1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Sharon Parsons
v
Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust T/A Pope Nitschke
First National
(U2014/13331)
COMMISSIONER WILSON MELBOURNE, 4 DECEMBER 2015
Application for relief from unfair dismissal.
[1] Sharon Parsons was employed as a real estate agent by Pope Nitschke Pty Ltd which
operates a real estate business in Mount Barker, South Australia, and trades as Pope Nitschke
First National.
[2] Ms Parsons’ employment with Pope Nitschke finished in October 2014 and, on 17
October 2014, Ms Parsons made an application for an unfair dismissal remedy to the Fair
Work Commission (FWC). The matter has had a lengthy history. After a first conciliation in
the matter was not productive, it was listed for hearing initially in January 2015. Further
conciliation by an FWC Member was attempted on two further occasions in March and
September 2015, however those endeavours were also not successful.
[3] Ms Parsons contends that a course of conduct by the Respondent meant that she was
left “with no alternative but to resign her employment”.1 It is then argued that, in all
circumstances, this was a dismissal and an unfair one at that, with Ms Parsons seeking
compensation as her relief for a finding of unfair dismissal.
[4] The course of conduct said to have been engaged in by the Respondent against Ms
Parsons includes a direction for her to commence long service leave (LSL) from a date
slightly more than 60 days after the giving of the notice. The notice, dated 7 August 2014,
required her to take 109 days, or 15.6 weeks, LSL from 6 October 2014.2 While such notice is
permitted under the relevant legislation, the circumstances of Ms Parsons’ contract of
employment are such that she believed she would have no new earnings, and therefore no
income, during the period of leave, and that once she returned to work after the leave she
would have no commission income for a considerable period as well.3
[5] For the reasons set out below, I find that Ms Parsons was not dismissed within the
meaning of the Fair Work Act 2009 (the FW Act) and accordingly her application for unfair
dismissal remedy must fail.
[2015] FWC 8090 [Note: An appeal pursuant to s.604 (C2015/7649) was
lodged against this decision - refer to Full Bench decision dated 11 March
2016 [[2016] FWCFB 375] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
http://www.fwc.gov.au/decisionssigned/html/2016FWCFB375.htm
[2015] FWC 8090
2
BACKGROUND
[6] Part of the dispute between the parties involves a question of how long Ms Parsons
was employed by Pope Nitschke, or by an entity directly related to it.
[7] Ms Parsons contends that she was employed by a company named Korsten Pty Ltd,
trading as Nitschke First National, in January 2002.4 Her evidence is that she remained
employed by that entity until 20 January 2006. Further, her evidence is that after January 2006
her employment continued with another company, being the Respondent in this matter, Pope
Nitschke Pty Ltd. Ms Parsons’ evidence is that the two entities shared the same registered
address and at least one common director, being Mr David Nitschke.5 She therefore regards
herself as having been employed continuously since January 2002.
[8] For its part, the Respondent claims Ms Parsons was employed by it only since “around
February 2006”.6 Mr Nitschke’s evidence on the subject notes that the Respondent company
was formed by him and another real estate agent, Mr Darren Pope, in February 2006 and that
the business has traded as First National Pope Nitschke since that time.7
[9] It is unnecessary for the purposes of this matter, and for the reasons that follow, to
resolve the conflict between the parties on the subject of the starting date of Ms Parsons’
employment.
[10] The conflict between the parties that lead to the end of Ms Parsons’ employment in
October 2014 had been developing for some months and related significantly to the continued
operation and contents of a Collective Agreement that applied to the workplace.
[11] The relevant agreement is the Pope Nitschke First National Employee Collective
Agreement,8 (the Collective Agreement) and was the subject in 2014 of an application for its
termination supported by a number of employees bound to it, including Ms Parsons.9 That
matter is referred to as the Agreement Termination Case. The application was contested by
Pope Nitschke and was heard before Commissioner Hampton, who granted the application in
a decision given on 8 September 2014, with the agreement being terminated with effect from
7 December 2014.10
[12] One issue in the Agreement Termination Case was the effect of the Collective
Agreement payment to be made to employees during LSL.
[13] Ms Parsons was remunerated during her period of employment at Pope Nitschke
entirely on the basis of percentage-based commissions earned in relation to sales she
achieved.
[14] LSL is provided for in the Collective Agreement, with employees to be provided with
“[w]hatever is specified in the applicable State legislation”, with certain modifications,
namely the cashing out of leave, including for pro rata accrued leave, once seven years’
service has been completed, and a stipulation that leave, when taken or cashed out, will be
“paid at your basic rate of pay.11 While there is some level of uncertainty on the subject, the
Collective Agreement prescribes that commission-only salespeople are entitled to LSL
payments based on their “basic rate of pay” calculated in the same way as for annual leave.
There is also uncertainty about what might be the “basic rate of pay”, with Commissioner
[2015] FWC 8090
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Hampton noting that its meaning, in relation to annual and personal leave, was not
immediately clear. 12
[15] Ms Parsons understood the terms of the Collective Agreement to mean that when she
took LSL, and in the absence of an agreement by her to cash out the entitlement, she would be
paid only the basic rate of pay, being calculated in the same manner as annual leave, which
she understood to be a payment that would be ultimately debited back against her sales
commission earnings. In effect, she understood this to mean that her remuneration with Pope
Nitschke was entirely derived from sales commissions which could then be spread, through a
debit and credit system, to periods in which sales commissions were not earned, such as
during annual leave and LSL.
[16] The Agreement Termination Case was heard during July 2014, with further
submissions on 3 September 2014 and the Commissioner’s decision was published on 8
September 2014.
[17] On 7 August 2015, Pope Nitschke wrote to Ms Parsons directing her to take LSL, with
the direction being in the following terms;
“Ms S Parsons
[address]
RE: Long Service Leave
Dear Sharon,
As you have been an employee of First National Real Estate Pope Nitschke for a
period of twelve years, you are entitled to 109 days (15.6 weeks) long service leave. In
accordance with the Long Service Leave Act Version 1.1.2010, section 7 (3), this
letter serves as 60 days notice that you are to take your long service leave commencing
Monday the 6th of October 2014.
You are also entitled to receive payment in lieu of Long Service Leave, which we
would be prepared to discuss with you.
Regards,
(signed)
David Nitschke & Darren Pope”13
[18] Ms Parsons apprehended this direction would cause her significant financial difficulty,
saying the following in her witness statement;
“54. Had I not sought other employment I would have had no income from at least 25
November 2014 until perhaps late May 2015.
55. Even returning after 15.6 weeks absence, new clients would then have to be found,
the properties then listed, advertised, shown, sales negotiated, finance approved or
conditions met and then settlement achieved before I would receive any income while
[2015] FWC 8090
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having missed the key listing season. Mr Nitschke told a staff meeting on 17
September 2014 “Between now and the end of the year is a busy time to get your
listings to carry you through January”.”14
[19] Ms Parsons objected to the direction and, through an application dated 11 August
2014, sought the Commission deal with her objection in accordance with the dispute
settlement procedure of the Collective Agreement. The relief sought by Ms Parsons, as
indicated in the application form, was a request for a binding order on the Respondent that it
withdraw its direction to proceed on LSL. In the alternative, Ms Parsons sought orders that
would either have her paid an ordinary weekly rate of pay that would not be subject to the
debit system or have the direction delayed until at least 90 days after the matter was dealt with
by the Commission; or, in the further alternative, to have her paid in advance for the period of
leave, with the calculation to be consistent with a manner set out within the Long Service
Leave Act 1987 (SA) (the LSL Act).15
[20] The Commission dealt with the matter in conferences held on 3 and 15 September
2014, also convened by Commissioner Hampton, however the conferences were inconclusive,
with Ms Parsons’ evidence being that the Respondent argued that it could not be compelled to
participate and did not.16 Whether as a result, or unrelatedly, Pope Nitschke’s direction to Ms
Parsons for the taking of LSL from early October 2014 stood unaltered.
[21] Ms Parsons alleges Mr Nitschke initiated a conversation with her on 12 August 2014,
in which he made statements of a threatening nature to her, including that he didn’t “want to
have anything to do with” her; that “[w]e are going to make it very difficult for you”; “[y]ou
can go and tell Andrew Knox but I’m going to make it hard for you”; and “[y]ou need to think
about leaving”.17 Ms Parsons also says that when she explained why she had involved Mr
Andrew Knox in the matter, who was her representative, from Cognisage Australia Industrial
Relations, Ms Parsons claims Mr Nitschke swore at her saying she could have brought the
matter to him or his business partner, Mr Pope.18
[22] Mr Nitschke denies speaking these words to Ms Parsons, or words to similar effect,
and puts a different, more benign, perspective on the conversation – one in which he
expresses annoyance that Ms Parsons had not spoken to him or his business partner about her
grievances, but instead pursued a dispute notification. Mr Nitschke’s evidence is that he said
to Ms Parsons that he was “disappointed in the way she had handled the situation because it
was bad for our working relationship”.19
[23] On 15 August 2014, Mr Andrew Knox, acting for Ms Parsons, drew the things alleged
to have been said to Ms Parsons by Mr Nitschke to the attention of Mr Kidman of Crawford
Legal, the Respondent’s solicitors, by way of written correspondence.20
[24] Despite having been directed to take LSL from Monday, 6 October 2014, on 26
September 2014, Ms Parsons noticed she had been rostered normally on an internal roster, as
if she would not be on leave.
[25] Monday, 6 October 2014 was a public holiday in South Australia and so for practical
effect the parties have proceeded on the basis that the LSL direction would operate from
Tuesday, 7 October 2014.21 In any event, Ms Parsons attended for work as normal on
Tuesday, 7 October 2014. Later that day, Mr Kidman drew the situation to the attention of Mr
[2015] FWC 8090
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Knox with the following communication, which opens with a reference to the dispute
resolution conference held before Commissioner Hampton on 15 September 2014;
“Ms Parsons' position at the conference was that the direction to take leave must be
withdrawn. While my client was prepared to continue discussions with Ms Parsons and
seek an agreement in relation to her terms of employment after 7 December 2014 that
also encompassed a settlement of the long service leave issue, Ms Parsons insisted that
the requirement to take leave be withdrawn. My client did not agree to that. At the end
of the conference, you said that Ms Parsons had no alternative other than to seek an
injunction against our client.
My client has proceeded on the basis that unless Ms Parsons took some other step to
resist the requirement that she take long service leave, her leave would commence on
7 October 2014 as directed. Our client was entitled to proceed on that basis and Ms
Parsons has taken no further steps to resist the requirement that she take long service
leave. However, I am instructed that Ms Parsons attended work today. When
questioned why she was at work when she was required to be on long service leave,
Ms Parsons responded by saying that you informed her that the requirement to take
leave has been withdrawn or rescinded.
There has not been any withdrawal of the requirement to take long service leave.”22
[26] The correspondence sought a response by the end of the following day, 8 October
2014.
[27] The response from Mr Knox, on behalf of the Applicant, set out the following;
“As your client, of its own free will, chose to continue to roster our client for duty we
are entitled to accept that roster as clear rescission of the notice issued to our client,
under Section 7 (3) of the Long Service Leave Act 1987. Our client has clearly never
wished to tab her long service leave at this time.
In any event, we accept the recision [sic] of that notice and bind your client to it.”23
[28] The evident impasse between the two parties continued over the course of the week
with each making allegations about the behaviour of the other. In relation to Mr Knox’s
contention that the rosters circulated with the inclusion of Ms Parsons on it amounted to a
rescission of the instruction to proceed on LSL, the solicitors for Pope Nitschke provided the
following unequivocal advice to Mr Knox and thereby to Ms Parsons;
“My client does not accept the explanation that you provided for Ms Parsons attending
work this week. I am instructed that the roster for work on the desk is ordinarily drawn
up by the receptionist without reference to the directors and that she was unaware that
Ms Parsons was scheduled to take leave. Quite simply, inclusion on the roster was an
error and Ms Parsons ought either to have understood that or approached one of the
directors for clarification. I make the point that if Ms Parsons had been rostered to
work during, say, a period when she was scheduled to take annual leave, it would have
been reasonable for her to infer a mistake rather than conclude that her leave had been
cancelled without reference to her. In short my client finds the explanation that you
[2015] FWC 8090
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have provided to be disingenuous. In that regard, I am instructed that it is not an
explanation that Ms Parsons gave when Mr Pope spoke with her earlier this week.
To be very clear, there has been no withdrawal of the requirement to take long service
leave either express or implied. The direction to take leave stands. Although my client
does not accept the explanation that Ms Parsons provided, through you, for presenting
at work, it will in the circumstances defer the requirement to take leave until Monday,
13 October 2014. She must commence leave that day although, if she prefers, my
client will consider a “cash out” of the value of the leave. My client maintains that it is
entitled to apply a debit in respect of the value of the leave.
I am instructed that if Ms Parsons does not accept the direction take leave, my client
will view that as a serious disciplinary issue”24
[29] In response to the correspondence and shortly after receiving it, Mr Knox
communicated to Mr Kidman, for the Respondent, that Ms Parsons would not be forced into
unpaid leave and that she would attend for duty as rostered. On 13 October 2014, Ms Parsons
was provided with correspondence by Mr Nitschke and Mr Pope who advised her that if she
considered the direction to take LSL to be unlawful or unreasonable, she had a responsibility
to take constructive steps about her objection as an alternative to a plain refusal to accept it.
The correspondence advised that the Respondent viewed seriously Ms Parsons’ refusal to
accept the direction and take LSL, and as a result it would decide how to respond. The letter
advised her that while the Respondent was considering its position, she was directed not to
attend the office until further notice. It also set forth a proposal for Ms Parsons to consider
while it considered its own position. That proposal was in the following terms;
“Proposal
As we understand, you have two concerns about the requirement to take leave. First,
you are concerned about not being involved with selling activities during the period of
leave. Second you are concerned about our expressed intention to apply a debit in
respect of the value of leave according to our interpretation of the Collective
Agreement that applies to our business.
In relation to the first of these concerns, we would agree to cash out the value of your
leave if you request that. In relation to the second of your concerns, you could take
your leave or cash it out while reserving your right to bring a legal claim based on any
alleged breach of the Collective Agreement or the Long Service Leave Act that you
believe has occurred. In other words, we would not treat the taking of long service
leave or cashing it out as involving a concession by you in relation to your rights.
We ask for your response to our proposal by midday on Wednesday, 15 October
2014.”25
[30] The reply to Pope Nitschke from Mr Knox, on behalf of Ms Parsons, pointed out that,
by being instructed not to attend her place of work, Ms Parsons was denied the ability to work
and earn an income. The correspondence sought that, the same day, Pope Nitschke rescind its
direction not to attend work.26 As an alternative, Mr Knox put forward that Ms Parsons ought
to be allowed to work from home.
[2015] FWC 8090
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[31] Such proposition was not agreed to by Pope Nitschke, who refused to rescind its
direction to Ms Parsons not to attend work. The company’s correspondence, dated 14 October
2014 also set forth that it would deem Ms Parsons to actually be on LSL from that point;
“Our client has not claimed that Ms Parsons ought to have taken action to restrain our
client. At the conclusion of the conference before Commissioner Hampton, it was you
who in very clear terms foreshadowed that there would be an application for an
injunction. That was a very clear indication on behalf of Ms Parsons that the dispute
about the direction to take long service remained unresolved and she intended to press
her position in further legal proceedings. We do not accept that it was either necessary
or appropriate for Ms Parsons to seek injunctive relief, nor that there would have been
any reasonable basis for that. Our client’s complaint against Ms Parsons is that having
clearly signalled that she wished to press her position, she did not do anything.
Our client does not rescind its direction to Ms Parsons not to attend work.
Now that it is clear that Ms Parsons does not wish to accept our clients proposal, nor
apparently engage in any discussions, our client’s position is that Ms Parsons must
now take her long service leave in accordance with the position set out in the writer’s
email of 10 October 2014. We are instructed that our client will henceforth continue to
proceed on the basis that Ms Parsons is on long service leave. So that there can be no
uncertainty about the requirement to take leave, our client directs Ms Parsons to not
undertake any work. In keeping with that direction, our client will not provide normal
remote access to the computing system. Nor will our client provide the other items
referred to at the end of your letter.
If there are any items of personal property that Ms Parsons requires, please let us now
(sic).”27
[32] On or around that point, being 14 October 2014, Ms Parsons formed the view that her
employment by Pope Nitschke had come to an end. She had been told not to attend work and
not to undertake work. She had been told that she was considered to be on LSL; and, on 16
October 2014, she received an email from Mr Pope seeking the return of various things that
were the property of Pope Nitschke as well as advising her about her forthcoming pay
situation. That email set out the following;
“Hi Sharon
Could you please as a matter of urgency returned to the office any files, keys or
documentation
You may have at home for us to continue looking after these properties
In particular [address] and [address]
We can arrange for someone to pick them up if that is more convenient
Additionally pays have been done today and i will forward to you your payslip and our
calculations
To LSL shortly
Regards,
[2015] FWC 8090
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Darren Pope
Director”28
[33] On 17 October 2014, Ms Parsons made an application to the Fair Work Commission
for an unfair dismissal remedy.
[34] The overall circumstances of this matter allow me to find that Ms Parsons’
employment ended between 14 and 17 October 2014. While her employment did not end
through an explicit statement of resignation, the evidence leads to a finding, which I make,
that Ms Parsons was not prepared to accept the LSL direction and withdrew from
employment. There is not an explicit point or explicit communication in which she advised of
her resignation. However, by at least 17 October 2014, when her unfair dismissal application
was lodged, she regarded herself as having resigned. Her application used that term, referring
to the date on which dismissal was notified as being 14 October 2014. Her subsequent
conduct and submissions clarify that she understood she had resigned, albeit with Ms Parsons
contending that a resignation on her part was necessary in order for her to secure other
employment and income.29 The balance of probabilities lead me to find that the employment
relationship ended on 14 October 2014.
CONSIDERATION
[35] Section 386(1) of the FW Act allows that a dismissal includes a circumstance in which
there was a forced resignation, and provides the following;
“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.”
[36] The principles of forced resignation, or constructive dismissal, have been extensively
analysed in many cases, including by the Full Bench. Those principles require all of the
circumstances of a termination to be examined, and not only the actions of the employer. The
employer’s conduct must be weighed objectively and arising from that it “may be shown to be
a sufficiently operative factor in the resignation for it to be tantamount to a reason for
dismissal”.30
[37] In relation to what is meant by a termination at the initiative of the employer, the Full
Court of the Industrial Relations Court of Australia found the following in an early case,
Mohazab v Dick Smith Electronics Pty Ltd (No. 2)31;
“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
[2015] FWC 8090
9
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.”
[38] In considering such matters, the Commission must carefully consider what has
occurred, with the Full Bench finding as follows;
“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.”32
[39] In all though, a resignation that may be involuntary in and of itself may not be
sufficient on “an objective analysis of the employer’s conduct” to be said to form a
constructive dismissal;
“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.”33
[40] The Full Bench developed on these matters in the matter of Bruce v Fingal Glen Pty
Ltd (in liq) in which the following was said about the paragraph above from the earlier
Industrial Relations Court matter of Rheinberger v Huxley Marketing Pty Ltd;
“[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”.34
[41] I take the following from my analysis of the relevant authorities;
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The employer’s conduct must be weighed objectively, with the question to be asked
being whether, on any reasonable view, the employer’s conduct would probably
have the effect of prompting the employee’s resignation;
A forced resignation may result from some action on the part of the employer
intended to bring the employment relationship to an end or an action which would,
on any reasonable view, probably have that effect;
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; and
While an “important feature” of constructive dismissal, it is not sufficient that “the
act of the employer results directly or consequentially in the termination of
employment and the employment relationship is not voluntarily left by the
employee”.35
[42] The situation in which the parties to this matter found themselves prior to the
Agreement Termination Case includes a dispute over the actual payment to be made to an
employee of Pope Nitschke when they progressed on LSL. In the case of a commission-only
salesperson, that dispute was compounded with a further dispute about whether or not the
proper application of the Collective Agreement allowed for any such payments as were made
to a person during the period of their LSL to be debited against commission payments earned
by them.
[43] While those disputes have not been authoritatively determined by a Court the decision
of the Commission in the Agreement Termination Case is at least partially instructive about
the matters in dispute.
[44] The Commission’s decision was handed down on 8 September 2014, being a time
after Ms Parsons was given a direction about LSL, but a time before her employment ended.
[45] The context to the decision includes the following considerations about the
motivations for the application;
“[8] Mr Smart brings this application with the apparent support of 11 of his colleagues.
They were represented in this matter, with permission, by Mr Knox, who is also their
bargaining agent.
[9] Mr Smart contends that the Collective Agreement should be terminated given the
uncertainties arising from the instrument and what he describes as a number of
capricious terms. Amongst other matters, he relies upon the following contentions
regarding the Collective Agreement:
It is misleading in that it contains terms that are modified by the Act and the
National Employment Standards (NES) however that is not clear to the
employees and no clarification has been given to them by the employer;
It contains no actual wage rates;
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The employer has not been acting consistently with the terms of the
Collective Agreement in that some employees have not been given written
letters of appointment and/or agreements for commission-only arrangements
when these were required; and
The Long Service Leave (LSL) provisions are contrary to the State LSL Act
that forms part of the NES.
[10] Mr Smart also contends that the employer would not be disadvantaged by the
termination of the Collective Agreement and the application of the modern award that
would follow in that event. That is, the modern award minimum rates and the NES
already in effect apply to the parties. Rather, he suggested, Pope Nitschke was
attempting to cling onto an outdated “credit and debit” system for calculating
commissions.
[11] The Collective Agreement was said to undermine the policy and scheme of the
Act and Mr Smart contends that a move to the modern award as the basis for the future
would provide both fairness and certainty for all parties.” 36 (underlining added)
[46] The Commissioner also referred to the relevant provisions of the Collective
Agreement;
“[29] In relation to LSL, the Collective Agreement refers to the applicable State
legislation but provides that the parties may agree to cash out LSL, including for pro
rata leave after seven years. It does so in the following terms:
“17 Long service leave
17.1 You will receive the following entitlement to long service leave:
Whatever is specified in the applicable State legislation with the following
modifications:
(a) We may agree in writing (sign and dated) for you to cash out long
service leave including for pro rata leave once you have seven complete
years of service
(b) If you take or cash out long service leave you will be paid at your
basic rate of pay. Long service leave will not be payable on
Commissions/incentives/bonuses. Cashing out long service leave means
you lose the entitlement to take long service leave and you receive the
cash in lieu. A commission-only salesperson’s basic rate of pay will be
calculated as the same as for annual leave.””37
[47] In his decision, Commissioner Hampton identified firstly that a commission-only
salesperson’s payment for LSL would be upon their “basic rate of pay”, calculated in
accordance with certain mechanisms, but did not resolve the question of whether LSL
payments could be debited from sales commissions. In relation to the first proposition, the
Commissioner held the following;38
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“[66] I note that Clause 17 of the Collective Agreement states that LSL is not payable
on Commissions/incentives/bonuses. It is apparent that at least at some earlier stage,
Pope Nitschke understood that this meant that commission-only salespersons were not
entitled to LSL. However, the better view, and the one now apparently being adopted
by the employer, is that such salespersons are entitled to LSL based upon their “basic
rate of pay”. On that view, clause 17 in relation to commission-only salespersons refers
to the same basis of calculating payments as adopted for annual leave.
[67] This basis for annual leave payments is provided by Schedule 2.8(b) of the
Collective Agreement and this in turn refers to the “formula in the regulations for
piece workers”. That formula, in effect, is provided by the Workplace Relations Act
Regulations 2006 and this also apparently requires the consideration of the average
earnings over the preceding 12 months. In that regard, the definitions within the
former regulations are very complex and require consideration of the various partially
circular definitions of the terms applicable to piece workers within the WR Act itself. I
note that the clearer provisions under the Fair Work Regulations 2009, that would
apply in relation to annual leave and other direct NES entitlements for pieceworkers,
would not appear to apply to the LSL calculation given the preserved terms of the
Collective Agreement.”39 (references omitted)
[48] The Commissioner’s finding in relation to the debiting of LSL payments from sales
commissions was within the context of his decision to exercise the discretion within s.226 of
the FW Act of whether it was appropriate in all the circumstances for him to terminate the
agreement. He specifically took into account and made allowances for the fact that there
would be a need for the parties to resolve this question, amongst others;
“[93] There are however factors arising from the circumstances of the parties that
impact upon the discretion as to when the termination will take effect. That is, whilst
not leading to a view that the termination would be contrary to the public interest or
inappropriate, the need for the parties to deal with the consequences of the termination
is such that a reasonably lengthy lead time for the termination would be appropriate.
These considerations include most importantly, the requirement to renegotiate and/or
confirm written commission-only remuneration arrangements that would operate under
the terms of the modern award. This is not necessarily a straight forward exercise
given the strongly held and divergent views about the operation of commission
arrangements beyond the minimum commission-only payments required by the
modern award. Further, some delay would permit the opportunity to negotiate a new
enterprise agreement should that course of action ultimately be supported by the
majority of employees.
[94] I accept the continuation of the Collective Agreement for a period extends the
uncertainty. In terms of the impact of the delay upon the LSL arrangements, there is a
dispute about the capacity to debit such payments from commissions. Whatever the
Collective Agreement means on that count, and it is not clear, that matter can be
determined and it is not unreasonable per se to permit the approved and preserved
Collective Agreement terms to operate for a period given the consequences for all
parties arising from its termination. Importantly, any continuing uncertainty needs to
be balanced against the requirements for appropriate transitional arrangements for all
parties subject to the Collective Agreement.”40
[2015] FWC 8090
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[49] I draw from this, not only that the Commissioner was alive to the dispute between the
parties about whether LSL payments could be debited from sales commissions, but also that
he saw it as important for the parties to endeavour to resolve the differences on the subject.
[50] Also to be taken account of from the context of the Agreement Termination Case
decision is that by the time the decision was handed down, the Applicant in this matter, Ms
Parsons, had brought to the Commission her dispute under the Collective Agreement. That
dispute had been the subject of an initial conference before the Commission on 3 September
2014, prior to the handing down of the Agreement Termination Case decision, with that date
being coincidental with the last hearing date in the Agreement Termination Case. The dispute
was further dealt with by the Commission on 15 September 2015.
[51] The evidence received in this matter indicates that the dispute about the debiting of
LSL payments from sales commissions only intensified from the time of the LSL direction.
[52] The circumstances in which Ms Parsons found herself in the weeks and possibly
months prior to the date on which her employment ended were undoubtedly unpleasant, but
likely mutually so. However the question to be determined is whether or not there was a
course of conduct engaged in by Pope Nitschke that causes it to be said that Ms Parsons was
left with no alternative other than to resign.
[53] For the purposes of assessing Pope Nitschke’s conduct and whether, on any reasonable
view, it would probably have had the effect of prompting Ms Parsons’ resignation, I consider
that the conduct complained of appears to hinge on three matters: the LSL direction; the
parties’ relationship and the discussion between Ms Parsons and Mr Nitschke on 12 August
2014; and Pope Nitschke’s participation in the dispute resolution proceedings before the
Commission.
[54] The witness evidence in this matter came from Ms Parsons and Mr Nitschke.
[55] To the extent that there are differences in their evidence, I prefer that of Mr Nitschke.
[56] I give Ms Parson’s evidence less weight for several reasons.
[57] First, there was an apparent reluctance by her to comply in particular respects with an
Order of the Commission to produce documents relating to her employment and earnings after
leaving Pope Nitschke. The first two parts of the Order went to documents relating to
endeavours to obtain employment after leaving Pope Nitschke. The explanation that there are
no such documents potentially answers those parts of the Order. However the third, fourth and
fifth parts of the Order go respectively to payments made since 14 October 2014; payslips
since that date; and properties being marketed for sale by the Applicant. It was said in the
hearing that documents relating to the payments and payslips received could not be located or
were only available in summary form.41 The Respondent indicated in the hearing that it would
not press compliance with the fifth category.
[58] When Ms Parsons was directed, while giving evidence, to search during the lunch
break for payslips from her current employer and provide to the Commission what was found,
none were produced. Neither did she endeavour to provide any payslips to the Commission on
the second day of the proceedings, albeit after she had finished giving evidence. I consider it
[2015] FWC 8090
14
unlikely that Ms Parsons has not been provided with any documents, beyond those she chose
to tender, that would show her post-employment earnings, or how those earnings were
calculated.
[59] Finally, I regard Ms Parson’s evidence about how she came to obtain employment
with another firm on 29 October 2014, slightly more than 2 weeks after finishing with Pope
Nitschke, as being rather circumspect, and likely deliberately so.
[60] In contrast to her evidence on these matters, there is a forensic level of detail before
me from Ms Parsons about matters that occurred before leaving Pope Nitschke.
[61] In all, I regard Ms Parsons as lacking candour on these matters and being not
particularly desirous of the Commission examining her employment after she left Pope
Nitschke, or how or when she came to obtain that employment. Such management of her
evidence on those matters reduces the extent to which her evidence on other matters can be
relied upon.
[62] Mr Nitschke’s evidence does not suffer from these taints and so I accept and prefer his
evidence.
The LSL Direction
[63] At the time that the LSL direction was given, on 7 August 2015, the Agreement
Termination Case had not concluded. Shortly before the direction was given, on 31 July 2014,
and in the course of providing submissions to the Commission for the Agreement Termination
Case, solicitors for Pope Nitschke had submitted, somewhat ambiguously, the following about
its future LSL payment intentions;
“58. In light of the decision in Canavan, the Respondent will (if the Collective
Agreement continues) henceforward be paying the value of leave entitlements at the
time when leave is taken.”42
[64] Even at the point of his decision on 8 September 2014, Commissioner Hampton noted
that the “proper operation of the status quo is not clear and is very much in dispute”.43 There
is nothing before me that would indicate the parties held a contrary view at that time.
[65] The reference to Canavan in the foregoing passage is a reference to the Full Bench
decision in Re: Canavan Building Pty Ltd,44 in which it was held that “pre-payment” of
annual leave in a proposed enterprise agreement constituted cashing out of annual leave in a
manner inconsistent with s.93 of the FW Act, thereby rendering the agreement incapable of
approval.45 The Agreement Termination Case decision noted that the Collective Agreement
operated subject to the National Employment Standards and that Canavan potentially had a
significant effect because of what it had to say on the pre-payment of leave entitlements.46
[66] The evidence, and indeed the Commissioner’s decision in the Agreement Termination
Case, points to a minimum understanding on the part of Pope Nitschke that during the period
of her LSL it would need to pay Ms Parsons at her “basic rate of pay”, adopting the same
calculation basis as per annual leave.47 Similarly the evidence points to there being a
minimum understanding by the Respondent that such payment would have to be paid to Ms
Parsons irrespective of whether the Collective Agreement was terminated or not. Whether or
[2015] FWC 8090
15
not the payments made to Ms Parsons during a period of LSL would be subject to offsetting
against sales commissions earned through the debit and credit system was, at the relevant
time, one for resolution at some point in the future, if at all, with an answer being dependent
either upon the judgement of a Court or possibly the product of enterprise agreement
negotiations.
[67] The evidence points to there being a view on the part of Pope Nitschke that, at least in
early August 2014, it apprehended that its industrial arrangements at that time enabled it to
undertake such offsetting, but that at some point in the future it may be identified firmly that it
could not. It is, in the context of all of the evidence in this matter, more likely than not that
Pope Nitschke was motivated in its decision-making, and thereby its direction to Ms Parsons
to proceed on LSL, to exercise what it perceived as its workplace right arising under the
combined effect of the Collective Agreement and the LSL Act.
[68] The Respondent’s perception, unresolved at that time and apparently since, was that
payments for LSL at the “basic rate of pay” could be offset against sales commission
earnings. It also drew from the provisions of the LSL Act, which so far as is relevant, enables
a direction to be given by an employer to an employee who has accrued a period of LSL to
take that leave at 60 days’ notice, as well as enabling agreements to be made between
employers and employees for payments to be made in lieu of LSL.48 The provisions of the
Collective Agreement provide for the LSL Act to continue to apply, other than where
modified by the agreement. There is nothing within the Collective Agreement that would
indicate a direction for the taking of LSL cannot be given, or that the effect of such direction
is modified by the agreement.
[69] The relevant consideration becomes, in relation to this aspect of the potential course of
conduct of Pope Nitschke, whether on any reasonable view its conduct would probably have
the effect of prompting Ms Parsons resignation?
[70] In favour of the proposition that it would have prompted Ms Parsons’ resignation are
the contentions that she puts forward firstly that she would receive no new earnings and
therefore no income during the period of leave, and secondly that when she returned to work
after the leave she would have no commission income for a considerable period as well.
[71] To resolve in favour of Ms Parsons, the first proposition is dependent on acceptance
by the Commission that the employer was not within its rights to direct that she proceed on
LSL whether at the time it issued the direction or potentially at any time.
[72] The context of the LSL Act includes both that a long serving employee should be
rewarded with additional leave and that employees should be given the leave in one block,
close to the time that the period of leave accrues. The policy of the LSL Act, unmodified by
the Collective Agreement, is clear when it stipulates both that LSL should be granted by an
employer to a worker as soon as practicable (taking into consideration the needs of the
employer's business or undertaking) after the worker becomes entitled to the leave as well as
preferring that LSL should be taken in one continuous period.49 To the extent that the
operation of the LSL Act is not modified, employees may be fined if they work during the
period of leave and similarly employers may be fined if they employ persons who are at that
time on LSL.50
[2015] FWC 8090
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[73] It is entirely foreseeable within the unmodified context of the LSL Act that there will
be numerous occasions in which employees may be required to proceed on leave, even though
they do not want to. This might include being required to take leave at times that are
inconvenient to the employee (such as being at a time of year they do not want, or even in a
year they do not want) as well as potentially being against their financial interests (such as for
a person who is directed to take leave when that person instead was hoping to take a payment
in lieu perhaps upon resignation or retirement). There is no policy in the LSL Act, or the
Collective Agreement, that leave should be taken only at mutually agreed times.
[74] The Collective Agreement countenances payments in lieu of the taking of LSL where
agreement is in writing, with there being no regulation of the circumstances in which
agreement can be sought. Plainly, neither party needs to agree to an approach from the other
to have LSL paid in lieu of the time being taken off as leave. The myriad circumstances in
which leave is paid in lieu include those where it is mutually convenient for payment to be
taken instead of the leave being given, as well as those in which one party wants to do so, but
has to persuade the other to agree to payment.
[75] Within this context, it would be difficult to find that, by requiring Ms Parsons to
commence on leave, that Pope Nitschke was doing anything other than exercising rights given
to it by the combination of the LSL Act and its Collective Agreement. The possibility that
Pope Nitschke was defending its interests, whether financially or legally, by issuing the
direction to Ms Parsons, perhaps in anticipation of a later change to its understanding that the
LSL payments that were made could perhaps be later offset against sales commission earnings
through the debit and credit system is in itself also not an unreasonable action on the part of
the company. Such change in its legal requirements might come shortly, or in several years, or
never at all. At least at the time the direction was given, in August 2014, a month prior to the
Commission’s decision in the Agreement Termination Case, but after the evidence had been
given in the matter, Pope Nitschke was entitled to seek to protect its interests in accordance
with its understanding of the then prevailing Collective Agreement, albeit with the attendant
risk that its understanding may later be corrected, such as by a finding in a Court.
[76] The second proposition, relating to the likelihood that she would have no commission
income for a considerable period after returning from leave, also does not resolve in favour of
Ms Parsons since such feature is not unique to her employment. Instead it is likely to be a
feature of the employment of any commission salesperson. Predictably, almost to the point of
certainty, a salesperson remunerated to some degree through commission payments who takes
leave of any kind would find a lag in payments once they returned to work. Although this may
possibly be exacerbated in the case of a person who was a commission-only salesperson, in all
likelihood it would be a feature of the employment of any person whose remuneration was at
least partially contingent upon sales being achieved.
[77] The proposition was advanced at the time by Ms Parsons and during her evidence, that
inclusion of her name on the internal roster in late September 2014 meant that Pope Nitschke
had withdrawn its LSL direction. That proposition was emphatically and unambiguously
answered by the Respondent at the time. I prefer Mr Nitschke’s evidence on the subject,
which supports that it was a mistake from which the Respondent backed away as soon as it
realised the error.
The parties’ relationship and the discussion between Ms Parsons and Mr Nitschke on 12
August 2014
[2015] FWC 8090
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[78] There is little doubt that the relationship between the parties deteriorated markedly
through the period of August to October 2014. The evidence points to both parties, and their
representatives, presumably acting upon instructions, assertively defending their respective
interests. In a business as small as Pope Nitschke, it is inevitable that the level of mutual
assertiveness created interpersonal difficulties.
[79] The conversation between Ms Parsons and Mr Nitschke on 12 August 2014, and the
evidently contrasting versions about which each gave, is a product of that. While the evidence
as to the accuracy of their respective versions of events does not definitively fall in favour of
either, it does at the least point to a mutual antipathy. That is not unusual in workplaces
generally, or indeed in workplaces as small as this.
[80] In forming my views about the nature of the parties deteriorating relationship, I have
taken into account my preference on these matters for the evidence of Mr Nitschke, to the
extent that there are differences between his evidence and that of Ms Parsons, for the reasons I
have referred to earlier. His evidence is generally credible and thereby capable of acceptance,
and especially so in relation to the 12 August 2014 conversation.
[81] Whilst the conversation was no doubt argumentative, and it may have cast a pall over
the likely ability of either to continue working together, I am unable to find that the
conversation rises to the point of there being unreasonable behaviour on the part of Mr
Nitschke. The conversation, or argument, while a symptom of the conflict between the two, is
not, in the context of all the evidence, sufficient for it to be said to be part of a course of
conduct by the Respondent that would probably have the effect of prompting Ms Parsons’
resignation.
Pope Nitschke’s participation in the dispute resolution proceedings before the Commission
[82] Likewise the contentions put forward by the Applicant about the motivations of the
Respondent in its engagement with the dispute notification made by Ms Parsons to the
Commission are not sufficient for me to make a finding that Pope Nitschke’s actions formed
part of a course of conduct that led to her resignation.
[83] The Applicant puts forward that Pope Nitschke did not engage with the conference for
the reason that “the Respondent could not be compelled to participate and did not”.51
However, she has not put forward anything that would suggest such was not a correct
interpretation of its rights.
[84] Such exercise of rights on the part of Pope Nitschke is hardly remarkable. Ms Parsons
had her own rights at that time that were not exercised, having apparently indicated at the end
of the conference before the Commission on 15 September 2014 that she would contemplate
an injunction, however one was never sought.52
[85] Again, while these matters might be evidence of a deteriorating relationship between
the parties, I am unable to find in this case, with its own facts and evidence, that an exercise
by a party of their rights is part of a course of conduct that might lead to a person’s
resignation.
[2015] FWC 8090
18
[86] Finally, having reviewed the evidence of the discourse between the parties in the final
few weeks of employment, I do not find anything which would indicate a course of conduct
on the part of Pope Nitschke that might reasonably be said to have probably prompted a
reasonable person to resign.
[87] By mid-September, or the start of October at the latest, the position of each was well-
known;
Pope Nitschke expected Ms Parsons to proceed on leave anticipating that it would
pay her at her basic rate of pay and, in accordance with its understanding of the
continuing Collective Agreement which would not terminate until 7 December 2014,
it would seek to offset those payments against sales commission earnings through
the debit and credit system.
For her part Ms Parsons held a contrary legal view. She believed that the proper
interpretation of the Collective Agreement was that not only should she be paid the
basic rate of pay for the time that she was on leave but that such payments could not
be then offset against sales commission earnings.
Both parties were on notice from the Commission that the Collective Agreement
would terminate in about two months’ time and that the Commission had been
unable to resolve the question of payments to be made on LSL.
[88] During the months prior to 14 October 2014, Ms Parsons had alternatives available to
her other than resignation.
[89] Those alternatives included filing a dispute with the Commission, which was done but
ultimately did not produce a result beneficial to Ms Parsons. Ms Parsons’ options also
included seeking injunctive relief from a Court, which apparently was contemplated but not
undertaken. Her options also included proceeding on leave and being paid at the basic rate of
pay and then contesting whether through a Court or elsewhere any endeavour on the part of
Pope Nitschke to then later offset those payments against sales commission earnings.
[90] I accept that each of the options available to Ms Parsons had its own difficulties and
uncertainties. However, those options provided an alternative to ending her employment with
Pope Nitschke.
[91] In contrast, the alternative taken by Ms Parsons was to regard her employment as at an
end, as I have found, on 14 October 2014, with her witness statement addressing her motive
in this way;
“I had then no alternative but to resign in order to live if the Respondent forced me to
absent myself from my work.”53
[92] Ms Parsons acted on that alternative by seeking and gaining other employment as a
real estate agent with another local firm, which she took up from 29 October 2014.54
[93] As referred to above, Ms Parsons saw two harms to her of being on LSL – that she
would be paid at the basic rate of pay, perhaps debitable against commission earnings at some
later time, and that, because of her absence on LSL, she would suffer because sales would not
[2015] FWC 8090
19
be earned during the period, meaning that commission earnings would be lower for a time
when she returned.
[94] In context, while choosing to secure alternative employment may have avoided the
first of these concerns, it would not have avoided the second.
[95] Questions were put to Ms Parsons in cross-examination about whether she had any
documentation regarding her new employer. She made no written application for
employment, had no letter of offer or letter of appointment and does not receive regular
payslips from her new employer.55 The job came to her in the following way;
“How did you come into that employment then?---I spoke with a friend who works for
Harcourts, Angus Campbell. I had explained the situation I was in at the time and put
the phone down, and within minutes had a phone call from my boss saying that they
would like to take me on.”56
[96] In context, taking into account her evidence and a failure by Ms Parsons to produce to
the Commission documents relating to her employment after 14 October 2014, it appears
more likely than not that her lack of detail about her new employment was self-serving.
[97] This situation, coupled with the speed with which new employment was arranged,
means I am unable to exclude either that it simply suited Ms Parsons to change her
employment because the relationship was no longer viable, or even the possibility that
arrangements for her new employment were commenced prior to finishing at Pope Nitschke.
[98] In any event, the evidence does not lead to the view of Ms Parsons being a person with
no choice other than to resign, or that on any view the decisions taken by Pope Nitschke
would probably have had the effect of prompting Ms Parsons’ resignation.
[99] I am satisfied that Ms Parsons had options available to her, and that she balanced the
pros and cons of them, choosing in the end to finish her employment with Pope Nitschke,
with the intention of soliciting other employment.
[100] For the foregoing reasons I am unable to conclude that Ms Parsons’ resignation from
her employment was because she was forced to do so because of conduct, or a course of
conduct, engaged in by Pope Nitschke. Accordingly I am not satisfied Ms Parsons was
dismissed within the meaning of s.386 of the FW Act and so her application for unfair
dismissal remedy must therefore fail.
[2015] FWC 8090
20
[101] An order dismissing her application will be issued in conjunction with this decision.
COMMISSIONER
Appearances:
Mr A Knox (paid agent) for the Applicant
Mr A Manos (of counsel) for the Respondent
Hearing details:
2015.
Adelaide.
19 – 20 October.
Printed by authority of the Commonwealth Government Printer
Price code C, PR574306
1 Form F2 Application for Unfair Dismissal Remedy [3.29].
2 Exhibit Parsons 2, Applicant’s bundle of documents, Attachment A1.
3 Form F2 [3.29]; see also Exhibit Parsons 1, Witness Statement of Sharon Parsons, [54]–[55].
4 Exhibit Parsons 1 [1]; see also Exhibit Parsons 2 Attachment A23.
5 Exhibit Parsons 1 [4]; see also Exhibit Parsons 2 Attachments A21 and A22.
6 Exhibit Respondent 1, Respondent’s Outline of Submissions, [3].
7 Exhibit Respondent 2, Witness Statement of David Nitschke, [7]–[8].
8 CAEN084452045.
9 Exhibit Parsons 1 [6].
10 [2014] FWCA 4876, at [95].
11 Clause 17.1 Pope Nitschke First National Employee Collective Agreement.
12 [2014] FWCA 4876, at [66] and [56].
13 Exhibit Parsons 2 Attachment A1.
14 Exhibit Parsons 1 [54]–[55].
15 Exhibit Parsons 2 Attachment A10.
16 Exhibit Parsons 1 [22].
17 Ibid [28].
18 Exhibit Parsons 2 Attachment A3.
19 Exhibit Respondent 2 [37]–[38].
20 Exhibit Parsons 2 Attachment A25.
21 See, for example, Exhibit Parsons 2 Attachment A4.
AIR « THE FAIR FAIM WORK O COMMISSION THE SEAL NOISS
[2015] FWC 8090
21
22 Exhibit Respondent 2 Attachment DN-6.
23 Ibid Attachment DN-7.
24 Ibid Attachment DN–9.
25 Ibid Attachment DN–13.
26 Exhibit Parsons 2 Attachment A5.
27 Exhibit Respondent 2 Attachment DN–14.
28 Exhibit Parsons 2 Attachment A13.
29 Exhibit Parsons 1 [19]–[22].
30 Doumit v ABB (1996) AIRCFB N6999.
31 (1995) 62 IR 200, at 205-206.
32 Doumit v ABB (1996) AIRCFB N6999.
33 Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154.
34 Bruce v Fingal Glen Pty Ltd (in liq) [2013] FWCFB 5279, at [23].
35 Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200, at 205-206.
36 [2014] FWCA 4876, [8]-[11].
37 Ibid [29].
38 Ibid [94].
39 Ibid [66]–[67].
40 Ibid [93]–[94].
41 Transcript PN 57-62.
42 Exhibit Parsons 2 Attachment A16.
43 [2014] FWCA 4876, at [83].
44 [2014] FWCFB 3202.
45 Ibid, at [56]–[58].
46 [2014] FWCA 4876, at [30].
47 Ibid, at [66].
48 LSL Act, s.7(3) and s.8(3a).
49 Ibid, ss.7(1) and (2).
50 Ibid, s.14.
51 Exhibit Parsons 1 [22].
52 Exhibit Parsons 2 Attachment A4; Exhibit Respondent 2 Attachment DN-6.
53 Exhibit Parsons 1 [22].
54 Ibid [46].
55 Transcript PN 203–220.
56 Ibid PN 204.
