s.394 - Unfair dismissal

• [1] On 22 September 2024, Mr Adam Webster (the Applicant) made an application to the Fair Work Commission (the Commission) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act). The Applicant was employed by Archsign Pty Ltd (Archsign) (the Respondent) as an architectural draftsperson from 29 January 2024, and submits that he was unfairly dismissed on 11 September 2024, and seeks remedy by way of compensation.

• [2] The Respondent has raised an objection to Mr Webster's application. It says that the Applicant resigned and was not dismissed. The Applicant says that he felt he had no choice but to resign.[1]

• [3] This decision is concerned with the jurisdictional objection by the Respondent and must be determined prior to any consideration of the merits of Mr Webster's application. I have taken into account all submissions and evidence.

• [4] Archsign provides architectural and design services for the residential, commercial and disability sectors. The Applicant began his employment working in the specialist disability accommodation team and moved to the industrial team in June 2024.

• [5] There were some 'work from home' arrangements (WFH) available for staff, but there was a disagreement between the parties about the WFH process regarding notification and authorisation. On 9 September 2024, the Applicant worked from home and submits that this was in accordance with the agreement he had reached with his manager Mr Michael Guizzo, who was on leave. Mr Ned Cizmic, Archsign's operations manager, took issue with this. The Applicant was absent from work the following day and said he was unwell but returned to work on 11 September 2024.

• [6] In this case, there are several areas of conflicting evidence in respect of which I must make factual findings, particularly on what occurred in a meeting on 11 September 2024 between the Applicant and Mr Cizmic (11 September meeting).

• [7] The Applicant was called into a meeting by Mr Cizmic at about 4pm on 11 September. The Applicant refers to this meeting as the 'termination meeting'. He says that the circumstances that arose from this meeting ultimately put him in a position where he felt pressured to resign and accordingly that this was not a voluntary resignation.[2]

• [8] Mr Cizmic's evidence is that the Applicant was told that he needed to apply and get approval to work from home from Mr Guizzo or from him. On 9 September 2024, just before 9am, the Applicant had emailed a part-time receptionist advising that he was working from home that day. As it was not a day when the part time receptionist worked, Mr Cizmic says that he only found out about the Applicant's WFH arrangements at midday. It is Mr Cizmic's evidence he 'can't run an office if everyone was to behave like that'.[3] At the hearing, Mr Cizmic explained that working from home is a privilege given to some staff and not an entitlement, because it was an inefficient way to run the business as staff needed to be supervised, documents marked, sent back and marked up again. He explained that prior to the Covid pandemic productivity loss was only 5% but that during Covid it increased to 30%, and post-Covid still remained high at about 22%. He explained that these percentages relate to the percentage of staff time that cannot be charged to clients.[4]

• [9] The Applicant submits that he believed the meeting was to clear up the matter relating to him working from home. He says that the meeting began with Mr Cizmic saying 'it's not working out' and then he cited issues covering the previous eight months.[5] Mr Cizmic agrees that he said words to the effect of 'things aren't going that well'.[6]

• [10] The Applicant says that Mr Cizmic said that if it was up to him, the Applicant would be dismissed.[7] Mr Cizmic agrees that he did say that if it were up to him he would dismiss the Applicant, but added that it was not up to him, and the Applicant was also told that Mr Guizzo did not endorse a termination and had said 'it would be a bad idea'.[8] Even though the Applicant does not deny Mr Cizmic said that it wasn't up to him to dismiss him, he says that he still believed that Mr Cizmic could fire him.[9]

• [11] The Applicant submits that towards the end of the meeting he said words to the effect of 'so what happens now? I've never been fired before' and that Mr Cizmic replied 'well, you are resigning'.[10] The Applicant says that he replied with the word 'OK' and that Mr Cizmic replied "Are you sure?' The Applicant says that he felt he had no other option but to leave and said, 'I'm just going to go, goodbye and good luck'.[11]

• [12] The Applicant says that he felt his work environment had become hostile and that it was untenable for him to remain. Further, that he feared for his 'psychological safety' and that he offered the solution of departing from the meeting to remove himself from a hostile situation.[12] At the hearing, the Applicant said that he felt 'coerced into making an impulsive decision'.[13]

• [13] Mr Cizmic denies saying the words 'well you are resigning', agrees that the words 'what happens now' were spoken but says this is what the Applicant said after he resigned.[14] Mr Cizmic also denies that the Applicant said that he had never been fired before.[15]

• [14] Mr Cizmic's evidence is that he told the Applicant he had time to improve and he would have welcomed that, but that the Applicant did not like the idea of working for another 'two weeks... and then what?'[16]

• [15] Mr Cizmic submits that the Applicant became upset and said that he did not want to continue to work under these circumstances, and that he was going. Mr Cizmic then says he asked the Applicant if he was resigning and he replied that he was. Mr Cizmic says he asked the Applicant if he was sure, and the Applicant replied 'yes'.[17]

• [16] Mr Cizmic is adamant that he never told the Applicant that he was dismissed, that his employment was terminated, or that he told the Applicant he was resigning. The Applicant confirmed in cross-examination that he was not told by Mr Cizmic that he was terminated, that his employment had ceased, or that his services were no longer required. Mr Cizmic says that removing the work from home privileges was not a termination, and that the Applicant was to be given extra time to improve.[18]

• [17] There is some ambiguity about the discussion relating to the Applicant being a new parent. The Applicant says that there was no discussion of this at the 11 September meeting but that it had been brought up at other meetings. The Applicant says '...it was brought up as you're a father now you need to provide which made me feel like there's no sort of clear future'.[19]

• [18] When questioned at a later point in the hearing, the Applicant said he could not remember if the discussion about being a father was something that had been discussed at the 11 September meeting. At another point in the hearing, the Applicant confirmed that at the 11 September meeting, Mr Cizmic had said words to the effect 'Well, you're a new father now. You have to provide'. The Applicant says he replied 'you don't have to worry about me'.[20] Further, the Applicant submitted that when Mr Cizmic said these words, that it 'felt like almost being bullied into staying at Archsign' and that these were intimidating words.[21]

• [19] Following the 11 September meeting, the Applicant sent an email to Mr Cizmic on 16 September 2024. This email attaches a document that the Applicant says is his version of the 11 September meeting. In this document, the Applicant does not include any reference to Mr Cizmic telling him that he (the Applicant) was resigning.

• [20] I accept Mr Cizmic's account of his discussion and interactions with the Applicant on 11 September 2024. Mr Cizmic's evidence was clear and he was forthcoming and direct in his responses.

• [21] I do not find the Applicant's evidence convincing. He gave evidence that was at times contradictory or obtuse. He presented as terse and unsure when giving evidence at the hearing. He firstly denied that the comments about being a parent and needing to provide were said at the 11 September meeting. He later said he could not remember, and finally he said he recalled the discussion regarding him being a parent, and his response to Mr Cizmic. That the Applicant changed his position on this one issue three times, does little to persuade me to believe his version of events.

• [22] It is also confusing that the Applicant says on the one hand that Mr Cizmic told him, 'you are resigning', but on the other hand he was supposedly 'being bullied' to stay on by being told he was a new father and needed to provide.[22]

• [23] There is an inconsistency in the Applicant's account of the 'resignation'. In his witness statement, the Applicant says he was told to resign but there was no reference to a resignation of any sort in the 16 September 2024 email.[23]

• [24] It is clear from the evidence and the Applicant's demeanour at the hearing that he took offence at being held accountable for the time he was working from home, and that this accountability was not coming from his direct manager.

• [25] I find that he was unreasonably offended when Mr Cizmic advised him that he had an opportunity over two weeks to 'prove him wrong'. I find that the Applicant made the decision to resign. Mr Cizmic did not tell him to resign. In fact, Mr Cizmic followed up expressing concern about the Applicant's new family responsibilities, and asked him if he was sure if he wanted to resign. It makes no sense that Mr Cizmic would direct the Applicant to resign and then effectively tell him to stay for the sake of financial security because he had a family to look after. Mr Cizmic did not bully the Applicant in an attempt to force him to stay at Archsign, he was merely showing reasonable concern.

• [26] Section 386 of the Act sets out circumstances in which a person is taken to have been 'dismissed' for the purposes of s.394. This section provides, relevantly, as follows:

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.

• [27] Section 386(1) of the Act allows for dismissal under two distinct limbs, the first being that an employee's employment is terminated on the employer's initiative, and the second being a resignation forced by the conduct of the employer where the employee had no choice but to resign. It is unclear from the Applicant's materials under which limb he submits he was dismissed and seems to rely on both limbs.

• [28] The Applicant submits that he was forced to resign by the Respondent. I found earlier that Mr Cizmic did not say to the Applicant words to effect 'you are resigning' and that it was the Applicant who confirmed that he was resigning.

• [29] The Applicant also says that the work environment had become untenable, that he was treated differently to the other employees, and that he feared for his 'psychological safety' and then 'offered a solution to the problem' which was for him to leave the meeting.[24]

• [30] I have considered whether the circumstances of this case fall within those described in Bupa Aged Care Australia v Shahin Tavasossoli,[25] in which the Full Bench concluded at [47] as follows:

(1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the "heat of the moment" or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign. Although "jostling" by the employer may contribute to the resignation being legally ineffective, employer conduct is not a necessary element. In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer.

• (2) 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 probably 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.[26]

• [31] In considering and applying this passage, I adopt Deputy President Colman's approach in Jack Lipari v YPA Estate Agents Pty Ltd [2019] FWC 3546 (Lipari) when he said:

It is clear from this passage that the mere fact that a person resigns in circumstances of heightened tensions or strong emotions will not turn a rash or imprudent decision made by an employee into a dismissal at the initiative of the employer. Rather, if, applying the objective test referred to by the Full Bench, it can be said that the employee could not reasonably be considered to have conveyed a real intention to resign, then there may be a termination on the employer's initiative if the employer treats the resignation as effective. The conclusion must be that objectively no such intention was evident, not simply that it is fair to allow the employee an opportunity to rethink the matter. There is no statutory 'cooling off' period for resignations. It is for the Parliament to create any such rule. The Commission cannot fashion one.[27]

• [32] In any private enterprise, it is expected that management take reasonable measures to ensure that staff are providing the value for which they are paid. That the Applicant was called into the meeting by Mr Cizmic and not his direct manager, is not a hostile act as submitted by the Applicant. His manager, Mr Guizzo was away. In light of the company's productivity challenges, it was not unreasonable for Mr Cizmic to be concerned about the Applicant's productivity. The 11 September meeting was held to discuss such concerns and an opportunity to improve was provided. The Applicant was to have a couple of weeks to act on his employer's concerns.

• [33] The Applicant appears to have taken offence that he was asked to endeavour to improve (over two weeks) and conflates his outrage to fears for his 'psychological safety'. In all the circumstances the request made by Mr Cizmic is not unreasonable. The Applicant has not given a clear explanation of what he means by 'psychological safety', and provided no evidence that the his 'psychological safety' was in danger of being compromised, and accordingly I reject all submissions in this regard.

• [34] The Applicant's offence and state of upset was not such that he could not reasonably be understood to convey a real intention to resign.

• [35] As per Deputy President Colman in Lipari, "there is no statutory 'cooling off' period for resignations".[28] An objective and reasonable assessment of the circumstances is that the Applicant chose to resign from his job. The evidence does not support a finding that the Respondent acted in a way that gave the Applicant no choice but to resign. The Respondent had not made a choice to dismiss the Applicant, and in fact the Applicant's manager had said it would not be a good idea. The Respondent did not suggest that the Applicant resign, and Mr Cizmic expressed concern when the Applicant did resign. The Applicant unreasonably interpreted this as coercion to stay with Archsign.

• [36] In the circumstances, I reject the contention that the Applicant had no effective choice but to resign. The Applicant's employment ended because he preferred to resign than to demonstrate improvement over the following two weeks. It did not end on the employer's initiative (s.386(1)(a)), nor did it end as a result of conduct or coercion by the Respondent (s.386(1)(b)).

• [37] The Applicant was not dismissed by Archsign. The jurisdictional objection is upheld and the Applicant's unfair dismissal application is therefore dismissed.

[1] Digital Hearing Book ('DHB') 33-38.

[14] Digital Hearing Book 86; Transcript PN 129.

[15] Digital Hearing Book 86; Transcript PN 126.

[25] [2017] FWCFB 3941.

[27] Jack Lipari v YPA Estate Agents Pty Ltd [2019] FWC 3546 ('Lipari').

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