November to the morning of 18 November 2016 to fall within the limits of a reasonable period for an employee wth poor English skills and in a highly emotional state. I find that by not accepting Ms Tavassoli’s attempt to rescind her resignation, Bupa acted in an unreasonable manner.”
[16] On the basis of these findings, the Commissioner concluded that the dismissal was harsh and unjust. 20 The Commissioner then proceeded to determine that the remedy of reinstatement was appropriate on the basis that he did not consider there was any reason why Ms Tavassoli’s employment relationship could not be restored. He also determined that it was appropriate to make ancillary orders to maintain the continuity of her employment and to compensate her for her lost base remuneration from the date of dismissal to the date of the Decision. The order made to give effect to the Decision required compliance within seven days.21
Grounds of appeal and submissions
[17] Bupa’s notice of appeal set out four grounds of appeal in relation to the Commissioner’s determination that Ms Tavassoli had been dismissed, and a further three grounds of appeal with respect to the conclusion that her dismissal was unfair. There was no ground of appeal directed to the Commissioner’s determination on the question of remedy.
[18] On the dismissal question, Bupa’s first four grounds of appeal contended that the Commissioner erred in that he:
(1) found that Ms Tavassoli had been “constructively dismissed”;
(2) failed to make a finding concerning whether Ms Tavassoli had been dismissed within the meaning of s.386(1)(b) of the FW Act, and failed to find that she had not been so dismissed;
(3) misunderstood or failed properly to apply the salient authorities concerning whether a person has been dismissed within the meaning of s.386(1)(b); failed to take into account that Ms Tavassoli had voluntarily resigned and admitted as such in her evidence; identified and/or applied the wrong test for determining whether a person has been dismissed within the meaning of s.386(1)(b); erroneously found that Bupa had denied Ms Tavassoli procedural fairness in refusing to accept the rescission of her resignation in circumstances where procedural fairness was not required and the refusal was irrelevant to the test to be applied under s.386(1)(b); and misunderstood and incorrectly applied the decisions of Ngo v Link Printing 22, Nohra v Target Australia Pty Limited23 and Simpson v Sahid Akram24 to the circumstances of the case; and
(4) found that Bupa should have taken additional unspecified steps to ensure that the Ms Tavassoli understood the circumstances of the investigation and the effect of her resignation, when Bupa was entitled to simply accept her resignation.
[19] In support of these grounds, Bupa submitted that:
[20] The appeal grounds relating to Bupa’s challenge to the Commissioner’s conclusion that the dismissal was unfair were to the effect that the Commissioner erred in that he (using the numbering appearing in the notice of appeal):
(5) failed to take into account properly or at all Bupa’s submissions concerning Ms Tavassoli’s lack of credit;
(6) having regard to Ms Tavassoli’s lack of credit, the Commissioner erred by finding that there was no valid reason to dismiss Ms Tavassoli insofar as he found that she was on a break and not required to respond to residents’ buzzers, when in fact she was not on a break and was neglecting her duties; and
(7) incorrectly found that Ms Tavassoli was not laughing about the death of two residents and was not singing in a condescending manner towards a resident.
[21] In support of these grounds, Bupa submitted:
[22] Bupa submitted that permission to appeal should be granted because the Commissioner’s erroneous conclusion that Ms Tavassoli was dismissed caused him to make a decision which he had no jurisdiction to make, the Decision was disharmonious compared to other Commission decisions concerning employees who had resigned during an employer investigation into their conduct, and the conclusion that Ms Tavassoli should be reinstated with back-pay in circumstances where she had resigned manifested an injustice. These matters, it was submitted, enlivened the public interest.
[23] Ms Tavassoli submitted:
Consideration
Permission to appeal
[24] Section 400(1) of the FW Act applies to this appeal. It requires that permission to appeal not be granted unless the Full Bench considers that it is in the public interest to do so. This test is a stringent one. 25 The determination of whether the test is met is a discretionary exercise involving a broad value judgment.26 Considerations which may attract the public interest include that the matter raises issues of importance and general application, or there is a diversity of decisions at first instance requiring guidance at the appellate level, or the decision at first instance manifests an injustice or has a counter intuitive result, or the legal principles applied appear disharmonious with other comparable recent decisions.27 It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated because an appeal cannot succeed in the absence of appealable error.28 However, the mere identification of error in the decision under appeal is not necessarily a sufficient basis for the grant of permission to appeal.29
[25] With respect to those grounds of the appeal challenging the Commissioner’s conclusion that Ms Tavassoli’s dismissal was unfair (grounds 5-7), assuming for present purposes there was a dismissal, we are not satisfied that it would be in the public interest to grant permission to appeal. This is a matter which turned on its own particular facts. The Commissioner had the advantage of seeing and hearing the witnesses - in particular, Ms Tavassoli - give their evidence, and was in a position to engage in a close analysis of that evidence as it compared to what might be seen in the video footage. We are not persuaded that any inference of fact which the Commissioner drew from that analysis concerning whether Ms Tavassoli laughed in response to Ms Govender’s anecdote concerning residents who had died, why she sang a line from the song “Anything you can do I can do better”, and whether she was on a break when the buzzers were sounding, is demonstrably incorrect. Bupa’s submission concerning Ms Tavassoli’s credit was considered, albeit briefly, in the Decision, and the Commissioner certainly gave reasons as to why, on the critical issues, he accepted Ms Tavassoli’s evidence. We have some reservations concerning the Commissioner treating Bupa’s refusal to accept the withdrawal of Ms Tavassoli’s resignation as a relevant matter under s.387(h), but given that the Commissioner had earlier found that there was no valid reason for the dismissal, this could not have affected the result. Permission to appeal in relation to grounds 5-7 of the appeal is therefore refused.
[26] However we are satisfied that it would be in the public interest to grant permission to appeal in relation to those grounds concerning the Commissioner’s conclusion that Ms Tavassoli was dismissed (grounds 1-4). Those grounds raise an issue of general application concerning the proper application of s.386 to cases where an applicant has, prima facie, resigned. For the reasons which follow, we consider that the Commissioner’s conclusion on this issue was attended by appealable error, and this was an error going to the Commission’s jurisdiction. Permission to appeal in relation to grounds 1-4 is granted.
The dismissal finding
[27] The definition of dismissal in s.386(1) of the FW Act has two elements. The first, in s.386(1)(a), refers to a dismissal occurring where a person’s employment has been “terminated on the employer’s initiative”. This is a formulation derived from the Termination of Employment Convention, which was incorporated by reference in the initial version of the federal termination of employment regime established by the Industrial Relations Reform Act 1993. 30 Its meaning was extensively considered in the decision of the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd.31 The facts of Mohazab were, in brief summary, that an employee who had signed a letter of resignation drafted by the employer shortly after being interviewed in relation to allegations of dishonesty claimed that he had been unlawfully terminated by the employer. The Court proceeded on the following findings of fact concerning the circumstances in which the letter of resignation was signed, made by the Judicial Registrar before whom the trial was conducted:
“The Registrar made the following material findings squarely based upon his assessment of the demeanour and credibility of witnesses:-
The appellant was given no opportunity to have present at the interview an independent person who "might provide an independent recollection of what went on in this interview".
During the interview Mr Jeffrey told the appellant that either he resign or the police would be "called in".
When the appellant signed his resignation letter he felt he had no alternative other than to resign.
The Registrar drew the following inferences from those findings of fact:-
The appellant resigned involuntarily.
The appellant had no proper opportunity to defend himself against the allegations made.”
[28] The Full Court’s analysis included the following:
“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. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd ("David Graphics"), Industrial Relations Court of Australia, NI 94/0174, 12 July 1995, as yet unreported, Wilcox CJ. His Honour, at 3, referred to the situation of an employee who resigned because "he felt he had no other option". His Honour described those circumstances as:-
‘... a termination of employment at the instance [of] the employer rather than of the employee’.
and at 5:-
‘I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.’”
[29] In relation to the facts of the matter before them, the Full Court then determined:
“On the finding of fact that the respondent directed the appellant to resign or have the police "called in", it is our view that what occurred was a termination of employment at the initiative of the employer. When an employee has no effective or real choice but to resign it can hardly be said that the termination of her or his employment is truly at the employee's initiative. But for the insistence of the employer, termination of employment would not cross the mind of the employee.
According to the appellant's evidence which as we have said the Registrar accepted, and preferred where it conflicted with evidence adduced by the respondent, the respondent told the appellant that it would have the police "press charges" against him. He was placed in a situation designed to induce him into resigning on the basis that he would be relieved of having to go through the ordeal of a police investigation. An unstated consequence of benefit to the respondent was that, in turn, it would be relieved of an obligation to the appellant to conduct a procedure that gave a fair opportunity to the appellant to answer any allegation made against him before the respondent terminated the appellant's employment if it decided so to act.
It was not a real option for the appellant to respond to the respondent's ultimatum by electing to face a police investigation where there was an operative inducement that resignation would save the appellant and his family from the embarrassment that would ensue from an investigation. In so far as the ultimatum offered the choice of resigning it was not in the circumstances a real choice.
On the facts as found by the Registrar the threat to call in the police was intended to induce a reluctant resignation in circumstances where the respondent had not completed its enquiries and had not resolved to report the matter to the police. It appears to have been accepted by the Registrar as a finding that the appellant believed that a report to the police would place a stain on his character and inhibit his prospects of other employment in the future, irrespective of the outcome of a police investigation.
The proper conclusion from the facts as found by the Registrar and presented to his Honour was that the respondent wanted the appellant's resignation because it desired to terminate the appellant's employment. There was no other reason for it to do so. It sought to do so in that way to avoid any consequences that might flow from summary dismissal of the appellant. It is apparent that on the findings of the Registrar as to what occurred at the interview the respondent made it clear through its representatives that it no longer desired to employ the appellant.
In our opinion, the "critical action" here, to use the expression of the Chief Justice in David Graphics (supra), was the threat of the respondent that unless the appellant resigned the respondent would ask the police to charge him with an offence. The termination of the appellant's employment was not at his initiative. It was a resignation obtained by the respondent by an ultimatum designed to achieve that objective. That conclusion is reinforced by the peremptory conduct of the respondent in escorting the appellant out of the respondent's premises, leaving him to stand in a car-park to await a letter of resignation to be prepared by the respondent and brought to him to sign. That conduct by the respondent suggested summary termination of the appellant's services by the respondent rather than voluntary resignation by the appellant.
It is necessary for present purposes to concentrate on the expression "termination at the initiative of the employer", as that expression is central to the operation of Division 3 of Part VIA of the Act. Accordingly it cannot be assumed that decisions concerning other legislative formulations or cases concerning constructive dismissal are to be applied without qualification when considering the provisions of Division 3. However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.”
[30] It may be noted that the concept of forced resignation constituting a “constructive dismissal” had been recognised in State industrial jurisdictions 32 and in other legal contexts well before the enactment of the first federal termination of employment scheme. In Case V67, a taxation case, the Administrative Appeals Tribunal said:
“I am satisfied that a provision which, put crudely, means ‘resign or else’ has all the hallmarks of leaving a loaded pistol in the hands of an officer and gentleman and telling him that he is about to be court martialled for hocking the regimental silver. Applied to the instant case I have concluded that the ‘option’ of a voluntary retirement is a Faustian bargain equivalent to a constructive dismissal; it is not the ‘voluntary retirement’ referred to in s 27F(1).” 33
[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 34 and O'Meara v Stanley Works Pty Ltd35. 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.” 36
[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).
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:
[34] It is apparent, as was observed in the decision of the Federal Circuit Court (Whelan J) in Wilkie v National Storage Operations Pty Ltd 37, that “The wording of s.386(1)(b) of the Act appears to reflect in statutory form the test developed by the Full Court of the then Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No. 1) and summarised by the Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd” (footnotes omitted). The body of pre-FW Act decisions concerning “forced” resignations, including the decisions to which we have earlier referred, has been applied to s.386(1)(b): Bruce v Fingal Glen Pty Ltd (in liq)38; Ryan v ISS Integrated Facility Services Pty Ltd39; Parsons v Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust40.
[35] Additional but not unrelated to the concept of “forced” resignation is a line of cases concerned with the circumstances in which an ostensible indication of an intention to resign on the part of an employee may not be effective to terminate the employment on the employee’s initiative. Where the resignation is ineffective, purported acceptance of the resignation by the employer forthwith, without clarifying with the employee whether resignation was truly intended, will constitute a termination of employment at the initiative of the employer. The usual position is that where an employee uses unambiguous words of resignation, the employer is entitled to treat this as an effective resignation which operates to terminate the employment. However an expression of resignation which cannot reasonably be regarded as voluntary may not operate as an effective resignation capable of acceptance by the employer. In Gunnedah Shire Council v Grout 41 a Full Court of the Industrial Relations Court said:
“It seems to us that, if the council knew, or should have known, that Mr Grout was then suffering such a degree of confusion or pressure that his act of resignation was not a considered and voluntary act, it was not open to it to resolve to accept the resignation. Although the factual situation is very different, the position is similar in principle to that discussed recently in Mohazab v Dick Smith Electronics Pty Ltd (28 November, 1995, Lee, Moore and Marshall JJ, not yet reported) where an employee resigned while being questioned about suspected dishonesty. The Court held that, notwithstanding the resignation, the termination was a termination at the initiative of the employer, so as to fall within Division 3 of Part VIA of the Industrial Relations Act. The Court said that "an important feature" of termination at the initiative of the employer "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". Because voluntariness is critical, it is important to consider carefully the evidence concerning Mr Grout's mental condition at the time he submitted his resignation letter.” 42
[36] The Full Court went on the consider mental state of the employee in question, Mr Grout, at the time he resigned:
“There is no doubt that Mr Grout was suffering at the time he wrote his letter of 18 May. There was a history of controversy about his work. He had had trouble sleeping. Dr Harris thought he was suffering from "severe work related stress" that was "causing severe depression" and affecting his general health. On at least two occasions that day, in Dr Harris' surgery and during the meeting at the abattoir with Mr Lyle and Mr Kemmis, Mr Grout broke down and wept. This evidence builds up an impression of a man under severe pressure. But it does not provide a basis for a finding that Mr Grout's action in writing the letter was a product of confusion or was involuntary. Given that he had just had a conversation with Mr Thomas in which he coherently and rationally discussed his situation and announced an intention consistent with what he stated in his letter, it would be extremely difficult to reach that conclusion. Moreover, Moore J's finding as to Mr Grout's condition at that time is significant. His Honour did not find that Mr Grout's mind was so affected by his medical condition that he was not capable of acting rationally, or that he was acting irrationally at the time. Nor did he find that he did not intend what he did. The finding was that he acted "to some extent, in a state of despair and was not in a state of emotional equilibrium, however composed he might have appeared at any particular time".
In our opinion, Mr Grout made a considered decision to leave his employment...”
[37] A number of subsequent Australian cases have referred to and applied UK decisions to the effect that there may exist “special circumstances” which render an apparent indication of resignation on the part of the employee ineffective unless the employer obtains confirmation of the employee’s intention to resign after a reasonable period. In the decision of the Industrial Relations Court (Murphy JR) in Minato v Palmer Corporation Ltd 43, the Court referred to the UK authorities as follows:
“It is now necessary to consider the legal effect, in the light of the Act, of the words and actions of the parties. The respondent contended that where there were unambiguous words or actions of resignation then that was the end of the matter. The applicant had resigned.
It was contended by counsel for the respondent that no case supported the proposition that where there were unambiguous words of resignation combined with acts then there was a duty to clarify the matter. In particular, he maintained that there was no obligation on an employer to clarify a resignation tendered in "the heat of the moment". In the light of the analysis by Moore J in Grout v Gunnedah Shire Council (1994) 125 ALR 355 and other cases this is not a proper approach.
The legal position is set out in the case of Sovereign House Security Services Ltd v Savage [1989] IRLR 115 where at 116 May LJ said:
"In my opinion, generally speaking, where unambiguous words of resignation are used by an employee to the employer direct or by an intermediary, and are so understood by the employer, the proper conclusion of fact is that the employee has in truth resigned. In my view tribunals should not be astute to find otherwise ....
However, in some cases there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee him or herself, to entitle the tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight."
Those comments were considered in another case: Kwik-Fit (G.B.) Ltd v Lineham [1992] ICR 183 where at 188 Wood J said that he saw no difference in principle between words or actions of resignation. At 191 he set out the position as follows:
"If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure ("being jostled into a decision") and indeed the intellectual make-up of an employee may be relevant: see Barclay v. City of Glasgow District Council [1983] I.R.L.R. 313. These we refer to as "special circumstances". Where "special circumstances" arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employer's risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the "special circumstances" the intention to resign was not the correct interpretation when the facts are judged objectively."
UK authorities to similar effect were followed in a recent decision in Queensland: Achal v Electrolux Pty Ltd (1993) 50 IR 236. (Cf. Connally v Malifind Pty Ltd (Industrial Relations Court of Australia, Murphy JR, 1 March 1995) for a discussion of the position in relation to an "ambiguous" resignation). Applying the above cases the
issue is whether the circumstances of the applicant are such as to come within the term "special circumstances" such as to require clarification of her intention to resign, or of her actions at the store on 23 December.”
[38] In Minato, the employer purported to accept a resignation of the employee even though it knew that when the employee uttered the words taken as a resignation she was under personal pressure, not in a “sensible state” and did not intend to resign. In those circumstances the acceptance of the resignation was characterised as constituting a termination of employment at the initiative of the employer. 44
[39] It may be noted that the UK decision in Barclay v. City of Glasgow District Council 45 referred to in Minato included an employee “being jostled into a decision” to resign as one of the “special circumstances” which might require an employer to obtain confirmation of the employee’s intention to resign. This is apt to confuse, since such “jostling” may shade into the “forced resignation” situation discussed earlier. However it is reasonably clear that the cases concerning “special circumstances” are focused on situations where the mental or emotional state of the employee causes the employee to communicate a resignation without truly intending to resign. For example, in Achal v Electrolux Pty Ltd46 the Queensland Industrial Relations Commission (Hall CIC) said:
“... There is now a respectable line of English authority for the proposition that a resignation given in heat or in a state of emotional stress or as a result of being jostled into a decision by the employer, may be withdrawn, see Sothem v Franks Charlesly and Co [1981] IRLR 278 at 280 per Fox LJ, and Barclay v City of Glasgow DC [1983] IRLR 313, at 315. The latter case was not cited to Gray J in Birrell v Australian National Airlines Commission (1984) 9 IR 101 when his Honour held (at 110 to 111):
‘All this having been said, I regard the decision in Martin v Yeoman Aggregates Ltd [1983] ICR 314, as confined to its facts, and therefore as not extending beyond permitting the withdrawal of words uttered in the heat of the moment, when those words are retracted swiftly. A principle such as that does not at all fit the present case. The Applicant did not speak in the heat of the moment, but rather took the considered and deliberate step of giving notice to terminate his contract of employment. At the time when he handed over the letter, he did intend to resign. His subsequent reconsideration of this step, in the light of what he took to be the reaction of TAA to it, does not approximate to the action of a person who, realizing that he has said something in anger which he did not intend, immediately makes amends.’
Birrell's case (ibid) was not a case of resignation in a distressed rather than an angry state. It was not necessary for his Honour to decide, and I do not understand his Honour to have decided, that an employee whose distress is real and obvious and whose employer jostles her into resigning whilst in that state may not withdraw the resignation unilaterally on recovering her composure where the employer will not be prejudiced thereby, save to the extent that the advantage flowing from the resignation evaporates...”
[40] The circumstances described in Erbil v Sportscraft Manufacturing 47, a decision of the Australian Industrial Relations Commission (Williams SDP), are illustrative of how a resignation given by an employee in a state of emotional distress combined with a degree of “jostling” on the part of the employer might result in a termination at the initiative of the employer, even though the circumstances do not demonstrate that the employer forced the employee to resign:
“I have no doubt that, when, during the course of the discussion in the morning with Robinson and Magar, the applicant stated that she wanted to "leave", she meant that she wanted to leave her employment. I am satisfied, however, that she made this statement "in the heat of the moment". It was made during what was a volatile discussion, in a situation where the applicant had raised a complaint with the respondent and where she felt that she was being badly treated by the respondent for doing so. She was both angry and upset, so angry and upset that the union representative told the respondent's representative to allow the applicant time to calm down and counselled him against providing her with a "resignation" form. I am satisfied that, if she had not been provided with the form at that stage and in those circumstances but had been allowed time to consider her position in a more rational atmosphere, she might not have signed the "resignation" form. It was the provision to her of the form which prompted her to actually "resign" by signing it. I do not accept that the provision of the form was an attempt by the respondent to "clarify" the applicant's position. In the circumstances, the respondent should, in my view, have allowed a reasonable period of time to elapse before seeking confirmation or otherwise of the applicant's intentions. It was specifically asked to do so by the union representative. By failing to do so, the respondent ran the risk of a finding being made that, on an objective consideration of the facts, the applicant did not have a real intention of resigning.
I am of the view that the applicant did not voluntarily terminate her employment. It was the act of the respondent in providing the applicant with the "resignation" form combined with the circumstances in which and at the time at which it was so provided that directly brought about the termination of the applicant's employment. For those reasons, I am satisfied that the termination of the applicant's employment was, for the purposes of the Act, a termination at the initiative of the employer.”
[41] A Full Bench of the Australian Industrial Relations Commission in Ngo v Link Printing 48 discussed Minato and the possibility that an employer might have an obligation to obtain confirmation of a dismissal, but only in equivocal terms. It commenced by saying:
“[12] We have had regard to the various decisions to which we were referred relating to resignations of employment. In particular we have considered the decisions that assert the existence, in certain circumstances, of a duty to clarify a resignation.”
[42] After then quoting from Minato, the Full Bench said, referring to the facts of the matter before it:
“[13] We are prepared to assume, without so deciding, that it was incumbent on Link, following Mr Ngo's statement that he resigned, to allow a reasonable period of time to elapse to ascertain whether circumstances arose during the period that put Link on notice that further enquiry was necessary to see whether Mr Ngo's resignation was really intended. Mr Ngo spoke his words of resignation on the afternoon of 8 June 1998. He then resumed work for the balance of the shift, went home, resumed work the next day and, when approached by Mr Corrigan, said that he was not resigning. In our view, any reasonable period of time had elapsed well before Mr Ngo said this.”
. . .
[16] The next point is whether Mr Ngo was entitled to withdraw his resignation. The relevant law was the subject of extensive consideration by Gray J in Birrell v Australian National Airlines Commission (referred to in paragraph [8]). The conclusion to be drawn from that case is, we think, clear - a unilateral withdrawal of a notice of termination of a contract of employment is not possible (p.110). There was some suggestion by the appellant that Birrell has been overtaken by later cases. We do not agree; Birrell was applied by the Federal Court in 1993 in Saddington v Building Workers Industrial Union [(1993) 49 IR 323 at 336], by the Commission in the same year in Ampol Ltd v Transport Workers Union of Australia [(1993) 54 IR 134 at 138] and in 1995 by Ryan J as a member of the Industrial Relations Court in Fryar v Systems Services Pty Ltd [(1995) 60 IR 68 at 87-88].
[17] In Birrell, Gray J referred to Martin v Yeoman Aggregates Ltd [1983] ICR 314, a decision of the Employment Appeal Tribunal (UK), in which it was held that words of dismissal spoken in the heat of the moment were ineffective if withdrawn immediately the heat had died down. Gray J said that he regarded this decision as confined to its facts and therefore as not extending beyond permitting the withdrawal of words uttered in the heat of the moment, when those words are retracted swiftly (pp.110-111).
[18] In Mr Ngo's case, assuming in his favour that his resignation was given in the heat of the moment, it was not retracted swiftly. In our view, Mr Ngo was not entitled to withdraw his resignation on the day following the giving of it.”
[43] The Full Bench separately referred to Mohazab and, somewhat confusingly, Erbil as cases concerning where the employee had “no effective or real choice but to resign”. 49
[44] Notwithstanding the equivocal position taken by the Full Bench, Ngo has been taken in a number of subsequent AIRC decisions and Commission decisions under the FW Act as an authority which affirms the approach taken in Minato. 50 Other decisions have applied Gunnedah Shire Council to the same effect.51
[45] The approach taken in the UK decisions referred to was most recently endorsed by the Federal Court (Rares J) in Koutalis v Pollett 52:
“[43] The question whether a resignation did or did not occur 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 immediately after Mr Pollett left the Koutalis’ business’ premises on the morning of 5 May 2014, based on what each party to the conversation had said or done, in light of the surrounding circumstances. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at 179 [40], Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:
This Court, in Pacific Carriers Ltd v BNP Paribas [(2004) [2004] HCA 35; 218 CLR 451], has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. 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. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction [Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at 461-462 [22]]. (emphasis added)
[44] In my opinion, the same considerations apply to the evaluation of the circumstances where parties engage in conversations and conduct that affects their legal rights under a contract, including the assessment of whether or not words and or conduct can be seen to amount to a resignation. Nonetheless, in employment contexts, a court must be conscious that situations can arise in which one or other of the parties acts in the heat of the moment in such a way that a reasonable person in the position of the parties in all the circumstances would not understand the employee to be resigning or the employer to be terminating the employee’s employment, as the case may be. So much is reflected in what May LJ, with whom Croom-Johnson and Woolf LJJ agreed, said in Sovereign House Security Services Limited v Savage [1989] IRLR 115 at 116 ...”
[46] The Court then referred to this consideration as also bearing on the question of whether there had been a “constructive dismissal” under s.386(1)(b). 53 We note that there may be tension between the objective approach to the ascertainment of whether there has been an effective resignation taken in Koutalis and the approach taken in Gunnedah Shire Council which, by focusing upon the mental state of the employee and the voluntariness of the resignation, is arguably subjective in nature.
[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 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.
[48] It is necessary for an applicant for an unfair dismissal remedy whose employment has terminated because the employer has acted on a communication of resignation on the part of the employee to articulate whether they contend they were dismissed in the first or the second scenario above (although it may be possible for both scenarios to arise in a particular factual situation). Where the applicant is self-represented or inadequately represented, it may be necessary for the member of the Commission hearing the matter to clarify with the applicant the precise basis upon which it is contended that the applicant was dismissed. If this is not done, it may lead to the wrong test being applied to the matter.
[49] We do not consider it is particularly helpful in applying s.386(1) to refer to the concept of “constructive dismissal” - an expression nowhere used in the FW Act. In saying this, we acknowledge that the expression has been used in a number of the authorities and also in the passage from the explanatory memorandum earlier quoted. However, as explained by Greg McCarry in his 1994 article “Constructive Dismissal of Employment in Australia” 54, the concept of “constructive dismissal” in UK law was not a development of the common law, but rather a description of a statutory extension to the ordinary meaning of dismissal to encompass a situation where “the employee terminates the contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer’s conduct”.55 That is a much wider concept than just “forced” dismissal and is conducive of confusion, as McCarry warned:
“If the forced resignation is now to be regarded as a dismissal, at least under some statutes, then so be it. But it is not and should not be called a “constructive dismissal”, nor should that term come to be regarded as a separate concept in its own right, as may be happening. To regard “dismissal” as including constructive dismissal without the aid of a definition of extension is reading a lot into a statute by English and Australian standards of statutory interpretation, although as we shall see American courts have had no trouble doing just that. Moreover, unnecessary or loose use of the phrase “constructive dismissal” brings with it the inevitable, and erroneous, tendency to draw on English judicial pronouncements and examples which arise in the quite different situation adverted to earlier. Given the way the extended definition in England is to be interpreted, all kinds of breaches of contract and repudiatory conduct, as determined by the common law rules, can legitimately come within the statutory extension. There are good reasons for arguing that similar definitions should be inserted into our statutes, but at the moment they are not there. So care is needed that decisions on the English regime are not misunderstood or misapplied.” 56
[50] In the different statutory context of the NSW unfair dismissal scheme in the Industrial Relations Act 1991, a Full Bench of the Industrial Relations Commission similarly warned in Allison v Bega Valley Council, in relation to forced dismissal, that the term “constructive dismissal” could “deflect attention from the real inquiry ... Did the employer behave in such a way so as to render the employer’s conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?” In the current statutory context of s.386(1), the breadth of the concept of “constructive dismissal” may cause confusion and deflect attention away from whether a dismissal within the meaning of paragraph (a) or paragraph (b) is being considered. That occurred in this case.
[51] As we have set out earlier, and contrary to the submission advanced on her behalf in the appeal, it is apparent that Ms Tavassoli’s case before the Commissioner was that she was forced to resign because of Bupa’s conduct and thus was dismissed under the second limb of the definition in s.386(1)(b). In the appeal hearing there was no attempt to substantiate, by reference to the record of the proceedings below, the proposition that Ms Tavassoli had advanced a case of the first type identified above under s.386(1)(a).
[52] That being the case, the Commissioner did not however apply the test we have identified as applicable to a case advanced under s.386(1)(b), but rather proceeded to assess whether there were “special circumstances” which might “result in her resignation being defined as being at the initiative of the employer”. 57 The Commissioner turned his attention to Ms Tavassoli’s emotional state at the time she resigned and Mr Brice’s refusal to accept her attempted retraction of her resignation. Although the Commissioner referred in a critical way to Mr Brice’s conduct on 16 November 2016, he did not do so to conclude that he had forced Ms Tavassoli’s resignation, but to explain the circumstances which caused Ms Tavassoli’s mind to descend “...into the realm of confusion and self-condemnation...”. The Commissioner found that the resignation was provided in “special circumstances”, and expressed the view that Mr Brice should have taken additional steps to ensure that Ms Tavassoli “understood the circumstances of the investigation and the effect of her resignation”.58 He made a reference to Ms Tavassoli not resigning of her own free will, but referenced this not to Bupa’s conduct but to its knowledge of her “poor language skills and her emotional state”.59
[53] The Commissioner concluded by expressing satisfaction that Ms Tavassoli’s resignation “satisfie[d] the test summarised in O’Meara” and thereby constituted a “constructive dismissal” 60 but it is apparent, we consider, that this was not the test which he actually applied. No conduct on the part of Bupa on 16 November 2016 was ever identified by the Commissioner as having the intended or probable result of terminating the employment such as to leave Ms Tavassoli with no choice but to resign. That is because there was no such conduct. Bupa removed her from a training course for the purpose of informing her, later in the day, that there was to be an investigation into allegations against her. Whatever view of Ms Tavassoli’s conduct as seen in the video footage may have been held in Mr Brice’s mind that day, there was no finding that he ever said anything to her as to what the outcome of the investigation would be or that she was going to be terminated. In the appeal reference was made to contested evidence that Mr Brice had said “disgusting” to Ms Tavassoli while he escorted her from the training meeting, but the Commissioner did not find that this had actually occurred.61 While it is unfortunate that, due to lack of money, Ms Tavassoli had to sit in the street for two hours waiting for the meeting rather than, as Mr Brice suggested, going to have a coffee, there was no evidence that this was intended by Mr Brice to occur let alone devised as a tactic to place pressure on Ms Tavassoli. She formed the intention to resign because she was concerned that she might be about to be accused of stealing a six pack of beer, and did not want to be labelled as a thief. Mr Brice refused the letter of resignation (on four weeks’ notice) which Ms Tavassoli subsequently proffered, and proceeded with the meeting at which he advised her of the allegations and the investigation process. Ms Tavassoli pressed her resignation again because she did not want to participate in the investigation. Mr Brice’s advice that she would have to resign effective immediately to avoid the investigation influenced her to alter the notice period of her resignation, but it was not the cause of her prior decision to resign in the first place. It is clear that an employer that raises allegations of misconduct against an employee and gives notice of an investigation is not, without more, forcing the employee to resign.62
[54] The test that was applied by the Commissioner was in fact the “special circumstances” test applicable to a case of the first type set out in paragraph [47] above - that is, a case advanced under s.386(1)(a) that the employee’s resignation was legally ineffective because of “special circumstances”. That was wrong test to be applied to the case advanced on Ms Tavassoli’s behalf. In that connection, we note Ms Tavassoli’s concession that the Commissioner’s determination that she was dismissed was made by reference to s.386(1)(a), not (b). In effect the Commissioner, with respect, decided a case that was not argued. This constitutes appealable error. We uphold grounds 1-4 of the appeal.
Disposition of the appeal
[55] Bupa’s position was that Ms Tavassoli had advanced her case on the basis that she was dismissed within the meaning of s.386(1)(b), that this case had not succeeded before the Commissioner and could not succeed now, and accordingly that permission to appeal should be granted, the appeal upheld, the Decision quashed, and Ms Tavassoli’s application for an unfair dismissal remedy quashed. However while it is correct to say that Ms Tavassoli’s legal representative sought to invoke the Commission’s jurisdiction under s.386(1)(b) on a basis that was without merit, the Decision does expose at least the possibility that the Commission’s jurisdiction might have been successfully invoked under s.386(1)(a). We do not consider that we should dismiss Ms Tavassoli’s application on jurisdictional grounds merely because her legal representative advanced her case on the wrong basis in circumstances where there might otherwise be jurisdiction to hear her application.
[56] For her part, Ms Tavassoli contended that, in the event we upheld Bupa’s appeal, we should proceed to determine ourselves whether she was dismissed under the s.386(1)(a) limb of the dismissal definition based on the evidence that was adduced before the Commissioner. That approach is also problematic. Bupa presented its evidentiary case, and tested Ms Tavassoli’s evidence, on the basis that it was meeting a case advanced under s.386(1)(b). It would be unfair to Bupa, and would constitute a denial of procedural fairness, if it was denied the opportunity to mount an evidentiary case which addressed s.386(1)(a).
[57] We consider that the appropriate course is to remit the matter to a single member of the Commission to re-hear the question of whether Ms Tavassoli was dismissed within the meaning of s.386(1)(a) having regard to our reasons for decision on the basis of the evidence adduced to date and such further evidence as the member may determine to admit. If the member is satisfied under s.386(1)(a) that Ms Tavassoli was dismissed, the matter will return to us and we will, after hearing from the parties, determine what further orders should then be made. If the member’s conclusion is that Ms Tavassoli was not dismissed, her application for an unfair dismissal remedy will be dismissed. The stay order made on 25 July 2017 will remain in effect until further ordered.
Orders
[58] We order as follows:
(1) Permission to appeal is granted with respect to grounds 1-4 of the notice of appeal. Permission to appeal is otherwise refused.
(2) Grounds 1-4 of the appeal are upheld.
(3) The matter is referred to Commissioner Cambridge for re-hearing as to whether Ms Tavassoli was dismissed by Bupa within the meaning of s.386(1)(a) of the Fair Work Act 2009 on the basis of the evidence admitted to day and such further evidence as the Commissioner may determine to admit.
(4) If, on the re-hearing, it is determined that Ms Tavassoli was dismissed within the meaning of s.386(1)(a), the Full Bench will then determine what further orders should be made in the appeal. If it is determined that that Mr Tavassoli was not dismissed, her application in matter U2016/14357 will be dismissed.
(5) The stay order made on 25 July 2017 will remain in effect until further order of the Commission.
VICE PRESIDENT
Appearances:
C. McArdle on behalf of Shahin Tavassoli.
J. Darams of Counsel with A. Malon on behalf of Bupa Aged Care Australia Pty Ltd.
Hearing details:
2017.
Sydney:
9 August.
2 Applicant’s outline of submissions in U2016/14357, dated 21 February 2017
3 Transcript 15 May 2017, PN2719
4 Transcript 15 May 2017, PN2719
5 Transcript 15 May 2017, PNs2851-2867
6 Transcript 15 May 2017, PNs2868-2874
7 Decision at [1]
8 Decision at [28]
10 (1996) 67 IR 154
12 Print R7005, [1999] AIRC 57, (22 January 1999)
13 [1983] IRLR 313
16 Decision at [36]-[37]
17 Decision at [38]-[42]
18 Decision at [63]-[68]
19 Decision at [69]-[70]
20 Decision at [88]
21 Decision at [87]-[93]
22 Print R7005, [1999] AIRC 57, (22 January 1999)
25 Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [43]
26 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46]
27 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 at [27]
28 Wan v AIRC (2001) 116 FCR 481 at [30]
29 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]
30 See s.170CA of the Industrial Relations Act 1988.
31 [1995] IRCA 625; 62 IR 200
32 Roberts v Prince Alfred College (1979) SAIR 598, Re Michaelis Bayley Trading Co and New South Wales Sales Representatives and Commercial Travellers’ Guild re Dismissal (1979) AR(NSW) 392, and Transport Workers’ Union of Australia and Eastern Goldfields Transport Board (1989) 69 WAIG 1895, referred to in Greg McCarry, Constructive Dismissal of Employees in Australia (1994) 68 ALJ 494
33 (1988) 1 ATC 505 at 508 (also quoted in the McCarry article cited above)
34 (1996) 67 IR 154
35 PR973462, [2006] AIRC 496 (11 August 2006)
36 (1996) 67 IR 154 at 160-161
37 [2013] FCCA 1056 at [99]
38 [2013] FWCFB 5279 at [13]-[19]
39 [2014] FWCFB 8451 at [15]
40 [2016] FWCFB 375 at [38]-[40]
41 (1995) 134 ALR 156
42 Ibid at 166
43 (1995) 63 IR 357
44 Ibid at 362-363
45 [1983] IRLR 313
46 (1993) 50 IR 236
47 Print P8154, [1998] AIRC 85 (23 January 1998)
48 Print R7005, [1999] AIRC 57, (22 January 1999)
49 Ibid at [19]-[21]
50 See for example Cole v Rydlyme International Pty Ltd [2014] FWC 4173 at [42]-[45] and Javed v Proeye Video Productions T/A Proeye Video Productions [2017] FWC 3550
51 See for example Simpson v Sahid Akram [2013] FWC 5110 at [12]
52 [2015] FCA 1165; 235 FCR 370
53 Ibid at [45]
54 (1994) 68 ALJ 494
55 Ibid at 500
56 Ibid at 505-6. McCarry’s analysis of the UK development of the concept of “constructive dismissal” was confirmed by the High Court in Commonwealth Bank of Australia v Barker [2014] HCA 32, 253 CLR 169 at [32]-[33] per French CJ, Bell and Keane JJ, [68] per Kiefel J (as she then was).
57 Decision at [35]
58 Decision at [48]
59 Decision at [48]
60 Decision at [50]
61 See Decision at [19]
62 Davidson v The Commonwealth [2011] FWA 3610 at [104] (permission to appeal refused in [2011] FWAFB 6265); McGregor v Melbourne Equine Veterinary Group [2012] FWA 6712 at [41]
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