[2018] FWC 1610

The attached document replaces the document previously issued with the above code on 28 March 2018.

The catchwords in the decision header have been updated.

Edrea Venal

Associate to Senior Deputy President Hamberger

Dated 29 March 2018

Fair Work Act 2009
s.394—Unfair dismissal

Matthew Niven
v
Dash Digital Media Pty Ltd T/A Tiger Nutrition
(U2017/13090)

Application for an unfair dismissal remedy – jurisdictional objection that applicant was not dismissed – applicant not dismissed – jurisdictional objection upheld – application dismissed.

[1] Matthew Niven (the applicant) filed an application on 10 December 2017 for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Cth) (the FW Act) in relation to the alleged termination of his employment by Dash Digital Media Pty Ltd T/A Tiger Nutrition (the respondent) on 21 November 2017.

[2] The respondent raised a number of jurisdictional objections, the primary one being that the applicant resigned voluntarily and therefore was not dismissed.

[3] I held a hearing in Sydney on 12 March 2018 to consider the respondent’s jurisdictional objections. The applicant, who appeared by video link, represented himself. The respondent was represented by its chief executive officer, Izhar Basha.

The evidence

[4] The applicant submitted that the respondent made his working conditions unbearable, to the point where he felt he had no choice but to leave. 1

[5] The applicant said in his evidence to the Fair Work Commission (the Commission) that he had moved from Cairns to Sydney to take up his role with the respondent. He said he thought the position was to be a sales role, working on the road, building and establishing relationships with new and existing clients, but when he arrived the role was ‘vastly different’. He said that he did his best, but was then ‘demoted’ to a role located away from the office after having complained of being bullied. He said that after being relocated, he was then ‘forgotten about’ and given inadequate support. He said that Mr Basha was often unavailable, constantly overseas, and non-responsive to his messages and attempts at communication. He added:

‘Then at a point, I had been moved from a social environment into a non-social environment where I was isolated in a store by myself, for many, many hours at a time, and I feel that I was forced to leave because I didn’t fit into the working community.’ 2

[6] On 29 October 2017, the applicant had the following conversation via text message with the chief financial officer of the respondent, Ted Sarkis:

‘[Mr Niven:] Good afternoon Ted,

I have asked on many occasions for a number of things that will improve the way this business operates and streamline processes that are hindering me in achieving the task given to me by yourself and Izhar.

As of Friday Superior Supplements called me to inform me that they have cancelled DNA’s credit account due to invoices being so far past due and inconstancy of payment in the past.

I feel that it imperative that I mention this, I am on the verge of resigning from my position due to the continuing feeling of being over looked and unimportance.

I am doing all I can to promote change in this business and the numbers speak for themselves. I continue to meet opposition on the smallest of things.

I feel changes need to be made as soon as tomorrow.

I apologise for bothering you on your Sunday, but this matter is of the upper most importance.’

[Mr Sarkis:] It is also very important that you follow procedures. Putting through orders without our permission is grounds for a formal warning.’

[Mr Niven:] So that’s the approach that people want to take…

I thought it would have been in the best interests of the business to want to improves (sic) the operation of the business. If head office is not interested in communicating about how to improve the business then there is nothing I can do to make this a success.’

[Mr Sarkis:] It is the approach that has proved to be successful. We have asana as a project management tool for a reason. You chose to not follow the set procedures that you knew of.

That is not a (sic) approach that improves business.

I hope you have a good day.

[Mr Niven:] I’ve had to fight to get every single invoice approved.

I submitted Tiger invoices last week that still have not been submitted.

If we can’t see eye to eye on what needs to be done I’ll give notice tomorrow.

[Mr Sarkis:] You see this as the world against you whereas I see it as strict financial management to secure the long time success of the business.

We do not operate on open credit card systems. Not even Izhar has one.

[Mr Niven:] I’m not asking for an open credit card system. I’m asking for the tools I need to create a business that is respected among the industry. I understand why things are as they are. The system needs to be adapted so that it works easily and readily for the people using it.

Here I have some questions for you. Would you like to see the business make money? Yes. Would head office like to see the business become reliant? Yes. Would head office like to maintain a positive relationship with suppliers, to receive good margins and expand on opportunities? Yes.

All I’m asking for is the tools to allow this to happen.’

[Mr Sarkis:] Well I am sorry that I can’t approve any of this. All financial decisions are to be run by me. All orders are to be approved by Ross.

Thank you Matt.’

[7] Following this conversation the applicant sent the following letter to Mr Basha:

‘To: Izhar Basha

I would first like to thank you for the opportunities that have been presented to me over the past months. You have done an amazing job at assisting to elevate me to a point where I am now a much better and more well-rounded individual. The exposure that I have gained to a number of new things has been a tremendous experience. It goes without saying that you have been single-handedly one of the most influential people I have ever met; your kindness and warmth is overwhelming and admirable.

However it is my duty to inform you that I will be resigning from my position with Dash Digital Media as of Sunday 21st November (23 days) if my suggestions in this letter cannot be discussed and a middle ground met.

I am now working in a position that I was not recruited into. Nevertheless, I have more than adequate experience to be successful in this role, there is already evidence of this in the increase in turnover that store has experienced in the past 3 months.

Over a number of weeks, I have raised numerous points to members of head office about changes that need to be made to improve the running of Direct Nutrition Australia (DNA), as well as rebuild the reputation of DNA within the industry. At no point in time have I received any feedback what so ever in regards to these changes, I receive no communication in regards to accounts, banking targets, recruitment of staff or even responses to txt messages.

I was given the clear instruction that it was my responsibility to rebuild DNA from a business that was not viable to one of prestigious standing, as it was once. If I am given tools I need to achieve this then I see no reason as to why this goal cannot be accomplished. It is my firm belief that DNA has the ability to be a driving force within the supplement industry. DNA was the birthplace of EHP Labs which is now the market leader in fat burners and a major player in the supplement industry. Furthermore, it has been the starting point for many other people to do a number of amazing things.

My vision of DNA is one of greatness. With the ideas provided by yourself and my knowledge and ability to generate sales, there is a real opportunity to grow the business both online and as a storefront. I have the drive to make this happen, all I am looking for is the support of head office and the understanding that we are working towards a common goal.

What DNA needs to allow for a work environment conducive to growth and expansion - A streamlined system for ordering.

Funds to allow for the purchase of stock – Stock level needs to sit roughly 45 – 50 thousand dollars.

A combined effort between myself and the marketing team to grow the DNA social media.

Additional staff.

Creation of a store website to allow for additional revenue through online sales.

An incentives program for staff.

So far I have managed to achieve a good turnaround despite not receiving support I have been requesting for months on end. But this success has been to my own detriment and frustration because it appears to me that I am only one who is concerned for the welfare of DNA.

I love DNA; I admire you, and I am grateful for all that you have done for me, I want this business to be a driving success.

I have listed the things that the store needs; I was asked to imagen (sic) that the store was my own and this is me doing that, you have always said to me “Adapt or die…” It is now time for DNA to adapt.

Best regards

Matthew Niven.’

[8] Mr Sarkis received a copy of this letter. 3 He said that he considered the applicant’s proposals, but deemed them inappropriate.4 He responded to the applicant’s letter:

‘Thank you for the resignation letter. It is received. Notice period will start.’

[9] The evidence is that the change in the applicant’s role from one based in head office to a store took place about three months before the end of his employment. It was accepted by the applicant at the time. 5 There was no change in the applicant’s remuneration. The change in location was only a matter of a few kilometres.

Consideration

[10] Section 394 of the FW Act provides that a person who has been dismissed may apply to the Commission for an order granting an unfair dismissal remedy. The meaning of ‘dismissed’ is set out at s.386(1) of the FW Act:

‘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.’

[11] A Full Bench of the Commission recently considered s.386, in Balgowan. 6 It noted that:

‘Section 386(1)(a) seems plainly to be intended to capture the case law determining the meaning of termination (of the employment relationship) at the initiative of the employer. In Mohazab the Court considered that the expression “termination at the initiative of the employer” was:

“. . . a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘termination of employment’.”

Importantly, in Mohazab the Court did not decide that the termination of employment in that case was at the initiative of the employer because there had been a constructive dismissal. Indeed, the Court expressly observed that it was “... unnecessary to consider whether the facts fall within or without the notion of constructive dismissal.”’ 7

[12] The Full Bench found, on the basis of the Explanatory Memorandum to the legislation, that s.386(1)(b) of the FW Act is intended to reflect the common law principle of constructive dismissal.

[13] The applicant, in his submissions, appeared to move between the concepts of constructive dismissal and termination at the initiative of the employer. I have considered whether the applicant was dismissed as defined by the FW Act, using both subsections.

[14] In relation to termination at the initiative of the employer, a Full Bench of the Australian Industrial Relations Commission reviewed the relevant authorities and concluded that for a termination to be at the initiative of the employer, those decisions required:

‘… that there be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end.’ 8

[15] In this case, it is clear from the applicant’s exchange of text messages with Mr Sarkis and the letter he wrote on 29 October 2017 that he had a number of differences with the respondent’s management about the way the business should be run. While he refers to the fact that he was working in a position he had not been recruited into, he appears to have become reconciled to the situation (‘… I have more than adequate experience to be successful in this role, there is already evidence of this in the increase in turnover that store has experienced in the past 3 months’). His real concern was that the respondent should agree to make changes to the way it ran its business along the lines he proposed in the letter. If it was not willing to do so, he would be resigning as of 21 November 2017. The respondent did not wish to make the suggested changes, and accordingly treated the letter as the applicant’s notice of resignation. There is no evidence that the applicant sought to correct this understanding of his letter on the part of the respondent.

[16] There was no action on the respondent’s part that was either intended to bring the employment to an end or had the probable result of bringing the employment relationship to an end. The applicant effectively threatened to resign if he did not get what he wanted. The respondent did not give him what he wanted, and accepted his resignation. The relevant action was that of the applicant.

[17] With regard to the common law concept of constructive dismissal, this involves action on the part of the employer which brings the contract of employment to an end by taking action that amounts to a ‘repudiatory breach’ of that contract. The High Court in Koompahtoo said:

‘The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it… Secondly, it may refer to any breach of contract which justifies termination by the other party…

… there are two relevant circumstances in which a breach of contract by one party may entitle the other to terminate. The first is where the obligation with which there has been failure to comply has been agreed by the contracting parties to be essential… The second is where there has been a sufficiently serious breach of a non-essential term.’ 9

[18] The Full Bench in Balgowan stated that:

‘The question whether there has been a repudiation of the contract of employment is determined objectively, it is unnecessary to show a subjective intention to repudiate and is a question of fact not law. Relevantly, for present purposes, repudiation may exist where an employer reduces the wages of an employee without the employee’s consent or where there is a serious non-consensual intrusion on the nature of the employee’s status and responsibilities in a way which is not permitted by the contract. Similarly, if an employer seeks to bring about a change in the employee’s duties or place of work which is not within the scope of the express or implied terms of the contract of employment, the conduct may evince an intention to no longer be bound by those terms. Therefore, in these circumstances if an employee does not agree to the change, which if agreed would amount to a variation of the contract, the employee may claim to have been constructively dismissed.

Conduct of an employer which repudiates the contract of employment does not by that act alone bring the contract of employment to an end. A repudiation of the contract by the employer gives the employee who is not in breach the option to decide whether to continue, that is to affirm the contract, or to treat the contract as at an end by accepting the repudiation.

As repudiation in the second sense referred to by the High Court in Koompahtoo involves conduct in breach of the contract of employment it is plainly necessary to identify the term or terms of the contract said to exist and which it is said has or have been breached…’ 10

[19] The applicant said that the respondent had breached the fundamental terms of his contract of employment. 11 When asked how, the applicant responded:

‘I was taken advantage of and placed in a position of employment that I wasn’t recruited to.’ 12

[20] There are two problems with this assertion. First, the evidence suggests that the applicant acquiesced at the time to his relocation. Secondly, and more fundamentally, his written contract of employment explicitly allowed the respondent to change the applicant’s position, duties, responsibilities and reporting lines and work location. When this was put to the applicant, he agreed that the relocation could be viewed as the respondent acting under the terms of the contract…

‘… but the major problem here is not the fact that I was moved, it was the fact that there was a total lack of support for me as an individual, and for me, as a business manager or as a sales representative. The big one here is the fact that the support just wasn’t given. There was, under no circumstances, at any point in time, did I feel that I was given adequate opportunity to be successful.’ 13

[21] I am satisfied, objectively, that there was no repudiation of the contract of employment. It is hard to square the applicant’s complaint that he felt unsupported with the first paragraph of his letter of 29 October 2017 to Mr Basha. What is clear from that letter and the associated text messages exchanged with Mr Sarkis is that the applicant genuinely felt that the respondent should have given greater weight to his views on how the business should operate – to the point where its failure to do so led him to resign. However, that failure did not amount to a breach of the applicant’s employment contract and did not constitute constructive dismissal.

Conclusion

[22] The applicant was not dismissed within the meaning of that term in s.386 of the FW Act. Accordingly, I have no jurisdiction to hear his application for an unfair dismissal remedy. I dismiss the application.

SENIOR DEPUTY PRESIDENT

Appearances:

M Niven, the applicant, in person.

I Basha for Dash Digital Media Pty Ltd T/A Tiger Nutrition.

Hearing details:

Sydney with video link to Cairns.

2018.

March 12.

<PR601281>

 1   PN17.

 2   PN35.

 3   PN131.

 4   PN133.

 5   PN58, PN82.

 6   City of Sydney RSL & Community Club Limited v Mrs Roxanna Balgowan [2018] FWCFB 5.

 7   Ibid [11]-[12].

 8   P O’Meara and Stanley Works Pty Ltd PR973462.

 9   Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 [44]-[49].

 10   [2018] FWCFB 5 [18]-[20].

 11   PN49.

 12   PN50.

 13   PN53.

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