DECISION

Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal

James McKay
v
Astro Aero Pty Ltd
(C2021/6367)

Application for an unfair dismissal remedy – whether the Applicant was dismissed – the Applicant was dismissed – jurisdictional objection dismissed

[1] James McKay (the Applicant) lodged an application with the Fair Work Commission (the Commission) pursuant to s.365 of the Fair Work Act 2009 (the Act) to deal with a general protections dispute in relation to the termination of his employment with Astro Aero Pty Ltd (the Respondent).

[2] It was uncontroversial that the Applicant had been employed by the Respondent since on or around 29 January 2020 and that he had resigned on 10 September 2021, effective immediately. However, while the Applicant asserts that his resignation was a constructive dismissal, the Respondent contends that he voluntarily resigned.

[3] Directions were issued for the filing of submissions and evidence in respect of that jurisdictional objection. The hearing took place before me by Microsoft Teams on 1 December 2021, at which both parties sought to be represented. To allow the matter to be dealt with most efficiently – given the legal question of whether a dismissal occurred – I was satisfied that the present case is one in which both parties and the Commission would benefit from the assistance of legal representation to allow for the efficient conduct of the case. Accordingly, both parties were granted permission to be represented. Brian Newman from Workplace and Human Rights Advocates represented the Applicant, while Simon Grant of counsel represented the Respondent, instructed by Richard Gunningham from Batch Mewing.

Background

[4] The Respondent is a project company, meaning that its purpose is to execute a single project being the design and manufacture of a prototype single engine freight aircraft. The Respondent does not itself generate any revenue or profit. All its funding comes from a benefactor, David Chou, who sells and leases aircraft across Asia.

[5] The Applicant and his wife both commenced employment with the Respondent on or about 29 January 2020 in the role of CAD Design Draftsman.

[6] During 2021, the Respondent was late in paying the wages of all its employees on six occasions due to funding difficulties. In February 2021, the Applicant’s wage was paid to him 24 days late, in April it was seven days late, in May it was 10 days late, in June it was 53 days late, in July it was 31 days late and in August it was two days late. Given the Respondent’s late payments and allegedly poor communication in respect of same is the basis of the Applicant’s application, it is worth setting out some of the written communication exchanged between the parties during that period.

Chronology

[7] On 23 February 2021, Peter Adams (Project Director) notified employees by email that February wages will be late. He wrote:

“I thought it best to let you know due to February being a short month and the end of the month overlapping with the weekend, the wages payments for this month will roll over to the 1st week in March.”

[8] On 3 March 2021, Mr Adams wrote again in respect of the outstanding February wages:

“As of mid‐afternoon today we are waiting for the wages fund transfer from the bank in Hong Kong to clear. Realistically, at this rate, as it takes 3 days to process the entire group, it could be Monday before the wage payments are processed into your local accounts. I’ll let everyone know once the funds have been cleared – again apologies for the delay.”

[9] Then on 11 March 2021, Mr Adams wrote:

“I have not yet received confirmation the funds have been cleared, we will let you know the moment we have confirmation. I appreciate this is far from satisfactory, however I ask everyone to be patient a little longer.”

[10] Also on that day, the Applicant – after consulting with the Fair Work Ombudsman (FWO) – wrote to the Respondent requesting payment of his outstanding February wages.

[11] On 12 March 2021, Mr Adams followed with another email:

“There has been several communications with David last night and this morning, he is confident, as am I, the payment issue will be resolved very soon. He will send confirmation ASAP. He also mentioned there are processes being put in place to prevent this happening again.”

[12] On 17 March 2021, the Applicant wrote to Justin Stannard (Head of Design) about the anxiety caused by the outstanding pay issues:

“In my weekly report I highlighted that productivity has been affected due to the ongoing pay issues. In the team meeting on Tuesday (16 Mar), I raised the fact that the added anxiety was affecting team morale and productivity which would have a knock-on effect on the schedule. The team was told that they have all the tools that they need to do the job and schedule should not be affected by the pay issues. Aside from acknowledging in the meeting that management had read my weekly report, the mental wellbeing of employees was dismissed and I have had no feedback on the issue.

I realise that no one at Astro Aero has any idea or control over when pay issues will be resolved. The legalities of not paying employees is somewhat concerning and more so is the fact that the effects on mental wellbeing of employees are ignored.

We have been told to raise any issues that we have with our immediate supervisor which is why I am sending you this.”

[13] Mr Stannard replied to the Applicant and requested a phone call. Following that call, he sent the Applicant an email confirming that he had raised the general issue of anxiety regarding the delayed payments with Francois van Teijlingen (the Respondent’s Accountable Manager, Design Organisation) and Mr Adams and requested that this be remembered when communications were sent to staff. He also asked that, “all staff to keep in mind that management are just as stressed about the situation. Local management are responsible for comms, but cannot control the pay situation as you are aware.” He also “raised the possibility of a direct briefing from Jessica, as the Astro CEO”.

[14] Between 18 March 2021 and 26 March 2021, Mr McKay was the subject of a medical certificate which provided he was unfit for work.

[15] On 26 March 2021, Jessica Wang (the Respondent’s CEO) wrote to all staff. Ordinarily, it would not be necessary to reproduce large passages, however I have done so because the tone of the letter may be some significance. It read:

“Dear All,

As the chairman of the Board Mr Chou informed Peter in mid Feb that the wages payment would be late and Peter has advised everyone of this information immediately without holding back, although we could not tell Peter the exact date at each of the regular updates but to pass on the information to the team for advance notice. There was never any inference (intention) that the team would not get paid. The delay has caused me and Mr Chou a great deal of embarrassment and personal anguish.

For the past year during the pandemic there have been many shutdowns and layoffs within this industry all around the world including Australia. We have been very fortunate to avoid much of this upheaval…. We are very much aware of the commitment shown by members of the team who have moved their families… At the same time we hope you recognise the company has remained very committed to seeing the project through even though schedules have slipped.

We do care for the team wellbeing therefore informed Peter that the March salaries were to be paid as soon as possible before the end of the month. Unfortunately, due to unforeseen delays the March Pay-run could not commence until the 25^th not the 15^th as was the original instruction. However, I understand all but some of management will have been paid by today the 26^th…

We are not here to provide the dream or transit job. From our experience with other project, to be successful, it requires an extraordinary effort and commitment from all involved…

It is of some concern the increasing number of days missed due to personal leave and sickness.

This is a major investment from the group and as the CEO of the company it is my responsibility to report to the Group Chairman of the schedule delay due to funding restrictions or management or staff behaviour having a negative influence on the programme timing… Hard work, perseverance, mutual respect and trust are the keys to success.

The company needs to complete the project as planned…

I trust the team will continue to remain committed and focused to deliver project in a professional manner as soon as possible...

Regards

Jessica Wayne

CEO Astro Aero Pty Ltd”

[16] On 26 March 2021, the Applicant wrote to Mr van Teijlingen and others indicating that there were several factors contributing to poor employee morale including the payment issues, as well as bullying and lack of trust.

[17] On 28 April 2021, Mr Adams wrote to staff forwarding a message from Ms Wang which stated:

“Unfortunately, despite our best efforts and reassurances, there has again been a delay in the foreign exchange approval processing time. On checking this morning the funds will not clear into HSBC (Hong Kong) until Thursday 29th at the earliest. As it normally takes 2 working days for the funds to be transferred from HSBC to Westpac Hervey Bay the wages payments will slip into next week. At this stage I cannot say exactly on what day the wages will be paid. The funds transfer is dependent on approval being given by the State Administration of Foreign Exchange (SAFE). I request your understanding in this matter.”

[18] On 4 May 2021, Mr Adams informed staff that the funds had been transferred and it would ordinarily take two days to clear.

[19] On 25 May 2021, Mr Adams informed staff that the funds for the May wages would be transferred on the following Thursday, so the pay run is scheduled to run between 27 and 31 May 2021.

[20] There was some further correspondence over the next week about the payment of the May wages but it was not until 8 June 2021 that Mr Adams wrote to staff stating:

“We have received the payment receipt from HSBC to the Astro account. Allowing 1 day for clearance, the wages payments will run over the period 10th – 12th.”

[21] On 25 June 2021, Mr Adams told staff that there going to be a delay with respect to June wages. Again, there was a series of correspondence from Mr Adams to employees. On 1 July 2021, Mr Stannard wrote to staff indicating that he had written to Mr van Teijlingen expressing the frustrations felt by himself and the engineering team regarding the wages payment and the communications surrounding the late payment. That email was forwarded to Mr Chou and Ms Wang. Mr Chou’s response stated that he appreciated it was a difficult time but reiterated that the Respondent was committed to continuing its business and retaining its staff. Mr Stannard stated the Mr Chou, “specifically acknowledged that the project can only continue and be successful with the support of loyal and passionate staff.”

[22] Also on 25 June 2021, management wrote to employees indicating there would be another delay to wages and advised employees to plan accordingly. On 29 June 2021, Mr Adams wrote to advise staff that there would be a 7 to 10 day “slippage” until funds would be cleared and available. Further communications regarding the payment of June and July wages followed.

[23] All staff, including the Applicant, were paid an ex-gratia payment of $1000 in July 2021.

[24] On 15 July 2021, Mr Stannard, Brian Walsh (Head of Production) and Daniel Rich (Head of Flight Test) wrote to Mr van Teijlingen and Mr Adams expressing the staff’s gratitude to Mr Chou for the goodwill payment (of $1000) and video message, but also summarising the financial impacts that the delayed payment of wages was having on staff. They indicated that some staff were having to take out loans to meet living costs, were unable to pay their credit card bills by the due date thereby incurring significant interest, missing payments on school fees, redrawing funds from their mortgage or incurring additional interest on mortgages due to using offset accounts to cover living expenses. They were just a few of the examples given in their letter. The letter also set out a payment timeline and asked that communication from management be improved. The staff felt that up until this point management had barely acknowledged the significant impacts that the Respondent’s failure to pay their wages on time was having on each of them.

[25] A company-wide briefing was scheduled. On 23 July 2021, Mr Stannard sent an email which refers to an offer by Ms Wang to contact her for a confidential discussion if anyone was experiencing financial hardship.

[26] On 27 July 2021, employees were given the opportunity to stay at home on full pay until 11 August 2021 by which time management expected the wages would be paid. This period was extended twice by a week each time, until the overdue wages were finally paid on 24 August 2021.

[27] On 29 July 2021, Mr Adams wrote to staff in respect of the July wages, stating:

“Funds for the July wages are being released by HSBC in Hong Kong on Friday the 31st. As it takes a day to clear, with the week-end in between it will be the 4th and 5th before funds are cleared and paid into your accounts. I apologise for the inconvenience this may cause.”

[28] On 3 August 2021, Mr Adams sent an email in respect of the outstanding July wages stating:

“Unfortunately there is going to be a further delay to the funds being transferred for the July wages. The latest advise [sic] is funds will not be transferred to late this week.

David has asked to extend his apologies to the team for this delay and has given instructions for the August wages be paid a week early to allow for any issues that may again arise, to be taken care of.

The superannuation on the July wages was paid last Friday.

Again I apologise for the inconveniences this may cause.”

[29] On 6 August 2021, Mr Adams wrote again to staff stating:

“I am awaiting confirmation David has received clearance for the funds to be transferred from HSBC Hong Kong to the Astro Westpac account.

Realistically the earliest this will happen is tomorrow. Allowing for the weekend and one working day it normally takes to clear the funds, It will be Tuesday and Wednesday before the July wages are paid. I appreciate early payment of the August wages is little help to those seriously affected by this delay however payment is being scheduled for the 20th and 21st of August.”

[30] Between 25 August 2021 and 12 September 2021, Mr McKay was the subject of a medical certificate which provided he was unfit for work.

[31] By 2 September 2021, the Respondent had paid all employees their wages, including the Applicant and his wife. They had both also received a $1000 ex-gratia payment.

[32] On 10 September 2021, both the Applicant and his wife resigned from their employment with the Respondent, effectively immediately. In the Applicant’s resignation letter, he wrote:

“To whom it may concern

I regret to inform you of my decision to end my employment with Astro Aero, effective today, 10 Sep 2021.

The repeated failure of Astro Aero to pay my wages on time over the past seven months, the lack of adequate and timely communication on the matter and the lack of visibility on measures in place to prevent this from happening in the future has left me with no choice but to end my employment.

To summarise, Astro Aero has paid my wages late on the following occasions this year:

Feb 2021 – 24 days late

April 2021 – 7 days late

May 2021 – 10 days late

Jun 2021 – 53 days late

Jul 2021 – 31 days late

Aug 2021 – 2 days late

With a young family, and my wife working in the same field, I need a stable and reliable income, which, if I was paid according to my employment contract, Astro Aero would have provided. Continued failure to pay my wages on time has forced me to leave and seek employment elsewhere.

I feel it is unfortunate to have come to this and wish Astro Aero every success in it’s [sic] future endeavours.

Yours faithfully,

James McKay”

[33] On 14 September 2021, Mr van Teijlingen wrote to the Applicant on behalf of the Respondent stating that:

“Good Day James,

Thank you for providing notice of your resignation.

We don’t agree that you have no other option apart from resignation, and we invite you to please reconsider your resignation.

You do have the option of remaining employed.

All late wages have been paid. We regret that the impact of COVID-19 has meant that payment of wages has been late for periods this year. This has been because of the devastating and ongoing impact of COVID-19 upon the industry. However please understand that Astro has done everything possible to manage the impact of late wages upon its employees.

For example, we offered all employees the option of not attending work without deduction of leave, with payment in full for those periods as soon as the company had the funds. This has now occurred. We also made an ex-gratia payment to all employees and offered to make additional support payments upon request.

Notice of Resignation

We do not agree that you have no other option apart from resignation and invite you to please reconsider.

Please confirm one way or another whether you still intend to resign by close of business on Wednesday.

If upon consideration it is still your intention to resign, or if we do not hear from you by Wednesday, please note that you must give us notice of your resignation as required under your employment contract.

If you would like us to waive the requirement that you work your notice period, please let us know, and we will then consider paying you in lieu of all or part of your notice period…

We hope that you reconsider and please contact me if you would like to discuss.

Best Regards,

Francois van Teijlingen

Accountable Manager, Design Organization

Astro Aero Pty Ltd”

[34] The Applicant did not contact the Respondent following receipt of that email. Accordingly, the Respondent accepted the Applicant’s (and his wife’s) resignation on 17 September 2021 and notified him of same by email.

Was the Applicant dismissed?

A note about the evidence

[35] I have read and considered all the submissions and evidence provided by each party. However, my decision is based primarily on the undisputed sequence of events as set out in the chronology above. The allegations made (and the responses to those allegations) regarding the behaviour or comments of particular individuals on particular occasions, while providing additional context to the present matter, need not be reproduced here.

[36] I place no weight to the recordings provided and little weight to the alleged comments attributed to local management that would suggest there was any bullying or pressure placed upon employees to not protest too vigorously about the late wages payment generally or make this an issue with Mr Chou. I accept that local management were attempting to keep morale and motivation during a period that the workforce and the Applicant became increasingly agitated (rightfully so) regarding the late payments. As it happens, given the clear documentary evidence as set out above, the matter can be resolved without having regard to such allegations. The chronology of events speaks for itself. Consequently, I have summarised in short compass the other material relied upon by each party.

Respondent’s submissions

[37] The Respondent submits that the Applicant was not dismissed within the meaning of s.386 of the Act, but rather resigned voluntarily from his employment.

[38] The Respondent asserts that contrary to what is claimed by the Applicant in his resignation letter – that is, that the non-payment of wages “continued” – at the time of the Applicant’s resignation, the Respondent had paid all his (and his wife’s) outstanding wages.
[39] Similarly, the Respondent points to the Applicant’s admission in cross-examination that in resigning on the same day as his wife, the Applicant did not provide “a stable and reliable income” for their young family, noting neither of them had any position to go to, contrary to the intention evinced in the Applicant’s resignation letter to find financial stability for their family. Furthermore, the Applicant acknowledged in evidence that his resignation came about in circumstances where he understood the choice in his current role was between not knowing when he would be paid and the uncertainty of not being paid at all until he found employment elsewhere.

[40] The Respondent submits that there were options available to the Applicant other than resignation. By his conduct, he had demonstrated that he was aware of his rights and capable of making a complaint to the FWO. Given his previous interactions with the FWO he now had direct contact details to a FWO inspector so was well placed to make another complaint should another late payment occur. There was therefore another option available to the Applicant apart from resignation.

Evidence of Francois van Teijlingen

[41] Mr van Teijlingen gave evidence in these proceedings on behalf of the Respondent. He stated that from early 2020, Mr Chou stopped approving expenditure for procurements and by February 2021, the Respondent stopped receiving funding in advance. This meant that at times the Respondent had not received funding in time to pay its employees’ wages, causing wages to be paid late for periods in 2020 and 2021. Mr van Teijlingen had been told by Mr Chou that the funding issue was caused by the impact of COVID-19 on the aircraft industry. He had been informed that the revenue Mr Chou’s companies derived from selling and leasing aircraft across Asia was negatively impacted by the sharp decrease in overseas travel and that many carriers had grounded their fleets. Mr Chou informed him that the airline to whom he sold and leased planes to fund the Respondent went bankrupt.

[42] Mr van Teijlingen’s evidence was that since 1 September 2021, the Respondent’s funding situation has greatly improved. All employees’ wages had been paid on time and approval had been given by Mr Chou to recruit new employees (including for the Applicant’s role) and lease a new hanger. It is expected that the Respondent will keep operating, begin the manufacturing phase of the prototype and deliver upon its mission to create a new single engine freight aircraft.

[43] Mr van Teijlingen denied the Applicant’s allegations that he behaved unprofessionally and had he made some of the comments attributed to him.

Evidence of Peter Adams

[44] Mr Adams also gave evidence in these proceedings on behalf of the Respondent. He is both a director of the Respondent and a Project Director. He and Mr van Teijlingen manage the day-to-day operations of the Respondent, but he reports to Mr Chou (in Canada) and Ms Wang (in China). When funding for the Respondent was insufficient and delayed causing the late payment of wages, he was the primary point of contact with Mr Chou. He also took responsibility for communicating about the delays to the Applicant and other employees.

[45] Mr Adams’ evidence was that prior to March 2020, the Respondent had not had any issues in respect of funding. From early 2020 it became progressively more difficult to get expenditure other than wages approved. In or about February 2021, the Respondent stopped receiving payments for its budget (including wages) a month in advance.

[46] The Respondent was due to pay its employees monthly, on the last day of each month. Unfortunately, delayed funding led to the late payment of wages to the Applicant and all other employees. When funding was received, Mr Adams prioritised the payment of wages above all other expenses.

[47] Mr Adams noted that offers of financial assistance were made in July 2021 after the Respondent acknowledged the impact that the late payments of wages were having on employees. Employees were provided with a $1000 ex-gratia payment and paid special leave in late July and early August.

Applicant’s material

[48] The Applicant submits that he was left with no choice but to resign from his employment. In other words, he was constructively dismissed. The Applicant alleges that he had lost all trust that the Respondent would pay wages in a timely manner in alignment with their contractual obligations. The late payments spanned the period from February 2021 until early September. The timeline was set out above.

[49] Furthermore, the Applicant stated that employees were encouraged not to raise issues regarding wage payments in case the sponsor for the project would withdraw his support, implying that the project would be abandoned. As I have stated above, given my reliance on the documentary evidence, I have not given this allegation much weight.

[50] The delayed payments, imperfect communication by the Respondent in respect of same and poor workplace culture caused the Applicant great stress and anxiety. He required periods of leave between 18 March to 26 March and 25 August 2021 to 12 September 2021.

[51] The Applicant says it is important to understand the context of his employment. He and his wife had relocated themselves and their children to Australia for the opportunity to work on this project. Given that both the Applicant and his wife were employed by the Respondent, the financial burdens of the whole family rested upon the payment of wages by the Respondent. That was one of the reasons why the situation was so stressful.

[52] The Applicant asserts that when employees returned to work on 25 August 2021 following a four-week break from work, management did not provide any further explanation for the delay and, he contends, there was no sincere apology for the situation. There were more reassurances on the project’s future by management. The Applicant’s July wages (due end of July) were received on 1 September and August wages were paid on 2 September 2012.

[53] The Applicant understood that other staff had resigned during the ongoing pay disputes. One such staff member was Justin Stannard, the Head of Design, to whom the Applicant reported.

[54] When the Applicant spoke to management on 9 September 2021 about the pay matter, he did not receive any assurances that the pay issues would not continue. That is one of the reasons he resigned on 10 September 2021 with immediate effect. The other reasons were, more specifically, because:

(a) of the Respondent’s failure to pay wages on time in February, April, May, June, July and August 2021;
(b) the Respondent’s poor communication with staff about those late payments; and
(c) as a result of the matters stated above, they no longer trusted the company to fulfil its contractual obligations to pay them and there was no assurance that late payment of wages would not occur again.

James Newcombe

[55] The Applicant relied on evidence given by James Newcombe, a colleague of his who was employed by the Respondent from 19 March until 24 September 2021. He was a member of the design team and claims to have witnessed and supports many of Mr McKay’s evidence.

[56] Mr Newcombe recorded several management meetings during July 2021 and August 2021. Mr Newcombe asserts that staff were frequently threatened with project closure if they contacted authorities or questions specific work practices. As many of the staff were on temporary work visas he asserts that management used the perceived threat of deportation to ensure staff were lined with management’s direction. Mr Newcombe provided examples to support the view that management did not wish to be question all the pay or concerns more broadly that staff had about the operation running of the project.

[57] For the reasons set out above, I have not relied upon Mr Newcombe’s evidence.

Michelle McKay

[58] Michelle McKay is the Applicant’s wife, who had also been employed by the Respondent since 29 January 2020. She held the same position as her husband and was present in the management meetings and supported her husband’s observations of local management and communications received by the workforce. She noted that despite the information provided to staff on 12 March 2021 that “processes being put in place to prevent this happening again”, the delayed payment of wages continued well after that.

[59] She also gave evidence of having seen how the deteriorating employment situation caused the Applicant great anguish.

Consideration

[60] Section 386(1) of the Act relevantly provides that 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.

[61] There is no suggestion that the Applicant’s employment was terminated on the Respondent’s initiative. The question before me is whether the Applicant resigned from his employment because he was forced to do so as a result of the Respondent's conduct or course of conduct. In short, whether the Respondent’s failure to pay the Applicant on time over a substantial period forced the Applicant to resign from his employment.

[62] In Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli (BUPA v Tavassoli), the Full Bench expanded on the second limb in the following terms:

“A resignation that is “forced” by conduct or a course of conduct on the part of the employer will be a dismissal within the second limb of the definition in s.386(1)(b). The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable (sic) result of the employer’s conduct such that the employee had no effective or real choice but to resign. Unlike the situation in (1), the requisite employer conduct is the essential element.”    1

[63] The Full Bench went on to outline the relevant authorities in relation to the second limb. In short, it is not sufficient to simply demonstrate that the employee did not voluntarily leave their employment. 2 While it may be that some action by the employer brought the employment to an end, it is not necessary to show the employer held that intention.3 It is sufficient that the employer’s conduct, would, on any reasonable view, be likely to bring the employment relationship to an end.4 Put another way, did the employer’s conduct have the probable result of bringing about the end to the employee’s employment or leaving the employee with no effective or real choice but to resign?5 It is necessary to conduct an objective analysis of the employer’s conduct to determine if it was of such a nature that resignation was the probable result or that the employee had no effective or real choice but to resign.6 In other words, it must be shown 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.”7

[64] The Applicant’s wages were paid late for six consecutive months, beginning in February 2021. For each of those months, the Respondent’s management communicated with staff indicating that funding had not been received and set out an expected payment date. Often the new date promised by the Respondent – which itself was already late – was not met. In considering whether the Respondent’s conduct left the Applicant with no effective or real choice but to resign, this fact is telling because not only was the Applicant consistently paid late, but he could also not trust that the Respondent would pay him by any revised date.

[65] The payment of wages monthly is a basic requirement under the Act. Indeed, that the return of effort is to be paid according to the with the employment contract and any other applicable industrial instrument is fundamental to the employment relationship. By frequently not complying with that agreement, the Respondent indicated that they were not going to live up to the contract between themselves and the Applicant. One or two momentary and short-lived occurrences of late payment may be accepted by parties engaged in a start-up or new organisation. Employees may be more forgiving if that occurred once or twice and was met with deep apologies and quick rectification. However, this is not such a case. This matter involved an egregious non-compliance with an employer’s obligation to pay their employees in accordance with their entitlements over a significant period. The present matter involved breaches of the employment contract by the Respondent on multiple occasions, during the course of which they only provided platitudes to the workforce about the reasons for the delays. That Mr Chou was not able to finance the regular wages of his staff and so frequently left the workforce without their monthly pay demonstrates a lack of understanding of the employment conditions and obligations required by law in Australia.

[66] I accept the Respondent’s management team on the ground in Australia had very little control and that the funding issues fell at the feet of Ms Wang and Mr Chou who were based in China and Canada respectively. Wherever within the Respondent’s enterprise those issues arose, the impact was significantly felt by each of its employees of which the Applicant and his wife were two. It seems that up until July 2021 there was very little acknowledgement from Ms Wang, Mr Chou and others within the senior management team of the significant impact that the late payment of wages was having on staff members. Even then, that acknowledgment only came about after the concern and discontent felt by staff was reported to senior management through various communications from both the Applicant himself and more senior individuals in his team.

[67] The Applicant and other employees had made it clear to the Respondent that the situation was far from satisfactory. The Applicant had specifically written to the Respondent in March noting the requirements under the employment contract and the Act. He had also raised his concerns with the FWO. Given the broken promises and lack of commitment to the monthly deadline, it is understandable that the Applicant (who was jointly responsible for the economic welfare of his family) determined that he had to leave his employment.

[68] The Respondent asked how the Applicant's resignation on the same day as his wife without further employment to go to provided a stable and reliable income opportunity for their young family. The Applicant acknowledged that it did not and that they had been relying on savings ever since. However, he noted that the Respondent’s work environment – with the uncertainty regarding the payment of wages and other workplace issues (such as bullying) that were exacerbated by the uncertainty and discontent amongst the workforce – was not an environment in which he could continue to work. For the first time in his career, he had required two periods of sick leave due to his mental wellbeing.

[69] The Respondent seeks to utilise the pandemic as a shield against responsible financial management. It relies on the proposition that staff wages were affected by the impacts of COVID-19 on Mr Chou’s other businesses, yet there was no transparency in respect of this issue. Similarly, the communication from Ms Wang noted the impact of the pandemic on the industry and suggested that the Respondent was lucky in that it had avoided the need to impose shutdowns and layoffs. The communications from the Respondent suggest an attitude whereby staff should continue working as normal, despite the consistently late wage payments, on the understanding that they would be paid at some point in the future. That is not good enough and it is not in accordance with the expectations of an employer conducting business in Australia.

[70] The Respondent points to the efforts made to mitigate the impact of the late payment of wages by the $1000 goodwill payment and the offer to staff suffering financial hardship to provide the invoices to management for assistance. Whilst at least demonstrating some awareness to the plight of the workforce (including the Applicant) it does not mitigate the Respondent’s responsibility to pay their staff in accordance with their employment contracts and pursuant to their obligations under the Act.

[71] The Respondent further asserts that by the time the Applicant resigned in September his wages had been paid in full and that he could have contacted the FWO if late payment occurred in future. On that basis, the Respondent argues that there were options available to the Applicant other than resignation.

[72] While I accept that may be so – the Applicant could have remained employed and continued working for the Respondent in a state of uncertainty as to if or when his wages would be paid – that is hardly a realistic option. There was no absolute commitment from the Respondent that the funding issue had been substantially addressed or an alternate plan being put in place by the Respondent to avoid further late payments of wages. The Applicant could have no confidence that the Respondent’s inconsistent and casual approach to the payment of wages would not continue.

[73] In that way, while the Respondent’s failure to pay its staff on time was not taken with the intention of bringing their employment to an end – in fact they continued to impress upon the staff that they should continue to work hard to ensure that the timelines for the project were met – it would, on any reasonable view bring about that outcome. Indeed, the Applicant was not the only employee to resign in these circumstances. Based on the evidence before me I am satisfied that the Respondent’s failure to pay its employees’ wages on time for six months – in circumstances where new dates for payment were proposed and then missed and when, in one month, wages remained outstanding for nearly two months – had the probable result of bringing about the end to the employee’s employment. In other words, I accept that the frequent late payment of wages to the Applicant was of such magnitude and frequency that the Applicant was left with no other reasonable choice but to resign.

[74] Accordingly, I find that there was a dismissal. I order that the jurisdictional objection be dismissed. I will list this matter for conference in due course.

DEPUTY PRESIDENT

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 1   Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli [2017] FWCFB 3941.

 2   Ibid.

 3   Ibid; see also Rheinberger v Huxley Marketing Pty Limited (1996) 67 IR 154, 160-161; see also O’Meara v Stanley Works Pty Ltd [2006] AIRC 496 (11 August 2006); Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200.

 4   Rheinberger v Huxley Marketing Pty Limited (1996) 67 IR 154, 160-161 cited in Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli [2017] FWCFB 3941 [31].

 5   O’Meara v Stanley Works Pty Ltd [2006] AIRC 496 (11 August 2006) [23].

 6   Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200.

 7   Ibid.