FWC 3941
FAIR WORK COMMISSION
Fair Work Act 2009
Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN
ADELAIDE, 19 JUNE 2013
Application for unfair dismissal remedy - termination at the initiative of the employer - course of conduct engaged in by employer.
 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
 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:
“ In the event that either party advises that it seeks a hearing in this matter, further advice about those hearing arrangements will be provided. Absent any such request, the matter may be decided on the papers.
 Compliance with these Directions is mandatory and a failure to do so may disadvantage the party concerned. This may extend to the determination of the application. Any enquiries with respect to these Directions should be provided to my office on 08 8308 9851.”
 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.
 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.
 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.
 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:
“53. While I was on holidays my pay which was supposed to be paid on the 10th of January did not come in. In my view, the situation had become untenable. I had tried everything I could think of to get paid on time but nothing had worked.”
 Her letter of resignation states:
“January 10th 2013
Please accept this as my resignation from Comfort Hotel Adelaide Riviera. My final day is Wednesday January 23rd 2013.
Although I have enjoyed my employment as a Front Office Receptionist under Daniel Thompson, I can honestly say my resignation is not with regret or disappointment.
Being paid late constantly week in and week out is stressful as well as not receiving one cent of my superannuation after 12 months of employment. I can no longer deal with the stress of my basic entitlements being neglected.
According to my payslips I am owed in superannuation, $2026.07 (financial year 2011/2012) and $2177.14, as of week ending Jan 6th 2013 (financial year 2013). I gave my superannuation fund details at the start of my employment but have been informed by Hostplus that Fingal Glen P/L or Comfort Hotel Adelaide Riviera is not registered as my current employer (reference number for conversation is 11929506).
Upon receipt of my final payment, where I expect all outstanding annual leave owing to be paid, I would like full payment of my superannuation to be paid into my superfund Hostplus 68168194.
As a current union member with United Voice, this letter will be sent to them for their records.
 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.
 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.
 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.
 Section 386 deals with the meaning of dismissal. This section relevantly states:
“386 Meaning of dismissed
(1) 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.”
 A conclusion with respect to this issue requires a decision on whether the Commission has the jurisdiction to consider the application.
 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:
“1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person‘s employment with his or her employer was terminated on the employer‘s initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer‘ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).
1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).
1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations: where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.”
 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:
“ The circumstances in which a resignation, while apparently a termination of employment by the employee, nevertheless constitutes a termination at the initiative of the employer, have been considered in a number of cases. A prominent authority is the decision of a Full Court of the Federal Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (Mohazab). In that case, the employer made a threat that unless the employee resigned the employer would ask the police to charge the employee with an offence. The analysis of the concept of termination at the initiative of the employer by the Court in that case has not always been quoted in full. It is desirable that we do so in this case. After referring to dictionary definitions of the term “initiative” and the convention giving rise to the statutory provisions, the Full Court said:
“These definitions reflect the ordinary meaning of the word ‘initiative’. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression ‘termination at the initiative of the employer’ as 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’: Siagian v Sanel (1994) 1 IRCR 1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process. An example would be a situation where the employer decided to dismiss an employee and did so orally or in writing with immediate effect. Other situations may be more complex as exemplified by the circumstances considered by Moore J in Grout v Gunnedah Shire Council (1994) 1 IRCR 143; 57 IR 243 where an employee had given written notice purporting to terminate the employment relationship. The notice was not reasonable but was accepted by the employer which later refused to allow the employee to withdraw the notice. A question arose as to whether that was a termination of the employment at the initiative of the employer and his Honour held it was. His Honour said at 160-161; 259:
‘I have already said that Div 3 concerns termination at the initiative of the employer. The respondent submits that “initiate” means “to begin, commence, enter upon; to introduce, set going, or initiate”: see Shorter Oxford English Dictionary. In this matter, it is submitted, it was the applicant and not the respondent that initiated the termination by writing the letter of 18 May. This, in my opinion, gives the expression “termination” in the Act, read in conjunction with Art 3 of the Convention which speaks of “termination … at the initiative of the employer”, a narrow meaning that was not intended. A principal purpose, if not the sole purpose, of Div 3 is to provide an employee with a right to seek a remedy in circumstances where the employee did not voluntarily leave the employment. An employee may do some act which is the first in a chain of events that leads to termination. An example would be an employee who engaged in misconduct at work which ultimately led to the employer dismissing the employee. However, that situation and the present are not situations where the termination was at the initiative of the employee. In both instances the step or steps that effectively terminated the employment or purported to do so were taken by the employer.’
In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an 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. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations Court of Australia, July 1995, Wilcox CJ). His Honour, at p 3, referred to the situation of an employee who resigned because ‘he felt he had no other option’. His Honour described those circumstances as:
‘… a termination of employment at the instance [of] the employer rather than of the employee.’
And at p 5:
‘I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.’”
 Moore J, one of the members of the Full Court in Mohazab, addressed the question further in Rheinberger v Huxley Marketing Pty Limited (Rheinberger). His Honour said, after referring to extracts from Mohazab:
“However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct.”
 In this Commission the concepts have been addressed on numerous occasions and by a number of Full Benches. In Pawel v Advanced Precast Pty Ltd (Pawel) a Full Bench said:
“ It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee. In the instant case the uncontested factual findings are that the applicant had for almost the whole of his employment performed welding duties; that there was no objective threat to his health and safety involved in the requirement that he undertake welding duties so long as it was not on a continuous basis and that the welding he was required to do was not continuous.”
 In the Full Bench decision of ABB Engineering Construction Pty Ltd v Doumit (ABB Engineering) it was said:
“Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination. The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer’s conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer’s conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.”
 In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to 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. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” 19 Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”
 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:
“ .... Where questions of jurisdiction are involved it is the facts which are relevant, not the parties’ subjective beliefs or the reasonableness of their conduct.”
 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.
 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:
“ It was the unchallenged evidence of the applicant that he had been employed by the respondent from 1 July 2010 as an under-graduate accountant, working approximately 40 hours per week. While the respondent initially paid the applicant on time and the correct amount, a pattern of irregular payment of the applicant’s wages emerged. The applicant suspected that the respondent had cash-flow problems and believed that his wages would be paid eventually. However, as time progressed the payments became more irregular, and when payments were made they were made for only some of the amount owed.
 The Applicant produced pay slips to show that between 20 July 2011 and 2 November 2011 he had earned $11,647.75. He also produced documentation to demonstrate that in the same period he had received only $3,570.00 of that amount from the respondent. On numerous occasions between 2 November 2011 and 29 November 2011 the applicant raised with the respondent the non-payment of his wages. He sent the respondent emails and text messages and made a number of telephone calls. The only replies received from the respondent did not address the issue of the applicant’s unpaid wages.
 On 29 November the applicant, having decided that he had little prospect of recouping his unpaid wages, provided a letter to his employer giving two weeks’ notice of his resignation together with a letter of demand for his unpaid wages.
 It was the evidence of the applicant that he was owed annual leave entitlements by his former employer and that no superannuation payments had ever been made on his behalf.”
 The Commissioner concluded:
“ I accept the evidence of the applicant that he resigned his employment as a result of the respondent’s failure to pay his wages in full and on time. On the evidence it is clear that the applicant was forced to resign by the conduct engaged in by his employer. The applicant could not be expected to continue to provide services to his employer in a situation where the employer did not pay his wages. Clearly the applicant was dismissed for the purposes of s. 386 of the Act.”
 I do not consider Ms Bruce’s situation to be so extreme.
 Ms Bruce’s employment was covered by the Hospitality Industry (General) Award 2010 (the Award). Clause 26 of that Award states:
“26. Payment of wages
26.1 Except upon the termination of employment, all wages including overtime must be paid on any day other than Friday, Saturday or Sunday in each week. However, by agreement between the employer and the majority of employees in the workplace, in a week where a holiday occurs payment of wages may be made on Friday.
26.2 By agreement between the employer and the employee wages may be paid either weekly or fortnightly by one of the following means:
26.3 However, an employer may pay an employee weekly by cash without consultation.
26.4 Employees who are paid their wages at any time other than during their working time, will, if kept waiting more than 15 minutes, be paid overtime rates for all such waiting time.
26.5 Employees who are not paid by electronic funds transfer and whose rostered day off falls on pay day must be paid their wages, if they so desire, before going off duty on the working day prior to their day off.”
 Hence, the award recognises situations where payments to employees will be late and provides an enforceable remedy in this respect.
 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.
 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.
 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.
 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.
 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.
 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.
 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.
 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.
SENIOR DEPUTY PRESIDENT
Final written submissions:
Applicant - May 31, 2013
Respondent - June 14, 2013
1  FWC 2704
3 Directions of 10 May 2013
5  AIRCFB 1088
6  FWA 2907
7 (1996) 9 December [N6999]
Printed by authority of the Commonwealth Government Printer
<Price code C, PR538004>