Cross v Secretary of the Department of Education

Cross v Secretary of the Department of Education - [2022] NSWIRComm 1096 - NSWIRComm 2022 case summary — Zoe

[4]

Was Ms Cross dismissed?

Chapter 2 Part 6 of the IR Act is titled "Unfair dismissals". It is a precondition to the Commission's jurisdiction under that Part that an employee have been dismissed by their employer: s 83.
Section 83(5) of the IR Act defines "dismissal" in these terms: dismissal includes - (a) the threat of dismissal, and (b) in the case of a public sector employee - dispensing with the services of the employee, dismissing the employee as a consequence of disciplinary proceedings against, or the commission of an offence by, the employee or annulling the appointment of the employee.
As can be seen, this definition sets out what the term "dismissal" includes. It does not in terms define the meaning of "dismissal" itself.
In Smith v Director General of Education (1993) 51 IR 204 ("Smith") the Full Court was required to consider the meaning of "dismissal" in the context of s 245 of the Industrial Relations Act 1991. In observations that I consider to be apposite to the meaning of the term as it appears in s 83 of the IR Act, the Full Bench stated (at 219): "The Industrial Relations Act does not define 'dismissal', but, as we have said, s 245(5)(a) includes in the concept the Crown's dispensing with the services of an employee. It is to the ordinary meaning of 'dismiss' that assistance may be obtained; the Oxford English Dictionary, 2nd ed (1989) defines the word in appropriate respects as follows: '2.a. … To send away (a person); to give permission to go; to bid depart. b. … 3.a. … To send away or remove from office, employment, or position; to discharge, discard, expel. b. … 4. To deprive or disappoint of or from some advantage.' We apprehend no real issue may be taken with the ordinary meaning of the word 'dismissal' as so applied to s 245, and, indeed, it seems to us that it is in that defined sense of an employee being sent away from employment that unfair dismissal cases in industrial jurisprudence have been concerned. The terms of s 245 of the Industrial Relations Act would suggest no latent limitation in that respect. Therefore, we find no difficulty in accepting the ordinary meaning of 'dismissal' suggested by Brereton J in Ex parte Wurth as being 'the termination of services by the employer without the employee's consent'…"
As the Full Court in Smith went on to observe, even where the employee tenders their resignation, the situation may still be regarded as one of dismissal.
An oft-cited authority in this regard, on which both the Secretary and Ms Cross relied, is Allison v Bega Valley Council (1995) 63 IR 68 ("Allison"). In that case the Full Bench observed (at 72): "There are cases where the courts, after analysis, have determined that although on the face of it an employee has resigned and brought about the termination of the contract of employment, in reality the conduct of the employer has compelled or unduly influenced the employee to resign. The most quoted example is an assertion by an employer to an employee to the effect that the employee must resign or he or she will be dismissed. This situation is commonly referred to in the text books and decided cases as a 'constructive dismissal', that is in effect the employer has brought about the termination of the contract of employment. Although the term 'constructive dismissal' is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation? … In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee particularly where the dynamics within a factual situation may change. For example, an employer may demand a resignation with a threat of dismissal, negotiations may then ensue and the employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer."
Having regard to this authority, the Secretary conceded, properly with respect, that had Ms Cross tendered her resignation on 25 March 2022, in obedience to the direction in Mr Anderson's letter of 17 March 2022, there could be no question that she had been dismissed. However, the Secretary relied on the third paragraph of the extract from Allison reproduced above to submit that Ms Cross "resigned freely and without any undue influence being brought to bear by" the Secretary.
In her written outline of submissions, the Secretary contended: "15. This Respondent submits that this background indicates that the Applicant negotiated the conditions on which she would resign and freely agreed to resign on negotiated conditions which would confer [on] her a financial benefit. 16. The conditions of resignation which the Applicant negotiated for herself were materially different from the conditions on which she had been directed to resign. In particular, the Applicant negotiated to resign with effect on 1 July 2022 (i.e. in the new financial year) despite Mr Anderson having directed her to resign on the basis that he would accept a resignation involving the Applicant's last day of service being 25 March 2022. 17. This conferred a financial benefit on the Applicant (which had been sought by the Applicant as part of her negotiation settlement) because it meant she received payment of her outstanding employment entitlements in the new financial year. The Applicant acknowledged the financial benefit of this arrangement to her in her email of 24 March 2022. Presumably, the financial benefit to the Applicant was that she would receive payment of outstanding employment entitlements, including her accrued but untaken balance of long service leave, in a financial year in which she anticipated she would have fewer earnings, thereby reducing her taxation liability. 18. It would now be disingenuous for the Applicant to assert that she did not resign freely, or that the Respondent placed undue pressure on her to resign, in circumstances where: (a) the negotiations regarding the conditions on which she ultimately resigned were initiated by her by way of her email to Mr Anderson on 24 March 2022; (b) Mr Anderson offered that the Applicant be allowed to resign with effect in the new financial year on the basis that the Applicant had communicated that this would have a financial benefit to her; (c) the Applicant accepted Mr Anderson's offer without any insistence or demand; and (d) the Applicant derived the benefit of the conditions of resignation she negotiated because she received payment of outstanding employment entitlements in the new financial year."
In her written submissions, Ms Cross submitted: "10. In this case, the Respondent at all times directed the Applicant to resign expressly stating writing that if she did not they would terminate her employment. The fact the Respondent agreed to allow the Applicant to extend her service until 1 July 2022 by taking part of the long service leave she was owed to that date (i.e. with the rest paid as a lump sum along with her other entitlements on termination as at 1 July 2022) does not mean the Appellant freely resigned of her own volition. It was always under threat of dismissal, which continued during the entire period of the long service leave ending on 1 July 2022. The assertion that she asked for this and it was accepted does not remove the ongoing threat, which continued after that agreement was reached. More importantly, there was no waiver of the Applicant's rights to by seeking that concession to the way in which the direction imposed by the respondent was changed to extent to a longer period of time ending with her service on 1 July 2022." (Footnote omitted)
During the hearing of the Motion, Ms Cross deposed repeatedly under cross-examination that she did not wish to resign. She stated that she had been informed by her union that if she did not resign, she would be dismissed "instantaneously" and that she had signed and submitted the Separation Form because "she did not consider that she had a choice". She suggested that she had been acting on the advice of her union to seek a deferral of the resignation date, so as to derive a better financial outcome than might otherwise have been the case.
Ms Cross also submitted that in order for the Secretary to succeed on the Motion, it was necessary that the Secretary demonstrate that in tendering her resignation Ms Cross had agreed to relinquish any rights she may have to bring an unfair dismissal claim. No authority was offered for this assertion and I do not accept it. It is not necessary for the Secretary to show that there was an express release or waiver of any particular legal rights. All that is required is that the facts demonstrate that through a process of negotiation an outcome was reached such that the resignation tendered by the employee "may be said to be given freely and without any undue influence being brought to bear by the employer" (per Allison).
To my mind, though, the evidence falls short of establishing such an outcome. Mr Britt of Counsel, who appeared for the Secretary, submitted that "there were genuine negotiations, there were genuine discussions and there was a genuine agreement". I do not accept these submissions. There was no meaningful "negotiation" between Ms Cross and Mr Anderson. Rather, Ms Cross sent an email to Mr Anderson making a certain request, which was met with a counter-proposal in an email from Mr Anderson. That was, for all relevant purposes, the extent of the exchange.
The content and tone of Mr Anderson's email of 25 March 2022, and that of Ms Hall of 8 April 2022, do not convey a negotiated resolution so much as a variation to the disciplinary action that Mr Anderson proposed to take. That is, Mr Anderson did not apparently rescind the direction to resign, so much as extend the date from which it would take effect, from 25 March 2022 until 1 July 2022. This is reflected in the repeated threat in the emails that, if Ms Cross failed to abide by the conditions imposed, "the disciplinary outcome of dismissal [would] be immediately effective". In other words, the "disciplinary outcome" remained "live".
I accept Ms Cross's submissions that after 25 March 2022 the threat of dismissal hung over her head. The emails from Mr Anderson and Ms Hall say as much.
As already observed, Ms Cross deposed repeatedly that she had no wish to resign, but felt that she had little choice but to accept the counter-proposal or face "instantaneous" dismissal. The impression I formed from the evidence is that she was attempting to make the best of a bad situation. To adopt the language of Allison, Ms Cross could not properly be regarded as being "genuinely pleased with the outcome of [the] negotiations" such that her resignation is to be seen as having been "given freely and without any undue influence being brought to bear by" the Secretary.
The notation that Mr Anderson placed on the Separation Form (see [14] above) also seems to be more consistent with the maintenance of the disciplinary outcome than a reflection of an agreed settlement.
I accept that Ms Cross derived some financial benefit from the deferral of her resignation to 1 July 2022. That does not argue exclusively in favour of a negotiated outcome resulting in a resignation being given freely. It is just as possible to have been the motivation for Mr Anderson to vary the disciplinary action he had determined to take. That seems to be the better conclusion to be drawn from the evidence.
I find that the Secretary, through Mr Anderson, maintained the direction to Ms Cross that she resign. This direction was varied at Ms Cross's request so as to permit her resignation on 1 July 2022 as opposed to 25 March 2022. This conduct was "the real and effective initiator of the termination of the contract of employment". It follows that Ms Cross was dismissed for the purposes of Ch 2 Pt 6 of the IR Act.

[5]

When did the dismissal occur?

Section 85(1) of the IR Act requires that an application under Ch 2 Pt 6 "must be made not later than 21 days after the dismissal of the employee". It is necessary to determine the date on which Ms Cross's dismissal occurred to ascertain whether the Application has been filed in time.
During the hearing of the Motion, the Secretary conceded that were I to find that Mr Anderson had varied his direction to replace 23 March 2022 with 1 July 2022, and that Ms Cross had been dismissed, the Application would have been filed within time. Given [38] above, that would be enough to dispose of the matter. However, for clarity and certainty I offer the following observations.
Ms Cross contends that the dismissal should be regarded as having occurred on 1 July 2022, her last day of employment.
In her written submissions, the Secretary contended: "30. The Respondent's primary position is that the Applicant was not dismissed. However, if the Commission finds that the Applicant was dismissed, the Respondent submits this occurred at the latest on the date that the Applicant resigned on 28 March 2022 when she provided the Respondent with a signed separation form. 31. The Commission would fall into error if it were to treat the Applicant as having been dismissed when the Applicant's employment ended on 1 July 2022. The distinction between a dismissal and the date a dismissal takes effect is well recognised."
The Secretary drew my attention to the apparent anomalies in the Application having been filed on 23 June 2022, prior to the asserted dismissal date, and to the Application giving the "date of dismissal or threatened dismissal" as 23 March 2022. These facts were said to reflect a concession by Ms Cross that the date of dismissal cannot be 1 July 2022.
I have trouble accepting the contention that the dismissal occurred on 28 March 2022, when Ms Cross was permitted to remain in employment in the Teaching Service, albeit on leave, until 1 July 2022. The contention is difficult to reconcile with the phrase "dispensing with the services of the employee" appearing in the definition of "dismissal" in s 83(5) and with the observations of the Full Court in Smith. Ms Cross was not "being sent away from employment", nor was there a "termination of services", prior to 1 July 2022.
Ms Cross drew my attention to several decisions of the Commission which supported her contention that the "dismissal" for the purposes of the IR Act occurs when it takes effect, not when it is notified to the employee. I will deal with them in chronological order.
In Helen Reid v Robert Burns Real Estate [1999] NSWIRComm 393, the employee had been informed verbally on 20 August 1998 that her employment was to be terminated on 30 September 1998 on the basis of redundancy, as a result of her employer's decision to sell the business. The employee was provided a letter dated 24 August 1998 confirming that the business was to close "at the end of September next". In November 1998 the employee discovered that the business continued to operate, and on 30 November 1998 she commenced proceedings under s 84 of the IR Act. The matter for determination was whether the application ought to be accepted out of time.
In the course of determining that question, Commissioner Cambridge observed: "8. Although the application nominated an effective date of dismissal of 20 August 1998, a date apparently coinciding with the respondent's visit to the applicant whilst in hospital, the effective date of the applicant's dismissal was 30 September 1998, the date of the advised closure of the respondent's business. The time limitation as prescribed by section 85(1) of the Act would therefore have expired on 21 October 1998, and as the application was lodged on 30 November 1998, it was made some forty days beyond the prescribed time limit. … 22. Although the respondent asserted that the application was some eleven weeks late, this calculation was made by reference to the date of dismissal as 24 August 1998. Although the letter of dismissal was dated 24 August 1998, it provides a notice of termination at September 30 1999. Further, evidence that the applicant's termination payments were not finalised until mid to late September, must also provide for support for the effective date of dismissal to be 30 September 1998. Consequently the length of the delay is some forty days, and not eleven weeks as asserted by the respondent."
Applying this authority to the present case, I reiterate that Ms Cross received payment of her accrued but untaken leave entitlements on 7 July 2022.
In Healey v HPA Pty Ltd (2003) 125 IR 227; [2003] NSWIRComm 195, one of the matters the Full Bench had to consider was whether the Commissioner at first instance had erred in finding that the applicant's unfair dismissal application had been filed out of time. As observed by the Full Bench at [2], "[t]he appellant contended that his termination took effect on 2 June 2002 (which if correct, would result in the appeal being within the statutory time period) whilst the respondent contended that termination occurred on 2 May 2002 when notice of termination was given to the appellant".
The Full Bench observed: "24. …We consider, however, that there was significant evidence before the Commissioner, which did not rely upon the applicant's oral evidence and which indicated that the date of the applicant's termination was 2 June. In short, there was material before the Commissioner which, upon the principles in Siagian v Sanel Pty Limited (1994) 54 IR 185, warranted a finding that the employment ceased on 2 June 2002, and hence, a finding that the application was brought within time. For example, there was documentary evidence before the Commission that constituted clear indicia of a continuation of some form of employment until 2 June 2002. A letter was handed to the appellant on 2 May 2002, signed by the respondent's Technical Operations Manager, Ms Kenyon, with the subject heading 'Redundancy of your position of technical support analyst'. The letter stated that the respondent was retrenching the appellant, giving him '1 months notice from today the 2nd May 2002'. …"
In the context of the present case, it is relevant to observe that the Full Bench quoted from the applicant's termination letter which stated that "we will have no work for you during that time [that is, the notice period] and so we require you to leave HPA today after you have said your farewells".
Finally, in Kirkwood & Victor Ollis t/as Country House and Land Sales [2005] NSWIRComm 1037, the employee was informed of his dismissal on 5 July 2004. His letter of dismissal acknowledged that he was to take a further week of accrued leave after the date of the letter. In determining whether the application had been filed out of time, Commissioner McLeay calculated time from the end of that period of leave, namely 12 July 2004.
The Secretary's contention as to the existence of a "well recognised" principle that a distinction is to be drawn "between a dismissal and the date a dismissal takes effect" does not sit comfortably with these authorities. I am aware of no authorities in which the Commission has accepted that for the purposes of s 85(1) of the IR Act, time runs from the date on which the employee is informed of their dismissal, even if the employment relationship continues (whether as a result of the employee taking leave or serving a period of notice). The Secretary did not refer me to any such authorities.
In what appeared to be an alternative argument, the Secretary placed reliance on the definition of "dismissal" in s 83(5) and its inclusion of "threatened dismissal". Mr Britt submitted: "We note that the definition in s 83 of 'dismissal' includes a threatened dismissal. There was a threat to dismiss, that was the dismissal date 23 March 2021. So, if we've dismissed, the date of the threat is 23 March 2021." [sic]
To avoid confusion, I observe that I clarified with Mr Britt that he intended to refer to 23 March 2022. That was the date on which Ms Cross received the letter from Mr Anderson dated 17 March 2022.
There are two things to say about Mr Britt's submission. First, it misdescribes the effect of Mr Anderson's letter of 17 March 2022. That letter did not threaten dismissal: it communicated a decision which had been made to bring about the termination of Ms Cross's employment. As already observed, the Secretary accepted that had Ms Cross tendered her resignation in accordance with that letter, that would have been a "dismissal" for the purposes of the IR Act.
Second, the submission rests on the premise that once a threat of dismissal is made, the employee is to be regarded as having been "dismissed". The broader concept of what might constitute a dismissal (noting that the definition in s 83(5) is an inclusive one) would apparently be subsumed by the threat of dismissal. On this analysis, time to commence proceedings in respect of that dismissal would then begin to run. If the threatened dismissal was effected more than 21 days after the threat was made, the employee would be out of time to challenge the dismissal itself.
The inclusion of "threatened dismissal" in the definition in s 83(5) allows for applications to be made to avert threatened dismissals. The Commission is empowered to provide relief to prevent threatened dismissals from taking effect. Nothing in the IR Act properly allows for a construction that would support the outcome for which the Secretary contends.
I do not place much weight on the fact that in the Application the date of dismissal is given as 23 March 2022. On all of the evidence I do not see this as amounting to a concession by Ms Cross as to the date of her dismissal.
I find that for the purposes of the IR Act, Ms Cross's dismissal took place on 1 July 2022. The time in which she was required by s 85(1) to commence proceedings ran from that date. Nothing in the IR Act operates to preclude the Application being brought before the employment came to an end. In any event, the concession made by the Secretary as referred to at [40] is noted.

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