In the decision of Mrs Kerri Trail v O’Brien Group Australia [2021] FWC 4048, the Fair Work Commission (‘Commission’) determined that an employee who had tendered a written resignation to her employer was in fact unfairly dismissed and awarded the employee 14 weeks’ compensation ($28,269) minus various deductions.

Background

The employer is a large privately-owned business with catering contracts with major sporting and recreational stadiums.   The employee had been employed by the business for approximately five years’ as the Venue Manager for Metricon Stadium on the Gold Coast.

The employee resigned after receiving two written warnings in quick succession.   The First Letter of Warning was issued by the Venue Catering Manager on 11 September 2020 because the Venue Manager denied having knowledge that the Executive Chef at the Metricon Stadium was under the influence of alcohol while at work and for consequently “turning a blind eye” to the Chef’s “act of gross misconduct”.

Less than a week later, on 16 September 2020 the employee was issued with a Second Letter of Warning (dated 12 September 2020) by the same manager because the employee had disclosed that she had requested and received game tickets on a couple of occasions.  The warning stated that the employee had acted in “direct conflict” with company policy and procedure, namely the “Gifts, Hospitality and Benefits Policy and Procedure” (Gift Policy).

The Resignation

On 16 September 2020 (after receipt of the Second Letter of Warning) the Venue Manager provided her resignation in writing stating, among other reasons that:

• “I have been excluded from meetings and email correspondence
• I have been excluded from financial discussions relating to the business that the Venue Manager role would normally be a part of
• I have been excluded from the redevelopment project
• I have continually had to find out about company decisions from direct reports or the Stadium General Manager which in itself is so unprofessional and embarrassing, not only for me but for OBGA”.

The employee also stated in her resignation that prior to receiving the two written warnings, she had “never received any form of disciplinary action” in 35 years of working and that “over the last 7 days I have received 2 written warnings and have been witness to the issuing of another one”.  The employee claimed that the employer on both occasions had failed to follow company policy and procedure and that there was a “blatant disregard for due process”. 

The resignation letter was also critical of the employer’s processes relevant to the warnings given to her in the following ways:

• There was no formal meeting
• There was no option or offer to have a support person present
• No evidence was presented
• The investigation process was not impartial (i.e. only statements were taken from staff members supporting the employer’s version of events).

After resigning, the employee made an application to the Fair Work Commission, claiming that she had been unfairly dismissed by her employer and that the dismissal was harsh, unjust and unreasonable.

Was the employee dismissed?

Commissioner Hunt noted that in circumstances where an employee has resigned, the employee must first demonstrate to the Commission that the circumstances surrounding their resignation are consistent with the “meaning of dismissed” under s 386 of the Fair Work Act 2009 (Cth) (‘FW Act’), namely:

(1)  A person has been dismissed if:

…

(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. [Emphasis added].

In this instance, Commissioner Hunt was satisfied that the employer “engaged in the conduct that it did with an intention to bring the employment relationship to an end, or that it would have that probable result.”  The Commissioner also accepted that the employee had “no effective or real choice but to resign her employment” and was “forced to do so because of a course of conduct engaged in by the [employer]”.

In support of that view Commissioner Hunt noted that:

• The Operations Director had an “eye on the future” without the employee, evidenced by other employees being told that “they were the future of the stadium because of their age and “look”;
• The employee had been removed from relevant emails;
• The Venue Catering Manager “deliberately” ostracised the employee from important emails; and
• It would be “difficult to believe” that the Operations Director “scarcely” spoke with other Venue Managers in the same way she “scarcely” spoke to the employee in the latter part of 2020.

Ultimately, Commissioner Hunt “accepted [the employee’s] concerns were real and termination of her employment would likely be realised given the manner in which she had been treated in the prior months, weeks and days”.  Once satisfied that the employee was dismissed, the Commission was then required to consider whether the employee’s dismissal was “harsh, unjust or unreasonable”.

Was the Dismissal Unfair?

The Commission, in determining that the employee was unfairly dismissed, inserted a “very large amount of transcript” into the decision.  The Commission was of the opinion that the insertion of the transcript was essential to provide reasoning as to why the Commission reached this conclusion.

In this instance, the Commission was highly critical of the evidence provided by the employer’s witnesses stating that there appeared to be “an unwavering sense of entitlement, arrogance and ineptness”, “no moving from their righteous position”, “no independence of opinion” and “nobody senior enough in the business with relevant gravitas and independence to inform the [family run business] that they are not, relevant to this matter, doing the correct thing”.

Commissioner Hunt noted that the Venue Catering Manager tasked with executing the employee’s written warnings had no experience in the businesses’ “disciplinary policy and procedure and […] no understanding of how to properly conduct an investigation”.   Despite the business having Human Resources expertise, Commissioner Hunt was of the opinion that consultation would have no impact given the “family’s determination to do things their way”.

The Commission also criticised the inaction of the General Manager in not advising the employee of “avenues” available such as an anti-bullying application when the employee alleged that she had been bullied at work.  The Commission also highlighted that while the General Manager “encouraged” the employee to look after her “immediate mental health”, he did not inform the employee to take a substantial break from work, or to make a workers’ compensation claim if she considered that she was “suffering a workplace injury”.

The Commission considered the following factors in determining that the dismissal was harsh, unjust and unreasonable:

1. Valid Reason

The Commission accepted that the Venue Manager was “truthful” in accepting the Executive Chef’s explanation that he was “groggy” because he was on painkillers at work. The Commission also accepted that the employee acted appropriately in directing the employee to take leave.

The Commission was not convinced by the employer that the employee had attempted to conceal the number of times she had procured game tickets (for herself and others).  Rather, the Commission accepted that like other employees’ evidence, the employee was not aware of the details of the Gift Policy.  Furthermore, the Commission highlighted that the employer had made no attempts to “periodically educate team members on the policy” and that the policy was “largely ignored” and not consistently applied.

The Commission concluded that there was not a valid reason warranting dismissal and that at best if the employee had been aware of the policy the employee was deserving of a “written warning at the highest” concerning the tickets.

2. Notification of the valid reason

While the Commission noted that warning letters were issued, this factor was considered neutral based on the fact the employee had resigned from her employment.

3. Opportunity to respond

The Commission acknowledged that the employer, in defending the unfair dismissal claim, relied on some evidence of a breach of the Gift Policy that came to light after the employee’s resignation (dismissal) and that this meant that the employee was not provided with an opportunity to respond.

However, the Commission did conclude that the employee was not provided with a proper opportunity to respond to the breaches of the Gift Policy raised during her employment, and that had resulted in the employee receiving the Second Letter of Warning.

4. Unreasonable refusal by the employer to allow a support person

The Commission was neutral on this factor as the employee did not request a support person.  However, the Commission noted “regretfully” that the Venue Catering Manager organised for the employee’s direct report to observe her being issued with the two warnings.

5. Whether there was dedicated human resources

The Commission noted that despite employing thousands of employees, the evidence indicated that the organisation’s human resources function “is unsophisticated and largely impotent when regard is had to the O’Brien family’s overreach on such issues”.

6. Other factors

The Commission also considered the employer’s “failure to follow the Disciplinary Action and Warnings: Policy and Procedure”.  Commissioner Hunt pointed out that the employer’s policy is a “well-written document” that “explains how the [employer] will conduct relevant investigations when considering whether to discipline an employee.”

The Commission pointed out that the policy should have been followed and was alarmed by the Operations Director’s comment that the policy “is not required to be followed and that the [employer] is simply required to follow “the law”.

In concluding that the employee’s dismissal was harsh, unjust and unreasonable, the Commission was satisfied that the Operations Director (Director’s daughter) and Venue Catering Manager “in the months leading up to [the Venue Manager’s] resignation […] largely ostracized her or excluded her unnecessarily from relevant emails”. 

7. Misconduct reduces amount of compensation

While the Commission confirmed that the employee’s breach of the Gift Policy did not constitute misconduct, the Commission ordered that the compensation awarded to the employee be reduced by 10% on account of an inappropriate email disparaging the Director (containing foul language) sent by the employee (discovered following her departure).

Take-Aways

This decision serves as a great reminder to employers that if you place an employee in a position where they have no choice but to resign, then that employee may still be able to make an unfair dismissal claim with prospects of success.  The decision also raises a number of practical examples of why it is important to ensure that:

• workplace policies and procedures are adhered to by decision makers (and consistently between employees);
• employees are pro-actively educated about workplace policies and procedures;
• managerial staff tasked with performance management are properly trained and experienced (and apply workplace policies and procedures where relevant);
• workplace investigations are conducted by appropriately trained and experienced persons.

Aitken Legal assists employers by assessing performance and conduct concerns, and recommending appropriate processes to deal with those concerns, and whilst mitigating the risk of a successful claim against the employer.  We can also assist with the development, of workplace policies and procedures, including reviewing existing documents, and providing training in relation to policies and procedures.  Should you have any questions or concerns about performance management, misconduct investigations or workplace policies and procedures, please contact one of Aitken Legal’s specialist employment lawyers.