[2018] FWCFB 5


Fair Work Act 2009

s.604 - Appeal of decisions

City of Sydney RSL & Community Club Limited
Mrs Roxana Balgowan



Appeal against decision [2017] FWC 3798 and order [PR594678] of Commissioner Cambridge at Sydney on 27 July 2017 in matter number U2017/4635; casual employment; whether casual employee was dismissed; whether proposed alteration to shifts, work location and duties performed by a casual employee was a repudiation of the contract of employment by the employer; whether there was a constructive dismissal; appeal upheld; decision and order quashed; stay order set aside; question whether there was a termination of the employment at the employer’s initiative remitted to another member for determination.

[1] City of Sydney RSL & Community Club Limited (Appellant) lodged an appeal, for which permission is necessary, on 16 August 2017 against a decision 1 (Decision) and order2 (Order) of Commissioner Cambridge in which the Commissioner determined that Mrs Roxana Balgowan (Respondent) had been unfairly dismissed and ordered compensation be paid to the Respondent in the amount of $13,566.00, subject to appropriate taxation, within 21 days.

[2] In our decision 3 of 25 October 2017 we were persuaded that an arguable case of appellable error had been established and that the appeal enlivened the public interest and consequently, we granted permission to appeal (PTA decision). Subsequently, the parties to the appeal gave their consent4 for the appeal to be conducted without holding a hearing and it appeared to us that the appeal could be adequately determined without the parties making oral submissions. We decided to determine the appeal on the papers after allowing the parties to make written submissions.
[3] The background to this appeal, a relevant summary of the decision the subject of the appeal and a summary of the grounds of appeal are set out in our PTA decision and need not be repeated here. 5

[4] We have decided to uphold the appeal on the repudiation grounds advanced by the Appellant and to quash the Decision. Our reasons for doing so are set out below as is our decision on a rehearing of the application.


[5] Section 394(1) of the Fair Work Act 2009 (Act) provides that a person who has been dismissed may apply to the Commission for an order granting an unfair dismissal remedy. Self-evidently, a person who has not been dismissed cannot apply for an unfair dismissal remedy. The meaning of “dismissed” is to be found at s.386, which relevantly provides:

[6] In its employer response to the Respondent’s unfair dismissal remedy application lodged on 1 May 2017, the Appellant raised a jurisdictional objection on the ground that the Respondent was not dismissed and asserted that the Respondent “verbally resigned her position during a disciplinary meeting on 10 April 2017”. The Respondent contested the assertion that she had resigned during the 10 April 2017 meeting. It seems to us evident on the face of the Decision that the Commissioner did not expressly determine this issue. This is apparent from [30] of the Decision which is as follows:

[7] Nor did the Commissioner determine that the Appellant terminated the Respondent’s employment directly. Instead, the Commissioner proceeded to consider the concept of constructive dismissal. The Commissioner determined ultimately that there had been a repudiation by the Appellant of the contract of employment which the Respondent was entitled to accept and did accept, thereby bringing the contract of employment (and presumably the employment relationship under it) to an end, with the consequence that it was the action of the Appellant which brought the employment to an end, and so the Respondent was constructively dismissed.

[8] It may be inferred from the Commissioner’s analysis that he ultimately accepted that the Respondent had resigned on 10 April 2017 in response to the Appellant’s repudiation of the contract of employment. This seems to us apparent from [31] of the Decision which is as follows:

[9] The distinction between a dismissal falling under s.386(1)(a) and one falling under s.386(1)(b) is sought to be explained in the Explanatory Memorandum to the Fair Work Bill 2008 as follows:

[10] It seems clear from the above that the concept of constructive dismissal is to be accommodated by s.386(1)(b) and that concept is not subsumed in s.386(1)(a).
[11] Section 386(1)(a) seems plainly to be intended to capture the case law determining the meaning of termination (of the employment relationship) at the initiative of the employer. In Mohazab the Court considered that the expression “termination at the initiative of the employer” was:

“. . . 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.’’ 6

[12] Importantly, in Mohazab the Court did not decide that the termination of employment in that case was at the initiative of the employer because there had been a constructive dismissal. Indeed, the Court expressly observed that it was “. . . unnecessary to consider whether the facts fall within or without the notion of constructive dismissal.” 7

[13] As s.386(1)(b) is intended to capture or reflect the common law concept of constructive dismissal and as the Commissioner concluded that “the applicant was constructively dismissed” because she had accepted the Appellant’s repudiation of the contract of employment and thereby brought the contract and the employment under it to an end, 8 we consider that when read in its entirety the Commissioner concluded that the Respondent had been dismissed within the meaning of s.386(1)(b) of the Act.

[14] We turn now to consider the Commissioner’s analysis and the question of repudiation. The Respondent’s submissions did not grapple with this issue. In essence, the Respondent maintained that she did not resign but that the Respondent “ended my employment by telling myself that the club was not offering myself any shifts at the club”. 9 The Respondent is therefore putting that her employment was terminated at the initiative of the Appellant. This is not unimportant and because of the basis on which the Commissioner decided the issue of whether there had been a dismissal, limited as it was to constructive dismissal, the question whether there was otherwise a termination of the Respondent’s employment at the Appellant’s initiative was neither considered nor decided.

[15] So far as is presently relevant, the Appellant contended that there was no repudiation by it of the contract of employment and consequently the Commissioner erred in concluding to the contrary and in concluding that the Respondent had been constructively dismissed. 10 As will be apparent from our discussion below, we agree.

[16] It is plain, for the purposes of identifying the relevant employer conduct as required by s.386(1)(b), that the Commissioner considered that the Appellant’s conduct, involving an alteration to the Respondent’s shifts, work location, duties and consequently remuneration, was “a repudiation of the employment”. 11 The Commissioner’s analysis is encapsulated in the following paragraphs of the Decision:

[17] That which will constitute repudiation was considered by the High Court of Australia in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd 13 (Koompahtoo) in which Gleeson CJ, Gummow, Heydon and Crennan JJ said as follows:

“In its letter of termination, Koompahtoo claimed that the conduct of Sanpine amounted to repudiatory breach of contract. The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. (In this case, we are not concerned with the issues that arise where the alleged repudiation takes the form of asserting an erroneous interpretation of the contract. Nor are we concerned with questions of inability as distinct from unwillingness.) Secondly, it may refer to any breach of contract which justifies termination by the other party. It will be necessary to return to the matter of classifying such breaches. Campbell J said this was the sense in which he would use the word “repudiation” in his reasons. There may be cases where a failure to perform, even if not a breach of an essential term (as to which more will be said), manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.

In the past, some judges have used the word “repudiation” to mean termination, applying it, not to the conduct of the party in default, but to the conduct of the party relying upon such default. It would be better if this were avoided.

. . .

For present purposes, there are two relevant circumstances in which a breach of contract by one party may entitle the other to terminate. The first is where the obligation with which there has been failure to comply has been agreed by the contracting parties to be essential. Such an obligation is sometimes described as a condition. In Australian law, a well-known exposition was that of Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd who, in comparing conditions and warranties, employed language reflected in many statutory provisions. The widespread statutory adoption of the distinction between conditions and warranties, or essential and inessential terms, is an established part of the background against which the common law has developed. The Chief Justice of New South Wales said (references omitted):

“In considering the legal consequences flowing from a breach of contract, it is necessary to remember that (i) the breach may extend to all or to some only of the promises of the defaulting party, (ii) the promises broken may be important or unimportant, (iii) the breach of any particular promise may be substantial or trivial, (iv) the breach may occur or be discovered (a) when the innocent party has not yet performed any or some of the promises on his part, or after he has performed them all, and (b) when the innocent party has received no performance from the defaulting party, or has received performance in whole or in part; and to remember also that the resultant rights of the innocent party and the nature of the remedies available to him may depend upon some or all of these matters.

The nature of the promise broken is one of the most important of the matters. If it is a condition that is broken, ie, an essential promise, the innocent party, when he becomes aware of the breach, has ordinarily the right at his option either to treat himself as discharged from the contract and to recover damages for loss of the contract, or else to keep the contract on foot and recover damages for the particular breach. If it is a warranty that is broken, ie, a non-essential promise, only the latter alternative is available to the innocent party: in that case he cannot of course obtain damages for loss of the contract.

The question whether a term in a contract is a condition or a warranty, ie, an essential or a non-essential promise, depends upon the intention of the parties as appearing in or from the contract. The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor. If the innocent party would not have entered into the contract unless assured of a strict and literal performance of the promise, he may in general treat himself as discharged upon any breach of the promise, however slight. If he contracted in reliance upon a substantial performance of the promise, any substantial breach will ordinarily justify a discharge. In some cases it is expressly provided that a particular promise is essential to the contract, eg, by a stipulation that it is the basis or of the essence of the contract; but in the absence of express provision the question is one of construction for the Court, when once the terms of contract have been ascertained. In general, Courts of common law have been more ready than Courts of Equity to regard promises as essential. This is in part due to the fact that Courts of common law are in the main concerned with ordinary commercial contracts in which it is common to find provisions which are intended to be strictly and literally performed. It is now provided by s 13 of the Conveyancing Act 1919 (taken from the Judicature Act 1873 , 36 and 37 Victoria, Ch 66, s 25(7)) that stipulations in contracts, as to time or otherwise, which would not before the commencement of the Act have been deemed to be or to have become of the essence of such contracts in a Court of Equity shall receive in all Courts the same construction and effect as they would have heretofore received in such Court. This serves to make equitable liberality of construction supersede common law strictness, so far as is consistent with apparent intention, in fields where equity and common law overlap; but it does not affect the principle that effect must be given to the apparent intention of the parties as disclosed in the contract.”

What Jordan CJ said as to substantial performance, and substantial breach, is now to be read in the light of later developments in the law. What is of immediate significance is his reference to the question he was addressing as one of construction of the contract. It is the common intention of the parties, expressed in the language of their contract, understood in the context of the relationship established by that contract and (in a case such as the present) the commercial purpose it served, that determines whether a term is “essential”, so that any breach will justify termination.

The second relevant circumstance is where there has been a sufficiently serious breach of a non-essential term. In Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, the English Court of Appeal was concerned with a stipulation as to seaworthiness in a charterparty. Breaches of such a stipulation could vary widely in importance. They could be trivial or serious. The Court of Appeal held that to the accepted distinction between “conditions” and “warranties”, that is, between stipulations that were in their nature essential and others, there must be added a distinction, operative within the class of non-essential obligations, between breaches that are significantly serious to justify termination and other breaches. This was a recognition that, although as a matter of construction of a contract it may not be the case that any breach of a given term will entitle the other party to terminate, some breaches of such a term may do so. Diplock LJ said that the question whether a breach by one party relieves the other of further performance of his obligations cannot always be answered by treating a contractual undertaking as either a “condition” or a “warranty”. Of some stipulations “all that can be predicated is that some breaches will and others will not give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and the legal consequences of a breach of such an undertaking, unless provided for expressly in the contract, depend upon the nature of the event to which the breach gives rise”. 14” [Footnotes omitted]

[18] The question whether there has been a repudiation of the contract of employment is determined objectively, it is unnecessary to show a subjective intention to repudiate 15 and is a question of fact not law.16 Relevantly, for present purposes, repudiation may exist where an employer reduces the wages of an employee without the employee’s consent17 or where there is a serious non-consensual intrusion on the nature of the employee’s status and responsibilities in a way which is not permitted by the contract.18 Similarly, if an employer seeks to bring about a change in the employee’s duties or place of work which is not within the scope of the express or implied terms of the contract of employment, the conduct may evince an intention to no longer be bound by those terms. Therefore, in these circumstances if an employee does not agree to the change, which if agreed would amount to a variation of the contract, the employee may claim to have been constructively dismissed.

[19] Conduct of an employer which repudiates the contract of employment does not by that act alone bring the contract of employment to an end. A repudiation of the contract by the employer gives the employee who is not in breach the option to decide whether to continue, that is to affirm the contract, or to treat the contract as at an end by accepting the repudiation. 19

[20] As repudiation in the second sense referred to by the High Court in Koompahtoo involves conduct in breach of the contract of employment it is plainly necessary to identify the term or terms of the contract said to exist and which it is said has or have been breached. As was observed in North v Television Corporation Ltd: 20

[21] It was not controversial in the proceedings before the Commissioner (nor before us) that the Respondent was a casual employee, albeit one engaged on a regular and systematic basis. In describing that the Respondent was engaged for an average of approximately 30 hours per week, and that she performed work which included duties as a bar attendant, cafe, cashbox and gaming floor services and that part of her role involved the Respondent performing cash handling duties, 22 the Commissioner appears to have assumed, without proper analysis, that the “employment conditions” described above or at least some of them were terms of a contract of employment of an ongoing nature which could only be altered by agreement. This we think is plain from [31] of the Decision wherein the Commissioner makes reference to the question whether the Respondent was entitled to reject “the changed employment conditions imposed” by the Appellant, with the consequence that although the Appellant “may not have taken any action to overtly dismiss” the Respondent, “but instead it changed the employment circumstances”, so as to raise the question whether “such changes permit the” Respondent “to appear to resign on the basis of a rejection of the changes in the employment” and that “these circumstances are comprehended by what is often described as a constructive dismissal”.

[22] The assumption made by the Commissioner that the particular “employment conditions” identified by him as being contractual terms is respectfully erroneous because it ignores fundamentally the casual nature of the Respondent’s employment.

[23] Although the notion of casual employment developed by reference to the characteristic that a casual employee was someone who had occasional or irregular work, this is plainly no longer the case. Casual employees now frequently work for a single employer on regular hours over extended periods. Casual employees may be used in the short term or for much longer or extended periods; they may be employed as a casual employee on a regular and systematic basis with an expectation of continuing employment on that basis; or they may be called upon to work as a casual employee infrequently or irregularly and have no expectation of being engaged otherwise. That this is so is plainly recognised in s.384(2) of the Act which describes the method by which a period of service as a casual employee is counted towards an employee’s period of employment for the purposes of ascertaining whether an employee has completed a period of continuous service with the employer at the time of his or her dismissal so as to meet the minimum period of employment identified in s.383 of the Act.

[24] The general contractual characteristics of casual employment is that a person who works over an extended period of time as a casual employee will be engaged under a series of separate contracts of employment on each occasion a person undertakes work, however they will not be engaged under a single continuous contract of employment. 23 There are some, albeit rare, cases where a casual employee has been found to have been engaged under a single continuing contract of employment,24 but the accepted orthodoxy of casual employment is the notion that each engagement is under a separate contract rather than a continuing contract of employment. True it is that service rendered under a series of separate casual employment contracts may be regarded as continuous in respect of statutory entitlements such as long service leave, certain entitlements prescribed under the National Employment Standards and accident compensation legislation, and as is evident from the above for the purposes of assessing whether a particular employee had been engaged for the minimum employment period for the purposes of making an unfair dismissal remedy application under the Act. But such recognition of casual service does not alter the fundamental contractual character of regular casual employment as a series of engagements, each under a separate contract of employment.

[25] Understood in this way, for each shift that the Respondent worked as a casual employee for the Appellant, there was a separate contract of employment. Thus, the number of shifts that the casual employee might in the future be requested to work, the location at which that work would be undertaken and the duties to be performed in undertaking that work in the future, were matters of expectation (and perhaps reasonable expectation), but not terms of the contract of employment, which were only for the shift on which the Respondent as a casual employee was engaged. There is nothing in the material before the Commissioner which would support a contrary conclusion. All of the evidence is suggestive of casual employment on a regular and systematic basis with a reasonable expectation of ongoing casual employment on a regular and systematic basis.

[26] As we have already observed, there was no contest as to the Respondent’s status as a casual employee. There was no written contract of employment. The work the Respondent performed involved a variety of general hospitality duties including bar attendant, café, cash box and gaming floor services. 25 The Respondent was rostered an average of approximately 30 hours per week but this would fluctuate depending upon the operational needs of the Appellant as well as the nature of casual employment.26 The Respondent’s evidence was that she could work between four (4) to six (6) shifts a week, but the number of shifts she would work would be dependent upon whether she picked up extra unrostered shifts.27 Moreover, we accept the Appellant’s submission that there was no suggestion that an entitlement to work an average of 30 hours or to undertake work cash box shifts was an implied term of the contract of employment.

[27] We would adopt with one modification the observations of Gooley DP in Andrew Kim v. ORC International Pty Ltd 28in which the Deputy President said:

[28] The one modification is that it seems to us plainly possible that there can be a repudiation of a contract of employment governing the engagement of a casual employee during a shift. A simple example will suffice. There may be a repudiation of an employment contract in circumstances where during a casual shift the casual employee is assaulted by his or her employer or is told by the employer that the casual employee will not be paid for the hours already worked by that employee.

[29] Since neither the future shifts, weekly hours and duties that the Respondent expected to work and perform nor the location at which that work would be undertaken were contractual, it was not open for the Commissioner to conclude that the proposed alteration, albeit short term, to the number of hours or shifts that the Respondent as a casual employee would be offered, the location at which work during those hours would be performed or the duties to be performed was a repudiation by the Appellant of the contract of employment. It follows that there was not a constructive dismissal.

[30] But that is not the end of the matter. As we have already observed the Commissioner decided the matter on the question whether there had been a constructive dismissal. The Commissioner did not consider whether there had otherwise been a dismissal, that is, whether the Respondent’s employment with the Appellant had been terminated at the Appellant’s initiative. As we have earlier noted, the Respondent maintains that she did not resign and that her employment was terminated at the Appellant’s initiative when the Appellant’s representative (Ms Faaui) told her that it would not offer her “any shifts at the club”. Since neither party properly addressed that possibility in their written submissions, it is not appropriate for us to determine that issue by way of a rehearing. In those circumstances we propose to remit that question to another member of the Commission for determination.


[31] For the foregoing reasons we have determined that the Commissioner erred in his conclusion that the Respondent had been constructively dismissed. We therefore order as follows:


Written submissions:

Appellant’s Submissions dated 22 November 2017.

Respondent’s Submissions dated 6 December 2017.

Appellant’s Submissions in reply dated 13 December 2017.

 1   [2017] FWC 3798

 2   PR594678.

 3   [2017] FWCFB 5537

 4   Telephone call on 28 November 2017 from Respondent confirming her consent to having matter dealt with on the papers and email from the Appellant dated 29 November 2017 confirming its consent.

 5   [2017] FWCFB 5537 at [3] – [20]

 6   (1995) 62 IR 200 at 205

 7   Ibid at 208

 8   [2017] FWC 3798 at [39]

 9   Respondent's outline of submissions on appeal dated 6 December 2017 at [5]

 10   Outline of the Appellant’s appeal submissions dated 22 November 2017 at [5] – [15]

 11   Ibid at [38]

 12   [2017] FWC 3798 at [36] – [39].

 13   (2007) 233 CLR 115

 14   Ibid at [44] – [49]; see also Fishlock v The Campaign Palace Pty Ltd (2013) 234 IR 1 at [116] – [130]

 15   See for example Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [32] – [41] and Fishlock v The Campaign Palace Pty Ltd (2013) 234 IR 1 at [126]

 16   See Woods v W M Car Services (Peterborough) Ltd [1982] ICR 693 at 698,699-700, 701-702

 17   See for example Rigby v Feredo Ltd [1988] ICR 29 and Brockton Holdings No V Pty Ltd v Kara Kar Holding Pty Ltd (1994) 57 IR 288

 18   See for example Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [41] – [46], [68] and Fishlock v The Campaign Palace Pty Ltd (2013) 234 IR 1 at [126]

 19   See Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 at 450 – 453, 461 – 463, 465 – 467; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 47 – 428; Visscher v Giudice (2009) 239 CLR 361 at [53] – [55]

 20   (1976) 11 ALR 599

 21   Ibid at 609

 22   [2017] FWC 3798 at [5]

 23   See Predl v DMC Plastering Pty Ltd [2014] FCCA 1060

 24   See AJ Mills & Sons Pty Ltd v Transport Workers’ Union of New South Wales [2009] NWSIRComm 135; (2009] 187 IR 56, which involved a casual engagement requiring a racing steward to attend throughout the year.

 25   [2017] FWC 3798 at [5]

 26   Exhibit 4 at paragraph (6), cited in [2017] FWC 3798 at [5]

 27   Transcript dated 13 July 2017 at PN62 - PN63

 28   [2016] FWC 1029

 29   Ibid at [47]

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