[2013] FWC 3144

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FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal

Ms Hanina Rind
v
Australian Institute of Superannuation Trustees
(C2013/257)

COMMISSIONER LEWIN

MELBOURNE, 31 MAY 2013

Constructive dismissal- parental leave- Enterprise Bargaining Agreement- right to request part time employment- request not to be unreasonably refused- employer refusal- assessment of refusal- reasonable or otherwise- refusal unreasonable- employee treating employment at an end- employee constructively dismissed

Introduction

[1] Ms Hanina Rind has made an Application pursuant to s.365 of Fair Work Act 2009 (the Act). The Application is made in respect of the termination of the employment of Ms Rind with Australian Institute of Superannuation Trustees, a Company limited by guarantee, (the Company).

[2] The matter was heard on 20 May 2013 in Melbourne. At the hearing Ms Rind was represented by Ms Teffaha, a workplace relations consultant. The Company was represented by Mr Thomas Page of the Victorian Employers’ Chamber of Commerce and Industry (VECCI), of which the Company is a member. When deciding to grant permission for Ms Rind to be represented by an agent, pursuant to s.596 of the Act, I considered that doing so would enable the matter to be dealt with more efficiently, having regard to certain jurisdictional issues which were raised by the Company and which are complex in nature.

[3] Evidence was heard from the Applicant, Ms Rind, and from a Representative of the Company, Ms Maryann Mannix-White, Executive Manager Business Operations & Company Secretary of the Company.

Jurisdictional Objection

[4] The Company objected to the Commission dealing with the Application because it submits that Ms Rind is not a person who has been dismissed from her employment with the Company.

[5] The provisions of s.365 are set out below:

365 Application for the FWC to deal with a dispute

[6] It will be observed that for Ms Rind’s application to be made in accordance with the Act Ms Rind must be a person who has been dismissed.

[7] The Company submits that Ms Rind was not dismissed from her employment ‘in accordance with the Act’s definition’. The reference in this submission to the Act’s ‘definition’ is a reference to s.386 of the Act which operates in respect of Protection Against Unfair Dismissal 1, which is a different statutory code to the General Protections2 provisions of the Act in respect of which Ms Rind’s Application is made. I will return to this aspect of the Company’s submissions in due course.

[8] The provisions of s.386 of the Act are set out below:

386 Meaning of dismissed

[9] Ms Rind submits that she was constructively dismissed because there has been ‘a breach of the implied term of trust and confidence in the AIST Enterprise Agreement’ 3. It is necessary to disentangle three legal concepts within this submission. The first concerns the common law concept of constructive dismissal. The second concerns the common law concept of a term of mutual trust and confidence implied by law as part of a contract of employment. The third concerns the operation of employee entitlements in an Enterprise Agreement made pursuant to the Act on the contract of employment between Ms Rind and the Company and in relation to “constructive dismissal”.

[10] Ms Rind was employed by the company in the position of Database/IT Systems Administrator. Ms Rind commenced her employment in August 2009. Ms Rind was employed on a full time basis and attended the workplace at Spring St Melbourne, Monday to Friday.

[11] In February 2009, to accommodate family responsibilities arising from the birth of her first child, Ms Rind and the Company agreed that she could perform her work from home on one day per week.

[12] Sometime thereafter Ms Rind became pregnant with a second child and proceeded on a period of parental leave. It was submitted by the Company that this period of parental leave would be comprised of a six week period in which payment was made, followed by a period of unpaid leave. In late 2012 Ms Rind began discussions with the Company to manage her return from this parental leave, the discussions included Ms Mannix- White.

Enterprise Agreement

[13] Ms Rind’s employment was subject to an Enterprise Agreement approved by Fair Work Australia, namely the Australian Institute of Superannuation Trustees Certified Agreement 2009 (the Enterprise Agreement), which was tendered by the Company. It was a term of the Agreement that the terms of the Insurance Industry Award 1998 were expressly incorporated as terms of the Agreement.

[14] Clause 21 of the Agreement provides an entitlement to parental leave which included maternity leave. Clause 21.1.1 provides that employees are entitled to parental leave ‘and to work part-time in connection with the birth or adoption of a child’.

[15] Clause 21.6 of the Agreement is in the following terms:

21.6 Right to Request

Return from unpaid maternity leave

[16] On 28 September 2012, Ms Rind meet with Maryann Mannix-White and Ms Kylie Jewell to discuss her return from unpaid parental leave. There was discussion of a gradually escalating return to work, commencing with two days per week in November to be followed by three days per week in December with a possible return to full time work in late January 2013.

[17] It was suggested by the Company that a return to work on a full time basis in late January 2013 was agreed at the meeting on 28 September 2012. Ms Rind’s evidence does not confirm formal agreement on that aspect of the return to work arrangements. For reasons which will become clearer below, I doubt whether or not this aspect of the discussion was settled conclusively at the meeting is critical to the determination of this matter. Nevertheless, I prefer the weight of Ms Rind’s evidence that the discussion on this point was, inconclusive or provisional. It may well be that the Company’s assumption that agreement was arrived at was genuine and not unreasonable in the circumstances but subjective. In any event, following that meeting a request was made by Ms Rind concerning her return to work under Clause 21.6 of the Agreement.

[18] On 6 October 2012, Ms Rind received a letter from the Company stating that she agreed to return to full time work with the Company on 21 January 2013.

[19] On 15 October 2012, Ms Rind indicated in an email that she had considered the proposal for a return to full time work in late January and indicated that she wished to work part time. Ms Rind explained the reasons for this, which were based upon her parental responsibilities. On what is before me there is no suggestion that these responsibilities were not genuine. The contents of that email from Ms Rind to the Company are set out below.

[20] Ms Rind was requested to make a formal request accordingly and did so on 26 October 2012. The email formally requesting part time work is in the following terms:

[21] On 29 October 2012, The Company refused Ms Rind’s request in the following terms:

[22] Having regard to the right to request part time employment prescribed by Clause 21.6.1(c) it is necessary to consider, in light of the evidence, whether or not the refusal of Ms Rind’s request for part time employment was based on reasonable grounds related to the effect on the workplace or AIST’s business. This is so because it was the effective continuing refusal to permit Ms Rind to return to work on the part time basis which caused the employment to come to an end. When doing so, it will be appropriate to consider the grounds which might be considered as reasonable grounds for the Company to have refused Ms Rind’s request, as set out in the final sentence of Clause 21.6.2 of the Agreement. It is noted that those grounds are not exhaustive of what might be considered reasonable grounds for the purposes of Clause 21.6.2 of the Agreement.

[23] There is no doubt that the request to work part time was recorded in writing as required by Clause 21.6.3 of the Agreement and was made no less than seven weeks prior to the date on which Ms Rind was due to return to work from unpaid parental leave. Moreover, I consider that, in the circumstances, the request can be characterised as having been made “as soon as possible”, for the purposes of Clause 26.3.4 of the Agreement.

[24] Between the Company’s refusal of Ms Rind’s request and the final communication between Ms Rind and the Company concerning the end of the employment relationship attempts at various arrangements were made for Ms Rind to return to work, unsuccessfully. However, Ms Rind’s request of 26 October 2013 to work part time was not granted in the course of those attempts. All proposals of the Company were either equalling attendance of five days of the week or otherwise conditional in nature.

[25] At this point, it is appropriate to observe and in due course consider the provisions of the Agreement for the settlement of disputes over the application of the terms of the Agreement, for reasons which will become clearer.

[26] The Dispute Settlement Procedure to the Agreement is set out below;

32. DISPUTE RESOLUTION PROCEDURE

32.1.1 If a dispute arises about:

workplace rights have been breached); the parties to the dispute will attempt to resolve the dispute at the workplace level by discussions between the employee or employees and the relevant supervisors and / or management.

32.1.2 As soon as is practicable after the dispute or claim has arisen, the employee will take the matter up with their immediate manager affording them reasonable opportunity to remedy the dispute or claim.

32.1.3 Where the attempt at settlement has failed, or where the dispute or claim

is of such a nature that a direct discussion between the employee and their immediate manager would be inappropriate, the employee will immediately take the matter up with their next level manager.

32.1.4 If the matter remains unresolved in so far as either party is concerned, the Chief Executive Officer will be notified and will attempt to resolve the dispute or claim.

32.1.5 Where steps 32.1.2 to 32.1.4 have failed to resolve the matter or where the dispute or claim is of such a nature that a direct discussion between the employee and their Manager and/or the Chief Executive Officer would be inappropriate, the employee may notify a duly authorised representative of the Finance Sector Union or other employee nominated representative who, if the representative considers that there is some substance to the dispute or claim, will take the matter up directly with Australian Institute of Superannuation Trustees;

32.1.6 Notwithstanding step 32.1.5, an employee who is a Finance Sector Union member may contact the Union office or workplace Union representative for representation at any stage of the procedure;

32.2 If the matter cannot be resolved at the workplace level, a party or their representative may refer the dispute to Fair Work Australia for resolution using any of its powers (including powers under section 739(4)). This includes the power to arbitrate any dispute.

32.3 Union members are entitled to be represented by their union at any stage of this process. Non-members are entitled to be represented by any representative of their choice. Australian Institute of Superannuation Trustees shall recognise the representative for all purposes involved with the resolution of the dispute.

32.4 The parties to the dispute and their representatives must act in good faith in relation to the dispute.

32.5 Without prejudice to either party, all work will continue in accordance with the status quo as it existed prior to the dispute while the matters in dispute are being dealt with in accordance with this clause.

32.6 The parties to the dispute agree to be bound by a decision made by Fair Work Australia in accordance with this term.

32.7 None of the above procedures shall restrict a party to a dispute (or their representative) from referring a dispute to Fair Work Australia for resolution at any stage.

32.8 A decision that Fair Work Australia makes when arbitrating a dispute is a decision for the purpose of Div 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.

[27] Ms Rind attempted to resolve the dispute concerning her request to return to work part time in accordance with the terms of the Enterprise Agreement by dealing with Ms Mannix-White who, on the evidence before me, would seem to be her immediate manager, and in my judgement, between October 2012 and January 2013 provided Ms Mannix-White with a reasonable opportunity to deal with the dispute. On the evidence before me, the matter was notified to the Acting Chief Executive Officer, Ms Tanya Reynolds, by Ms Mannix-White. Ms Rind also obtained representation from the Finance Sector Union who dealt with Ms Mannix-White on her behalf. Subsequently Ms Rind was represented by Ms Teffaha.

[28] Beyond attempting to resolve the dispute at the workplace level with her immediate manager and the contemplated notification to the Chief Executive Officer, obtaining representation from the Finance Sector Union, and the union taking the matter up with the Company, Clause 32.2 of the Agreement provides that a party ‘may’ refer a dispute to Fair Work Australia. Neither Ms Rind nor the Company exercised their respective discretion to refer the dispute to Fair Work Australia.

[29] The employment relationship ended as a consequence of, the Company refusing Ms Rind’s request to work part time and Ms Rind deciding that the employment was no longer viable. The circumstances are captured in two letters from the Company to Ms Rind and Ms Teffaha in response to representations on Ms Rind’s behalf which are referred to therein. The contents of these letters are as follows;

[30] It is appropriate to note that the proposals in this letter commencing “As a sign of good faith” follow Ms Teffeha’s previous email on behalf of Ms Rind, referred to at the first italicised paragraph, is set out below.

[31] The second letter of the Company was as follows:

[32] It is necessary to say something about the reference in this letter to what the Company refers to as the part time job share option.

[33] The Company had agreed to explore the possibility that Ms Rind could return to work part time, on the condition that it was able to find a suitable candidate to share the role of Database/IT Systems Administrator to a full time equivalent, so that either Ms Rind or the prospective candidate would work two or three days per week respectively.

[34] In my view, the conditional nature of this agreement in the factual circumstances of the case can be considered as a refusal of Ms Rind’s proposal request to work part time, for reasons which I hope will become, effectively, clearer below. Before departing from this subject, it is informative to consider what the necessary circumstances would be which would reasonably prevent Ms Rind from returning to work on a part time basis for three days a week while the recruitment of an additional part time employee for two days proceeded. That issue is addressed by what follows.

Constructively dismissed.

[35] The Common law concept of constructive dismissal is of long standing and was discussed by Allsop J in Thomson v Orica 5 and Driver FM in the case of Howe v QANTAS Airways Limited6 at paragraph 6 thereof.

[36] In my view, a radical distillation of the relevant legal principles which characterise a constructive dismissal is that an employee is entitled to leave their employment in circumstances where conduct of their employer is sufficiently inimical to the continuation of the contract of employment and the employment relationship.

[37] For my purposes the word inimical should be given its ordinary meaning. Inimical conduct will be conduct which is adverse, unfriendly or hostile to the contract of employment and the employment relationship. Given the breadth of such a concept it would seem self evident that individual cases will turn very much on their own facts, including the specific nature of the contractual relationship between the employer and employee and any other legal governance of the rights, duties and obligations of the parties to the contract and the employment relationship.

[38] In any given factual matrix the task of a court or tribunal will be to objectively assess an employer’s conduct as a whole and determine whether, judged reasonably and sensibly, relevant conduct of an employer was so harmful, adverse or unfriendly to the contract of employment and the employment relationship that the employee could not be expected to put up with it. 7

[39] In order to consider whether the Company reasonably refused Ms Rind’s request to return to part time work in accordance with Clause 21.6.1(c) of the Agreement it is appropriate to have regard to and evaluate that refusal in the circumstances, as revealed by the evidence before me.

[40] Basically, Ms Mannix-White’s evidence is that the Company sought to have Ms Rind return to full time employment because in her absence her role had been contracted to an external service provider for 12 hours per week and this had not proved entirely satisfactory. In addition, the letter of the Company set out above makes clear that the position of the Executive Team of the Company was for Ms Rind to return to full time employment for various reasons. However, that expression of the Company’s position must be objectively considered having regard to the actions of the Company in relation to the ongoing arrangements for the performance of the role Ms Rind performed. The letter portrays a situation where the Company is in imperative need of full time performance of the Database/IT Systems Administrator role at Spring Street.

[41] Of relevance is Ms Mannix-White’s evidence that, since the employment relationship came to an end in late January, the arrangement for provision of externally contracted services for limited hours has been continued. Additionally, it was conceded by the Company, that this arrangement with occasional or possible extension to 15 hours a week remains the case.

[42] There was no evidence of an attempt to recruit a full time Database/IT Systems Administrator to fill Ms Rind’s role since the employment came to an end, no such advertisement of the position has occurred, no recruitment service provider has been engaged to fill the position and no internal promotion has occurred. Nor, on what is before me, is there any intention to do any of these things. Nor has the Company increased the level of service provided by the external contractor to the equivalent of what would be provided by a full time employee. All of this was put by me to Mr Page and was not refuted.

[43] A reasonable conclusion therefore is that despite some frustration with the service provided by the external contractor the Company, notwithstanding the content of the letter to Ms Rind dated 29 October 2012, has been operating on what can be reasonably construed as a ‘part time’ performance of the Database/IT Systems Administrator for some considerable time and intends to continue accordingly for the foreseeable future.

[44] While no figures were mentioned Ms Mannix-White gave evidence that the ongoing cost of the external provider is greater than if Ms Rind had returned to work on a part time basis.

[45] While the terms of Clause 21.6 refer to a lack of adequate replacement staff as a potential ground for refusal of Ms Rind’s part time employment request this must be considered in context.

[46] The choice of the Company not to pursue a full time temporary replacement employee or full time external service provider during Ms Rind’s maternity leave and not to fill the position since January 2013, with no intention of doing so as of late May 2013, contextualises what should be considered in relation to adequate replacement staff. In my objective judgement, the Company has made a decision, despite what Ms Mannix-White referred to as some ongoing frustration with the limited level of external service provision of the role of Database/IT Systems Administrator, to persist with an allocation of resources to the role of less than a full time employee equivalent, by the limited engagement of a contracted service provider.

[47] On my consideration of the evidence, Ms Rind’s request to work part time for three days per week would most likely have provided a greater number of hours of work performing the Database/IT Systems Administrator role than are currently provided by the contractor service provider. Ms Rind in my objective judgement, could have more than adequately replaced the external service provider had her request been granted. Rather than making Ms Rind’s return to part time work conditional upon recruitment of another part time employee, which in my objective judgement was unreasonable, it would have been reasonable to have Ms Rind return to work for three days a week in late January. If the further resources were required that could have been achieved by subsequent recruitment or contracted services. However, it is clear that the Company has continued to provide part time equivalent performance of Ms Rind’s role.

[48] Finally, the refusal of Ms Rind’s request to work part time would not seem reasonably based in relation to the impact on customer service. The nature of the role would seem to impact on internal customers, presumably with potential consequential effects on the delivery of the Company’s service to its clients. On the evidence, it is not possible to judge that the primary impact on the customers referred to in Clause 21.6.2 of Ms Rind’s request to work part time for three days per week would have been adverse had it been granted in the circumstances, given that Ms Rind was an experienced employee of the Company and would have provided a greater number of hours of work in the role than was being delivered in a not entirely satisfactory manner by an external service provider.

[49] Taking all of the above into account, I consider that the Company’s refusal to grant Ms Rind’s request to work three days per week was not reasonable.

[50] In my judgement, there is a presumptive element to the provisions of Clause 21.6 of the Agreement such that an employee returning from unpaid parental leave will be able to work part time until the child in respect of which the leave was available reaches school age, unless there are reasonable grounds upon which that part time employment can be refused. Those grounds must be objectively based and objectively judged. The presumptive element is reinforced by the terms of Clause 21.1.1 of the Agreement. The position of the Company for Ms Rind to work full time, of itself, does not displace that presumption. Particularly, having regard to the evidence that the Company has chosen to continue with part time equivalent service provision.

[51] In my view, once a request is made and refused under Clause 26.1 of the Agreement it will be necessary for the Company to be able establish the reasonableness of the refusal on an objective basis. On my critical evaluation of all the circumstances revealed by the evidence, including the Company’s position, I judge the refusal of the request not to have been reasonable.

[52] The Enterprise Agreement governs the employment relationship between Ms Rind and the Company, while the terms of the Enterprise Agreement are not to be confused with the common law contract of employment, failure to carry out the Company’s obligations under the Enterprise Agreement is, in my view, relevant conduct of the employer which can be taken into account when considering whether or not Ms Rind was constructively dismissed. In my view, this conclusion is supported by the approach taken by Allsop J in Thomson v Orica 8 The question reasonably arises as to whether Ms Rind was required to put up with a persistent and unreasonable refusal of her request to work part time which was in accordance with the Enterprise Agreement.

[53] What will be sensibly and reasonably judged to be conduct inimical to the contract of employment and the employment relationship must have regard to the gravitas of the relevant conduct. While rights to parental leave may be of recent origin in the long history of employment in Australia the right in this case is no small thing. Ms Rind’s parental circumstances fundamentally affected her capacity to work for the Company. The practical necessity of her right not to have her request to work part time until her second child reached school age unreasonably refused was essential for her continued employment to be viable. The parenting of her children was a matter of fundamental importance to her capacity to give efficacy to the contract of employment, which was formally recognised in the Enterprise Agreement.

[54] While an opportunity for part time work on return from parental leave might not long ago have been considered a fortunate privilege, in my judgement, contemporary circumstances require a different view. Indeed, the importance of parental leave and in particular leave in relation to maternity has become a matter of vital public interest in various ways reflected in the Act and in the Award system. The matter variously attracts general legislative proposals in the public interest. Entitlements of employees are likely to vary and will be of great importance to pregnant women who conceive children while in employment.

[55] When judging the weight of the inimical conduct of unreasonably refusing Ms Rind’s request to return to work part time in the particular circumstances of this case the gravitas or seriousness of that conduct should be viewed from the contemporary vantage point, which affords considerable importance to the ability of women to give birth to children without foreclosing their employment due to the consequences of family formation.

[56] Given the factual circumstances of the unreasonable refusal to grant Ms Rind’s part time employment request, I am satisfied that the Company engaged in a course of conduct that justified Ms Rind treating the employment at an end because there was an unreasonable refusal to perform the Company’s obligations to Ms Rind under the terms of the Enterprise Agreement. Accordingly, I find that Ms Rind was constructively dismissed.

[57] Alternatively, or concurrently, the Company engaged in a course of conduct which forced Ms Rind to resign, if the letter of her representative can be considered a resignation on her behalf. Either way, Ms Rind was constructively dismissed at common law and, in accordance with the definition of a dismissal as prescribed by s.386 of the Act, in the latter case because the Company, knowing the practical impossibility of Ms Rind working full time, forced Ms Rind to “resign”, through her Representative after being informed that if she did not return to work on a full time basis she would be deemed to have abandoned her employment.

[58] As a consequence of these findings, I consider Ms Rind was constructively dismissed from her employment by the Company and was consequently able to make the application in this matter.

[59] Earlier I referred to the dispute resolution procedure term of the Enterprise Agreement. I am mindful of Clause 32.2 of the Enterprise Agreement which provides that an employee of the Company may refer a dispute to Fair Work Australia. Neither Ms Rind or the Company elected to refer the dispute accordingly. The issue which arises for consideration is the election of Ms Rind not to refer the dispute accordingly and consideration of the impact of that election upon the circumstances of the inimical conduct of the Company, which gave rise to Ms Rind treating the employment as at an end. The issue concerns the judgement of the gravitas of inimical conduct of the Company as I have found it in light of this provision of the Enterprise Agreement.

[60] Had the word ‘may’ not appeared in Clause 32.2 of the Enterprise Agreement, but rather in its place the word ‘shall’ had been used, I would conclude that Ms Rind was obliged to refer the dispute and by not doing so had herself repudiated the contract of employment and the governing effect of the Enterprise Agreement on the employment relationship.

[61] However, care must be taken when construing a dispute settlement procedure which creates enforceable legal obligations upon parties for the determination of their rights under an Enterprise Agreement.

[62] Importantly, the terms of the Enterprise Agreement should not be re-written. The parties to the Enterprise Agreement have made a specific compact, to the effect that referral to Fair Work Australia by either of them, is an election which each of them may or may not make, discreetly.

[63] I consider it would be contrary to this clear choice of what the Enterprise Agreement should relevantly provide for the determination of the parties rights to read into the Enterprise Agreement a de facto obligation to refer a dispute which is unresolved by other means provided for by Clause 32 of the Enterprise Agreement to Fair Work Australia. To proceed as if that were the mandatory effect of a term of the Enterprise Agreement for the determination of the parties legal rights in the respect of the Enterprise Agreement is not permissible. In my view, the optional characteristic of Clause 32.2 of the Enterprise Agreement should be respected. Moreover, if the contrary approach is considered it would require that the Company should have referred the dispute to Fair Work Australia before sending the letter of 24 January 2013 to Ms Rind. It did not. Had it done so Ms Rind would have been bound by Clause 32.6 of the Enterprise Agreement. In my view, the fact that neither party referred the dispute accordingly neutralises any consideration attaching to the right to refer the dispute about the reasonableness of the Company’s refusal to grant Ms Rind’s request to return to work part time for my purposes.

[64] For all of these reasons I dismiss the Company’s jurisdictional objection to Ms Rind’s application. The application will be listed for a Conference before the Commission.

COMMISSIONER

Appearances:

S Teffaha on behalf of the Applicant

T Page on behalf of the Respondent

Hearing details:

Before Commissioner Lewin

2013

Melbourne:

20 May.

Final written submissions:

Applicant - 16 May 2013.

Respondent - 13 May 2013.

 1   Fair Work Act 2009 (Cth) Part 3.2, Div 2.

 2   Ibid. Part 6-1, Div 3.

 3   Ph 2.2(1) F8 Original Application.

 4   Mr Richard Webb is a

 5   [2002] FCA 939 at [141].

 6   [2004] FMCA 242.

 7   Blaikie v South Australian Superannuation Board (1995) 65 SASR 85.

 8   [2002] FCA 939 at [141].

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