UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00098

DELIVERED : FRIday, 17 February 2023

FILE NO. : U 34 OF 2021

Applicant

AND

Nullagine Community Resource Centre Association

Respondent

CatchWords : Unfair dismissal; whether employee resigned; employment terminated at the initiative of the employer; reduction of hours of work in breach of contract

Legislation : Industrial Relations Act 1979 (WA)

Result : Unfair dismissal upheld and order issued

Representation:

Applicant : Mrs G Tawha (as agent)

Respondent : Mr J Payne

Case(s) referred to in reasons:

ABB Engineering Construction Pty Limited v Doumit, Print N6999 [1996] (AIRCFB 9 December 1996)

Bogunovich v Bayside Western Australia Pty Ltd [No 2] (1998) 79 WAIG 8

Gallotti v Argyle Diamond Mines Pty Ltd [2003] WASCA 166; (2003) 83 WAIG 3053

Gallotti v Argyle Diamonds Pty Ltd [2003] WAIRC 07928; (2003) 83 WAIG 919

JL v Haydar Family Restaurants t/a McDonalds [2003] WAIRC 09489; (2003) 83 WAIG 3303

Lukies v AlintaGas Networks Pty Ltd [2002] WAIRC 05633; (2002) 82 WAIG 2217

Manning v Huntingdale Veterinary Clinic (1998) 78 WAIG 1107

Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) IRCA 625; (1995) 62 IR 200

Harwood v Ace Services Pty Ltd trading as Defensive Driving School [2002] WAIRC 06122; (2002) 82 WAIG 2513

The Attorney General v Western Australian Prison Officers’ Union of Workers (1995) 75 WAIG 3166

Toncich v People Who Care Incorporated [2004] WAIRC 10538; (2004) 84 WAIG 401

Western Excavating (EEC) Ltd v Sharp [1978] QB 761

Willoughby v CF Capital Plc [2011] IRLR 198; [2011] ICR 88

Reasons for Decision

1         Mr Te Arai Tawha was employed by the Nullagine Community Resource Centre Association (NCRC) in the position of Assistant Coordinator from 1 July 2020 to 23 April 2021.  Mr Tawha asserts that he was dismissed unfairly and seeks an order for compensation.

2         The NCRC opposes Mr Tawha’s application and say that he resigned from his position and that he was not dismissed.

3         Mr Tawha says he was forced to resign because of the conduct and actions of the NCRC.

Question to be Determined

4         The question I must decide is whether Mr Tawha’s employment was terminated because of a voluntary resignation by him or by the conduct and actions of his employer?

Principles

5         A dismissal at the initiative of the employer is necessary to attract the jurisdiction of the Commission under s 29(1)(b)(i) of the Industrial Relations Act 1979 (WA) (IR Act).  This is a jurisdictional fact necessary to be found for the Commission to further consider whether any such dismissal is harsh, oppressive or unfair: Gallotti v Argyle Diamonds Pty Ltd [2003] WAIRC 07928; (2003) 83 WAIG 919, Gallotti v Argyle Diamond Mines Pty Ltd [2003] WASCA 166; (2003) 83 WAIG 3053, JL v Haydar Family Restaurants t/a McDonalds [2003] WAIRC 09489; (2003) 83 WAIG 3303.  That is, it is fundamental to the jurisdiction in matters of this kind for the applicant to be dismissed as a matter of fact and law.

Background and Facts

6         The facts that are relevant to this matter are as follows.

7         Mr Te Arai Tawha and his supervisor Mrs Gayle Tawha gave evidence on behalf of Mr Tawha.  Mr Jon Payne gave evidence on behalf of the NCRC.  Mr Payne is the Chairperson of the Committee of Management of the NCRC.

8         Mrs Tawha’s evidence is that on 16 February 2021, Mr Payne and Mrs Mary Palmer, the Secretary of the NCRC Committee, attended the NCRC office.  Mrs Palmer engaged Mrs Tawha and made belittling and humiliating comments to her.  Mrs Tawha’s evidence is that the harassment on this occasion was mainly targeted towards herself.

9         On 23 February 2021, Mr Payne and Mrs Palmer again attended the NCRC office.  Mrs Tawha observed Mr Payne intimidate Mr Tawha by trapping him in the corner of the office whilst Mrs Palmer engaged Mrs Tawha in a raised voice.  Mrs Tawha says Mr Tawha looked shocked and fearful.  Mrs Tawha requested Mr Payne and Mrs Palmer leave the office because there was a client waiting and invited them to return at the conclusion of the Centrelink service hours.  Mrs Tawha says Mr Payne and Mrs Palmer threatened to return with police officers.  Mrs Tawha says that following this event Mr Tawha was anxious and concerned about his future.

10      On 1 March 2021 Mr Tawha and Mrs Tawha arrived at the NCRC office to find Mr Payne and Mrs Palmer and several other persons waiting for them.  Mrs Tawha says the other people were friends of Mrs Palmer.  Mrs Tawha stated that sometime over the weekend the locks to the NCRC office had been changed.  Mrs Palmer eventually opened the door so that Mrs Tawha could collect her belongings.  Mrs Palmer was hostile and argumentative.  Mrs Tawha observed that Mr Payne had cornered Mr Tawha and was talking to him.  Mrs Palmer demanded Mr Tawha hand over his keys.

11      On 2 March 2021, Mrs Tawha emailed Mr Payne advising of the decision of the two staff members to commence stress leave and that the recent decisions had caused distress for the NCRC staff.  On 2 March 2021 Mrs Tawha emailed Services Australia, the funder of the Centrelink service provided by NCRC, informing that the staff of the NCRC had commenced stress leave due to the untenable conditions being forced upon the staff by the NCRC Committee of Management.

12      Mrs Tawha’s employment with the NCRC ceased on 23 February 2021.  The evidence reflects that there was some contention concerning the circumstances of the termination of Mrs Tawha’s employment.

13      Mr Tawha gave evidence that he commenced employment with the NCRC on 1 July 2020 as Assistant Coordinator under a contract of employment that set out his working hours of 38 hours per week with a pay rate of $27.34 per hour.  Clause 22 of the contract provides that any variation to the terms of the contract needed to be by mutual agreement and in writing between the parties.

14      Mr Tawha gave evidence that on 23 February 2021, Mr Payne attended the NCRC office, walked up to Mr Tawha’s desk which was in the corner of the office and held his hands out so that he could not pass him and had to remain in the corner of the room.  Mr Payne informed Mr Tawha that his job description had changed, he would now be working three hours a day and for three days a week and that the number of staff would be reduced from two staff to one staff.

15      On 2 March 2021, Mr Tawha says when he arrived at the NCRC office, Mr Payne and Mrs Palmer were there along with four other persons that he did not know.  Mr Payne raised the reduction in hours with him and asked him which of the three working days he would work.  Mr Tawha responded that the hours did not comply with the Centrelink contract.

16      Subsequently, the members of the Services Australia Remote Emergency Team attended the NCRC and negotiated with the Committee of Management for Mr Tawha to hold keys to the NCRC office so that Centrelink Services could be provided to the community by Mr Tawha.

17      Mr Tawha’s evidence is that following the departure of the Remote Emergency Team members, Mrs Palmer repeatedly demanded that he hand back the keys to the NCRC office.  On 18 March 2021, Mrs Palmer told him that he is ‘useless and that I was stupid’ and that he was going to be removed because he would not hand back the keys and she would call the police if he would not give the keys back.

18      Mr Tawha says that the conduct and actions of Mr Payne and Mrs Palmer resulted in him not feeling safe in the workplace.

19      On 22 April 2021 Mr Brennan commenced work with the NCRC in the role of Coordinator.

20      On 23 April 2021 Mr Tawha visited Mr Payne’s home and handed Mr Payne, who was standing in his front yard, his letter of resignation in which he states that he is resigning immediately.  Mr Tawha set out in his letter that his resignation was due to the actions of Mr Payne and other committee members over a period of four months that had made the NCRC working environment extremely stressful.  Mr Tawha says Mr Payne read the letter, confirmed with him that he was resigning and said ‘best of luck’.

21      Mr Payne’s evidence is that there was a reduction in funding for the NCRC and consequentially the staffing levels and hours of operation of services needed to be reduced.  Mr Payne says that he informed Mr Tawha that he would need to reduce his hours to 15 hours per week.  Mr Payne was unable to recall whether Mr Brennan was employed by the NCRC in April 2021.  I find that Mr Payne’s evidence in response to questions concerning the engagement of Mr Brennan, the context of alleged funding reductions and the need to reduce staffing levels and hours was evasive and not credible.

The Law Concerning Dismissal at the Initiative of the Employer

22      The Industrial Appeal Court, in The Attorney General v Western Australian Prison Officers’ Union of Workers (1995) 75 WAIG 3166 (Attorney General), held that the resignation of the employee was in fact a dismissal by the employer.  The employee was told that the allegations of the employer, which the employer’s agents supported with statements they knew to be false, would be made public unless the employee resigned.  The employer’s agents stated that they had been directed to obtain the employee’s resignation and the letter of resignation was dictated to the employee by the employer’s agent.  Furthermore, the employee’s request for an opportunity to obtain legal advice was denied.  The Court found that the employer’s conduct had left the employee with the impression that the options were to resign or be dismissed in circumstances of duress or procedural unfairness and held that the Western Australian Industrial Commission had jurisdiction to determine the matter.

23      In Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) IRCA 625; (1995) 62 IR 200 (Mohazab), the Full Court of the Industrial Relations Court of Australia held that for a resignation to be considered termination of employment at the initiative of the employer, it is necessary that the conduct of the employer results directly or consequentially in the termination of the employment, and that the employee does not voluntarily leave the employment relationship.  Termination at the initiative of the employer involves:

[T]ermination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship … [A]n important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship (205).

In Mohazab the employer suspected an employee had acted dishonestly and during an interview the employee was told to resign, or the police would be called in.  The employee agreed to resign and was escorted out of the premises and left standing in the car park until the respondent prepared a letter of resignation and brought it to him to sign.

24      The Full Bench of the Australian Industrial Relations Commission, in ABB Engineering Construction Pty Limited v Doumit, Print N6999 [1996] (AIRCFB 9 December 1996) (ABB Engineering), held that an employer’s conduct and decisions concerning the workplace which the employee found difficult, including behaviours toward the employee by one of the supervisors, the Full Bench described as offensive and abusive, did not constitute conduct that left an employee with no choice but to resign.

25      In the absence of a retraction of the words uttered in the heat of the moment following a reasonable period of time it may be inferred that the employer has dismissed the employee or the employee has resigned.  The Employment Appeal Tribunal considered this in Willoughby v CF Capital Plc [2011] IRLR 198; [2011] ICR 88 [38]:

In ordinary human experience we generally take people to mean what they say; but we often make allowances for words spoken in anger, recognising that they may soon be retracted and may reflect no more than a momentary, flawed intention on the part of the speaker. The law caters for this eventuality; but the law will not serve the wider interests of justice unless employers and employees are usually taken to mean what they say.

26      In Harwood v Ace Services Pty Ltd trading as Defensive Driving School [2002] WAIRC 06122; (2002) 82 WAIG 2513 (Harwood) Smith C (as Her Honour then was) stated the following in relation to the law when it appears that an employee has resigned:

In NGO v Link Printing Pty Ltd unreported Print R7005 (del 22 January 1999), the Full Bench of the Australian Industrial Relations Commission heard an appeal in relation to whether the appellant had resigned. Mr Ngo had been interviewed by the Respondent’s General Manager about his performance. At the conclusion of the interview Mr Ngo informed the General Manager of Production that he was very disappointed that the company did not trust the quality of his work and that he said, ‘I resign my job because I am so disappointed.’ The General Manager of Production advised Mr Ngo that he must give them a letter in writing and to give it to him tomorrow. Mr Ngo indicated that he would do so. Mr Ngo then returned to his job and completed his shift. In cross-examination Mr Ngo agreed that he said, ‘I resign. Is two weeks’ notice okay?’ He also said in his oral evidence that at the time he resigned his mind was confused, he really (sic) nervous and his heart was jumping. On the next day Mr Ngo went to work as usual and commenced work. He was then approached by the General Manager of Production who told him he would have to finish now and that he did not have to work that day as the company would pay him up to the end of the period of his notice. The General Manager of Production also asked Mr Ngo for his letter of resignation. Mr Ngo informed the General Manager of Production that he was not resigning and he did not write the letter because he had checked with his wife and family as well as his solicitor and accountant and he wanted to continue to work. After considering these facts the Full Bench of the Australian Industrial Relations Commission held—

‘We have had regard to the various decisions to which we were referred relating to resignations of employment. In particular we have considered the decisions that assert the existence, in certain circumstances, of a duty to clarify a resignation. The position was referred to by Murphy JR in Minato v Palmer Corporation Ltd [(1995) 63 IR 357 at 361-2] as follows:

‘The legal position was set out in the case of Sovereign House Security Services Ltd v Savage [1989] IRLR 115 where at 116 May LJ said:

‘In my opinion, generally speaking, where unambiguous words of resignation are used by an employee to the employer direct or by an intermediary, and are so understood by the employer, the proper conclusion of fact is that the employee has in truth resigned. In my view tribunals should not be astute to find otherwise …

However, in some cases there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee him or herself, to entitle the tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight.’

Those comments were considered in another case: Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 where at 188 Wood J said that he saw no difference in principle between words or actions of resignation. At 191 he set out the position as follows:

‘If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure (“being jostled into a decision”) and indeed the intellectual make-up of an employee may be relevant: see Barclay v City of Glasgow District Council [1983] IRLR 313. These we refer to as “special circumstances.” Where “special circumstances” arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employer’s risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the “special circumstances” the intention to resign was not the correct interpretation when the facts are judged objectively.’

We are prepared to assume, without so deciding, that it was incumbent on Link, following Mr Ngo’s statement that he resigned, to allow a reasonable period of time to elapse to ascertain whether circumstances arose during the period that put Link on notice that further enquiry was necessary to see whether Mr Ngo’s resignation was really intended. Mr Ngo spoke his words of resignation on the afternoon of 8 June 1998. He then resumed work for the balance of the shift, went home, resumed work the next day and, when approached by Mr Corrigan, said that he was not resigning. In our view, any reasonable period of time had elapsed well before Mr Ngo said this [46].

27      Mr Tawha says that he was the target of an orchestrated and sustained conduct of harassment toward him by members of the NCRC Committee.  Mr Tawha submits that the Committee members wanted him gone from the organisation and appointed a person to the role of Coordinator despite having told Mr Tawha that the organisation could only sustain one employee.

28      It is clear that Mr Tawha was distressed by the conduct of some members of the Committee of Management however he did not resign in the heat of the moment and did not seek to withdraw his resignation within a reasonable time once he had reflected on his action.  However, given the reasons set out in his resignation letter it may be open to consider whether Mr Payne, and other members of the Committee of Management, were obliged to make enquiries of Mr Tawha before accepting his resignation such as those cases referred to in Harwood. However, it is not necessary for me to further consider this element given my consideration and conclusion set out in [29 - 31].

29      In circumstances where one party conducts themselves in breach of a term of the contract of employment the other party may treat the contract as having come to an end.  The relevant law to be applied in this jurisdiction is set out by Beech SC in Lukies v AlintaGas Networks Pty Ltd [2002] WAIRC 05633; (2002) 82 WAIG 2217:

The Industrial Relations Commission of South Australia in Lucky “S” Fishing Pty Ltd v Jex (1997) 75 IR 158 at 164 also considered the decision of the Court of Appeal of New Zealand [Auckland Shop Employees’ Union v Woolworth’s (NZ) Ltd (1985) 2 NZLR 372]. It noted that the Court of Appeal stated that there has been a modification of the test in the Western Excavating (ECC) Ltd v Sharp case (1978) ICR 221 at 226 which stated that if the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed. The Court of Appeal suggested that in constructive dismissal cases the relevant test is whether the conduct complained of is calculated or likely to seriously damage the relationship of confidence and trust between the parties and is such that the employee cannot be expected to put up with it [34] [emphasis added].

30      In Toncich v People Who Care Incorporated [2004] WAIRC 10538; (2004) 84 WAIG 401 at [29], Kenner C (as he then was) said:

The question of a resignation, truly voluntary, or a dismissal, is a jurisdictional fact necessary to be found by the Commission in order to ground jurisdiction in matters of this kind. It is well settled that to attract the Commission’s jurisdiction in claims of this kind, an employee must be “dismissed”: Gallotti v Argyle Diamond Mines Pty Ltd (2003) 83 WAIG 353 (IAC); (2003) 83 WAIG 919 (FB). It is also the case, that in circumstances of a “resignation”, apparently tendered by an employee, those circumstances may be a dismissal for the purposes of the Act, if the contract of employment is not terminated truly voluntarily by the employee: Attorney - General v WA Prison Officers Union (1995) 75 WAIG 3156. Furthermore, an employee may be “constructively dismissed”, in the event that the employer conducts itself by way of a breach of the contract of employment, going to its root, so as to justify its acceptance by the employee: Western Excavating (EEC) Ltd v Sharp [1978] QB 761 per Denning MR at 769 [emphasis added].

31      I find that the NCRC unilaterally changed the terms of Mr Tawha’s employment contract by reducing his working hours from 38 hours per week to 9 hours per week.  The evidence of the parties differed as to whether the reduction was to 15 hours or 9 hours.  My assessment of the recollection of the two witnesses differing accounts lead me to favour the evidence of Mr Tawha that his working hours were to be reduced to 9 hours per week.  However, in both scenarios of the quantum of the reduction of hours, the change is a significant one and one that is at the root of the contract of employment.  The change breached the terms of Mr Tawha’s employment contract.  Consequently, like Western Excavating, Mr Tawha is entitled to consider his employment had been terminated because of the conduct and actions of his employer.  I find in these circumstances the termination of Mr Tawha’s employment was unfair.

32      I consider that it is not practical to reinstate Mr Tawha.  In this circumstance the Commission can award compensation for loss or injury arising from the dismissal.  Mr Tawha’s loss is the income he would have otherwise earned had his employment continued up to the date of the hearing.

33      Consistent with the principles in Bogunovich v Bayside Western Australia Pty Ltd [No 2] (1998) 79 WAIG 8 and Manning v Huntingdale Veterinary Clinic (1998) 78 WAIG 1107 that an unfairly dismissed employee should be compensated as fully as possible for loss.  However, a cap of the equivalent amount of six months’ salary on any compensation that may be awarded by the Commission is prescribed by s 23A(8) of the IR Act.  Therefore, the maximum that I may order is $27,098.46.  I propose to make this order.