1
Fair Work Act 2009
s.604—Appeal of decision
Kylie Bruce
v
Fingal Glen Pty Ltd (in liq)
(C2013/4957)
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT
DEPUTY PRESIDENT GOOLEY
COMMISSIONER HAMPTON
ADELAIDE, 2 AUGUST 2013
Appeal against decision - whether employee was dismissed - whether conduct or course of
conduct by employer forced employee to resign - applicable principles - public interest.
[1] This is an application by Ms Kylie Bruce (the Applicant) for permission to appeal and,
if permission is granted, an appeal pursuant to s.604 of the Fair Work Act 2009 (the Act). The
Applicant seeks to appeal against a decision of Senior Deputy President O’Callaghan made
pursuant to s.394 of the Act.1 In the decision, the Senior Deputy President determined that the
Applicant had not been dismissed by Fingal Glen Pty Ltd (the Respondent), and as such was
not entitled to pursue an application for an unfair dismissal remedy against it.
[2] The background to the appeal can be briefly set out as follows. Between January 2012
and January 2013 the Applicant was employed by the Respondent as a part-time receptionist
at the Comfort Inn Adelaide Riviera. Throughout this time her wages were frequently paid
late, she was not paid on time for a period of annual leave taken in early January 2013, and
the Respondent did not make any superannuation contributions on her behalf. The Applicant
resigned her employment with the Respondent by a letter dated 10 January 2013, in which she
sets out some of these complaints.
[3] The Applicant lodged an application for an unfair dismissal remedy with the Fair
Work Commission (the Commission) on 29 January 2013. The Respondent filed its response
to the application on 14 February 2013, relying on the Applicant’s resignation from her
employment. Prior to the original listing for hearing of the matter, the Respondent was wound
up by order of the Federal Court of Australia. The Senior Deputy President therefore directed
the parties to file submissions in relation to whether the matter should proceed and who the
correct respondent was. On 2 May 2013 the Senior Deputy President issued a decision2
finding that various legislative provisions relating to companies in liquidation3 that might
prevent the hearing of the matter did not apply, and that the matter could proceed.
1 [2013] FWC 3941.
2 [2013] FWC 2704.
3 See ss.440D, 471B and 500(2) of the Corporations Act 2001.
[2013] FWCFB 5279
DECISION
E AUSTRALIA FairWork Commission
[2013] FWCFB 5279
2
The Senior Deputy President’s Decision
[4] In the proceedings before the Senior Deputy President, the Applicant contended in
effect that she had been forced to resign because of conduct or a course of conduct engaged in
by the Respondent, and that she had therefore been dismissed (see s.386(1)(b) of the Act).
The Respondent did not appear in the proceedings. The Senior Deputy President was required
to consider in his decision whether the Applicant had been dismissed within the meaning of
the Act.
[5] In his decision the Senior Deputy President reviewed the part of the Explanatory
Memorandum to the Fair Work Bill 2008 that deals with what became s.386 of the Act, and
relevant decisions of the Commission’s predecessor bodies and the Federal Court. He noted
that failure by an employer to pay an employee can in certain circumstances constitute
dismissal by an employer,4 and quoted a decision of Commissioner Deegan in which it was
found that this had occurred.5 However the Senior Deputy President distinguished the matter
before him on the basis that it was a less extreme case, and that wages due to the Applicant
were paid, albeit late.6 He referred to provisions relating to the payment of wages in the
modern award covering the Applicant’s employment,7 and noted a number of avenues by
which she or her union could have taken action against the Respondent.8 He said that:
“[22] In this matter, the failure of Fingal Glen to make timely wage payments is, in my
view, a matter which goes to the competence and credibility of Fingal Glen and clearly created
the circumstances which prompted Ms Bruce to resign her employment. However the test
goes beyond simply explaining a logical basis for the resignation.
[23] In order to reach a conclusion about the facts relevant to Ms Bruce’s situation I have
noted that Ms Bruce does not assert that she was underpaid her wages. Rather, it is the late
nature of payments made to her and the absence of superannuation payments which led to her
resignation. That lateness was commonly one to two days but there are occasions when these
payments were even later. In the period immediately before Ms Bruce resigned on 10 January
2013 her pay was four days late. Clearly such a situation was improper and represented a
breach of normal employment obligations. However, it falls substantially short of the
circumstance considered in Hobbs and in my view could have been addressed in a number of
other ways.”
[6] The Senior Deputy President concluded that:
“[26] The Full Bench in ABB Engineering observed that the distinction between an
employer’s behaviour that leaves an employee with no choice apart from resignation, as
distinct from other options, is often a very narrow distinction. That narrow distinction is
relevant to this situation. Here, I am not persuaded that resignation was the only option open to
Ms Bruce. I am particularly concerned that a pattern of irregular wage payments and the non-
payment of superannuation ought not to be too readily taken to effectively terminate the
employment relationship as distinct from creating a situation where the recalcitrant employer
is bought to task, or possibly penalised under the appropriate legislation. The alternative
4 [2013] FWC 3941 at [16].
5 Hobbs v Achilleus Taxation Pty Ltd ATF The Achilleus Taxation Trust [2012] FWA 2907.
6 [2013] FWC 3941 at [19], [23].
7 Clause 26 of the Hospitality Industry (General) Award 2010 [MA000009].
8 Ibid at [20]-[21], [24]-[25].
[2013] FWCFB 5279
3
position could have the potential to place the ongoing employment of many employees at risk
rather than acknowledging that enforcement options exist and may be applied.
[27] In my view, serial underpayment or the late payment of wages situations, each need to
be considered on the merits. In this matter, Ms Bruce was clearly entitled to be annoyed and
disillusioned at Fingal Glen’s behaviour. That behaviour no doubt explains her perfectly
reasonable resignation decision, but I am not satisfied that the non-compliance by Fingal Glen
was of such a magnitude that, without the commencement of enforcement initiatives, it can be
described as leaving Ms Bruce with no choice other than to resign.
[28] Whilst in absolutely no way condoning Fingal Glen’s behaviour, I have concluded
that the resignation decision was based on Ms Bruce’s perception and a perfectly
understandable and subjective response. That resignation decision was not, as of 10 January
2013, the only option open to Ms Bruce.
[29] Accordingly, I am not satisfied that Ms Bruce was dismissed pursuant to s.386(1)(a)
or (b). The Commission does not therefore have the jurisdiction to consider the application
further...”
Appeal Principles
[7] An appeal under s.604 of the Act is an appeal by way of rehearing, with the powers of
the Full Bench being exercisable only if there is error on the part of the primary decision-
maker: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations
Commission.9 The nature of the error which an appellant must demonstrate will depend upon
the nature of the decision appealed.
[8] Because only a person who has been dismissed can pursue an unfair dismissal remedy
(see s.385(a) of the Act), the question of whether an employee has been dismissed is a
prerequisite to the exercise of the Commission’s jurisdiction under Part 3-2 of the Act.
Whether a person has been dismissed within the meaning of the Act is a question of
jurisdictional fact, not a matter for the exercise of the Commission’s discretion.10 As such:
“[29] ... in an appeal under s.604 of the FW Act from a finding of jurisdictional fact, the
Full Bench must be concerned with whether the decision-maker at first instance reached the
right conclusion as to the existence or otherwise of the jurisdictional fact, not simply with
whether the challenged finding was reasonably open.”11
[9] An appeal under s.604 of the Act may only be pursued with the permission of the
Commission. This would normally require an applicant to demonstrate an arguable case of
appealable error and to refer to other considerations which would justify the granting of
permission to appeal. Although s.604(2) requires the Commission to grant permission to
appeal if it is satisfied that it is in the public interest to do so, this does not apply in relation to
an application to appeal from an unfair dismissal decision. The effect of s.400 of the Act is
that the general approach to dealing with appeals is varied in two significant ways in relation
to appeals from unfair dismissal decisions. First, permission to appeal may only be granted
where the Commission considers it is in the public interest to do so (s.400(1)). Secondly,
9 (2000) 203 CLR 194 at 205.
10 See e.g. Dover-Ray v Real Insurance Pty Ltd [2010] FWAFB 2670 at [27].
11 McKewin v Lend Lease Project Management & Construction (Australia) Pty Ltd [2013] FWCFB 2568.
[2013] FWCFB 5279
4
where an appeal is based on an error of fact, the appeal can only be made on the ground that
the decision involved a significant error of fact (s.400(2)).
[10] The meaning to be given to “public interest” in s.400(1) of the Act was considered in
GlaxoSmithKline Australia Pty Ltd v Makin,12 where the Full Bench said that:
“Appeals have lain on the ground that it is in the public interest that leave should be granted in
the predecessors to the Act for decades. It has not been considered useful or appropriate to
define the concept in other than the most general terms and we do not intend to do so. The
expression ‘in the public interest’, when used in a statute, classically imports a discretionary
value judgment to be made by reference to undefined factual matters, confined only by the
objects of the legislation in question.
Although the public interest might be attracted where a matter raises issues of importance and
general application, or where there is a diversity of decisions at first instance so that guidance
from an appellate court is required, or where the decision at first instance manifests an
injustice, or the result is counter intuitive, or that the legal principles applied appear
disharmonious when compared with other recent decisions dealing with similar matters, it
seems to us that none of those elements is present in this case.”
Relevant legislative provisions and case law
[11] The Senior Deputy President decided that the Applicant had not been unfairly
dismissed because she had not been dismissed (see s.385(a) of the Act). The word
“dismissed” is defined in s.386 of the Act:
“386 Meaning of dismissed
(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.”
[12] According to the Explanatory Memorandum to the Fair Work Bill 2008,
“Clause 386 - Meaning of dismissed
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).
12 [2010] FWAFB 5343 at [26]-[27].
[2013] FWCFB 5279
5
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:
where the employee is effectively instructed to resign by the employer in the face of a
threatened or impending dismissal; or
where the employee quits their job in response to conduct by the employer which gives
them no reasonable choice but to resign.”
[13] The test of constructive dismissal in the context of the unlawful termination provisions
of the Industrial Relations Act 1998 was considered by the Full Court of the Industrial
Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2)13 (Mohazab)
and subsequently elucidated by Justice Moore in Rheinberger v Huxley Marketing Pty Ltd14
(Rheinberger). The commonly quoted statement of principle in Mohazab is that:
“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”.15
[14] It is important that this passage be read in the context of the judgment as a whole.16 It
is clear that the requirements set out by the Full Court in the passage quoted are necessary, but
not sufficient, to establish that employer action constitutes constructive dismissal.17
[15] These principles of constructive dismissal have been applied to the unfair dismissal
provisions of the Workplace Relations Act 1996 by Full Benches of the Australian Industrial
Relations Commission in Pawel v Advanced Precast Pty Ltd18 (Pawel) and ABB Engineering
Construction Pty Ltd v Doumit19 (ABB Engineering), and we accept the Applicant’s
submission that those decisions are relevant to any consideration of s.386(1)(b) of the Act.
[16] In Pawel the Full Bench said that:
“[13] It is plain that the Full Court in Mohazab considered that an important feature in the
question of whether termination is at the initiative of the employer is whether the act of an
employer results directly or consequentially in the termination of the employment and that the
employment relationship is not voluntarily left by the employee. However, it is to be noted that
the Full Court described it as an important feature. It plainly cannot be the only feature. An
example will serve to illustrate this point. Suppose an employee wants a pay rise and makes
such a request of his or her employer. If the employer declines and the employee, feeling
dissatisfied resigns, can the resignation be said to be a termination at the initiative of the
employer? We do not think it can and yet it can be said that the act of the employer i.e.
13 (1995) 62 IR 200.
14 (1996) 67 IR 154.
15 (1995) 62 IR 200 at 205-6.
16 O’Meara v Stanley Works Pty Ltd, AIRC Print PR973462 (11 August 2006) at [23].
17 Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 at 160; Pawel v Advanced Precast Pty Ltd, AIRC Print S5904
(12 May 2000) at [13].
18 AIRC Print S5904 (12 May 2000).
19 AIRC Print N6999 (9 December 1996).
[2013] FWCFB 5279
6
refusing the pay rise, has at least consequentially resulted in the termination of the
employment. This situation may be contrasted with the position where an employee is told to
resign or he or she will be terminated. We think that all of the circumstances and not only the
act of the employer must be examined. These in our view, will include the circumstances
giving rise to the termination, the seriousness of the issues involved and the respective conduct
of the employer and the employee...”20
[17] In ABB Engineering, the Full Bench said that:
“Where it is the immediate action of the employee that causes the employment relationship to
cease, it is necessary to ensure that the employer's conduct, said to have been the principal
contributing factor in the resultant termination of employment, is weighed objectively. The
employer's conduct may be shown to be a sufficiently operative factor in the resignation for it
to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly
readily be conceived to be a termination at the initiative of the employer. The validity of any
associated reason for the termination by resignation is tested. Where the conduct of the
employer is ambiguous, and the bearing it has on the decision to resign is based largely on the
perceptions and subjective response of the employee made unilaterally, considerable caution
should be exercised in treating the resignation as other than voluntary.”21
[18] The four authorities cited above were summarised by a Full Bench of the AIRC in
O’Meara v Stanley Works Pty Ltd22 (O’Meara) as follows:
“[23] In our view the full statement of reasons in Mohazab which we have set out together
with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of
this Commission in Pawel and ABB Engineering require that there... be some action on the part
of the employer which is either intended to bring the employment to an end or has the probable
result of bringing the employment relationship to an end. 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.”
[19] Subject to the comments below, we accept and adopt this as a summary of the
principles applicable in determining whether an employee has been forced to resign because
of the conduct of the employer within the meaning of s.386(1)(b) of the Act.
Consideration
[20] In the appeal the Applicant submitted that the Senior Deputy President applied the
wrong test in deciding whether the Applicant had been dismissed within the meaning of
s.386(1)(b). Reference was made to instances in the decision where the Senior Deputy
President frames the relevant test as being whether resignation was “the only option
available”.23 It was said that by applying this test rather than that set out in O’Meara the
20 AIRC Print S5904 (12 May 2000).
21 AIRC Print N6999 (9 December 1996). The print does not contain page or paragraph numbers.
22 AIRC Print PR973462 (11 August 2006).
23 [2013] FWC 3941 at [27].
[2013] FWCFB 5279
7
Senior Deputy President erred and thereby reached the wrong conclusion in relation to
s.386(1)(b).
[21] Assuming for present purposes that the test applied by the Senior Deputy President is
materially different to that set out in O’Meara, we are not satisfied that in the circumstances
of the present case the Applicant was dismissed. In relation to whether the Applicant had “any
effective or real choice but to resign”,24 two points should be noted. First, as referred to by the
Senior Deputy President, there were options other than resignation by which the Applicant
could have addressed the persistent late payment of her wages. Secondly, we accept that in
some circumstances the late payment of wages and/or a failure to pay superannuation may be
such as to amount to conduct which has forced an employee to resign. However in the
circumstances of the present case we are not persuaded that persistent delays of 1-2 days in
payment, with some longer delays, and a failure to pay superannuation, left the Applicant with
no effective or real choice other than to resign.
[22] In relation to whether on “an objective analysis of the employer’s conduct” the late
payment of wages and failure to pay superannuation “was of such a nature that resignation
was the probable result”, we note that the Full Bench in O’Meara was drawing from
Rheinberger. In that case Justice Moore said that:
“However it is plain from these passages [in Mohazab] 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”.25
[23] The situation contemplated in this passage is one in which the act of an employer
which led to an employee’s resignation was not intended to cause an employee’s resignation
(as was the case in Mohazab), but “would, on any reasonable view, probably have that effect”.
Rheinberger therefore qualifies the passage from Mohazab quoted above in two respects.
First, an employer may be found to have constructively dismissed an employee
notwithstanding that it did not engage in the relevant conduct with the subjective intention of
forcing the employee to resign. Secondly, although it is an “important feature” of constructive
dismissal, it is not sufficient 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”.26 There must also be either an intention to force an employee to resign, or else
the conduct must be of such a nature that resignation was the probable result. The “limb” of
the O’Meara test relating to resignation as a probable result of an employer’s conduct should
be read in this light.
[24] In the circumstances of the present case, resignation was a possible and foreseeable
result of the Respondent’s conduct, and in many respects a reasonable response in the
24 O’Meara v Stanley Works Pty Ltd, Print PR973462 (11 August 2006) at [23].
25 (1996) 67 IR 154 at 160-1.
26 Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 205.
[2013] FWCFB 5279
8
circumstances. However this is not itself sufficient to demonstrate that the Applicant’s
resignation was in effect a dismissal. Given the other avenues available to the Applicant to
pursue her complaints, and taking into account the nature of the Respondent’s conduct, we do
not consider that the Applicant’s resignation was objectively the probable result of the
Respondent’s conduct, and therefore that the Applicant was forced to resign because of that
conduct. In this regard, we note that although there were delays in the payment of wages, the
delays were short and the Applicant was paid her wages in full, and that the Applicant did not
take any further steps to pursue her complaints other than raising them with the Respondent.
[25] For all the above reasons, we conclude that even if there is a material difference
between the test applied by the Senior Deputy President and that set out in the relevant
authorities, the Senior Deputy President’s conclusion in relation to s.386(1)(b) was correct.
The public interest
[26] The Applicant submitted that it was in the public interest to grant permission to appeal
because while the issue of what constitutes dismissal commonly comes before the
Commission, there is disharmony between some recent decisions in the way that the relevant
principles and reasoning has been applied. In this regard, reference was made to the decisions
in Rind v Australian Institute of Superannuation Trustees27 and Bishop v Incitec Pivot Ltd.28
[27] It does not appear to us that there is any real question as to the correct principles to be
considered in applying s.386(1)(b) of the Act. Section 386(1)(b) reflects the common law
principles of constructive dismissal set out in Mohazab, Rheinberger, Pawel and ABB
Engineering, and summarised in O’Meara.
[28] More specifically, it was submitted that recent decisions also create uncertainty as to
both the relevance and existence of alternative remedies (including under award provisions),
and the nature and extent of employer conduct required to render a resignation a dismissal
under s.386(1)(b). However, we consider that each of these matters relate to questions of fact
which must be considered in the circumstances in each case.
[29] Plainly the existence of alternative means to address an employer’s conduct may be
relevant to the consideration of whether an employee had “no effective or real choice but to
resign” and/or the probability that they would resign as a response to that conduct, but the
weight to be given to the availability of such remedies will depend upon the nature of both the
employer’s action and the available remedy in a given case. The question of the nature of the
employer conduct required to constitute dismissal will likewise vary greatly from case to case
and according to all of the facts and circumstances of a particular matter. It follows that any
decision on appeal will be of only limited relevance beyond the circumstances of the
particular case.
[30] It was also submitted that refusing permission to appeal would result in substantial
injustice. We do not consider this submission to be made out, as we are satisfied that on the
application of the proper test relating to s.386(1)(b) of the Act, the Senior Deputy President’s
conclusion was correct.
27 [2013] FWC 3144.
28 [2011] FWA 8289.
[2013] FWCFB 5279
9
[31] We have therefore decided that the present application does not raise any issue of such
importance as to attract the public interest and to warrant granting permission to appeal.
Conclusions
[32] For all of the above reasons, we do not consider that there is any public interest in
granting permission to appeal, or that the Applicant would have any reasonable prospect of
success if permission were granted. As such permission to appeal is refused and the appeal is
dismissed.
SENIOR DEPUTY PRESIDENT
Appearances:
P Dean of United Voice for the Applicant
Hearing details:
2013.
Adelaide:
August 1.
Printed by authority of the Commonwealth Government Printer
Price code C, PR539675
