Fair Work Act 2009

s.365 - General protections

Wealth for Life Institute Pty Ltd T/A Wealth for Life Institute Unit Trust

Application for the Commission to deal with a dismissal dispute under s.365 of the Act - jurisdictional objection that there was no dismissal - rejected - matter referred for conference.

[1] On 28 August 2020, Ms Bei Zhang made a general protections application involving dismissal to the Fair Work Commission (the Commission) pursuant to s.365 of the Fair Work Act 2009 (the Act). The Respondent to this application is Wealth for Life Institute Pty Ltd T/A Wealth for Life Institute Unit Trust (the Respondent).

[2] The Respondent objects to Ms Zhang's application on the basis that there was no dismissal.

[3] Section 365 of the Act outlines when the Commission can deal with a general protections application involving dismissal as follows:

"365 Application for the FWC to deal with a dismissal dispute

(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;

the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute."

[4] This matter has been allocated to me to determine whether or not there was a dismissal. A person must have been dismissed to be entitled to make a general protections dismissal dispute application.[1] Accordingly, the Commission must determine whether an applicant has been dismissed before it can exercise powers under s368 to deal with a dispute about whether the applicant was dismissed in contravention of the general protections set out in the Act.[2]

[5] The parties have filed and served outlines of submissions, witness statements and documents pursuant to my directions and were provided with the opportunity to supplement these and give evidence at a hearing before me on 26 February 2021.

[6] I must first deal with a request by Ms Zhang that I recuse myself from determining the question as to whether or not there was a dismissal on the basis that I may not "bring an impartial mind" to the matter. Put another way, Ms Zhang has made application for recusal based upon a reasonable apprehension of bias. The High Court in Ebner v Official Trustee in Bankruptcy[3] (Ebner), has enunciated the governing principle that a decision maker is disqualified if a fair-minded lay observer might reasonably apprehend that he or she might not bring an impartial mind to the resolution of the questions he or she was required to determine.

[7] Ms Zhang's reasons for doing so arise out of comments "in conference" I made on 21 December 2020, together with comments made on the record that same day and afterwards which she apprehends will affect my judgement in the hearing.

[8] As to this application, I made a non-controversial observation that making an alternate application pursuant to s.372 of the Act would not attract the particular jurisdictional objection that Ms Zhang's current application had drawn and Ms Zhang might want to consider this option. Ms Zhang discussed this observation in private with her Counsel before electing to proceed with this application.

[9] Secondly, to the extent I commented on the state of the submissions and material Ms Zhang's then solicitor had filed to that point and identified matters that were exercising my mind, I expressed no concluded views because it was not entirely clear to me how Ms Zhang was putting her case. In fact, Ms Zhang's Counsel stated:

"I accept that there is a conflation of a number of issues, and that the submissions would benefit from being redrawn in an appropriate way so as that the respondent would be in a position to understand the case that is made against them in the correct provision of the act."[4]

[10] The end result was that I granted a request made by Ms Zhang's Counsel for another opportunity to file and serve further submissions in support of her application and made Directions to this effect on 21 December 2020.

[11] Thirdly, Ms Zhang has raised my refusal to conduct her hearing via Microsoft Teams at a time when she proposed to present her case and give evidence from what appeared to be an open plan space in a public library or in the alternative, from her vehicle. I did not consider either option acceptable for a hearing of the Commission and I do not resile from my decision to adjourn the matter on that occasion so that it could be conducted in a more appropriate environment.

[12] Applying the decision of the High Court in Ebner, I consider that there is no basis to conclude that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial mind to the resolution of the question I am required to determine, the question as to whether or not there was a dismissal, because of my conduct of the matter to date. I decline to recuse myself and now consider the objection to the application.

[13] Ms Zhang commenced employment with the Respondent in or around August 2014. She says she worked very hard for the Respondent during the course of her employment and never received any warnings prior to July 2019. At that time Ms Zhang alleges she was subjected to workplace bullying and a direction to conduct illegal work. Ms Zhang says she has not attended work since 15 August 2019, when she commenced a period of sick leave. She also says she lodged a WorkCover claim which was accepted in September 2019.

[14] Ms Zhang outlined a range of allegations of workplace bullying which culminated in her making application for anti-bullying orders in the Commission on 17 March 2020.

[15] Ms Zhang also alleges the Respondent's issuing of three show cause letters, which she describes as spurious, constitutes adverse action. She also alleges that she was required to return her work telephones, emails, computer and devices, had her access to the Respondent's IT system, including the company calendar and her email account blocked and was advised by co-workers that they had been told she was not to be trusted or communicated with.

[16] Additionally, Ms Zhang is aggrieved about having to incur expenses relating to visa applications, at being allegedly incorrectly classified under the Banking, Finance and Insurance Award 2020 (the Award) and various underpayments, including having been allegedly underpaid overtime for a total sum of $43,206.68.

[17] Finally, Ms Zhang alleges she was demoted and then replaced, with the Respondent having also determined that she would not have the capacity to return to her original job, once she recovered.

[18] In response to these matters, the Respondent asserts:

• Ms Zhang's access to the Respondent's CRM and data base was temporarily frozen because she had sent an email on 16 August 2019 divulging sensitive confidential company information, including information about employees, to an individual who was not an employee of the Respondent (it would seem this gave rise to one of the "show cause letters" with which Ms Zhang has taken issue);

• It took heed of advice from Deputy President Young on 4 May 2020 and withdrew the show cause letter it had issued on 17 March 2020, issuing instead a new letter dated 8 May 2020 (also considered by Ms Zhang to be a show cause letter). This letter stated the investigation into alleged serious misconduct involving confidentiality and non-compete obligations was on hold until such time as Ms Zhang was certified fit for work and that it had not yet formed any view regarding the allegations;

• Ms Zhang was requested to return her company laptop and mobile phone while she was on leave so that the duties of her role could continue and be covered by her manager in her absence;

• Ms Zhang and the Respondent agreed prior to her being employed that she would meet all visa costs and this is evidenced in an email from Ms Zhang to its then General Manager on 3 August 2016;

• It disputes Ms Zhang's assertion re her classification under the Award and outlined its basis for doing so. Further, it conducted a full reconciliation of Ms Zhang's overtime records, made payment of an outstanding amount totalling $6,182.99 and submitted its documentation to the Fair Work Ombudsman, which reviewed its documentation and has taken no action;

• Ms Zhang did not meet the required production targets in order to be paid the bonus payment she claims;

• All superannuation payments due to Ms Zhang were made and it produced a record of the most recent payment on 16 August 2020;

• All accrued annual leave was paid on termination and any issue with the amount of income tax incurred on Ms Zhang's accrued annual leave will be addressed when her income tax return is lodged;

• It was after Ms Zhang had been absent on Workcover for three months that it hired an employee to cover her duties in November 2019, and then for only a two-week period;

• Ms Zhang was advised by her rehabilitation consultant on 29 June 2020 that while her current role was not available at that time, due to the impact of COVID-19, this was temporary and Ms Zhang was also advised that the end goal was for her to return to her pre-injury duties;

• Ms Zhang was uncooperative and exhibited no intention of returning to work, with her rehabilitation consultant having reported her resistance to the attempts made to ascertain her capacity for work.

[19] I have also noted correspondence from the Chambers of Deputy President Young dated 4 May 2020 confirmed Ms Zhang's anti-bullying application was resolved in conference.

[20] On 10 August 2020, Ms Zhang's lawyers sent a letter to the Respondent and having outlined her allegations, asserted the following:

"In circumstances in which Ms Zhang was forced to leave work due to an injury arising out of workplace bullying and subsequent adverse actions, and in which, further, the Employer required her to return all company property, cut off her IT access, withdrew its nomination appeal application in AAT to sponsor her 186 visa application in October 2019, recruited a full-time new replacement Quality Assurance Manager and issued her with 3 spurious show cause letters, and now says it will only allow her to return to work in a diminished role as a telemarketer or receptionist, it is clear that the cumulative effect of all of that conduct constitutes a repudiation by the Employer of her contract of employment.

That repudiation is compounded by the treatment she received as noted above, including being required to work for Wealth for Life Mortgage without any additional consideration, on higher managerial positions without any pay rise, on multiple tasks on weekends and holidays for which she was not paid, and for which she has still not been paid, despite her efforts to seek payment. The Employer has made a small payment to her on 5 July 2020, but this payment was not correct as it was based on weekly rather than daily calculations and withheld the incorrect amount of tax, and in any event related to only a small part of her underpayment claim. As set out in our emails to Ms Tivan and Mr Peluso on 21 and 29 July 2020 attaching the relevant items and calculations by Ms Zhang of the underpayments (only $6,128.99 was paid out of the total amount of $49,335.67), there is a remaining total underpayment amount of $43,206.68 which has still not been rectified, despite our demand of the Employer in our 29 July email to rectify that underpayment by 4pm on 5 August 2020.

The combined effect of the abovementioned workplace bullying, adverse actions, appointment of a new employee in replacement of her position, diminution of our client's role in the event that she can successfully return to work post-injury, and the refusal to recognise her seniority, correct Award classification, and her hard work for over five years, and the substantial and continuing underpayment of our client in the amount just referred to, with no acknowledgement or rectification of those remaining underpaid amounts, leave our client in a position in which she has no other choice but to accept the clear repudiation of her employment contract by the Employer constituted by those matters.

She hereby accepts that repudiation. Accordingly, our client regards herself as constructively dismissed by the Employer.

Ms Zhang has instructed us to commence a general protections claim under the Fair Work Act 2009 (Cth) if a suitable resolution of all matters, including at least the abovementioned underpayments, her expenses paid for the Employer's nomination applications which should be paid by the Employer, the promised bonus from 2016 to 2019 plus interest accrued and all her entitlements, is not reached within the next 14 days." (my emphasis)

[21] The Respondent replied by letter dated 12 August 2020, stating:

"We deny that there has been a repudiation of Ms Zhang's Employment Agreement with Wealth For Life as alleged.

The matters outlined in your letter have been extensively ventilated and addressed in our previous correspondence and various FWC conciliations, facilitated discussions and WorkSafe remedial processes.

However, if Ms. Zhang wishes to cease her employment with Wealth For Life as stated on page 7 of your letter, then we accept Ms Zhang's resignation effective immediately. Ms. Zhang's annual leave will be paid out within the next schedule pay day."

[22] Ms Zhang says she received a payslip from the Respondent on 16 August 2020 and was advised that her annual leave had been paid out.

[23] In the recent decision of Coles Supply Chain Pty Ltd v Milford,[5] the Full Court of the Federal Court outlined the task of the Commission in cases such as this one, as follows:

"To summarise, when an application is purportedly lodged under s 365 it is open to a respondent to assert that there has been no dismissal, so giving rise to a dispute on that question. Such a dispute falls to be determined not under s 368 but under s 365 itself. It is an antecedent dispute going to the entitlement of the applicant to apply. It is also open to a respondent to admit that a dismissal has occurred but dispute that the dismissal took effect within 21 days of the date that the application was filed. Such a dispute may give rise to an issue under s 366(1), involving as it does a question as to whether it is necessary for the FWC to determine whether more time should be "allowed" for the application to be made under s 365. That too is an antecedent dispute, going to the question of whether an application has been made. It is a dispute that must be resolved before the powers conferred by s 368 can be exercised at all."[6]

[24] Ms Zhang has asserted the Respondent engaged in conduct constituting a repudiation of her contract of employment. She says she accepted that repudiation and regards herself as having been constructively dismissed. In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd, [7] the High Court described the following as constituting repudiation:

"The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it...

Secondly, it may refer to any breach of contract which justifies termination by the other party...

There may be cases where a failure to perform, even if not a breach of an essential term ... manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.

In the past, some judges have used the word "repudiation" to mean termination, applying it, not to the conduct of the party in default, but to the conduct of the party relying upon such default. It would be better if this were avoided."[8]

[25] I have reviewed what has been alleged by Ms Zhang to have been the repudiatory conduct by the Respondent, and the responses to those various allegations, and I am not satisfied the conduct of the Respondent was such as to convey to a reasonable person, in the situation of Ms Zhang, renunciation either of her employment contract as a whole or of a fundamental obligation under it. There was an explanation provided in relation to each category of allegation and/or each had been met with a response. The explanations and responses were not of type that leads me to conclude the Respondent evinced an unwillingness or an inability to render substantial performance of the employment contract.

[26] Further, I am not persuaded a breach of the contract by the Respondent constituting repudiation has been identified by Ms Zhang. This does not, however, dispose of the matter.

[27] The Respondent denies there was a repudiation of Ms Zhang's employment contract and has purported to accept a resignation. Ms Zhang maintains she never submitted a resignation and I am satisfied this is the case. Having advised Ms Zhang's lawyer via a letter dated 12 August 2020 that if Ms Zhang wished to cease her employment, it accepted her resignation effective immediately and would pay out Ms Zhang's outstanding annual leave "within the next schedule pay day", and having not received a reply, the Respondent proceeded to do just that on Sunday 16 August 2020.

[28] I consider Ms Zhang's employment was terminated by the Respondent when it paid out her annual leave. As such, I am satisfied Ms Zhang was dismissed by the Respondent.

[29] Having determined Ms Zhang was dismissed, she is entitled to apply under s.365 of the Act for the Commission to deal with her dismissal dispute. It is therefore worth outlining s.370 of the Act, which, in setting out the pre-requisites for the making of a general protections court application, provides an overview of the next steps for the conduct of Ms Zhang's application:

"370 A person who is entitled to apply under s 365 for the FWC to deal with a dispute" must not make a general protections court application (as defined in s 368(4)) in relation to the dispute unless:

(i) the FWC has issued a certificate under paragraph 368(3)(a) in relation to the dispute;

(ii) the general protections court application is made within 14 days after the day the certificate is issued, or within such period as the court allows on an application made during or after those 14 days; or

(b) the general protections court application includes an application for an interim injunction."

[30] The precursor to the issuing of the required certificate under s.368(3)(a) is that the Commission must deal with the dispute by conducting a conference[9] and reach a level of satisfaction "that all reasonable attempts to resolve the dispute (other than by arbitration) have been, or are likely to be, unsuccessful."[10]

[31] Finally, while I have determined Ms Zhang was dismissed by the Respondent and is therefore entitled to apply under s.365 of the Act for the Commission to deal with her dismissal dispute, it should be noted that the Full Court in Coles Supply Chain Pty Ltd v Milford[11] made observations of the following nature regarding s.370 of the Act and the making of a general protection court application:

• The Act establishes multiple alternate pathways for an applicant and prospective litigants;

• Section 370 of the Act is to be interpreted against the background that while the Commission may determine the question of a person's entitlement to make an application to it, this may not be conclusive; and

• This is because a Court may ultimately decline to recognise an "application" or resulting certificate granted by the Commission as valid, if called upon by a Respondent to determine a subsequent objection to the competency of a general protections court application under s.370 of the Act.[12]

[32] For present purposes and as a result of my determination, this matter will now be listed for conference in order to explore the possibility of resolution.

Ms S Tiven for Wealth for Life Institute Pty Ltd T/A Wealth for Life Institute Unit Trust

[1] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 at [54]

[2] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 at [67]

[3] [2000] HCA 63; (2000) 205 CLR 337

[4] Transcript of Proceeding on 21 December 2020 at PN 20.

[5] [2020] FCAFC 152

[7] [2007] HCA 61; (2007) 233 CLR 115

[9] Fair Work Act 2009, ss.368(1) & (2)

[10] Fair Work Act 2009, s.368(3)

[11] [2020] FCAFC 152.

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