s.365 - Application to deal with contraventions involving dismissal

Application to deal with contraventions involving dismissal - jurisdictional objection - not dismissed - jurisdictional objection upheld - application dismissed.

[1] Mr Mitchell Young (the Applicant) was employed from 2 September 2024 by the Trustee for the ThoroughClean Trust (the Respondent) as a Business Development Manager. The Respondent sells and rents different product lines of mobile and fixed water blaster products. Mr Young's role was to develop customer relationships in allocated geographic regions and increase the sales of the Respondent's products.

• [2] Mr Young resigned from his employment on 18 July 2025 and subsequently filed an application alleging a breach of the general protections in the Fair Work Act 2009 (Cth) (the Act). Mr Young claims that he was forced to resign because the Respondent made 'unilateral changes' to his role without consultation and that the changes caused him stress for which he required personal leave.[1]

[3] The Respondent objects to the application on the basis it says it did not dismiss Mr Young, either on its own initiative or by engaging in conduct that left Mr Young with no reasonable choice but to resign. This decision deals with the Respondent's jurisdictional objection that the Applicant was not dismissed.

[4] Mr Young represented himself in the proceedings and the Respondent was represented, with permission, by Mr Mitchell of Counsel. Mr Young gave evidence on his own behalf and Mr Garth Hanson, National Operations Manager, gave evidence for the Respondent.

[5] For the reasons set out in this decision, I find that Mr Young's resignation was not forced and consequently, he was not dismissed from his employment.

• [6] The Applicant asserts that from May 2025 his responsibility for sales in New Zealand were removed from him without consultation. This is denied by the Respondent who asserts that Mr Young was never allocated responsibility for New Zealand, but rather New Zealand was a shared responsibility between the Business Development Managers employed by the Respondent. Mr Hanson gave evidence that any sales made by Mr Young in New Zealand only "contributed a tiny amount to [Mr Young's] overall sales target".[2] Mr Hanson provided details of Mr Young's actual sales against his budget over his ten months of employment and noted that Mr Young was "consistently unable to meet" his sales targets.[3] Mr Young agreed that the figures were "quite accurate".[4]

[7] It is agreed between the parties that in late June 2025 the Respondent commenced discussions about a restructure of its business after the resignation of its General Manager, effective on 30 June 2025. In the restructure, Mr Young was given new regions as part of his responsibilities and other regions which he had previously overseen were removed from his responsibilities.

[8] Mr Young says that by June 2025 he was suffering from a stress-related illness which had caused him to leave work early on some occasions. The Respondent says they held a series of meetings to consult about the restructure. The evidence was not clear about which of the meetings were missed by Mr Young. It is likely that he missed meetings held to discuss the restructure on either 13 or 20 June (or both) and 27 June 2025. The Respondent says that Mr Young also missed a meeting on 9 June 2025 when the restructure was discussed. Mr Young says he was at that meeting but the restructure was not discussed.

• [9] The parties agree that the Respondent's decision to change Mr Young's geographical and product allocations was communicated to him in a meeting on 1 July 2025 by Mr Farrell, South Australian Branch Manager. Mr Young says in his evidence: "On 1 July 2025, I discovered that my responsibilities ... had been stripped."[5] It was after this discussion that Mr Young left the workplace and commenced a period of sick leave that concluded when he resigned on 18 July 2025.

[10] On 1 July 2025, Mr Young sent an email to Mr Hanson and Mr Huang requesting formal clarification about changes to his role, noting that he had not received "any written communication or formal consultation regarding these changes." Mr Young also said in the email that "[t]hese changes appear to materially alter the nature of my employment" and that his ability to meet sales targets and earn commission would be significantly affected.

[11] Mr Hanson responded on the same day, confirming the restructure and resulting changes and committing to "respond to queries shortly with the plan going forward in writing." After receipt of that email the Applicant left the workplace on account of illness and advised the Respondent he was going to see a doctor.

[12] From 1 July 2025, Mr Young communicated in writing with Mr Hanson and Mr Huang, the Chief Financial Officer, persistently raising his concerns that he had not received any written or formal consultation about the changes to his role which he said significantly affected his ability to meet sales targets and earn commissions, reducing his overall income.

[13] The Respondent sent an email to employees, including Mr Young, on 3 July 2025 setting out the new structure. This email stated that Mr Young was being allocated sales for ThoroughClean products in South Australia, Victoria, New South Wales and Tasmania.

[14] Mr Young emailed the Respondent on 4 July 2025 advising that he was continuing to suffer from "work-related stress" and that he was returning to his general practitioner the following Tuesday for further management. On 6 July 2025, Mr Young advised the Respondent he remained "quite unwell" and would remain absent from work. On 8 July 2025, Mr Young forwarded another certificate declaring him unfit for work from 7 to 11 July 2025.

[15] Also on 8 July 2025, Mr Young wrote to the Respondent again raising concerns that he had not been provided with an explanation that addressed the impact of changes including the removal of territories and product lines from his responsibility that would affect his "commission opportunity". He also complained that he had not been consulted about the re-assignment of key accounts and allocation of territories with "no active pipeline" of sales that had been "shutdown for underperformance." Mr Young noted the impact of the changes on his earning capacity and health and a lack of meaningful support from the Respondent.

[16] Mr Young then proposed a "mutual termination of employment". He offered to "resolve this matter efficiently for both parties" for a "lump sum settlement of $100,000, equivalent to my base salary, formalised with a Deed of Release with payment due in 7 days of execution." Mr Young told the Respondent that while he remained open to resolving the matter respectfully, he reserved "all rights under the Fair Work Act 2009, including pursuing a General Protections claim on the basis of Constructive Dismissal, should an agreement not be reached." I note that at this time Mr Young had not resigned from his employment. He was foreshadowing that he would resign if he could not negotiate a mutual termination of employment.

[17] On 11 July 2025, Mr Huang wrote to Mr Young and said: "Please accept this correspondence as formal notification that the company declines your proposal."

[18] Mr Huang again wrote to Mr Young on 11 July 2025 noting the further medical evidence he had provided to access personal leave and said: "Please take the time you need to ensure that you make a full recovery. Once you are fit to return to work, we look forward to your return to work and will provide whatever reasonable support we can to facilitate your return to work."

[19] Mr Young replied on the same day noting the refusal of his offer and again raising that his concerns had not been addressed by the Respondent. Mr Young made clear that he was "open to discussing an alternative resolution should the company wish to reconsider its position" but if there was no meaningful resolution by 14 July 2025, Mr Young would have "no choice but to consider other avenues".

[20] On 14 July 2025, Mr Huang sent an email to the Applicant that said: "While you remain unfit for work and suffering from mental health concerns, we do not believe it would be appropriate to discuss any of your concerns about the workplace. ... Once you have regained fitness for work, we will facilitate a process to respond to, and if necessary, address your concerns."

[21] Mr Young responded just over an hour later:

"I respectfully disagree with the assertion that my current health precludes the business from addressing the matters I have raised. These concerns relate to decisions already made and implemented by the company, including substantial changes to my role, the removal of product lines and accounts, and the resulting loss of earning potential. These issues are not hypothetical - they are active and ongoing. ... if the Company maintains its position to delay any discussion until my return, I will have no option but to consider all available avenues and remedies."

[22] On Friday, 18 July 2025, Mr Young sent a further email to the Respondent in the morning that said: "Despite providing multiple opportunities to engage constructively, I have not received a satisfactory response. ... If there is no meaningful engagement by close of business today ... I will consider the company to have made its position clear and will proceed accordingly."

[23] After business hours on the same day, Mr Young sent a further email to Mr Huang and Mr Hanson and said: "I am writing to formally resign from my position, effective immediately. ... I feel I have been left with no reasonable alternative but to step away. ... I consider the actions taken by the company to have fundamentally altered the terms of my employment and breached the trust and confidence necessary for the employment relationship to continue."

[24] Mr Young sent another email the following Tuesday, 22 July 2025, asking for an acknowledgement of his resignation and directions to return company property noting "this silence mirrors the company's broader pattern of failing to meaningfully engage with the serious concerns I have raised".

[25] Mr Huang sent a detailed letter on behalf of the Respondent to Mr Young on 23 July 2025 addressing a number of matters including Mr Young's post-employment obligations. The Respondent denied that the terms of Mr Young's employment had been altered by them and confirmed their view that Mr Young had voluntarily resigned on 18 July 2025. The Respondent made clear in the correspondence that, in their view, they had not engaged in any conduct intended to bring the employment relationship to an end.

• [26] Mr Young made clear in his evidence that he considered his role and responsibilities had been "stripped" from him. He asserted that the region of Western Australia and two of the Respondent's three product lines were removed from his responsibilities. Mr Young says that he was instead allocated the "historically underperforming"[6] regions of Victoria, New South Wales and Tasmania at a time when the Respondent introduced what he described as a "blanket travel ban"[7] which left Mr Young unable to travel to the allocated regions to sell the Respondent's products. The Applicant said that the decision to change his responsibilities had the result of him being "effectively unable to perform the very function of his role".[8] Mr Young complains that other business development managers retained their previous regions and product lines in which they had established relationships and he was "the only one reassigned to territories that [he] could not service or develop."[9]

[27] Mr Young also complained that previous responsibilities for selling a wider variety of the Respondent's products were removed from him and he was allocated to only one range of the Respondent's products to sell.

• [28] Mr Hanson gave evidence that Mr Young was only asked to prioritise their ThoroughClean products, based on previous success in selling that product line, but was otherwise free to sell the Respondent's other product lines.[10] Mr Hanson said that Mr Young was never told he could only sell one product line and that this issue could have been clarified if Mr Young attended the relevant meetings or had returned to work rather than resigning from his employment.

• [29] Mr Hanson also rejected the assertion that Mr Young's previously allocated regions were "valuable and productive" and said that Mr Young "consistently failed to achieve his targets with these territories within his responsibility."[11] Mr Hanson also gave evidence that a blanket travel ban had not been imposed, but rather a direction had been given that travel was to be limited during the period of the restructure with a more strategic and planning focus to be adopted thereafter. Mr Hanson explained the Respondent had made this decision because the "Respondent was spending significant amounts of money on travel with very little sales to show for it".[12] Mr Hanson's evidence was that the Respondent's intention was to implement a requirement for Business Development Managers to submit three and six month plans for their travel in the future.[13]

• [30] There is a dispute between the parties about the effect of the Respondent's decision to change Mr Young's responsibilities; Mr Young says it was a unilateral role change which caused a loss of earning ability[14] and the Respondent says that the reallocation of duties was to "untapped markets which presented a significant opportunity for the Applicant to improve his sales."[15] The key issue in this matter which is in dispute between the parties is whether the Respondent's conduct in re-allocating Mr Young's duties and causing him stress were actions that left Mr Young with no real choice but to resign.

[31] Mr Young has brought an application pursuant to section 365 of the Act:

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.

[32] It is a jurisdictional pre-requisite for this application that the Applicant has been dismissed in order for his claim to proceed.

• [33] Section 386 of the Act sets out the meaning of dismissed:[16]

(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.

• [34] In the leading case of Mohazab v Dick Smith Electronics Pty Ltd (No. 2)[17], the Full Court of the Federal Court found:

"[A] termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship ... [I]t is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of employment and the employment is not voluntarily left by the employee."[18]

• [35] Section 386(1)(b) requires for there to be a dismissal, the Applicant's resignation must be forced. For this high bar to be met, the resignation must be a probable result of the employer's actions and that the employer's conduct left the applicant with "no reasonable choice but to resign".[19]

• [36] The test to be applied to assessing whether a resignation was forced was set out by the Full Bench of the Commission in Bupa Aged Care Australia Pty Ltd v Tavassoli[20]:

"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 [sic] result of the employer's conduct such that the employee had no effective or real choice but to resign ... the requisite employer conduct is the essential element."[21]

• [37] Also consistent with the words in section 386(1)(b) of the Act, it is the conduct of the employer that must be assessed in determining whether an employee was forced to resign, not the subjective impact of circumstances and events on the Applicant that led them to form their own view they had no option but to resign.[22]

[38] Significant time was spent in the hearing, particularly in cross examination of Mr Young, on evidence relating to the nature and impact of the changes being made to Mr Young's role following the restructure. Mr Young asserted that he was forced to resign because the Respondent had changed his job so fundamentally that he was unable to perform his role and earn the same income with commissions on sales. The Applicant also asserted that he was left with no option but to resign when the Respondent did not consult him about the changes to his role, would not engage with the concerns he raised about the changes, and would not negotiate a resolution that involved him resigning from his employment.

[39] I accept that Mr Young felt upset about the changes to his role and may have felt that he had no option but to resign. However, it is my view that on his own case, and the evidence before me, Mr Young cannot establish that he was forced to resign by the conduct, or a course of conduct undertaken by the Respondent. This is even absent the evidence of the Respondent regarding their ability to change Mr Young's responsibilities, the lesser impact they argue the changes would have had on his employment and any evidence given by Mr Young in cross-examination.

• [40] Mr Young was employed by the Respondent as a Business Development Manager. His contract made clear that he was "expected to carry out [his] duties in [his] position description (as may be varied from time to time by the Employer)".[23] The Applicant's position description was not in evidence, but I note the terms of the contract make clear it can be varied by the Respondent. The Respondent was entitled to change the geographical and product allocations to Mr Young as a Business Development Manager because of a business restructure. Its decision to do so did not leave the Applicant with no real or effective option but to resign.

[41] Whilst I am not critical of Mr Young for making an offer to the Respondent to mutually terminate his employment on agreed terms, the making of an offer to resign in exchange for a financial settlement suggests that Mr Young was aware that he had an alternative option available to him other than resigning from his employment. Mr Young's efforts to negotiate a resignation on mutually beneficial terms is inconsistent with his assertion that he had no reasonable option other than to resign. Mr Young demonstrated an awareness that he had a choice to resign from his employment, should the Respondent agree to the terms of settlement, in exchange for a financial settlement.

[42] I acknowledge Mr Young's concerns that after the changes to his role he may not have been able to earn the same commissions he had earned previously. However, there was no evidence before me about the amount of commissions earned by the Applicant prior to his resignation and I have no appreciation of whether the loss of commissions were likely or significant. I also note the Respondent's evidence, not disputed by the Applicant, that he was significantly below his sales budget in the ten months he was employed by the Respondent. Mr Young's concerns about any impact on his income were valid but speculative.

[43] I understand Mr Young's submissions to be that the Respondent should have consulted him before the decision was made to change his role and it had not done so. He asserts that the failure to consult him caused Mr Young to become unwell and was conduct of the Respondent that was intended to force him to resign. Neither party submitted that the contract, or any other applicable industrial instrument (if any) created an entitlement for Mr Young to be consulted about proposed changes to his role.

• [44] Mr Hanson, in cross examination, said Mr Farrell had told him that he had discussed the changes with Mr Young and that Mr Young did not have any concerns about the changes before they were formally announced by email on 3 July 2025.[24] I cannot accept that Mr Young told Mr Farrell that he did not have any issues with the changes to his role considering Mr Farrell did not give direct evidence in the matter and the other evidence that demonstrates Mr Young consistently complained about the proposed changes to his role. Further, I do not accept Mr Hanson's evidence[25] that he was not aware that Mr Young was dissatisfied with the changes to his role when they were announced on 3 July 2025 and understood Mr Young's email of 1 July 2025 to be merely seeking clarification about the changes to his role and not expressing dissatisfaction about the decision. In the email of 1 July 2025, Mr Young noted that the changes "significantly affect my ability to meet sales targets and earn commission" and that he had not "received any written communication or formal consultation regarding these changes."

• [45] However, I accept that the Respondent consulted with the Business Development Managers, at least on 27 June 2025, and Mr Young was unable to attend that meeting because of a work-related stress condition.[26] Mr Young's absence from at least two of the three or four meetings in June 2025 in which the restructure was discussed made consultation with Mr Young more difficult for the Respondent.

[46] Even if the consultation with Mr Young was limited for reasons including Mr Young's absences, the alleged failure to consult did not leave Mr Young with no real or effective option but to resign. Further discussions with Mr Young would have given him additional opportunities to express his dissatisfaction. But Mr Young's dissatisfaction with the changes to his role, that I accept he expressed to the Respondent consistently from late June 2025 onwards, are not enough to lead to a conclusion that he had no real option but to resign and his resignation was therefore not voluntary.

• [47] Mr Young made demands of the Respondent to provide him with information and engage with his concerns during a period wherein he had made it clear to the Respondent that he was ill with a work-related stress condition. There is nothing inappropriate about the Respondent refusing to engage in consultation or dispute resolution with Mr Young while he was on sick leave. I do not accept that it was "inaction"[27] as described by Mr Young. I understand and have sympathy for Mr Young's submission that his stress was caused by the changes to his role and that discussions with the Respondent to clarify matters might have relieved his stress. However, if an employee is on sick leave, it is appropriate for their employer to ensure they have a break from work and are allowed time to recover. The Respondent's refusal to engage in discussions with Mr Young while he was ill did not leave Mr Young with no option but to resign. Mr Young could have taken the time away, had a break, sought treatment if appropriate, recovered his capacity for work and then engaged in discussions with the Respondent about his restructured role with a focus on returning to work.

• [48] I agree with the Respondent's submission that "[o]n the Applicant's own evidence, he had realistic alternatives to resignation, including continuing personal leave or returning to work on 21 July 2025."[28] The Applicant could have resumed his employment with the Respondent, once he had time away to recover from stress, and commenced developing the business in the areas he had been allocated, with the product lines available to him, in accordance with the role he was employed to perform.

• [49] The Respondent was entitled to change the Applicant's areas of responsibility in accordance with their business needs. The limited consultation that occurred could have been better but was affected by the Applicant's illness and absences. Once Mr Young notified the Respondent of his absence due to illness, the Respondent communicated its preference that the Applicant take time to recover from his illness and its willingness to respond to concerns once the Applicant was well enough to return to work. The Respondent also made clear to the Applicant that it was not interested in discussing a mutual separation and would facilitate Mr Young's return to work when he was fit to do so. I agree that the Respondent had communicated to Mr Young to: "take the time you need to ensure that you make a full recovery. Once you are fit to return to work, we ... will provide whatever reasonable support we can to facilitate your return to work." And I accept the Respondent's submission that "the clear and obvious option is that the employer wanted him to remain employed. That is fundamentally inconsistent with the proposition he had no option and that the Employer's conduct objectively intended to terminate the employment."[29]

[50] I find that the Respondent did not engage in any conduct, or a course of conduct that had the intention of bringing the employment to an end or conduct from which termination was the probable result.

[51] The Applicant was not forced to resign, he did so voluntarily and was not dismissed. As there was no dismissal, the Commission does not have jurisdiction to deal with this matter.

• [52] An order dismissing Mr Young's general protections application will be issued concurrently with this decision.[30]

S Mitchell instructed by B Smith of Mellor Olsson Lawyers with permission, on behalf of the Trustee for the ThoroughClean Trust.

[2] Statement of Mr Hanson at paragraph 11.

[4] Audio recording of hearing Part 1: 19:56.

[5] Statement of the Applicant at paragraph 6.

[6] Submissions of the Applicant at paragraph 3.6.

[9] Statement of the Applicant at paragraph 7.

[10] Audio recording of the hearing Part 2: 29:42.

[11] Statement of Mr Hanson at paragraph 22.

[15] Statement of Mr Hanson at paragraph 24.

[16] See Varichak v COG Regional Team Pty Ltd [2022] FWCFB 37 at [30] where it is noted 'the provisions of s.386 have been applied by the Courts to s.365 General Protections matters'.

[17] [1995] IRCA 625; (1995) 62 IR 200.

[19] Davidson v Commonwealth [2011] FWAFB 6265; (2011) 213 IR 120 at [14].

[20] [2017] FWCFB 3941 at [47](2).

[21] Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Moman v Tavassoli [2017] FWCFB 3941 at [47].

[22] See also Martin v Scentre Pty Ltd [2026] FWC 881 at [7].

[23] Applicant's contract of employment.

[24] Audio recording of the hearing at Part 2: 11:32.

[25] Ibid at Part 2: 15:36 - 17:42.

[26] See letter of Dr Lalonde, 15 September 2025.

[27] Audio recording of the hearing Part 2: 40:30.

[28] Submissions of the Respondent at paragraph 49.

[29] Audio recording of the hearing Part 2 at 49:00- 49:17.

[30] PR797908.

Printed by authority of the Commonwealth Government Printer