DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Roxana Balgowan
v
City of Sydney RSL & Community Club Ltd
(U2017/4635)

Unfair dismissal - jurisdictional objection - s. 386 - employment terminated on initiative of employer - dismissal harsh, unjust and unreasonable - compensation Ordered.

[1] This Decision involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was made by Roxana Balgowan (the applicant). The respondent employer is City of Sydney RSL & Community Club Ltd (ABN: 16 890 016 822) (the employer or the Club).

[2] The application was filed at Sydney on 1 May 2017, and the employer filed a response on 9 May 2017. The application indicated that the date that the applicant was allegedly dismissed was 28 April 2017. The employer’s response stated that “The applicant resigned her employment on 10 April 2017.” Consequently, upon any construction of relevant events, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] The employer declined to participate in Conciliation of the claim, and the matter proceeded to arbitration in a Hearing held on 13 July 2017. The Hearing involved the taking of evidence in respect to both the jurisdictional objection raised by the employer, which involved the question of whether the applicant was a dismissed employee, and also the substantive merits of the application.

[4] At the Hearing, the applicant represented herself, as her previous representatives, “HR Experts” had filed a notice of representative ceasing to act on 11 May 2017. The applicant gave evidence as the only witness who was called to provide evidence in support of the claim. The employer was represented by Ms L Pike from the Registered Clubs Association of NSW T/A Clubs NSW. Ms Pike introduced evidence from three witnesses, including substantial material from the employer’s Human Resources Manager, Ms E Faaui.

Factual Background

[5] The applicant commenced employment with the employer on 26 October 2015. The applicant was engaged as a Customer Service Attendant working at the employer’s premises located at George Street, Sydney. The applicant worked as a casual employee engaged on a regular and systematic basis which involved engagement for “an average of approximately 30 hours per week.” 1 The work that the applicant performed involved a variety of general hospitality duties including bar attendant, café, cash box and gaming floor services. As part of her role, the applicant often performed cash handling duties.

[6] In December 2016, the applicant was provided with a warning about poor performance involving a cash handling discrepancy. This cash handling discrepancy occurred on 20 December 2016, when the applicant completed a shift in the “change box” and the reconciliation of her float identified a shortfall of $188.75. The applicant believed that this discrepancy was caused by her failure to properly record a member’s gaming pay-out on the computer system and this resulted in the amount of $188.75 being paid twice.

[7] In early 2017 the applicant became aware that she was pregnant and due to give birth in September 2017. The applicant decided that she would leave her employment at the end of July in preparation for the birth of her first child.

[8] On 5 April 2017, the applicant worked a night shift at the “change box” and at the completion of the shift she discovered a cash discrepancy involving a $100 shortfall with her float. The applicant reported this discrepancy to the relevant manager who noted that the applicant could not offer any explanation for the cash discrepancy, and he referred the matter to the HR Manager, Ms Faaui.

[9] Ms Faaui investigated the cash discrepancy and determined that the variance of $100 was the result of the applicant’s poor cash handling procedure. On 7 April 2017, Ms Faaui telephoned the applicant and advised her that she was not required to attend her rostered shift for 8 April, and instead she was to attend a meeting with Ms Faaui on 10 April 2017, held to discuss the cash handling discrepancy.

[10] The applicant attended the meeting with Ms Faaui on 10 April 2017. Ms Faaui and the applicant were the only two persons in attendance at the meeting, and there was considerable divergence in the respective recollections of the detail of the conversation that occurred during the meeting held on the afternoon of 10 April. Despite the conflicting evidence concerning the detail of the discussion during the meeting, certain significant aspects of the meeting were uncontested.

[11] The applicant could not provide Ms Faaui with any explanation as to the reason for the $100 cash discrepancy. The applicant offered to rectify the discrepancy by paying the $100 that was missing, but this was rejected by Ms Faaui. Ms Faaui then advised the applicant that she would be removed from her rostered “change box” shifts and required to undergo training before she would be provided with any further “change box” shifts. This meant that the only rostered shift that the applicant would work would be on Anzac Day, 25 April.

[12] The applicant advised Ms Faaui that the removal of her rostered “change box” shifts would provide her with an insufficient number of rostered engagements. The applicant said that she told Ms Faaui that the reduction in rostered shifts was unfair, and that she would go home. Ms Faaui said that the applicant said that she would “just go” and “I’ll just leave” and then when questioned further, Ms Faaui said that the applicant stated words to the effect of “Yes, it’s okay, I’ll resign. It’s fine.”

[13] According to the evidence provided by Ms Faaui, she told the applicant that it was a shame that she had decided to leave. However, she accepted her verbal resignation and thanked her for her time working at the Club. The applicant steadfastly rejected that she ever used the word “resign”, and further, she asserted that there was no suggestion of retraining for money handling procedures mentioned during the meeting. Ms Faaui conducted a brief exit interview which involved asking the applicant three pre-prepared questions, and then the applicant was asked to return her uniforms which involved the applicant providing a shirt and apron to Ms Faaui.

[14] Later that evening, at 10:18 pm, the applicant sent an email to Ms Faaui which requested her termination notice. On 12 April 2017, Ms Faaui sent the applicant a letter which was headed “Re: Confirmation of Resignation”. This communication relevantly stated that the employer accepted the applicant’s verbal resignation provided on 10 April 2017. The letter also advised that the employer did not require the applicant to work out a notice period and that she would be paid in lieu of notice.

[15] On 20 April 2017, the applicant sent an email to Ms Faaui which stated inter alia, that the applicant was; “shocked to read the contents within your email dated 12 April 2017” and “I want to make it extremely clear that at no point in time did I put forward a verbal resignation.” Further, this communication from the applicant stated that “… by not providing me with the usual regular shifts I have received from day one you have effectively terminated my employment.”

[16] Ms Faaui did not respond to the applicant’s email of 20 April but instead contacted Clubs NSW for assistance. On 28 April 2017, the applicant sent a further letter to Ms Faaui which was headed “Involuntary resignation”. The involuntary resignation letter from the applicant repeated much of the contents of the previous email of 20 April, and stressed that the applicant believed that she was left with no other option but to resign.

[17] Since the termination of the applicant’s employment she has engaged unsuccessfully in the pursuit of alternative employment as part of the requirements to receive Centrelink payments.

The Applicant’s Case

[18] The applicant relied upon a written outline of submissions and she also made brief verbal submissions during the Hearing.

[19] In summary, the applicant submitted that at no stage did she verbally resign from her employment, and she had no intentions to finish her employment before 31 July 2017. The applicant stressed that when she was told that her shift rostered for 8 April was cancelled, it was the first time that she had had a rostered shift removed. Further, the applicant stated that she was never asked if she wanted to have a witness present for the meeting held on 10 April.

[20] The applicant said that the main reason that she had made a claim for unfair dismissal was because she wanted to stand up for herself, and that she wanted what was right. Further, the applicant said that she had no personal animosity towards Ms Faaui and she was not suing the club for hundreds of thousands of dollars.

[21] The applicant submitted that she was going to leave her employment within a three month period from April to July and she was claiming that period of three months lost wages as remedy for her unfair dismissal.

The Employer’s Case

[22] Ms Pike from Clubs NSW made verbal submissions in elaboration of written material that had been filed on behalf of the employer. The written submissions made on behalf of the employer strongly maintained jurisdictional objection to the application on the basis that the applicant had not been dismissed as provided for by the definition contained in s. 386 of the Act.

[23] Ms Pike made submissions which referred to various cases that had considered the concept of constructive dismissal and which provided authority for the Law that had been developed. Ms Pike submitted that at no time was there any actions taken by the employer that would have led the applicant to the conclusion that there was no option but to resign. The submissions made by Ms Pike acknowledged that during the meeting held on 10 April 2017, the employer did discuss with the applicant the intention to retrain the applicant in cash handling to enable the applicant to be rostered in the cashbox in the future. Ms Pike also stressed that the applicant was being provided with at least one shift remaining on the current roster, which was not a shift in the cashbox, and which the applicant could perform without undergoing cash handling training.

[24] The submissions made by Ms Pike stressed that the critical issue for determination of the matter was whether or not the applicant resigned from her employment, or if, in the alternative, the applicant’s employment was terminated at the initiative of the employer. Ms Pike submitted that the evidence established that the applicant resigned her employment during the meeting held with Ms Faaui on 10 April 2017. Further, according to the submissions made by Ms Pike, the evidence established that there was no action on the part of the employer which was either intended to bring the employment relationship to an end, or had the probable result of bringing the employment relationship to an end.

[25] Ms Pike further submitted that the circumstances that were conveyed to the applicant during the meeting of 10 April 2017, involved a temporary removal of the applicant from shifts that involved cash handling. Further, it was clear that the applicant was being offered at least one further rostered shift on 25 April, and Ms Pike submitted that the employer’s conduct was not the conduct of an employer who sought to construct the dismissal of an employee that it no longer wished to employ.

[26] In further submissions, Ms Pike stressed that it was not reasonable or viable for the applicant to continue to perform “change box” duties while she was awaiting her retraining. In these circumstances, according to the submissions made by Ms Pike, the Club didn’t see that there was an alternative to removing those shifts that the applicant was rostered for duties that involved the cashbox. Ms Pike submitted that the applicant had not been constructively dismissed, and the application for unfair dismissal remedy should be dismissed by the Commission.

Consideration

[27] Section 385 of the Act stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

[28] In this case there was a jurisdictional objection raised in respect to that element contained in subsection 385 (a) of the Act, specifically whether the applicant was a person who had been dismissed. The question of whether or not a person has been dismissed from employment involves mixed findings of both fact and law. Further, section 386 of the Act prescribes a meaning of “dismissed”. Relevantly, sub-section 386 (1) of the Act is in the following terms:

“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.”

[29] In this instance, the applicant asserted that she did not resign during the meeting with Ms Faaui on 10 April 2017. However, the employer has sought to rely upon the alleged verbal resignation of the applicant which was said to have been provided during that meeting. Although the applicant subsequently provided a letter of “Involuntary Resignation” on 28 April, the determination of this matter turns upon an examination of the circumstances that developed during the meeting of 10 April 2017.

[30] The employment of the applicant ceased at the end of the meeting of 10 April, and this was adequately confirmed by the applicant returning her work uniform to the employer. There was considerable contest about exactly what was, and was not, said by the two women during the meeting of 10 April. In particular, the applicant was adamant that she did not use the word “resign”, while Ms Faaui was equally resolute about the applicant providing a verbal resignation during the meeting. Whether or not the word “resign” was actually uttered by the applicant is not a question that has necessarily required determination.

[31] On any version of the event, the applicant rejected the changes that Ms Faaui imposed on the employment. Consequently, the question that does require resolution is whether the applicant was entitled to reject the changed employment conditions imposed by Ms Faaui during the meeting on 10 April. Therefore, although the employer may not have taken any action to overtly dismiss the employee, but instead it changed the employment circumstances, could such changes permit the applicant to appear to resign on the basis of a rejection of the changes to the employment? These circumstances are comprehended by what is often described as a constructive dismissal, in that it is asserted that even if it was not the conscious intention of the employer to have the applicant resign from employment, it was the action or actions of the employer that essentially compelled the applicant to resign.

[32] The concept of constructive dismissal involves an analysis of a variety of different circumstances which ultimately establish that the actions of the employer rather than the employee caused the employment to come to an end, even though the employer may not have taken any action to putatively dismiss the employee. An analysis of the circumstances that can be established by the uncontested aspects of the evidence of the meeting of 10 April, is conveniently explained by the learned authors of the often quoted source book, Macken’s Law of Employment  2 and the following passage from that text is particularly apposite to the circumstances in this instance:

“Alternatively, the employee may, in certain circumstances, treat herself or himself as discharged from further performance of the contract, and leave the employment without giving the requisite notice. This course will be justified where the conduct of the employer amounts to a repudiation of the contract, that is, the employer’s breach or proposed breach is sufficiently serious to allow the employee to regard herself or himself as discharged from further performance of the contract. The term “constructive dismissal” is often used to describe this situation.”

[33] Consequently, the circumstances in this instance can be properly construed to represent an alleged constructive dismissal where the resignation given by the applicant was a direct reaction to the actions of the employer. In such circumstances, the conduct of the employer must be carefully examined so as to establish whether it was sufficiently serious so as to be an egregious breach of the contract of employment which represented a repudiation of the contract of employment. If the evidence established that the employer’s conduct was such an egregious breach, proper basis would exist so as to permit the applicant to regard herself as discharged from further performance of the contract. In such circumstances, the applicant would be constructively dismissed.

[34] There is a significant amount of case law authority on the question of constructive dismissal. One case which is often referred to is that of Mohazab v Dick Smith Electronics (No2) 3 (Mohazab) which succinctly summarised the concept of constructive dismissal as follows:

“However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.” 4

[35] In Mohazab, the Full Bench of the Court also referred to another authority in the case of Allison v Bega Valley Council  5 (Allison). The following extracts from the decision in the Allison case are particularly helpful for application in the present circumstances:

“Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?”

and

“In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee...”

[36] In the present case, the applicant rejected the changes to the employment that were imposed by Ms Faaui during the meeting held on 10 April. The basis for the applicant’s rejection of the changed employment circumstances was neatly summarised by the hand written notes that were made by Ms Faaui at the time, and which included; “Roxy resigned stating that she would not have enough shifts.” 6

[37] The change that Ms Faaui imposed upon the applicant’s employment involved her removal from all rostered shifts that involved work in the “change box”. This alteration was said to have been necessary because of the second instance involving a cash handling discrepancy, and the need to have the applicant undergo training to improve her cash handling procedure. However, this change would result in a reduction of at least about 75% in the applicant’s remuneration. Further, although there was contest as to whether any mention was made of having the applicant undergo training in cash handling, the reduction in remuneration was recorded by the notes made by Ms Faaui to be for a period of “up to 3 months”. 7

[38] As previously mentioned, if upon objective analysis, the actions of the employer which involved changes to the employment were so egregious as to represent the repudiation of the employment, then the applicant would be able to treat the employment to be at an end. On any reasonable and objective contemplation, an indefinite reduction in remuneration of at least 75% would represent a repudiation of the employment which the applicant could properly reject.

[39] Consequently, it was the actions of the employer which brought the employment to an end. The decision by the employer to remove the applicant from regularly rostered engagements in the “change box” resulted in a 75% reduction in remuneration for the applicant. The applicant was entitled to reject an alteration to the employment of such significance, and to treat the actions of the employer as a repudiation of the employment. Therefore the applicant was constructively dismissed.

Conclusion

[40] The determination of this matter has involved a contest about whether or not the applicant was a person dismissed from employment. Upon application of the relevant tests and an analysis of the evidence involving the circumstances of the termination of employment, it has been established that the applicant’s employment was terminated on the employer’s initiative. To the extent that the actions of the applicant involved her resignation from employment during the meeting held on 10 April 2017, the applicant was forced to resign from her employment because of conduct engaged in by her employer.

[41] Unfortunately, the employer failed to appreciate that its decision to remove the applicant from all rostered engagements involving work in the “change box” involved such significant change to the employment as to amount to dismissal from employment. The conduct of the employer was the true initiator of the termination of employment as the changes imposed a reduction in remuneration of at least 75%, and such significant change when objectively and properly considered, was plainly incompatible with the continuation of the employment.

[42] Consequently, a careful analysis of the circumstances in this instance has established that it was the actions of the employer that operated as the real and effective initiator of the termination of the employment. The applicant was a person dismissed from employment, and the jurisdictional objection as advanced by the employer must be dismissed.

[43] Further, as the applicant was a dismissed employee and a person protected from unfair dismissal, the dismissal which involved circumstances of a second, but unexplained cash handling discrepancy, did not provide valid reason for dismissal. Further, the dismissal of the applicant has been assessed against all of the criteria contained in s. 387 of the Act.

[44] In summary, the dismissal of the applicant was without valid reason involving established misconduct or capacity inadequacy. Further, the dismissal was implemented by way of an unreasonable and unjust process. Consequently, upon analysis of the various factors that are identified in s. 387 of the Act, an objective and balanced evaluation of all of the relevant circumstances provides compelling basis to establish that the dismissal of the applicant was harsh, unjust and unreasonable.

[45] Therefore, the applicant’s claim for unfair dismissal remedy has been established.

Remedy

[46] The applicant did not seek reinstatement as a remedy for her unfair dismissal. The applicant sought compensation which was confined to 3 months of lost remuneration that she anticipated receiving before she intended to resign from her employment in preparation for the birth of her first child.

[47] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.

[48] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that were established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket 8 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 9.

[49] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.

[50] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.

[51] There was no evidence that an Order of compensation would impact on the viability of the employer’s enterprise.

[52] The applicant had approximately 18 months of service. The applicant would have been likely to have received remuneration of approximately $847.89 per week if she had not been dismissed.

[53] The employment of the applicant would not have continued beyond her anticipated resignation date of 31 July 2017.

[54] Following the dismissal, the applicant has attempted unsuccessfully to mitigate the loss suffered because of the dismissal.

[55] Thirdly, in this instance there was no established element of past misconduct of the applicant which can be said to have contributed to the employer's decision to dismiss.

[56] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[57] Consequently, for the reasons outlined above I have decided that an amount approximating with 16 week’s remuneration should be provided as compensation to the applicant. That amount is $13,566.00. Accordingly, separate Orders [PR594678] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Ms R Balgowan appeared unrepresented.

Ms L Pike of the Registered Clubs Association of NSW T/A Clubs NSW appeared for the employer.

Hearing details:

2017.

Sydney:

July, 13.

 1   Exhibit 4 @ paragraph 6.

 2   Macken’s Law of Employment , [Sappideen et al,] Seventh edition, Lawbook Co. @ [9.20] page 346.

 3   Mohazab v Dick Smith Electronics Pty Ltd (No.2), (1995) Industrial Relations Court of Australia, 62IR 200.

 4   Ibid @ page 207.

 5   Allison v Bega Valley Council, (1995) Full Commission of the Industrial Relations Commission of NSW, 63IR 68.

 6   Exhibit 4 – Annexure E.

 7   Exhibit 4 – Annexure E (page 2).

 8   Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.

 9   Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR594677>