1
Fair Work Act 2009
s.365—General protections
Owen Walter Terrens
v
Vera Stevanovic
(C2023/1428)
DEPUTY PRESIDENT BELL MELBOURNE, 7 JULY 2023
Application to deal with contraventions involving dismissal – jurisdictional objection – whether
applicant dismissed – constructive dismissal by non-payment of wages – jurisdictional
objection dismissed.
[1] The Applicant, Mr Owen Terrens, has made an application under s 365 of the Fair Work
Act 2009 (Cth) (Act) alleging he was constructively dismissed by the respondent, Vera
Stevanovic (trading as ‘B and V Cleaning Services’), for exercising workplace rights. The real
complaint is – and which is established - that Mr Terrens has been persistently underpaid since
his second payslip was received.
[2] After about four months of employment, Mr Terrens wrote a letter of resignation in
which (among other matters) he said “As a result of your repeated and continued non-payment
of wages you are in fundamental breach of the terms of the contract of employment, and as a
result I am forced to resign and am therefore constructively dismissed.” As is evident, Mr
Terrens relies upon s 386(1)(b) of the Act in support of his claim that he was “dismissed”.
[3] Ms Stevanovic denies that Mr Terrens was dismissed, although she does not deny
underpayments (which is a matter that I will return to). In a statement filed with the
Commission, she states “Owen had left on his own accord due to non payment of wages owed
to him.”
Legislation and applicable principles
[4] Section 365 of the Act provides that a person can apply to the Commission to deal with
a general protections dismissal dispute if the person has been “dismissed”. A jurisdictional
condition of that application is that the person was “dismissed”.1
[5] By s 12 of the Act, the term “dismissed” has a meaning defined by the criteria in s 386.
Section 386 is as follows:
[2023] FWC 1562
DECISION
AUSTRALIA FairWork Commission
[2023] FWC 1562
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“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.”
[6] There are exceptions to s 386(1) but none are presently relevant.
[7] Section 386(1)(b) is intended to reflect the common law concept of constructive
dismissal, as was explained in the following extract from the Explanatory Memorandum to the
Fair Work Bill 2008:
“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.”
[8] While the “common law concept of constructive dismissal” is perhaps more accurately
described as a concept arising from statutory schemes regulating dismissal, as opposed to the
common law, it at least would ordinarily include repudiatory conduct by the employer in breach
of the employment agreement that justifies the employee terminating the contract for breach or
anticipatory breach. Such conduct would usually fall within one test posited by the Full Bench
of the Commission in Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli [2017] FWCFB
3941 at [47](2), namely where the termination of employment was “probably result of the
employer’s conduct such that the employee had no effective or real choice but to resign”.
Factual findings
[9] Mr Terrens commenced work as a part-time cleaner on 8 December 2022. The
agreement was recorded in a contract dated 15 December 2022, in which Ms Stevanovic was
the employer. The employment relationship was also governed by the Cleaning Services Award
2020 (Award), a matter which was also recorded in the employment contract. The contract
incorrectly records that Mr Terrens’ hours were 38 hours per week. In fact, he was a permanent
part-time employee whose ordinary hours were 30 hours per week.
[10] By clause 16 of the Award, wages were to be paid either weekly or fortnightly (as
determined by the employer). Evidently, the employer chose to pay fortnightly. Wages were
also required to be paid by no later than Thursday in a given pay week.
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb3941.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb3941.htm
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[11] Mr Terrens’ first pay slip was dated 23 December 2022. While the payment of wages
described in that payslip was made about 6 days’ late, it was paid in full, at least based on the
face of the payslip, and there is no dispute about it.
[12] Mr Terrens’ evidence includes a table of verbal discussions he had with Ms Stevanovic,
either where he was chasing the progress of the payment of his wages or he was being given a
purported assurance about their payment. The first of those discussions was on 29 December
2022, where Ms Stevanovic said she was having problems with the bank. I infer that this was
related to the late payment of the first payslip just referred to.
[13] The real difficulties commenced with the second pay period. Mr Terrens’ second payslip
was dated 6 January 2023. He was not paid on that date.
[14] On 11 January 2023, the full amount described on the second payslip was paid. The
issue, however, was that the payslip failed to pay the full amount that ought to have been
described on the payslip.
[15] The payslip for that period described payment for 48 hours for the fortnight. As noted
above, Mr Terrens’ part-time role was for 30 hours per week, namely 60 hours for the fortnight.
As Mr Terrens queried at the time, he had not been paid public holidays falling during that
period.
[16] The initial response to Mr Terrens’ inquiry about the public holidays was that he was
not entitled to them, because he had not been working for more than 3 months. It was not clear
why Ms Stevanovic held this view.
[17] Mr Terrens’ third payslip was dated 20 January 2023, for an amount representing 60
hours’ work. This payslip did not represent an improvement for the earlier public holidays
entitlements that remained unpaid and nor, unfortunately for Mr Terrens, for actual payment of
the substantive work described in the payslip. The payslip itself indicated payment to a
designated bank account. Mr Terrens says, and I accept, he was not paid at all.
[18] That payslip also appears to have been provided late. Mr Terrens’ evidence includes a
text message he sent to Ms Stevanovic asking “Are you able to send me the payslip for the
period I haven’t been paid for?” There was no response to that text message, although Ms
Stevanovic responded to or acknowledged many of Mr Terrens’ other text messages at that
time.
[19] On 30 January 2023, Mr Terrens sent a follow-up text message. On 1 February 2023,
Ms Stevanovic replied and relevantly wrote “Hey Owen another pay run is due this Friday so
your other payment will be paid on Friday also, so you will receive double payment.”
[20] The next payslip was for the period 21 January to 3 February 2023. While it recorded
60 hours (including public holidays and leave) for that pay period, it did not indicate that the
previous pay period had yet been paid for. The payslip indicated payment to the same bank
account described in previous payslips. Curiously, the payslip states the ‘date paid’ as 17
February 2023, a matter I will return to below. The ‘net pay’ described as being payable was
$1,529.04.
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[21] On 7 February 2023, Mr Terrens sent a text message saying that the pay had not come
through and asked what was happening. The text message reply on the same date said “Hi
Owen, it definitely has been transferred 1000% just let me know in the morning if it hasn’t
come through. Rgds Vera.”
[22] On 9 February 2023, Mr Terrens and Ms Stevanovic exchanged text messages:
• At 2:05pm, Mr Terrens wrote “I still have not received my pay for the last two
fortnights”.
• The response by Ms Stevanovic, which appears to have been sent immediately, was
“Hi Owen thanks for letting me know, we are at the bank and will sort it out and let
you know. Rgds Vera.”
• At 8:06pm, Mr Terrens sent a further message “Just wondering if there’s any updates
about the payment situation.”
[23] At 7:10am the following morning, Ms Stevanovic replied to Mr Terrens’ final message
from the day before. She stated: “Gd morning morning (sic) Owen, sorry forgot to let you know,
your pay will be in there tonight. Rgds Vera.”
[24] Despite the assurances it had been “transferred 1000%”, the pay was not made to Mr
Terrens’ account at all. It was not a case of the pay being delayed. Ms Stevanovic gave no
evidence to explain this latest failure, which occurred in the face of specific assurances that
would now appear to have been falsely made.
[25] On 10 February 2023, Mr Terrens sent a further message. His message, which received
no reply, stated:
“Hi Vera
My pay still has not gone into my account tonight. Are you able to send me a copy of
the receipt of the transfer.
As it’s not there yet, does that mean it will not go through until after the weekend?
Cheers,
Owen.”
[26] Also on 10 February 2023, there was a conversation in which payment for Mr Terrens’
work was raised. Ms Stevanovic told Mr Terrens that he would get “paid tonight”.
[27] The following day, Saturday, 11 February 2023, Mr Owens sent a further message. It
stated:
“Hello Vera
I am getting a bit concerned. My pay for one fortnight is now 3 weeks late, another
fortnight is a week late. You keep promising that it will be transferred but I still have
not been paid.
Could you send me a copy of the receipt for the transfer please. I am enjoying working
for you but am finding this very stressful.”
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[28] I record at this juncture that that I accept the factual matters described in Mr Terrens’
text message on 11 February 2023. Namely, his pay for one fortnight (i.e. for the payslip for
the period ending 20 January 2023) was 3 weeks late and the pay for the following fortnight
(i.e. for the payslip for the period ending 3 February 2023) had also not been paid. Mr Terrens
was clearly justified in finding the position he was in was stressful. As for his statement that he
was enjoying working for Ms Stevanovic, I consider this reflects well on Mr Terrens despite
the obvious poor treatment he was receiving in return.
[29] On 13 February 2023, Ms Stevanovic and Mr Terrens spoke again. She said the problem
with the payments was that she was closing the bank account and there wasn’t any money in it.
[30] The next payslip is for the period beginning on 4 February 2023 and ending 17 February
2023. The payslip records 60 hours work for a total amount payable (net) being $1,376.20.
[31] On 17 February 2023, Mr Terrens again called Ms Stevanovic asking for an update. For
that day, Mr Terrens’ bank statement records he was paid $1,376.20, being the same amount
described in the payslip of that date. Mr Terrens says, and is clearly the case, he was paid in
full for that payslip. However, the amounts for the previous two payslips remained unpaid.
[32] On 19 February 2023, Ms Stevanovic called Mr Terrens giving another assurance. This
time, she said she was going to the bank to sort out the problem. The problem was not sorted
out and I have serious doubts as to the truthfulness of Ms Stevanovic’s assurances when they
were made.
[33] On 22 February 2023, Ms Stevanovic sent a text message to Mr Terrens stating:
“Hi Owen, just an update, just awaiting on NAB to confirm transfer confirmation details
so payment can be deposited. Rgds Vera.”
[34] No evidence was submitted about any such confirmation request made of NAB.
[35] On 23 February 2023, Ms Stevanovic sent a further text message to Mr Terrens in
response to a text message from him that same day querying payment. Ms Stevanovic’s text
message stated:
“Hi Owen, just awaiting on settlement of the situation so all can be finalised for payment
to be deposited in your account.”
[36] No evidence of the “settlement” – whatever that was intended to mean – was given by
Ms Stevanovic, let alone how that settlement afforded a proper basis to refuse paying Mr
Terrens.
[37] On 24 February 2023, Mr Terrens again called Ms Stevanovic to check on the progress
for the outstanding payment for the two fortnights’ pay.
[38] On 26 February 2023, Mr Terrens was evidently at the end of his patience, and sent the
following text message. It read:
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“Hello Vera
I am just touching base regarding the payment of my wages situation. I am still waiting
to be paid for the fortnights ending 20/1 and 3/2/23. One fortnight is now 5 weeks late
and the other 3 weeks.
I don't think it is reasonable that I should have to wait for my wages as a result of an
issue you are having with your bank.
Since I have received payment from your new bank for the fortnight ended 17/2/23,
could you please transfer the outstanding wages from that account.
Could you please pay the outstanding amounts before this Friday 3/3/23 or I don’t see
any other option but to go to Fair Work Australia.
In the payment for the next fortnight ending 3/3/23 could you also please include the
outstanding penalty rates for the New Year's Day public holiday I worked on 2/1/23.”
[39] There was no response to that text message.
[40] On 3 March 2023, Mr Terrens sent a further text message, then another on 5 March 2023
both to similar effect to the message on 26 February 2023. It is unnecessary to set them out in
full but they clearly record Mr Terrens’ increasing concern about non-payment. The message
on 5 March 2023 also began “I would like you to respond to my messages before working on
Monday.”
[41] Finally, Ms Stevanovic responded on 5 March 2023 but it was only to state she had
“seen” both his messages, she apologised for not responding earlier (although no explanation
was provided at all) and asked him to “give me a call to discuss further”.
[42] Mr Terrens’ evidence – not disputed by any evidence submitted by Ms Stevanovic - was
that he called Ms Stevanovic on 5 March 2023. In that call, Ms Stevanovic claimed that her
father was “developing” dementia and she had not been able to do the wages as a result. She
apologised and said she would transfer the full amount outstanding by 6 March 2023.
[43] As the narrative for the above might now suggest, Ms Stevanovic’s word was
objectively worth very little at this point in time. Once again, the promised payment was not
made by 6 March 2023.
[44] On 6 March 2023, Mr Terrens was yet again required to call Ms Stevanovic about the
overdue status of his now oft-promised wages. Mr Terrens’ latest request was met by assertions
that she had passed the information onto her accountant who was, allegedly, treating it as urgent.
I note that Ms Stevanovic gave no evidence about that claim nor has she submitted any evidence
from any accountant.
[45] On the same day, Mr Terrens sent further text messages. They included a specific
amount of what was now owed, namely $4,434.28. That sum was expressed to include the most
recent fortnight, whose pay period ended on 3 March 2023. Ms Stevanovic did not dispute any
of Mr Terrens’ calculations. In fact, the only response Mr Terrens received for any of his text
messages was a ‘thumbs up’ symbol for his message that he was “leaving Sunbury” (being a
reference to work he was still performing) and another statement saying “Please let me know
when you receive payslip?”
[2023] FWC 1562
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[46] At 5:08pm, on 6 March 2023, Mr Terrens sent a further text message stating:
“Hello Vera
You have told me today that you have provided the details of my 6 weeks outstanding
wages to your accountant for urgent payment.
Please refer to the email we have sent to advise that unless payment in full is made by
this Thursday 9/3/23 I will be lodging a claim for Constructive Dismissal with Fair
Work Australia.
Owen”
[47] An email to similar effect, albeit more detailed, was also sent to Ms Stevanovic.
[48] Despite the obvious adversity that Mr Terrens was working under, he continued to work
for the next four days on the dates 6 – 9 March 2023.
[49] On 9 March 2023, Mr Terrens sent a letter of resignation. It is unnecessary to set it out
in full, however the following extract goes to the heart of the letter:
“As a result of your repeated and continued non-payment of wages you are in fundamental
breach of the terms of the contract of employment, and as a result I am forced to resign
and am therefore constructively dismissed.”
[50] The letter also demanded payment for all entitlements, including annual leave and 1
weeks’ notice that were stated to gross $7,318.56. It also required a further payment for unpaid
superannuation said to total $1,164.14.
[51] The final payslip issued was for the period beginning 18 February 2023 and ending 3
March 2023. It is not a payslip as such, but it appears on its face to be a statement of a final
payment on termination because, in addition to the 60 hours’ work recorded in that statement,
it records ‘Termination Payments’ for unused annual leave. The total amounts described to be
payable in this statement were (in net amounts) $1,993.19.
[52] There was no payslip issued to cover the period of work from 6 – 9 March 2023.
[53] Mr Terrens included with his evidence the bank statement for the account where his
wages were supposed to be paid to. I have reviewed those statements. They show that only three
payments were paid:
• one on 29 December 2022 (i.e. aligning with the payslip dated 23 December 2022);
• the second on 11 January 2023 (i.e. aligning with the payslip dated 6 January 2023);
• and a third payment on 17 February 2023 (which, by the amount stated on it, aligns
with the payslip for the period ending 17 February 2023).
[54] Ms Stevanovic accepts she owes Mr Terrens money. Ms Stevanovic’s email
submissions dated 1 and 26 June 2023 state the amounts she owes Mr Terrens as follows:
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“$1376.20 (20.01.23)
$1529.04 (03.02.23)
$1529.04 (03.03.23)
$4.434.28 Wages Total
$911.81 Super Total
$314.04 Annual Leave
TOTAL AMOUNT OWING WITH ALL ENTITLEMENTS
$5660.13”
[55] Having regard to the payslips for the dates described above, I note that Ms Stevanovic’s
calculations are stated net of tax.
Consideration
[56] I have no hesitation in concluding that Mr Terrens was “dismissed” within the meaning
of s 386(1)(b) of the Act.
[57] The persistent failure to pay wages due and owing was a direct breach of a fundamental
term of the employment contract. The breach was not a minor or inadvertent breach but, by 9
March 2023, comprised three full pay periods ending 20 January 2023, 3 February 2023, and 3
March 2023, plus the unpaid public holidays outstanding from the payslip ending 6 January
2023, and the four further days’ work from 6 – 9 March 2023.
[58] Despite multiple demands for rectification in clear terms, the breaches were never cured.
To the contrary, in response to the demands, Mr Terrens was either met with no responses at
all or explanations and further promises that were never delivered upon. While Ms Stevanovic’s
explanations call into question whether her statements were simply dishonest, it is unnecessary
for me to make such a finding.
[59] It is sufficient to observe that, at common law, the question of whether there was a
sufficiently serious breach by Ms Stevanovic warranting an election by Mr Terrens to terminate
the contract is assessed objectively. Objectively, that criteria was satisfied.
[60] Mr Terrens elected to terminate the employment contract in response to Ms
Stevanovic’s breaches and, by doing so, the employment contract and employment relationship
came to an end. Within the language of s 386(1)(b), Mr Terrens was forced to do so.
[61] By 9 March 2023, there were more pay periods where Mr Terrens had not been paid
than those where he had been paid. The repeated promises made to him to make good his pay
all proved hollow. In no sensible way could Mr Terrens be expected to continue working in
circumstances where he had not been paid for past work and was unlikely to be paid for future
work.
[62] It also follows that Mr Terrens is entitled to notice for termination, which under the
Award and National Employment Standards was 1 week.
[2023] FWC 1562
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[63] While the events occurring after 9 March 2023 are not relevant to the above conclusions,
I note that Mr Terrens has still yet to be paid anything, even the amounts that Ms Stevanovic
herself acknowledges should be paid. The continuing failure to pay even the amounts Ms
Stevanovic concedes should be paid speaks poorly of her.
[64] I also note there is some dispute about what ought to be paid. I would strongly encourage
the parties to reach a practical resolution on those issues. If it assists, I set out my understanding
of the unpaid entitlements that remain owing:
• Pay period ending 20 January 2023 – net owed $1,376.20 ($1,570.20 gross).
• Pay period ending 3 February 2023 – net owed $1,529.04 ($1,775.04 gross).
• Pay period ending 3 March 2023 – net owed $1,529.04 ($1,775.04 gross).
• Wages for 6 – 9 March 2023 (24 hours) - $628.08 gross (no net amount is available)
• Christmas Day and Boxing Day 2022 holidays - $314.04 gross (no net amount is
available).
• 1 week (30 hours) notice for termination - $785.10 gross (no net amount is available)
• Unused annual leave at 29.53728 hours2 - $772.99 gross (no net amount is available).
• Superannuation.
[65] Ms Stevanovic’s calculations appear to incorrectly omit work after 3 March 2023, as
well as incorrectly omitting notice for termination, and the amount of $314.04 is unclear for
annual leave (noting the gross amount is $772.99). But otherwise the amounts are essentially
agreed, save that Mr Terrens seeks to be paid in gross figures (with him responsible for remitting
tax). On the question of tax, the primary responsibility rests with Ms Stevanovic and I
recommend that remain unchanged. While Mr Terrens’ concern that the tax might not in fact
be remitted to the Australian Tax Office is understandable, I recommend that he contact the
ATO to ensure such amounts get paid.
[66] I note that Mr Terrens’ calculations include an amount for 59 hours of travel time. I note
that clause 17.12 of the Award entitles Mr Terrens for payment (at the rate applicable at the
time they were working) for the time spent travelling between workplaces. If Mr Terrens has
undertaken such travel, he should be paid for it. I am unable to say for what travel, and for what
monetary amounts, payment should be made.
[67] The above is intended as guidance only but I encourage the parties, and Ms Stevanovic
in particular, to deal with those claims quickly.
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Disposition
[68] Otherwise, Ms Stevanovic’s jurisdictional objection that there was not a “dismissal” is
rejected. An order3 dismissing the jurisdictional objection will be issued in conjunction with
this decision. The matter will now be reallocated back to the Commission’s Registry and parties
will be informed in due course regarding the next steps
DEPUTY PRESIDENT
Appearances:
O. Terrens on his own behalf with K. Van Son assisting
V. Stevanovic on her own behalf
Determinative conference details:
2023.
Melbourne (and by Telephone):
July 6.
Printed by authority of the Commonwealth Government Printer
PR763685
1 Coles Supply Chain Pty Ltd v Milford and Another (2020) 279 FCR 591.
2 See payslip for period ending 3 March 2023.
3 PR763686
OF THE WORK C MMISSION THE SEAL
https://www.fwc.gov.au/documents/awardsandorders/pdf/pr763686.pdf
