Note: An appeal pursuant to s.604 (C2013/4957) was lodged against this decision - refer to Full Bench decision dated 2 August 2013 [[2013] FWCFB 5279] for result of appeal.

[2013] FWC 3941

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Fair Work Act 2009
s.394—Unfair dismissal

Kylie Bruce
Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen)



Application for unfair dismissal remedy - termination at the initiative of the employer - course of conduct engaged in by employer.

[1] On 2 May 2013 I issued a decision 1 in which I concluded that Ms Bruce was able to pursue her unfair dismissal application made pursuant to s.394 of the Fair Work Act 2009 (the FW Act) against Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen) notwithstanding that Fingal Glen was in liquidation. This decision was reached on the basis that Fingal Glen was subject to an involuntary winding up and hence, I was bound to follow the Full Bench decision in Smith and others v Trolloppe Silverwood and Beck Pty Ltd (In Liquidation).2

[2] Subsequent to that decision I issued directions 3 which specified dates upon which both parties were to file and serve material relevant to the application. These Directions stated:

[3] Material consistent with these directions was received from Ms Bruce. Nothing further has been received from Fingal Glen or from Mr White, the Court appointed liquidator. As a consequence, I have determined the matter on the material before me. I have particularly taken into account the affidavits made out by Ms Bruce, and a United Voice organiser, Mr Beasley who had significant dealings with Fingal Glen on behalf of concerned employees.

[4] Ms Bruce worked as a receptionist on a weekly hire part-time employment basis from January 2012 to January 2013. I have accepted the advice to me such that Fingal Glen employed in excess of 15 employees as at January 2013. Ms Bruce’s employment was covered by the Hospitality Industry General Award 2010.

[5] The application was made within the legislative time limit. Ms Bruce was a person protected from unfair dismissal. The Small Business Fair Dismissal Code does not have application and the termination of Ms Bruce’s employment was not a case of genuine redundancy.

[6] In her affidavit Ms Bruce detailed her experience of frequently late wage payments throughout employment and her various efforts to address her concerns in that respect. These included discussions with the Victorian-based senior managers of Fingal Glen. Ms Bruce also detailed the non-payment of superannuation monies due to her. Ms Bruce took annual leave in early January 2013. She was due to be paid on 3 and 10 January 2013. Her affidavit states:

[7] Her letter of resignation states:

[8] Ms Bruce attached to her affidavit, bank statements which confirmed that wage payments, paid by electronic bank transfer, were commonly made to her on differing days of the week and were frequently late.

[9] I have noted that Mr Beasley, a former organiser for United Voice has also recorded his difficulties in contacting the relevant Fingal Glen managers relative to numerous and ongoing underpayment issues involving employees of Fingal Glen.


[10] In order to be able to pursue her application, Ms Bruce had to be dismissed from her employment. Ms Bruce was represented in this matter by Mr Dean of United Voice, who submitted that Ms Bruce was forced to resign because of the conduct of Fingal Glen in not paying her wages regularly. Mr Dean then sets out submissions in support of the contention that this dismissal was unfair.

[11] Section 386 deals with the meaning of dismissal. This section relevantly states:

[12] A conclusion with respect to this issue requires a decision on whether the Commission has the jurisdiction to consider the application.

[13] The phrase “termination at the initiative of the employer” has long been an integral element of the concept of dismissal under workplace relations legislation and is being considered in the context of the Termination of Employment Convention. Section 386(1)(b) is an addition included in the FW Act. The Explanatory Memorandum makes it clear that this provision is intended to reflect the case law relative to the interpretation of the phrase “termination at the initiative of the employer”. The Explanatory Memorandum states:

[14] In O’Meara v Stanley Works Pty Ltd 4 a Full Bench considered the authorities relevant to the concept of termination at the initiative of the employer in the following terms:

[15] I have adopted this approach. A further guide to the approach to be adopted was simply expressed in another AIRC Full Bench decision which dealt with termination at the initiative of the employer. In Searle v Moly Mines Limited 5 the Full Bench stated:

[16] It is clear that a failure on the part of an employer to pay the employee can amount to termination at the initiative of the employee, or for that matter, can be described as a course of conduct engaged in by the employer that forced an employee to resign.

[17] In Thomas Hobbs v Achilleus Taxation Pty Ltd ATF The Achilleus Taxation Trust and others (Hobbs), 6 Deegan C dealt with a situation she described in the following terms:

[18] The Commissioner concluded:

[19] I do not consider Ms Bruce’s situation to be so extreme.

[20] Ms Bruce’s employment was covered by the Hospitality Industry (General) Award 2010 (the Award). Clause 26 of that Award states:

[21] Hence, the award recognises situations where payments to employees will be late and provides an enforceable remedy in this respect.

[22] In this matter, the failure of Fingal Glen to make timely wage payments is, in my view, a matter which goes to the competence and credibility of Fingal Glen and clearly created the circumstances which prompted Ms Bruce to resign her employment. However the test goes beyond simply explaining a logical basis for the resignation.

[23] In order to reach a conclusion about the facts relevant to Ms Bruce’s situation I have noted that Ms Bruce does not assert that she was underpaid her wages. Rather, it is the late nature of payments made to her and the absence of superannuation payments which led to her resignation. That lateness was commonly one to two days but there are occasions when these payments were even later. In the period immediately before Ms Bruce resigned on 10 January 2013 her pay was four days late. Clearly such a situation was improper and represented a breach of normal employment obligations. However, it falls substantially short of the circumstance considered in Hobbs and in my view could have been addressed in a number of other ways.

[24] I have accepted Ms Bruce’s evidence and that of the United Voice organiser, Mr Beasley about how difficult it was to contact the relevant managers of Fingal Glen and how the commitments given by these people were not followed on occasion. Notwithstanding this, Ms Bruce or the union could have referred the matter to the Commission under the dispute resolution provisions of the Award, or to the Fair Work Ombudsman, or could have instigated action in the Court to claim the penalties envisaged by the Award.

[25] I do not consider that Fingal Glen’s non-payment of superannuation to Ms Bruce, even when considered in concert with the late wage payments, requires a conclusion that Ms Bruce was forced to resign. Underpayment of superannuation entitlements is a matter which is regularly taken up with the Australian Taxation Office and may give rise to compliance penalties being imposed on an employer.

[26] The Full Bench in ABB Engineering 7 observed that the distinction between an employer’s behaviour that leaves an employee with no choice apart from resignation, as distinct from other options, is often a very narrow distinction. That narrow distinction is relevant to this situation. Here, I am not persuaded that resignation was the only option open to Ms Bruce. I am particularly concerned that a pattern of irregular wage payments and the non-payment of superannuation ought not to be too readily taken to effectively terminate the employment relationship as distinct from creating a situation where the recalcitrant employer is bought to task, or possibly penalised under the appropriate legislation. The alternative position could have the potential to place the ongoing employment of many employees at risk rather than acknowledging that enforcement options exist and may be applied.

[27] In my view, serial underpayment or the late payment of wages situations, each need to be considered on the merits. In this matter, Ms Bruce was clearly entitled to be annoyed and disillusioned at Fingal Glen’s behaviour. That behaviour no doubt explains her perfectly reasonable resignation decision, but I am not satisfied that the non-compliance by Fingal Glen was of such a magnitude that, without the commencement of enforcement initiatives, it can be described as leaving Ms Bruce with no choice other than to resign.

[28] Whilst in absolutely no way condoning Fingal Glen’s behaviour, I have concluded that the resignation decision was based on Ms Bruce’s perception and a perfectly understandable and subjective response. That resignation decision was not, as of 10 January 2013, the only option open to Ms Bruce.

[29] Accordingly, I am not satisfied that Ms Bruce was dismissed pursuant to s.386(1)(a) or (b). The Commission does not therefore have the jurisdiction to consider the application further. An Order [PR538005] dismissing the application consistent with this decision will be issued.


Final written submissions:

Applicant - May 31, 2013

Respondent - June 14, 2013

 1   [2013] FWC 2704

 2   PR940508

 3   Directions of 10 May 2013

 4   PR973462

 5   [2008] AIRCFB 1088

 6   [2012] FWA 2907

 7   (1996) 9 December [N6999]

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