[2009] AIRCFB 680

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Workplace Relations Act 1996
s.120—Appeal to Full Bench

Australian Hearing
L Peary



Appeal – termination of employment – resignation – whether termination at the initiative of the employer – Workplace Relations Act 1996 ss.642(1), 642(4) and 643.

[1] This is an appeal, for which leave is required, by Australian Hearing against a decision given by Commissioner Thatcher on 18 February 2009. 1 The proceedings concern an application for a remedy pursuant to s.643 of the Workplace Relations Act 1996 (the Act) by Mrs L. Peary on the grounds that the termination of her employment by Australian Hearing was harsh, unjust or unreasonable. The circumstances in which Mrs Peary’s employment came to an end are at the centre of the appeal. The issue is whether the employment was terminated at the initiative of the employer, a jurisdictional requirement for an application under s.643 of the Act. Australian Hearing made an application to Commissioner Thatcher that he dismiss Mrs Peary’s application because, as she had resigned, there was no termination of the relevant kind. The Commissioner rejected this application. He found that Mrs Peary’s employment had been terminated at the initiative of Australian Hearing and he referred her application for conciliation.

The statutory provisions

[2] Section 643 of the Act provides for an application for relief with respect to termination of employment. It reads, relevantly:

[3] The section is only available to an employee whose employment has been terminated. It is necessary to examine the concept of termination of employment as it is referred to in the section and for that purpose to consider the guidance provided in ss.642(1) and (4) of the Act. Section 642(1) of the Act contains the following definition:

[4] Section 642(4) deals with resignation. It provides that where an employee resigns the termination will nevertheless be at the initiative of the employer if the resignation was not voluntary but resulted from the employer’s conduct. The burden of proof that the resignation was not voluntary but resulted from the employer’s conduct is upon the applicant. The section reads:

[5] The definition of termination of employment in s.642(1) has been in the Act since 1993. Section 642(4), on the other hand, came into the Act relatively recently. It was enacted by the Workplace Relations Amendment (Work Choices) Act 2005 with effect from 27 March 2006. Before 27 March 2006, cases involving resignation were decided by reference to the definition of termination of employment and the expression “termination at the initiative of the employer.” The most recent review of the authorities at Full Bench level is to be found in O’Meara v Stanley Works Pty Ltd. 2 That decision dealt with the Act as it was before s.642(4) came into operation. This is the first occasion on which a Full Bench has considered the construction and application of s.642(4). We have decided that the subject matter of the appeal is of such importance in the public interest that leave should be granted to appeal. We grant leave.

The facts

[6] Mrs Peary commenced employment with Australian Hearing in February 2005 at Lismore. In May 2005 she became a permanent employee in the classification of customer service officer (CSO). In May 2006 she was promoted to office manager at Lismore. In January 2008, following the promotion of the district manager, Mr Eakin, to regional manager, Mrs Peary agreed to take on the role of acting district manager for a period of five months in addition to her normal duties. After one week, however, Mr Eakin advised Mrs Peary that she was no longer required to act as district manager. This decision was apparently based on Mr Eakin’s view that Mrs Peary had discussed confidential information relating to Australian Hearing’s business with a former employee and she was therefore unsuitable for the role of district manager. Mrs Peary did not accept that she had breached confidentiality. She also believed that Mr Eakin had not conducted a fair investigation of the issue. On 4 February 2008 Mrs Peary took sick leave for one week with depression.

[7] Another employee, Ms Thompson, one of the clinical staff at Lismore, took over the role of acting district manager in early February 2008. She did so on a full-time basis. Unhappiness soon developed between Mrs Peary and Ms Thompson concerning another employee, Ms Essery. Mrs Peary believed that by ignoring her and going straight to Ms Thompson, Ms Essery was undermining Mrs Peary’s authority. Mrs Peary apparently complained about this to Ms Thompson almost on a daily basis.

[8] Mr Eakin became concerned that the employees in the Lismore office were not communicating properly. He arranged a team workshop at Lismore on 26 March 2008. On 28 March 2008 Mrs Peary unsuccessfully requested a meeting with Ms Thompson concerning Ms Essery. After consulting a psychologist, Ms Charleston, Mrs Peary took another week off with depression. It should be noted that Ms Charleston became involved through the Employee Assistance Program provided by Australian Hearing. Thereafter it appears that Mrs Peary’s medical condition deteriorated and that personal relationships among the staff in the region became increasingly fraught until Mrs Peary resigned on 13 November 2008. Commissioner Thatcher’s decision contains a detailed account of the evidence as to what occurred during that 10 month period. For the purposes of the appeal it will be necessary to set out a summary of the relevant facts emerging from the evidence and findings.

[9] First it is relevant to note that on 28 March 2008 Ms Thompson had lodged a complaint with Mr Eakin about Mrs Peary. The complaint listed some 28 matters. Mrs Peary was unaware of this complaint until after the termination of her employment. Following the complaint, and apparently as a result of it, Mr Eakin initiated some action which resulted in an Occupational Health and Safety Advisor employed by Australian Hearing, Ms Doyle, contacting Mrs Peary and offering her assistance.

[10] Mrs Peary consulted her general practitioner in early April following which she took another week of sick leave. On 11 April 2008 Australian Hearing engaged a consultant, Ms Shears, to assess and attempt to assist Mrs Peary. The two met on 21 April 2008.

[11] On 2 May 2008 Ms Essery made a detailed complaint about Mrs Peary. The complaint referred to 13 alleged incidents during April 2008. Mr Eakin initiated a disciplinary inquiry under the relevant collective agreement, the Australian Hearing Collective Agreement 2006 (the Agreement). Part 9 of the Agreement provides a process for giving employees particulars of alleged misconduct and providing them with an opportunity to respond before any decision is made on disciplinary action. On 12 May 2008 Mrs Peary responded to Ms Essery’s complaint indicating that her claims were unfair and unreasonable.

[12] Also on 12 May 2008 the psychologist, Ms Charleston, provided a report to Ms Shears, the consultant, in which she said that Mrs Peary had difficulties with conflict management. The report did not say, however, that Mrs Peary should be removed from the workplace. Ms Shears forwarded this report to Ms Doyle.

[13] On 20 May 2008 Mr Eakin and Ms Fraumano, an industrial relations consultant, held interviews with Ms Essery, Ms Thompson and the staff who reported to Mrs Peary. Mr Eakin gave evidence that all of those interviewed supported Ms Essery’s account of events over Mrs Peary’s. Consequently Mr Eakin wrote to Mrs Peary on 26 May 2008 indicating that Ms Essery’s complaints had been substantiated and it would be inappropriate for her to continue working with Ms Essery. The letter also referred to Australian Hearing’s desire to conform to the recommendations of “your rehabilitation consultant.” The basis for this last statement is unclear. As we have noted, Ms Charleston’s report of 12 May 2008, forwarded by Ms Shears to Ms Doyle, while noting her difficulties with conflict management, did not recommend that Mrs Peary be removed from contact with Ms Essery. The letter went on to propose that Mrs Peary should take up a temporary assignment as a CSO at Tweed Heads or Ballina for a period of three months with salary maintenance. Mrs Peary was to indicate her preference by 29 May 2008. On 28 May 2008 Mrs Peary obtained a medical certificate from her general practitioner which indicated that she was unfit for work until 28 June 2008. The certificate indicated that she was suffering major depression.

[14] On 30 May 2008 Australian Hearing indicated to Mrs Peary that she would be working full-time at Ballina for three months. She responded on 2 June 2008 to the effect that she had no choice but to accept as “Tweed is really not an option for me.” On 3 June 2008 she lodged a workers’ compensation claim.

[15] Ms Essery commenced acting as office manager at Lismore as a consequence of Mrs Peary’s temporary placement at Ballina.

[16] On 17 June 2008 Mrs Peary’s general practitioner forwarded a proposed management plan to Australian Hearing involving mentoring, mediation and some training. On 30 June 2008 Australian Hearing finalised a management plan directed towards Mrs Peary resuming work as a CSO at Ballina four days per week by 18 August 2008. Thereafter Mrs Peary was to return to the Lismore office, pending the resolution of the conflict with the staff there. The detailed arrangements which were subsequently made involved Mrs Peary commencing work two days per week at Ballina on 1 July 2008. This occurred. After a few weeks she increased to three days per week having received a supporting medical certificate from her general practitioner. Mrs Peary had been travelling from Lismore to Ballina by car with her sister each day. Her sister also worked in Ballina. In late July Australian Hearing organised a hire car for Mrs Peary, while her sister was on six weeks leave, so that she could drive herself to work. On 1 September 2008 she consulted her general practitioner who indicated that she was fit to return to pre-injury duties. Consequently she returned to full-time work on 2 September 2008 at Ballina.

[17] Between July and September 2008 Mrs Peary underwent a number of examinations and assessments. On 25 July 2008 she was psychologically assessed by a firm called Catalyst. Recommendations were provided to Australian Hearing by Catalyst, although these were not made available to Mrs Peary prior to the termination of her employment. She underwent a psychiatric assessment and report at Comcare’s request on 21 August 2008. On 8 September 2008 she underwent an assessment by a human resources consultant in Sydney. The consultant reported that she did not have natural leadership skills.

[18] On 29 September 2008 Comcare rejected Mrs Peary’s compensation claim.

[19] While she was at Ballina Mrs Peary did not participate in Lismore team meetings or training. Although the Ballina office was attached to the Lismore office, being part of the Lismore district, Mr Eakin nevertheless arranged for Mrs Peary to report directly to him rather than through the Lismore staff. In addition the Commissioner found that her duties at Ballina were limited and not clearly defined or documented while Mr Eakin was the Lismore area manager. He also found that no action was taken to gradually re-introduce Mrs Peary to the Lismore office and little was done by way of mentoring, mediation or training either to improve her skills or to resolve the staff relationship issues. The Commissioner also found that no progress was made on these matters after Ms Graham took over from Mr Eakin as Lismore area manager in late August 2008. He accepted Ms Graham’s evidence that she believed that Mrs Peary had never got to the point where she could go back to the Lismore office. He also accepted that Ms Graham had advised Mrs Peary that she could not participate in a mediation process until she had completed more than six sessions with a psychologist. It was also accepted that Mrs Peary would have had to fund the sessions herself.

[20] There were some suggestions of continued disharmony between Mrs Peary and the staff at Lismore, although the Commissioner did not make any conclusive findings. On 16 October 2008, however, Mrs Peary sent an email to the technician at Lismore which indicated that she was lonely at Ballina, that she was still depressed but improving and suggesting, not in so many words, that the Lismore office would be a frustrating place to work. The technician showed this email to Ms Essery, who it will be recalled was acting as office manager, and also forwarded it to Ms Graham. Australian Hearing subsequently informed Mrs Peary that it regarded the email as disrespectful and as undermining Ms Essery’s authority. On that basis it initiated a further disciplinary proceeding under Part 9 of the Agreement. It was decided that Mrs Peary should give a written response by 23 October 2008.

[21] On 16 October 2008, the day on which Mrs Peary had sent the email in question, Ms Graham spoke to Mrs Peary and advised her of the disciplinary proceeding and the requirement for a written response by 23 October 2008. She also indicated that she would review the provision of a hire car to Mrs Peary. Ms Graham apparently raised the question of the hire car without full knowledge of the facts. It seems clear that the Commissioner accepted that Mrs Peary was entitled to the hire car, pursuant to arrangements made with Mr Eakin.

[22] On the day after this conversation, 17 October 2008, Mrs Peary went on sick leave again. She forwarded a medical certificate for the period until 17 November 2008 to Ms Graham. On 20 October 2008 Mrs Peary emailed Ms Graham asking her to let the relevant employee know that she would be responding to the disciplinary charge when she received a medical clearance to return to work. In a letter dated 12 November 2008 Ms Perry, Australian Hearing’s Executive Manager, People and Performance, notified Mrs Peary that her response to the disciplinary charge would be required by 17 November 2008, the day on which her sick leave certificate would expire.

[23] The next day, 13 November 2008, Mrs Peary sent an email to Ms Graham. The email included the following:

[24] A certificate from Mrs Peary’s general practitioner was attached to the email. It said in part:

[25] Ms Graham responded to this email and asked whether Mrs Peary was resigning. Mrs Peary responded within five minutes. The response included the following:

[26] Australian Hearing accepted this resignation and gave effect to it. In evidence before the Commissioner, which he clearly accepted, Mrs Peary said:

[27] While this summary of the facts is necessarily not comprehensive as to detail and omits some matters which the Commissioner made findings about or commented upon, it deals with the main matters. In the course of its appeal Australian Hearing suggested that the Commissioner had made a number of findings of motive or intention on the part of its employees. We deal with that suggestion later.

The reasons for decision

[28] We turn now to the substantive reasons given by the Commissioner. In the concluding part of his decision the Commissioner summarised the evidence which in his opinion bore on the question of whether Mrs Peary had been forced to resign and then stated his conclusions. We set out the main passages:

The grounds of appeal

[29] The first ground of appeal is that the Commissioner did not give proper effect to s.642(4) of the Act. It was submitted that the use of the word “forced” indicates a legislative intention that in cases of resignation there will be no termination at the initiative of the employer unless the resignation was an intended consequence of conduct or a course of conduct engaged in by the employer. On that basis, the Commissioner’s finding that the resignation resulted from the employer’s conduct is not sufficient to attract the operation of the section. The element of intention is missing. It was further submitted that there was no evidence of such an intention in any event.

[30] We cannot accept this construction of the section. The section specifies the matters that an employee who has resigned must prove in order to displace the legal effect of the resignation. The employee must prove that the employer engaged in conduct or a course of conduct which forced the employee to resign. There is no warrant for requiring the employee to prove an additional matter, that the employer intended to force the employee to resign. The plain words of the section deny such a requirement. Furthermore, the section is not directed at the state of mind of the employer, but at the state of mind of the employee. It is particularly difficult for an employee to prove an employer’s intention. In that respect it is relevant to note that where the Act imposes a requirement related to the intention or motive of the employer a reverse onus is usually applied.

[31] The next ground of appeal is that there was insufficient evidence for a finding as to Mrs Peary’s mental state at the time she resigned and that the Commissioner impermissibly adopted a test of unconscionability or special disadvantage in his decision. The relevant paragraph, paragraph 213, is included in the passages we have set out above.

[32] Mrs Peary gave evidence in the proceedings and she also appeared on her own behalf. The Commissioner had an opportunity to assess her credibility. He clearly accepted her evidence as to her state of mind when she visited the doctor on 12 November 2008. It was open to the Commissioner to conclude that Mrs Peary was very upset indeed by the requirement that she provide a written answer to a disciplinary charge the day her sick leave expired. We also reject the suggestion that the Commissioner impermissibly relied upon the equitable notion of unconscionability. Although using language familiar from another area of law, the Commissioner was doing no more than explaining why in the circumstances what on the surface appeared to be a voluntary resignation in fact was not.

[33] The third ground of appeal raises a natural justice issue and is comprised of a series of allegations that the Commissioner made findings which had never been put to witnesses in clear terms. All but one of these allegations concerns the question of whether particular conduct was engaged in by various witnesses for the purpose of forcing Mrs Peary to resign. It was said that the Commissioner made findings to that effect without it ever having been put to the witness concerned that they had such a purpose. In our view, contrary to what Australian Hearing contends, the Commissioner did not make findings as to purpose. The Commissioner’s findings were confined to what occurred and, in a few cases, whether the conduct was reasonable. Accordingly the basis for the challenge fails at the outset. The remaining allegation relating to the natural justice ground concerned a finding that in some respects Australian Hearing had made decisions on Mrs Peary’s future without adequately consulting her or giving her an opportunity to comment. We think this finding was open. There was no failure to accord the witnesses or Australian Hearing natural justice.

[34] The fourth ground of appeal challenges the significance the Commissioner attached to the fact that Mrs Peary had been transferred to Ballina and had not been relocated to Lismore. Counsel drew our attention to the fact that Mrs Peary herself had acknowledged clashes with two of the Lismore staff and that working with them would be uncomfortable and stressful. It is reasonable to infer, counsel submitted, that Australian Hearing may have reasonably considered that a return to Lismore may have exacerbated Mrs Peary’s illness. Further, Australian Hearing’s actions did not have the purpose of forcing resignation, but were in accordance with professional advice and based on discussions with Mrs Peary herself.

[35] This ground of appeal focuses on one element, an important one, of the course of conduct relied on by the Commissioner. The course of conduct is summarised in the passages we have already set out. 4 It may be that if Mrs Peary had been returned to Lismore things may have got worse. But it appears that Mrs Peary had been placed in isolation at Ballina, cut off from contact with staff at Lismore, of whom there were eight, working mainly alone on unstimulating tasks, travelling 32 kilometres twice a day. There was little or no prospect of the situation altering. This was because of Australian Hearing’s requirement that she could not return to Lismore until she had attended mediation and she could not attend mediation until she had undergone six sessions of psychological counselling at her own expense. In addition there was the disciplinary charge, the implied threat to withdraw her transport and the requirement that she submit a written response to the disciplinary charge the day her sick leave expired. We have no doubt there was an adequate basis for finding that she was forced to resign.

[36] The final ground of appeal is that the Commissioner dealt with the evidence and the matter generally on the basis of whether Australian Hearing’s conduct was harsh, unjust or unreasonable. It is true that the Commissioner made findings that particular conduct was unreasonable. While that might indicate that he had gone beyond the question posed by s.642(4) of the Act, on analysis we do not think that he did. The reasonableness of conduct, in an objective sense, might be relevant when considering whether the conduct forced the employee to resign.

[37] In oral submissions counsel also contended that the Commissioner made other errors in the application of the test required by s.642(4). While there may be some inconsistencies of language, we are satisfied that when the substance of the Commissioner’s decision is considered none of the alleged errors is critical.


[38] It is important to note that an appeal of this kind cannot succeed in the absence of error. While it is true that the jurisdiction of the Commission is only enlivened if there has been a termination at the initiative of the employer, the Commissioner’s conclusion that there was such a termination can only be disturbed if it was affected by error. For the reasons we have given each of the grounds of appeal is rejected. Error not having been shown, the appeal must fail.

[39] We emphasise that the question of whether a termination is at the initiative of the employer is not the same question as whether the termination of employment is unfair. If the employer’s conduct forces an employee to resign it does not automatically follow that the termination was harsh, unjust or unreasonable. In deciding whether a forced termination is harsh, unjust or unreasonable all of the circumstances must be taken into account including the conduct of the employer, the conduct of the employee and the reasons for the conduct in each case.

[40] In determining whether a termination was at the initiative of the employer it is often necessary to consider evidence and make findings which might also be relevant in determining whether the termination was unfair. In this case Commissioner Thatcher made a number of findings which may be relevant to the question of whether the termination of Mrs Peary’s employment was harsh, unjust or unreasonable. For that reason, should conciliation be unsuccessful and should the application need to be determined by arbitration, the arbitration should be dealt with by a member other than Commissioner Thatcher. While this may be inconvenient, as he has already heard a great deal of evidence, it is important that there should be no suggestion of prejudgement of any kind.

[41] We mention an issue which may have wider significance. As we have pointed out, in cases involving resignation the factual inquiry necessary to determine whether there was a termination of employment at the initiative of the employer often overlaps with the factual inquiry necessary to determine whether, if there was such a termination, it was unfair. In some cases the overlap may be almost complete. A respondent has a statutory right to have the question of whether the termination was at the initiative of the employer determined first. Exercise of that right may, in some cases, result in significant duplication and added costs for both sides should arbitration be necessary. In mentioning the issue we do not intend to criticize Australian Hearing in any way, but it is an issue which respondents generally should be aware of.




A. McNab, of counsel, for Australian Hearing.

C. Smith, of counsel, for Mrs L Peary.

Hearing details:

Sydney, with video link to Lismore:
April, 22.

 1   [2009] AIRC 152.

 2   PR973462.

 3   [2009] AIRC 152 at para [172].

 4   Particularly in paragraphs [198], [199], [206] and [207].

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