Fair Work Act 2009

s.394 - Unfair dismissal

Unfair dismissal application - resignation - settlement agreement - application dismissed

[1] This decision concerns an application for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Cth) (Act). Mr Max Bailey contends that he was unfairly dismissed from his employment with Dynamic Glass Pty Ltd (company), where he had worked for four years before his employment ended on 18 December 2020. Mr Bailey says that he was forced to resign, and to sign a release agreement, under threat of termination for serious misconduct, and that he was therefore dismissed by the company for the purposes of s 386 of the Act. Mr Bailey submits that his dismissal was unfair and seeks compensation.

[2] The company objects to the application on the jurisdictional ground that Mr Bailey was not dismissed but freely resigned from his employment after the company put to him two allegations of theft, each involving the taking of glass for personal use without paying for the product. It further contends that, even if Mr Bailey were considered to have been dismissed, any cause of action he may have had has been extinguished by a release agreement signed by Mr Bailey. The company submits that the Commission should dismiss the application under s 587(1)(c) of the Act because it has no reasonable prospect of success.

[3] I heard the company's jurisdictional objection and its application under s 587 on 13 April 2021. I have concluded that the company's objection must be upheld.

[4] Mr Bailey gave evidence that on 23 November 2020 he ordered a supply of toughened glass for personal use from the company's supplier. He placed the order in his own name on the company's account, as he and other employees had done before. On 23 November 2020, the company's director, Mr Brian Breed, sent him an invoice for the toughened glass in the amount of $785.00. Mr Bailey said that on 9 December 2020 he told Mr Breed that it was unreasonable to expect payment in full of $785.40 prior to collection, given his weekly salary of $1008. According to Mr Bailey, Mr Breed then agreed that, as normal, he could make as many payments as he could afford until the full amount was paid off, and that he could take the product. Mr Bailey then made a part payment to the supplier of $300.00. He later collected the toughened glass. This incident is the subject of the company's first allegation of theft.

[5] Mr Bailey said that on 14 December 2020, after finishing work, he took from the company's warehouse a small glass offcut to use for a personal job. Mr Bailey said that he was not able to contact Mr Breed to tell him that he was taking the offcut, so he told a co-worker about it. Mr Bailey said that he approached Mr Breed at around 6.30am the next morning and began to inform him of the specifications and details of the panel he had taken the day before. He said that Mr Breed acknowledged him and continued to walk into the factory, without raising any concerns, and that he believed Mr Breed was aware that he had taken the panels. On 17 December 2020, Mr Bailey was sent an invoice for the offcut panel for $22.00, payable by 24 December 2020. From this Mr Bailey concluded that the company knew that he had taken the offcut. This incident is the subject of the company's second allegation of theft.

[6] Mr Bailey said that throughout his employment, employees had been able to take glass for personal use, provided they recorded this and advised Mr Breed so that he could calculate the required payment. He said that there was an honour system that was based on trust, and that prior to November 2020 he had never been issued with an invoice for glass nor had he received any instruction that employees must pay for glass before taking it. He said that he had often ordered glass and had been allowed to make payments in instalments.

[7] Mr Bailey said that on 18 December 2020 he was called to a meeting with Mr Breed and his business partner, Mr Mitten, and accused of stealing the toughened glass and the glass offcut. Mr Bailey said that he was very surprised, overwhelmed, and upset by the false accusations, and that Mr Breed said that the police would be called unless he resigned and signed a deed of release. Mr Bailey offered to pay the outstanding amount of $507.40 (the balance of $485.40 for the toughened glass and the $22.00 for the offcut) over the Christmas period. He was then handed a preprepared deed of release to sign. Mr Bailey said that he asked Mr Breed for time to seek advice, because he did not understand what he was being asked to sign, but his request was refused. Mr Bailey's evidence was that he felt that he had no option but to resign and sign the release agreement, and he did so.

[8] Mr Breed's evidence was that the company had previously allowed employees to use the company account and collect goods ordered prior to making full payment, but that this had caused problems, because he had been left to chase employees for payment. Mr Breed said that he had decided to put a stop to the practice, and that he had told employees, including Mr Bailey, that orders must now be paid in full prior to collection from the supplier.

[9] Mr Breed gave evidence that he specifically told Mr Bailey that he needed to pay for the toughened glass in full before collecting it. Consistent with this policy, he agreed with Mr Bailey that he could collect and pay for three of the panels Mr Bailey had ordered, panels used for showers screens, which were valued at approximately $300.00. Mr Breed denied authorising Mr Bailey to collect the entire order prior to full payment of the invoice. He produced the invoice issued to Mr Bailey on 23 November 2020. It lists three lines of supply items. Mr Breed explained that the three shower panels constitute the first line of items. The invoice states that it must be paid in full before goods can be collected, and that it is payable by 8 December 2020.

[10] Mr Breed said that on 17 December 2020, while reviewing surveillance footage from the previous days, he saw Mr Bailey loading a glass panel from the factory into his vehicle. Mr Breed said that he had not authorised this and denied that Mr Bailey had told him about taking the offcut. Mr Breed said that he then arranged for Mr Bailey to be invoiced for the offcut, not so as to authorise the taking of it, but to demand payment for it. He then made inquiries with the company's glass supplier and was told that Mr Bailey had collected the entire order for the toughened glass, without having paid for it in full.

[11] Mr Breed said that on 18 December 2020, he and Mr Mitten met with Mr Bailey and put to him two allegations of theft: that he had stolen the remaining toughened glass, and that he had stolen the glass offcut taken from the factory. Mr Breed said that he then told Mr Bailey that these matters gave him the right to summarily dismiss him for serious misconduct, and that he intended to notify the police. According to Mr Breed, Mr Bailey then became angry and swore at him, and said words to the effect that he should go and 'get fucked' and that he would 'quit'. In his evidence, Mr Bailey denied saying these things, but acknowledged that he was angry. Mr Breed said that there was then a discussion about the possibility of Mr Bailey resigning. Mr Breed said that he suggested that, if Mr Bailey resigned, the company was prepared to waive the money Mr Bailey owed it for the glass panels and would not report the matter to the police. Mr Bailey then took a piece of paper and wrote out a brief resignation, which was tendered in evidence. It states: 'I, Max Bailey resign and have agreed with Dynamic Glass to be paid out all entitlements and annual leave on the next pay run Tues 22/12/20'. It is signed by Mr Bailey, Mr Breed and Mr Mitten.

[12] Mr Breed said that he and Mr Bailey then signed a release agreement that the company had already prepared. The document was tendered in evidence. It states that Mr Bailey and the company 'agree to settle the employee's termination' on the following basis:

"The Employee will, upon agreement (sic) Dynamic Glass will waiver (sic) all outstanding monies owed to the value of $507.40 from the aforementioned Employer in full and final settlement of all claims arising out of employment with the said Employer, release and forever discharge the said Employer from any liability past, present or future from all claims, actions or proceedings arising out of employment by the Employer."

[13] The agreement goes on to provide that the company releases Mr Bailey from any liability connected to his employment, that the parties will not disparage one another, and that the terms of settlement will be kept confidential, save as required by law.

[14] I make the following factual findings. First, I accept Mr Breed's evidence that he told employees that personal orders made on the company's account at the supplier must be paid in full prior to collection, and that he told Mr Bailey that he had to pay for the toughened glass in full before collecting it from the supplier. I find that Mr Bailey was aware of the requirement that orders on the company account be paid in full prior to collection, because the invoice dated 23 November 2020 said so, and because Mr Breed had told him so.

[15] Secondly, I find that Mr Breed agreed with Mr Bailey that he could pay $300 for, and take, the three toughened glass shower panels. I find that Mr Breed did not tell Mr Bailey that he could collect the entire order before it had been paid for. I found Mr Breed's evidence to be clear and candid. It is consistent with the terms of the invoice dated 23 November 2020, which confirm the requirement for payment in full prior to collection. Mr Breed's evidence was logical and convincing. He did not want employees taking orders placed on the company's account without paying for them, because he was then left to chase up late payments. Mr Breed's decision to allow Mr Bailey to pay for and take the shower panels was consistent with the new rule: employees could only collect orders that they had paid for. I find it improbable that Mr Breed would make an exception to the new rule which required full payment before collection.

[16] Thirdly, I find that on 15 December 2020, Mr Bailey did not tell Mr Breed that he had taken the glass offcut. In his witness statement, Mr Bailey said that he had 'begun to inform' Mr Breed of the details of the panel he had taken the day before, and that Mr Breed 'acknowledged' him. I found Mr Bailey's evidence in this respect tentative and unconvincing, whereas Mr Breed was very clear that Mr Bailey did not tell him that he had taken the glass from the factory.

[17] Fourthly, I accept Mr Breed's evidence that he only learnt that Mr Bailey had taken the offcut when he saw the video footage of it on 17 December 2020, and that he invoiced Mr Bailey for the offcut not to authorise the taking of it, but to demand payment for it.

[18] Fifthly, I accept Mr Breed's evidence that, during the meeting on 18 December 2020, Mr Bailey became angry and told Mr Breed and Mr Mitten that they could 'get fucked' and that he would 'quit'. I prefer Mr Breed's evidence to that of Mr Bailey. Mr Breed's evidence was consistent and clear, and he made relevant concessions. I believe him. I accept Mr Bailey's evidence that he told Mr Breed that he wanted to seek advice, but I do not accept that Mr Bailey did not understand what the company was proposing, namely that, if he resigned, the parties would release one another from liability, and the company would waive his debt.

[19] Mr Bailey was not forced to resign from his employment. The fact that Mr Bailey may have felt that he had no other option but to resign, and felt overwhelmed, are subjective matters. Whether there was a forced resignation is to be assessed objectively. Mr Breed did not tell Mr Bailey that he had to resign; rather, Mr Breed said that he had the right to dismiss Mr Bailey summarily. It was then that Mr Bailey told Mr Breed to 'get fucked' and said that he would 'quit'. Mr Bailey chose to resign. It was a rational choice. It resulted in the company's waiver of Mr Bailey's $500 debt, the avoidance of disciplinary action, and a waiver of any right the company had to bring proceedings against him. Mr Bailey agreed to end his employment on this basis. I accept that Mr Bailey wanted time more to think about the proposal, and to obtain advice, and that the company was not prepared to afford him further time. But Mr Bailey also wanted the benefits associated with the company's proposal. This was not a forced resignation, nor was it a termination on the employer's initiative. Mr Bailey was therefore not dismissed within the meaning of s 386. The company's jurisdictional objection is upheld.

[20] I also consider that the effect of the release agreement was that, even if Mr Bailey had been dismissed, his right to bring an unfair dismissal application was extinguished. The extract from the agreement reproduced above is ungrammatical and poorly drafted, however its import is clear: the employee will release the company from liability arising from the employment, and the company will waive the employee's debt of $507.40. The release agreement is an accord and satisfaction which is a complete answer to Mr Bailey's claim (see Australian Postal Corporation v Gorman [2011] FCA 975, Besanko J, at [31]-[33]). The document purports to be a deed, but it is not necessary for me to consider the formal requirements for a valid deed in Victoria. The document is plainly a contract for which each party has provided consideration. I note that Mr Bailey asked for more time to consider the document and obtain advice, and that this was refused. But if Mr Bailey had misgivings, he could have declined to sign the document. I do not consider that the release agreement was vitiated by duress. As to the company's threat to involve the police, Mr Bailey's evidence was that he was comfortable that he had done nothing wrong. There was circumstantial pressure; the benefits offered by the company to Mr Bailey under the agreement might be lost if he did not accept it. But that is no different from any proposed contract where an offer remains open for a limited time. The fact that the release agreement had been preprepared is of little relevance. This only shows that the company had uthe forethought to draw up its proposal, not that it compelled Mr Bailey to agree to it.

[21] Mr Bailey said that, in relation to the merits of his application, he would be content to rely on the material before the Commission. I will therefore record that, had I not upheld the jurisdictional objection, and had the claim not been extinguished by the release agreement, I would have dismissed Mr Bailey's application. There was clearly a valid reason for dismissal. Mr Bailey took the glass offcuts from the factory. He was not authorised to take them. Mr Bailey also took the remaining toughened glass he had ordered on the company's account, without paying for it, contrary to Mr Breed's instructions. Mr Bailey's own evidence was that he was unable to make full payment at the time. He was using the company's account with the supplier as a personal credit facility, despite being told not to do so. Regardless of whether or not these actions constitute theft, they are grave matters which in my opinion constitute serious misconduct, warranting dismissal without notice. Mr Bailey submitted that he received no warnings. But it is not necessary for an employer to warn a person against such misconduct. Mr Bailey was provided with an opportunity to respond to the allegations against him at the meeting of 18 December 2020. His explanations were not compelling. Mr Bailey was dismissed for good and substantiated reasons. There is nothing about the circumstances to render the dismissal unfair. In particular, I reject the suggestion in Mr Bailey's materials that his dismissal was connected in some way to an earlier incident in which the company had agreed to pay a speeding fine incurred while Mr Bailey was driving a company vehicle. I also reject Mr Bailey's generalised claims of having been subjected to harassment and bullying during his employment. And I reject his contention that the company's new requirement that employees pay for goods ordered on its account prior to collection was a device to procure his dismissal. Had I been required to determine the merits of the application, I would have concluded that Mr Bailey's dismissal was not harsh, unjust, or unreasonable, and that it was not unfair.

[22] The company's jurisdictional objection is upheld. Mr Bailey's application is dismissed.

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