Dec 1609/96 S Print N6999
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.170ECA appeal re consent arbitration
ABB Engineering Construction Pty Limited
(C No. 22722 of 1996)
s.170EA(1) application to the Commission for relief in respect
of termination of employment
ABB Engineering Construction Pty Limited
(U No. 22128 of 1996)
DEPUTY PRESIDENT DUNCAN
COMMISSIONER MERRIMAN SYDNEY, 9 DECEMBER 1996
Consent arbitration; appeal; termination of employment initiated by employer
In this matter ABB Engineering Construction Pty Limited (the company) gave notice of appeal under section 170ECA of the Industrial Relations Act 1988 (the Act) on 28 August 1996. The decision to which the notice of appeal relates is an award made by Redmond C on 31 July 19961. Reasons for this award were published on 3 September 19962. It follows that the appeal is competently lodged within the time prescribed by Rule 50.
The proceedings before Redmond C concerned an application under section 170EA of the Act by Mr A.S. Doumit alleging unlawful termination by his employer, ABB Engineering Construction Pty Limited. The primary issue in the hearing before Redmond C, and also on the appeal, was whether Mr Doumit, who had tendered a letter of resignation, was in fact terminated from his employment at the initiative of the employer. Redmond C held that the applicant's employment had been terminated at the initiative of the employer and that there was no valid reason for the termination. He awarded nine weeks' payment at the applicant's final rate of pay, in compensation for the termination.
Redmond C's reasons for decision commenced with an analysis of relevant principles. For that purpose, Redmond C adopted several extracts from the decision of a Full Bench of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No. 2)3, and from a decision of Moore J in Rheinberger v Huxley Marketing Pty Limited4.
On the hearing of the appeal, Mr M. Kimber, of counsel, appeared for the company. Mr M. Kanaan, solicitor, appeared for the applicant. By consent, the application for leave to appeal was heard in conjunction with the merits of the appeal. After the decision was reserved, Mr Kanaan was given leave to lodge written submissions in reply to some points raised by Mr Kimber. In accordance with a timetable directed by the Commission, written submissions were lodged by Mr Kanaan on 25 October 1996. A reply on behalf of the appellant was lodged on 11 November 1996.
Mr Kimber put extensive submissions on the correct principle to be applied to determining the jurisdictional fact of whether a termination at the initiative of the employer is established. Those submissions were directed to a contention that Redmond C erred in both his understanding and his application of the principles to be applied to distinguish a termination of employment at the initiative of the employer from a termination by notice given by an employee. However, we did not understand Mr Kimber's challenge to have been directed particularly against Redmond C's statement of the principles derived from the decisions of the IR Court to which he had referred. Rather, Mr Kimber challenged whether the principle implicit in Redmond C's reasons for decision had been correctly understood and applied. Mr Kimber attacked specific aspects of Redmond C's concluding statements of his reasons for decision, which read:
"In May 1996 there was a proposed restructuring of the company. There was an initial meeting to discuss the restructure and then another meeting in the boardroom for the administrative staff. Mr Martin Kane was no longer to be the person to whom the applicant directly reported, but was to be promoted to Operations Manager. As a result of this restructure the applicant had to report to a person at his own level and was in his opinion, and on my view of the restructure, downgraded. There was a meeting between Mr Kane and the applicant at which the applicant tendered his resignation, giving notice from 15 May to 12 June. There is conflict between the witnesses as to what happened at this meeting and what words were used. Immediately following the presentation of the very briefly worded handwritten resignation, the applicant was taken off the computer system and walked to his desk. He was required to leave the premises immediately and to remove all of his personal belongings. He was not permitted to speak privately to other employees.
The circumstances of the resignation are disputed. Mr Kane and Mr Grant, Business Controller for the respondent, gave different evidence to that of the applicant in relation to what was said and the circumstances of the interview at which the applicant tendered his resignation.
In all areas where there is a conflict in the evidence between the applicant and the witnesses for the respondent I prefer the evidence of the applicant.
I accept there was antagonism towards the applicant from Mr Kane which was originally confirmed by Mr Kelly on the applicant's return and then confirmed by Mr Kane himself. Given the background of imminent restructure, the perception of demotion in the applicant's mind, and allegations of lying made by Mr Kane, I conclude that the termination of the applicant's employment resulted from the actions of and at the initiative of the employer. The applicant did not on the facts before me have a real choice.
I do not think that this case has any parallel with the circumstances in Grout - v - Gunnedah Shire Council (1995) 62 IR 150. The applicant does not allege that any stress he was suffering was such that he did not know what he was doing and, although the applicant was clearly angry and upset, in my view the cases are not comparable.
I have decided this matter on the basis that the applicant had no real choice, given his background and the circumstances of the employment relationship, the events on the day that his employment ceased and particularly given the conduct of the employee's immediate superior, Mr Kane. See Mohazab v Dick Smith Electronics Pty Limited (supra) 206:
`When an employee has no effective or real choice but to resign it can hardly be said that the termination of his or her employment is truly at the employee's initiative.'
The facts in this case are not as extreme as those in Mohazab v Dick Smith Electronics Pty Limited (supra). The police were not threatened to be called. However, as in that case, the behaviour of the employer in removing Mr Doumit's access to the computer immediately as if he had been terminated for misconduct and peremptorily obliging him to gather his belongings and leave the premises under escort reinforces my view that this termination amounted to a termination at the initiative of the employer.
In reaching this conclusion I have considered the evidence of the parties (and as I have already indicated I prefer the evidence of the applicant), the submissions of the parties and the various authorities referred to. In my opinion, had it not been for the employer's actions and the other background matters referred to previously in this decision, the employee would not have resigned.
This was a termination at the initiative of the employer and there was no valid reason for this termination. The termination was harsh, unjust and unreasonable. In the circumstances, giving the length of employment, the previous history between the parties and the likelihood of the employment relationship surviving into the future, I have decided to award the applicant nine weeks pay at the applicant's final rate of pay."5
In support of both the grant of leave to appeal and the merits, Mr Kimber submitted that Redmond C had fallen into a jurisdictional error in that, on the evidence before him, the Commissioner did not have any or any proper basis for concluding that there was a termination "at the initiative of the employer" within the operation and intention of section 170CA of the Act.
In Mr Kimber's submission the Commissioner erred in both his understanding and application of the established tests/principles that are to be applied when seeking to distinguish a termination at the initiative of an employee from a termination at the initiative of the employer. Mr Kimber outlined those principles as requiring that in circumstances where an employee has given an unconditional notice of intention to resign from his/her employment and where it is clear that the employee knows what he/she is doing and wants to resign (whether happily or otherwise) then the rebuttable presumption will be that the ensuing termination of employment will be at the initiative of the employee and not at the initiative of the employer: Gunnedah Shire Council v Grout6.
He submitted that the action of the employer will be regarded as "the principal contributing factor" leading to the termination in circumstances where the employer pressures the employee into resigning (e.g. by placing the employee in a situation "designed to induce" a resignation) and where it is clear that but for such pressure the employee would not have resigned: Mohazab v Dick Smith Electronic (No. 2)7. A resignation will not be characterised as a "termination at the initiative of the employer" merely because the employee can demonstrate that he/she did not voluntarily leave his/her employment. A termination at the initiative of the employer must result from some action on the part of the employer intended to bring the employment to an end, and perhaps, from action that would, on any reasonable view, probably have that effect: Rheinberger v Huxley Marketing Pty Limited8.
In Mr Kimber's submission the error in the Commissioner's appreciation and application of the relevant principles was demonstrated in passages in the reasons for decision, where Redmond C stated:
"... Given the background of imminent restructure, the perception of demotion in the applicant's mind, and allegations of lying made by Mr Kane, I conclude that the termination of the applicant's employment resulted from the actions of and at the initiative of the employer. The applicant did not on the facts before me have a real choice.
I have decided this matter on the basis that the applicant had no real choice, given his background and the circumstances of the employment relationship, the events on the day that his employment ceased and particularly given the conduct of the employee's immediate superior, Mr Kane.
... In my opinion, had it not been for the employer's actions and the other background matters referred to previously in this decision, the employee would not have resigned."9
Mr Kimber submitted that in a proper analysis the facts of the case were substantially similar to those before the IR Court in Gunnedah Shire Council (supra). In Mr Kimber's submission a number of errors were manifested in the passage quoted and in particular:
(1) The "imminent restructure" affecting Mr Doumit did not support a conclusion that termination was at the initiative of the employer. The restructure was not shown to be other than bona fide and the applicant did not at the time of his resignation assert any connection between it and his decision to resign.
(2) It was not open on the evidence for the Commissioner to conclude that the applicant reasonably held a perception of "demotion"; and no evidence existed to suggest that any change in the reporting structure was designed or intended to induce a resignation.
(3) Allegations of lying made by Mr M. Kane, then General Manager of Finance and Operations, against the applicant as a subordinate employee were a "typical workplace disagreement" about a particular work situation. There was no proper foundation in the evidence for concluding that Mr Kane wrongfully made allegations with a view to inducing the applicant to resign.
(4) The conclusion that the applicant did not have a real choice to do other than resign was not open on the evidence.
(5) There was no adequate basis for an inference that any conduct of Mr Kane toward the applicant was of a kind that could support a conclusion that the applicant was left with no option but to resign.
(6) No proper reliance could be placed on the "events on the day" that the applicant's employment ceased. The applicant's account of those events does not support the conclusion that the termination was at the initiative of the employer. Rather the applicant made a conscious and deliberate decision to resign because he did not "need this hassle anymore". The respondent's conduct after the resignation in removing the applicant from the premises should not have been considered to be capable of reinforcing a view that any conduct prior to the resignation was directed to securing a termination of the employment.
(7) Despite the Commissioner's references to "the employer's actions and other background matters", there was no evidence of relevant employer actions that could properly be regarded as either intended to bring the employment to an end, or as action which might reasonably be considered likely to have that effect.
In his oral and written submissions Mr Kanaan analysed in detail the evidence substantiating the findings of fact made or implicit in Redmond C's reasons for decision. Mr Kanaan submitted that the Commission had found that the termination was at the initiation of the employer and that decision should be sustained on appeal. Each case is to be determined on its own facts although several cases referred to by Mr Kanaan were said to provide assistance as to whether a particular set of facts is within the concept of the termination being at the initiative of the employer. Here, the termination by resignation could not be found to be untainted by any hint of pressure, and it was therefore reasonably open to Redmond C to have made the award.
The grant of leave to appeal and the merits of the appeal in this matter were argued on grounds that depend upon the adequacy of the evidence to support the findings and decision made. In the circumstances, it is convenient to outline the evidence in a way that states a number of the most salient points that, in our view, may be derived from it.
In the proceedings before Redmond C the applicant gave evidence in person and called one witness. For the respondent employer, Mr Kane and Mr A. Grant, the Business Controller for the company, gave evidence. Each witness was asked some questions in cross-examination. However, that cross-examination was rudimentary. No witness was cross-examined on a basis that put each of the main ingredients of opposing evidence to the witness.
Questions were directed to Mr Kane and Mr Grant in a way that challenged their respective denials that Mr Kane's opening statement to Mr Doumit at his final meeting with Mr Doumit was the declaration: "You're lying to me again". Plainly, Redmond C preferred Mr Doumit's evidence that that statement was made at the outset of the meeting. In that meeting, Mr Kane refused to accept Mr Doumit's explanation of a point at issue. Mr Doumit had protested that no misrepresentation was involved when he had relayed to Mr Kane information he had been given about a system fault in a payroll software application that came within the responsibility of another section. It was conceded by Mr Kimber in effect that Redmond C could properly have made a finding to the effect made.
Otherwise, there were only minor conflicts between the evidence given by Mr Doumit and the two company witnesses about what happened at the time of Mr Doumit's resignation. In the circumstances, and in the absence of specific findings by Redmond C to the contrary, we consider that the facts established on the evidence may properly be gleaned from a reading of the evidence generally.
Mr Doumit's version of the interview was first given in examination in chief in the following passages:
"... I checked with the system analyst the week before and I said to Martin (Kane) that, yes, the system - the problem has been corrected but the people in Western Australia hadn't put it to use, so they hadn't tested it and he come back to me and said, "No, you were lying to me" and I says, "I've got no control over the systems analyst. She doesn't work for me and she informed me the thing was work and as far as I'm concerned I have to accept that." That - he says, "No, that's not right." So, I said, "Well, I've had this." That's why I resigned. I got - you know, I don't want this any more. I don't need this hassle any more and I resigned. (emphasis supplied)
So, you said: I don't need this hassle any more. Did you say anything else? Did he say anything?---He says, "Well, put it in writing."
THE COMMISSIONER: You were invited to put it in writing by him; were you?---Yes. Yes. As I've had enough.
That is Mr Kane?---That's right. I said, "I've had enough of this. I don't want this any more." He said, "Well, you know, you want to resign, put it in writing." Which I did, took up to his secretary and left it with her and I've come back down and then I had Mr Kane and Mr Grant waiting for me there and he says, "You've put your resignation in writing?" I says, "Yes." He says, "Okay, get off the system straight away" and I said, "Well, it's useless me ---
... But me, being the payroll manager, it just seemed, it made me feel that you know, I'm walking out, I was here now, and five minutes from now, I'm not there, you know, what does it throw in the minds of people that I know out there. No, I think - that made me feel awful. That me feel - and, you know, I was hoping to with putting in my resignation note that if I was allowed to work out my month that, you know, maybe it'd kick off a, you know: why are you leaving, you've been here for 15 years in total, you've just been given a 15 year award, why are you leaving? That it would generate that type of situation, maybe from Mr Cockburn or Mr Maddocks, but there - that - that just didn't happen because I was out of the building within half an hour.
You were not allowed to stay?---No.
Do you tell the court, did you intend to resign on that day?---Well, no. No. There was no intention. ... You know, it's - I just couldn't take that situation any more. I know Martin didn't want me there and - for what reason I don't understand, but I know he just didn't want me there and he made it very difficult for me to stay. And it got to where it's the straw that broke the camel's back with that thing on the Wednesday. I'd just had enough. And, again, I didn't take the situation lightly. I'm building extensions on my house which means I knew there was expenses involved, but then I just, as I said, it's - I just couldn't take the situation any more."10
In Mr Doumit's cross-examination, Mr Kane's version of the first interview was not put to him in any detail.
The only significant cross-examination of those events was in the following exchange:
"Did you offer to resign or did Mr Kane ask you to resign?---No, I said I'd had enough, you know, I just can't take it anymore, I want out and I'll put it in writing.
Was it Mr Kane who said to put it in writing?---Yes. I said, "You know, do you want it to go to you or do you want it to go Alex who is going to be my new boss?" He said, "No, make it to me."
You went away and wrote out the resignation?---That's right."11
Mr Kane later gave his version of the ultimate stage of the discussion in which Mr Doumit offered his resignation. It was as follows:
"... Effectively Mr Doumit asked me to - could he see me privately as the others left and closed his door and he said words to the - basically to the effect was - it looks like you want me to resign. And I said, "Arthur, it's up to you." And he said, "Okay, I resign.". And my words were basically: I'm sorry about this. I said I get Mr Anderson who is the company secretary who was office paymaster, effectively, to come down and actually witness this.
What happened then?---I went upstairs to actually get Mr Anderson who was actually tied up at the time so Mr Grant joined me and we went through the termination procedures of the company - sorry, we went back down to Mr Doumit's office. He was not there right then but he turned up a few minutes later. He had been up at my office to drop off his written resignation.
Did you ask for his written letter of resignation at the meeting you had earlier?--I don't believe I did actually.
MR KANAAN: I am sorry, what was that?---I do not believe I actually did say those words, can I have it in writing."12
Mr Doumit's written resignation was in a longhand note addressed to Mr Kane and was in the following terms:
To Martin Kane
From Arthur Doumit
As discussed please find my letter of resignation.
My last day of work to be Wednesday 12.06.96.
It appears, from Exhibit D9 and we find, that Mr Doumit was paid by the company up to and including 15 May 1996, the date he submitted his resignation, for salary, annual leave, and long service leave purposes. No allowance was credited for service after that date for purposes of leave but he was paid a further amount of one month's salary in lieu of notice. His company car was taken back into possession on 15 May 1996 and he was put in a cab for his journey home. It appears that the payment of the amount calculated as due was made on 15 May 1996 by cheque less an amount already scheduled to be paid into Mr Doumit's bank account on 20 May 1996.
The events preceding the termination of Mr Doumit's employment may be conveniently summarised around the following points:
(1) Following Mr Doumit's voluntary retrenchment in 1989 after eight years' service, Mr Kane had opposed Mr Doumit's re-employment by the company in April 1991. Mr Doumit returned to employment with the company on the condition he would not be "working for" Mr Kane.
(2) The evidence did not establish any particular personal animus on Mr Kane's part directed against Mr Doumit. It did establish that Mr Doumit had good reason to believe that Mr Kane placed a low value on the quality of his work and his value as an employee. The clearest evidence of this occurred after a restructure of the company resulted in a purge and the departure of Mr Doumit's management superiors who were well disposed toward him, and the installation of Mr Kane as the manager to whom Mr Doumit reported. Within three months of the establishment of that relationship, Mr Kane concluded a staff development review report with the overall performance assessment that Mr Doumit "almost meets job requirements". That assessment appears to be severe for an employee who had been with the company for almost 15 years, much of it in payroll management, and able to produce favourable references from former managers. It may also have been unfair. Mr Doumit thought it to be so, and he challenged it by refusing to sign it. He protested to a more senior manager, Mr Maddocks, about the assessment. The tenor of the assessment was put in a somewhat less unfavourable light by some parts of Mr Kane's evidence to the effect that he "wanted more" from Mr Doumit.
(3) On the whole of the evidence, it is clear enough that even if Mr Kane had no personal dislike for Mr Doumit, he made no bones about his dissatisfaction with Mr Doumit's application to some of his work. On several occasions, Mr Kane upbraided Mr Doumit publicly in terms likely to be unsettling and humiliating to any subordinate employee of Mr Doumit's experience and status. The main example of that conduct, the assertion on 15 May 1996 that Mr Doumit was lying again, was defended by Mr Kimber as part of a normal range of exchanges between a manager and his senior staff. Plainly, Mr Kane's language was pejorative. It was also probably unfair. It indicated that Mr Kane had no trust in Mr Doumit.
(4) Mr Kane's intemperate aspersions against Mr Doumit's honesty and performance are part of a background of other events and circumstances relevant to Mr Doumit's decision to resign. Those events included Mr Kane's selection of one of Mr Doumit's subordinates, Mr Strike, for preferred posting to duties and associated leave without consulting Mr Doumit. Mr Strike was appointed to Mr Doumit's former post soon after Mr Doumit's resignation.
(5) Mr Doumit's performance in his work was scheduled to be reviewed by Mr Kane in early May 1996. Before that review was undertaken, a number of positions, including Mr Doumit's, were affected by another reorganisation of the management structure. Mr Doumit was to be required to report to Mr Grant. He thereby effectively slipped down a rung in the hierarchical ladder of the management structure. Mr Doumit's resignation and termination occurred before lunch on 15 May 1996. Earlier that day, the new organisation structure illustrating his loss of standing was displayed generally to staff. That display occurred at a meeting immediately before Mr Doumit was confronted for the last time by Mr Kane. Mr Doumit acknowledged that he had been told of the organisation change earlier in the week. He had acted then in a manner consistent with reluctant acceptance of a change to his status that carried no loss to his terms and conditions of employment.
(6) Mr Doumit also accepted that reference was made by Mr Kane at the time of his February 1996 performance review to Mr Doumit possibly undertaking a university level management course in 1997. He acknowledged that the reference was consistent with an apparent intention on the part of Mr Kane and the company that he would continue to be employed into 1997.
(7) It is necessary to add a reference to a consideration that may properly have been caught within Redmond C's reference to the applicant's "background". That reference was not elaborated upon and no direct comment was made on the point. Mr Doumit is about 47 years of age with just over 15 years' experience with the company or its predecessor. His salary at the time of his termination from a middle management post was $58,000. However, we consider that it is manifest from the way in which Mr Doumit's evidence reads that his background and personality was such that he may have lacked self assurance particularly in the absence of support from his superiors. That inference may have been drawn from his insistence on his not having to work for Mr Kane, from the style of his evidence and the language used in it.
An appeal under section 170ECA of the Act is, of necessity, directed to showing that the award was made in error. The error alleged in this instance is a question of law and jurisdictional fact. The question of whether there was a termination at the initiative of the employer is one of mixed law and fact. Essentially, and in substance, the issues about the error for purposes of leave to appeal and about the merits of the appeal, in this instance turn upon the answers to two questions:
(1) Can the facts and reasons, that Mr Doumit may have accepted subjectively to be sound reasons and the basis for his resignation, be held on the evidence to be the objective basis for a finding that the termination of Mr Doumit's employment was initiated by his employer?
(2) Did the immediate acceptance by Mr Kane of Mr Doumit's resignation intended to take effect on 12 June 1996 and the direction that there be an immediate cessation of service and payment of accruing benefits cause the termination of the employment to be at the initiative of the employer?
In relation to each of those questions, for purposes of the proceedings at first instance, it is for the applicant employee to establish that there was a termination at the initiative of the employer. Although on appeal it is the applicant who has the burden of establishing error, in a case of this nature the alleged error pertains to a jurisdictional fact. In assessing whether the decision at first instance was in error for reasons based on the adequacy of the evidence to establish a jurisdictional fact, it is proper for the Commission in its appellate role to take into account the need for the applicant to have satisfied the Commission on that point.
The principles applicable to determining whether in particular circumstances there has been a termination at the initiative of the employer have been considered by the Industrial Relations Court in a number of cases. In that Court, and in this Commission, the unanimous decision in Mohazab v Dick Smith Electronics (No. 2) (supra) has been adopted as an accurate statement of the primary principles. In the argument in this case, a number of other decisions were referred to by Mr Kimber and Mr Kanaan. Plainly, a decision whether there has been termination at the initiative of the employer must depend upon the facts and circumstances of the particular case. Because each case depends on the facts established, we are not persuaded that any good purpose is served by seeking to identify refinements to the broad statements made in Mohazab. We consider the relevant principle is sufficiently summarised in a recent decision of a Full Bench on another section 170ECA appeal about the principle crystallised in Mohazab:
"That principle is that for a resignation from employment to be conceived to be a termination of employment at the initiative of the employer, it is necessary that the act or conduct of the employer results directly or consequentially in the termination of the employment, and that the employment relationship is not voluntarily left by the employee. Notwithstanding the voluntary character of a resignation, the termination may be taken to be at the initiative of the employer if, had the employer not taken the action it did, the employee would have remained in the employment relationship, and if, because of the action or conduct of the employer, the employee had no effective or real choice but to resign."13
When the facts of this matter are assessed against that principle, one point is almost immediately apparent. It is far from self evident that it can be said that Mr Doumit had no effective or real choice but to resign. No ultimatum was given to Mr Doumit to force his resignation. There is no evidence at all to suggest that Mr Doumit had reason to expect that his dismissal may have been imminent. Apart from Mr Kane's action after Mr Doumit declared his intention to resign, no single act of the employer could reasonably be said to have been clearly intended to be a preliminary to dismissal, or to force a resignation. Even the "straw that broke the camel's back", Mr Kane's declaration that Mr Doumit was lying again, appears to have been an invective flourish in an exchange that had had no conclusive outcome. Mr Kane's style of address was offensive and abusive in the circumstances. But something more is required to convert the resignation that resulted from that act into a termination at the initiative of the employer. In this case, Mr Kanaan sought to establish that "something more" in the course of conduct by Mr Kane. The circumstances pointed out by Mr Doumit establish that he had good reason to fear that Mr Kane would move against him at some time in the future. Moreover, he had good reason to believe that Mr Kane would be neither fair nor balanced in his supervisory assessment of some of Mr Doumit's work. We accept that there is evidence that in his dealings with Mr Doumit, Mr Kane may have shown himself to be quick to allocate blame to others and slow to acknowledge his own oversights or rash denunciations. But even if Mr Doumit's view of Mr Kane's conduct as a manager be allowed as valid, and as the principal contributing factor that lead to Mr Doumit's resignation, it does not follow that the conduct left Mr Doumit with no real choice but to resign.
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 this instance, we consider that a reasonable and humane employer might well have reassured Mr Doumit that his resignation was not being sought. According to Mr Kane's evidence, he told Mr Doumit "It's a matter for you" when Mr Doumit asked if Mr Kane wanted his resignation. If allowance were to be made for the different perceptions of relative power, it may be that Mr Kane's failure to unequivocally state that he was not seeking Mr Doumit's resignation might be given sufficient weight to tip the balance. Mr Kane claimed that he said he was "sorry" immediately after Mr Doumit had indicated he would resign. However, circumstances belie the depth or sincerity of that comment. With alacrity Mr Kane snared a written resignation, he accepted it on a basis that converted it to an immediate termination of the employment relationship, and he mustered an escort from the premises. Such conduct, and the apparent absence of all except one enquiry as to whether Mr Doumit was acting in his own best interests, affords some basis for an inference that Mr Doumit's resignation was at least welcomed, and may have been looked for. But a comment made by Mr Doumit to Mr Grant as he got into the cab to leave the premises does nothing to erase the impression that Mr Doumit's resignation gave effect to a contingency plan he had himself devised prior to that day's developments.
There is little or no support in decided cases to suggest that an employer should reassure an employee seeking to tender his or her resignation that the act is not necessary or called for by reason of the employer's conduct. There is some support for making a close examination of the employer's conduct. Thus in Minato v Palmer Corporation Ltd14 Murphy JR referred to a number of cases dealing with the situation where "special circumstances" arise. He referred in particular to a UK decision where Wood J stated:
"If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure ("being jostled into a decision") and indeed the intellectual make-up of an employee may be relevant: see Barclay v City of Glasgow District Council  I.R.L.R. 313. These we refer to as "special circumstances". Where "special circumstances" arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employers risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the "special circumstances" the intention to resign was not the correct interpretation when the facts are judged objective,"15
Murphy JR stated in the Minato decision:
"UK authorities to similar effect were followed in a recent decision in Queensland: Achal v Electrolux Pty Ltd  50 IR 236. (Cf. Connally v Malifind Pty Ltd (Industrial Relations Court of Australia, Murphy JR, 1 March 1995) for a discussion of the position in relation to an "ambiguous" resignation). Applying the above cases the issue is whether the circumstances of the applicant are such as to come within the term "special circumstances" such as to require clarification of her intention to resign, or of her actions at the store on 23 December."16
The failure of the employer to provide reassurance was also considered to be a relevant factor by Tomlinson JR in Moran v St George Bank Limited:
"... it seems the appellant shouldered far more responsibility than the scope of her position afforded, and those actions, coupled with the lack of support from Ms Bennett and Mr Barker, led to the applicant, in effect, seeking confirmation and reassurance from her superiors, in reality asking what she should do. No such assurance nor leadership was forthcoming and the applicant accordingly resigned. Both Ms Bennett and Mr Barker told the Court they believed the applicant believed she may be dismissed if she did not resign. ..." 17
But those expressions of view and the related decisions turned on the particular facts of the cases in which they were made. Special circumstances have not been made out in the evidence before Redmond C and no reference was made to the existence of them. Moreover, Mr Doumit's account of the exchange makes no reference to his having asked Mr Kane whether he wanted his resignation. On balance, we are inclined to the view that, although angry, Mr Doumit decided to resign, announced it, and was then bundled through a termination process that he had expected and hoped would be more protracted and more open to negotiation. But the action of resigning was unequivocally his own voluntary action. He could not, in our view, be properly found to have had no real choice but to take the action.
It follows that we are unable to conclude that Mr Doumit's tender of his written resignation, with intended effect from 12 June 1996, may properly be conceived to have been a termination of employment at the initiative of the employer.
However, it is necessary to consider also whether the frustration of Mr Doumit's intention for his resignation to take effect on 12 June 1996 and the associated cessation of his employment reluctantly on 15 May 1996 resulted in the termination of employment on that date being a termination at the initiative of the employer.
Although the Bench raised the substance of this question with Mr Kimber in the course of his opening submissions, neither he nor Mr Kanaan put a full argument on the point in their oral or later written submissions. However, it is desirable that the Commission act and determine matters with reasonable expedition. In this instance we doubt that the nice points that might be raised for consideration would, in the final analysis, be determinative of the practical question of jurisdictional fact raised on the appeal.
The material facts appear to be that, upon receipt of Mr Doumit's written resignation, Mr Kane instructed Mr Grant to act on the basis that the resignation was accepted and given immediate effect. Mr Doumit was required to quit the premises on the basis that the company chose to pay him one month's pay in lieu of the one month's notice given by Mr Doumit. As noted at page 9 above, the final payment to Mr Doumit was calculated on the basis that the employment ceased on 15 May 1996. Other than salary, Mr Doumit received no payment or allowance in respect of the period between 15 May 1996 and 12 June 1996, the date he intended his resignation to take effect. For that intended period of service he accrued no additional recreation leave or payment in lieu of it, and had no use of the company car to which he may otherwise have had some form of entitlement. It is not clear on what basis the company allowed payment in lieu of long service leave on Mr Doumit's resignation. But no payment was made for any accrual of long service leave for the days between 15 May 1996 and 12 June 1996.
In the circumstances, whether the termination of any connection between Mr Doumit and the company on 15 May 1996 was a termination at the initiative of the employer depends on whether there was any relationship to terminate after the company received the resignation.
There can be no doubt that the subjective intention of Mr Doumit was not to sever the relationship then and there. The evidence entitles us to draw the conclusion that he intended the relationship to continue until 12 June 1996. However it is clear, again from the evidence, that a notice of resignation was given.
The effect of the giving of notice is summarised by Gray J in the Federal Court in Birrell v Australian National Airlines Commission18:
"The giving of notice of termination of a contract, in accordance with the terms of that contract, is a unilateral right. Its exercise does not depend in any way on the acceptance or rejection of the notice by the other party to the contract. The giving of such a notice operates to determine the contract by effluxion of the period of notice."
McCarry "Termination of Employment Contracts by Notice"19 sums up his view of the situation as:
"A valid notice of termination, once received, will operate to end the contract of employment when the period of notice expires or is due to expire, unless in the meantime the contract is ended by some other independent cause. The employer/employee relationship will end with the contract, if it has not ended earlier, but aspects of the contract can still be enforced thereafter."
We assume for this purpose, and it was not suggested otherwise, that the action taken by Mr Doumit was action he could take under his contract. There is no need to consider matters such as inadequate notice or conditional termination as was the case in Gunnedah Shire Council v Grout and other authorities such as Automatic Fire Sprinklers Pty Ltd v Watson20.
There is no suggestion in this case that the employee gave notice which was inadequate or inappropriate. This meant that there was no option for the employer to decide whether or not to accept the notice. The employee could not withdraw the notice unilaterally [see discussion thereon in Birrell at pages 109 - 110]. The only thing required was the effluxion of time.
The employer took no issue with the notice and acted, or at least intended to act, in accord with the contract by giving pay in lieu of notice. It proffered the payment in lieu because it considered that the contract had been terminated. That was a reaction. It was not an initiative to terminate the employment so as to bring the termination under Part VIA Division 3 of the Act as a termination at the initiative of the employer. In the employer's perspective, its actions did not substitute a fresh termination for that which was initiated by Mr Doumit. However, the employer's action did operate to substitute an earlier termination of the employment relationship than that initiated by Mr Doumit. The employer's action operated to reduce some of the benefits that would have accrued if Mr Doumit had worked out the notice period.
We consider that having regard to all relevant circumstances and particularly the length of the notice period, and the scale of payment to Mr Doumit, the company's action to bring forward the date of effect may and should be conceived as consequential to the resignation. In our view the circumstances of the case do not establish matters of fact or degree that would justify our finding that the employer took advantage of the resignation to in effect substitute a termination of the employment on its own initiative. We do not preclude the possibility of there being such a case, particularly in circumstances where a long period of notice is given in the form of a resignation. But this is not such a case.
We determine that on the facts of the case no termination of employment at the initiative of the employer is established. Plainly, our finding on that point has involved consideration of some relatively complex questions of law and the application of them to the facts. It follows from our conclusion that we find also that Redmond C was in error in the finding he made. However, we add that Redmond C was faced with a difficult task, as we have been in this case. Mr Doumit's predicament attracts our sympathy. His case was not devoid of merit. The moderate award made by Redmond C might have survived on appeal had the point taken not been one foundational to jurisdiction and to the proper administration of the statutory power. That consideration might be taken into account by the employer in considering whether any adjustment might be made in Mr Doumit's favour having regard to the outcome of this appeal.
The determination of the Commission is that leave to appeal be granted, the appeal be allowed, and the award made by Redmond C on 31 July 1996 set aside.
BY THE COMMISSION:
JUSTICE P. R. MUNRO
M. Kimber, of counsel, for ABB Engineering Construction Pty Limited.
M. Kanaan, solicitor, for A.S. Doumit.
Termination of employment - unlawful termination - appeal - whether the decision at first instance was in error for reasons based on the adequacy of the evidence to establish a jurisdictional fact - whether termination at the initiative of the employer - narrow line distinguishing conduct that leaves an employee no real choice but to resign from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer examined - no special circumstances made out in evidence before Redmond C - action of resigning was unequivocally employee's own voluntary action -whether employee's intention for his resignation to take effect on 12/6/96 and the associated cessation of his employment reluctantly on 15/5/96 resulted in termination on that date being a termination at the initiative of the employer - having regard to all relevant circumstances and particularly the length of notice period, and the scale of payment to employee, the company's action to bring forward the date of effect may and should be conceived as consequential to the resignation - circumstances of case do not establish matters of fact or degree that would justify finding that employer took advantage of the resignation to in effect substitute a termination - no termination of employment at the initiative of employer established - Redmond C erred in his finding - appeal allowed - award of Redmond C set aside.
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1 Print N3761.
2 Print N4672.
3 (1995) 62 IR 200 at 203-207.
4 unreported, 16 April 1996, NI2064R/95.
5 Print N4672, pp.4-5.
6 (1995) 62 IR 150 especially at 159.1 and 161.1-161.8.
7 (1995) 62 IR 200 at 206-207.
8 unreported decision of Moore J, 16 April 1996, NI2064R/65 at 15.8.
9 Print N4672, pp.4-5.
10 Transcript of U No. 22128 of 1996, pp.18, 19- 20.
11 Ibid at 26.
12 Ibid at 37.
13 Print N5682 at p.7 per Munro J, Harrison DP and Lawson C.
14 unreported decision, 30 June 1995, VI1239/95.
15 Kwik-Fit (G.B.) Ltd v Lineham  ICR 183 at 188.
16 unreported decision, 30 June 1995, VI1239/95.
17 unreported decision, 2 August 1996, NI1288/96.
18 (1984) 9 IR 101 at 109.
19 (1986) 60 ALJ 78 at 85.
20 (1946) 72 CLR 435.