s.394 - Application for unfair dismissal remedy

The Trustee for RB45 Trust Trading AS Fitness Warehouse

Application for unfair dismissal - jurisdictional objection - no dismissal - no dismissal at the initiative of the Respondent - application dismissed

• [1] Mr Ted Pilkington (the Applicant) lodged a claim for unfair dismissal, claiming he was dismissed from his employment as a store manager for the Trustee for RB45 Trust trading as Fitness Warehouse (the Respondent) on 13 December 2024. He alleges his dismissal was harsh, unjust or unreasonable because he did not commit the misconduct alleged and was not afforded an opportunity to respond to the allegations.

• [2] The Respondent filed a response to the Applicant's claim and asserted that there had not been a dismissal of the Applicant's employment.

• [3] The matter proceeded to a hearing before the Commission on 12 March 2025. The Applicant filed materials in advance of the hearing, but did not attend the hearing. My Chambers attempted to contact the Applicant by telephone and email the morning of the hearing. When there was no response, the hearing proceeded as scheduled.

• [4] Mr Willemse, General Manager, and Mr McNally, Managing Director of Fitness Warehouse, gave evidence on behalf of the Respondent.

• [5] I advised the parties present on the day of the hearing of my decision to uphold the Respondent's jurisdictional objection. I informed parties present that I would subsequently issue my reasons in writing. For the reasons set out below, I found that there was no termination at the initiative of the Respondent. The Commission, therefore, does not have jurisdiction to deal with the Applicant's unfair dismissal claim and the application has been dismissed.

• [6] Mr Pilkington commenced work for the Respondent on 20 May 2024 as store manager for the Respondent's Parafield store.

• [7] On the morning of 12 December 2024, Mr McNally sent a request to Mr Pilkington to meet the following morning to discuss a promotion and pay rise sought by the Applicant.

• [8] Later that day, the manager of the Respondent's Hindmarsh store received a complaint from a customer who had not received all the parts to the home gym he had recently purchased. Mr Willemse, in his evidence, told the Commission that the staff member who had received the complaint escalated it to him because the customer had said that Mr Pilkington had delivered the home gym to the customer's residence in exchange for a delivery fee of $100.00 paid in cash to Mr Pilkington.

• [9] Both the Respondent's witnesses gave evidence that the Respondent engages a related entity to conduct all of its deliveries and it was not part of Mr Pilkington's job to make such deliveries. Mr Willemse was concerned that Mr Pilkington had arranged the delivery in exchange for money from a customer and reported the complaint to Mr McNally as the Managing Director.

• [10] Mr McNally gave evidence that he immediately asked Mr Willemse to contact the customer to ask about what had occurred from the customer's perspective and to address the customer's complaint that items were missing from his order.

• [11] Mr McNally gave evidence that he then proceeded to investigate the complaint further. Mr McNally explained that he extracted the receipt for the sale of the home gym from the company computer system. The invoice for the sale of a home gym was dated 5 December 2024. Mr McNally used the invoice date as a point of reference and in conjunction with Mr Thorp, the owner of the Respondent business, identified relevant CCTV footage of Mr Pilkington removing boxes from the stock area of the Hindmarsh store on 5 December 2024. Still images of CCTV footage of a person Mr McNally gave evidence was Mr Pilkington removing boxes on 5 December 2024 were placed into evidence.

• [12] In the application filed by Mr Pilkington in this unfair dismissal claim, he confirmed that he offered to deliver the home gym to the customer "out of the kindness of [his] heart"[1] on Saturday, 7 December 2024 on his own day off and not on "company time".[2]

• [13] The Respondent's witnesses told the Commission that Mr Pilkington had not left any record of the delivery, such that it could not be confirmed in reference to company records. The only information that could be obtained by the Respondent that the delivery occurred on Saturday, 7 December 2024 was from the customer to whom the home gym was delivered.

• [14] Mr Willemse gave his own evidence about steps to investigate the customer complaint. Mr Willemse said that he called the complaining customer on 12 December 2024. The customer confirmed that he had purchased a home gym that included a leg press. Mr Willemse then also identified the relevant invoice and noted that the customer had been charged the cost of a home gym without a leg press. The home gym with the leg press was more than eight hundred dollars more expensive. Mr Willemse's evidence was that the company did not charge the customer the difference and the error of Mr Pilkington resulted in that money being lost by the Respondent.

• [15] Mr Willemse said that the customer confirmed that he had "pre-negotiated"[3] the delivery fee of one hundred dollars with Mr Pilkington and referred to him by name. The customer confirmed that he paid the one hundred dollars to Mr Pilkington on delivery of the home gym and was disgruntled that, despite paying the delivery fee, he had not received all of the parts of the home gym.

• [16] The customer then told Mr Willemse that Mr Pilkington had also telephoned him earlier that day and he was fixing the issue. When Mr Willemse asked the customer what he meant the customer advised that Mr Pilkington was "coming out here" to fix it.[4]

• [17] Mr Willemse then called Mr McNally to report these matters to him. Both Mr Willemse and Mr McNally gave evidence that they were alarmed that Mr Pilkington may have left the store to do a customer home visit when this was not a function performed by staff and he was supervising and training a new staff member in the Parafield store who would be left alone.

• [18] Mr McNally said that he then called Mr Pilkington and could hear that he was driving. Mr McNally asked Mr Pilkington why he was out of the store and Mr Pilkington said: "I just have something to sort out"[5] and said something about returning parts to a customer. Mr McNally asked further questions about where the customer was located and reminded Mr Pilkington that "we have delivery services for that, I really don't understand why you're on the road by yourself."[6] Mr Pilkington said he would not be long and Mr McNally did not probe him further, but asked that he confirm he would be attending the meeting scheduled for the following morning. Mr Pilkington confirmed that he would attend.

• [19] Mr McNally then arranged a meeting with Mr Willemse, Mr Thorp and himself the following morning at 8:00am, before the meeting scheduled with Mr Pilkington at 9:00am. Mr McNally said he wanted to discuss what to do about the view he had formed, based on his investigations, that Mr Pilkington had committed serious misconduct in making a delivery outside of work hours and the process used by the Respondent, leaving work when not authorised, and asking for and accepting money from a customer that was not then paid to the business.

• [20] Mr Pilkington had not been informed that the meeting the following morning would no longer be about future promotions, pay-rises and coaching to meet the requirements for a promotion, but would instead be about the alleged misconduct.

• [21] At the meeting the following morning at 8:00am, Mr McNally, Mr Willemse and Mr Thorp discussed the events of the day prior relating to Mr Pilkington. Mr Willemse described the conversation with the customer. The Respondent's likely response to the conduct was also discussed.

• [22] Mr Willemse said that he left the meeting before its conclusion but when he left it was his understanding that the pervading view amongst the group was that "it would be best that Ted [Mr Pilkington] no longer be employed with [the Respondent]"[7] but that no final decision had been made about whether Mr Pilkington's employment should be terminated.

• [23] Mr McNally was insistent in his evidence that he wanted to "hear out Ted"[8] before making a decision about his employment. He described the need to have a meeting with Mr Pilkington to hear his version of the events as a necessary "business process" but did contemplate that Mr Pilkington may have "something left of field" to say to explain his conduct.[9] Mr McNally agreed that at the meeting with Mr Thorp and Mr Willemse "it was loosely decided Ted was going to be dismissed"[10] but Mr Thorp left the final decision to Mr McNally to make after he had his meeting with Mr Pilkington. Mr McNally also gave evidence that it was his intention to ask Mr Pilkington for a response to the allegations, let him work for the remainder of the day on Friday, to visit the store on that day to check on him and to consider the decision as to whether or not to terminate his employment over the course of the day.

• [24] At 8:48am on 13 December 2024, Mr Pilkington sent the following text message to Mr McNally:

"I'm having to postpone today's meeting unfortunately, I've tried every possible route this morning to cover up my sickness but todays appearing to be the worst it's gotten and I feel too embarrassed/uncomfortable working under these conditions.. as well as the awkward pain it's giving me.

"I'll be obtaining a Dr's certificate hopefully today if not tomorrow to cover myself for the working day.

I apologise greatly as I'm aware on the importance of today's meeting but have found myself neglecting this issue now for a couple weeks to be available for work, today I'm having to prioritise the matter first."[11]

• [25] Mr McNally's evidence was that the text message was the first time he had been made aware that Mr Pilkington had any kind of illness.

• [26] At 9:47am, Mr McNally responded by text message:

"Thank you for letting me know, and I truly hope you get the care and support you need moving forward.

Look mate, I want to be upfront with you because I genuinely like you a person and think you have some great qualities. With the right training, I honestly believe you could become a highly competent store manager at any business.

However, I've come to learn yesterday afternoon that you organised to take money from a customer for a delivery outside of business hours. Unfortunately, this is a serious breach of company policy and something I cannot overlook.

That said, and as I've mentioned, I respect you personally. In light of this, I'd like to give you the opportunity to resign rather than myself take further action.

I can meet you today with a letter of resignation to sign and collect your keys, or if you prefer you can drop them at one of the stores today.

Let me know how you'd like to proceed."[12]

• [27] The Respondent did not receive any contact from the Applicant in response to this correspondence.

• [28] Mr McNally gave evidence that he invited Mr Pilkington to resign his employment to allow him the opportunity to "go out on his own terms," rather than having a termination over him.[13] Mr Pilkington did not respond to this text message or otherwise accept Mr McNally's invitation to resign.

• [29] In the statement filed by Mr Pilkington, but not tested in evidence, he indicated that the correspondence from Mr McNally was "nothing more than a termination of employment and unwelcoming for myself to return to work at any point forward."[14]

• [30] On Monday, 16 December 2024, the Respondent expected Mr Pilkington to attend for work on his next rostered shift. Mr Pilkington did not attend for work. Mr McNally told the Commission that last-minute arrangements had to be made to cover Mr Pilkington's shift.

• [31] At 11:04am on Monday, 16 December 2024, Mr McNally sent the following text message to Mr Pilkington:

"I have recently tried to call you to discuss the current situation and work towards a resolution. It's important that we address recent events so we can both move forward. As you have not attended work today, please make contact with me as soon as possible to arrange next steps."[15]

• [32] After Mr Pilkington did not respond to that text message and did not attend for work on Tuesday, 17 December 2024, Mr McNally sent a further text message to Mr Pilkington as follows: "Please get back to me so we can work through the current situation."[16]

• [33] Mr McNally gave evidence that he continued to try to contact Mr Pilkington by phone, leaving voicemails for a number of days after his last text message on 17 December 2024. Mr McNally could not contact the Applicant by phone.

• [34] Mr McNally told the Commission that the Respondent paid the Applicant sick leave on Friday, 13 December 2024 and his accrued annual leave for a number of days thereafter until his entitlement was exhausted. Mr McNally also confirmed that the Respondent did not issue Mr Pilkington with a letter of termination because they did not terminate his employment and understood Mr Pilkington had abandoned his employment.

• [35] Mr Pilkington made no further contact with the Respondent after he sent the text message on Friday, 13 December 2024 at 8:48am until he filed his unfair dismissal claim.

• [36] In his application, Mr Pilkington relevantly claimed:

(a) he arranged for the delivery of the home gym to the customer out of kindness to avoid delays of deliveries over the Christmas period;

(b) the customer insisted on giving him $100.00 for the delivery despite his protestations;

(c) he was made aware that the customer was dissatisfied with the delivery by another team member and in order to satisfy the customer he made sure his responsibilities at the store were covered and left the store for approximately one hour;

(d) when Mr Willemse became aware that Mr Pilkington was paid for the delivery, he escalated the issue to Mr McNally and a decision was made "then and there" to terminate his employment;

(e) less than an hour after notifying of his illness and inability to attend the meeting on 13 December 2024, he received a text message from Mr McNally terminating his employment, suggesting he sign a resignation letter the same day and asking for the keys to be returned;

(f) he was fearful that Mr McNally would take further action or refuse to pay out his accrued annual leave;

(g) he was not given an opportunity to explain the events that had occurred in relation to the delivery and the receipt of payment directly from the customer; and

(h) his only intent was to return the money when he attended work on 13 December 2024 because he was not comfortable accepting the funds.

• [37] Section 385 of the Act says:

A person has been unfairly dismissed if the FWC is satisfied that:

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy."

• [38] In order for an unfair dismissal application to be determined on its merits by the Commission, as a threshold requirement, the person bringing the application must have been dismissed.

• [39] Section 394(1) of the Act, in Division 5 of Part 3-2, headed 'Procedural Matters' is also of relevance to this matter. Section 394(1) provides:

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy."

• [40] Section 386 sets out the meaning of dismissed:

(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."

• [41] In the present matter, section 386(1)(b) does not apply because Mr Pilkington did not resign. Mr Pilkington asserts that the words used by Mr McNally inviting him to resign amounted to a termination. But neither the Applicant nor the Respondent assert that Mr Pilkington resigned. The Applicant's claim is that he was dismissed at the time the Respondent offered an opportunity to resign and the Respondent maintains the Applicant abandoned his employment.

• [42] The remaining consideration as to whether Mr Pilkington was dismissed is whether his employment was terminated at the initiative of the Respondent.

Whether there was a termination at the initiative of the employer

• [43] The Full Bench in Mihajlovic v Lifeline Macarthur[17], citing the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2),[18] referred to the following passage in the decision of the Full Court:

"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.

In these proceedings it 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 the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship."[19]

• [44] The Respondent's witnesses gave evidence that in the meeting held between them and the owner of the Respondent business, Mr Thorp, they had discussed the termination of Mr Pilkington's employment, given the information to hand, as being a likely outcome. However, the evidence of both witnesses was corroborative of a position reached by the Respondent that the Applicant would be allowed an opportunity to provide an explanation of the events and that Mr McNally would then further consider the Respondent's response after hearing from the Applicant. I do note, however, that Mr Pilkington was not informed by Mr McNally in the telephone call of 12 December 2024 that the meeting taking place the following morning was to be changed from a discussion about career progression and a salary increase to a meeting in which Mr Pilkington was to be required to address allegations of serious misconduct. Regardless, Mr Pilkington's sick leave, and then failure to attend for work again, prevented a process of responding to the allegations from occurring.

• [45] As set out, the Applicant says that the Respondent communicating via text message that the conduct alleged was serious and could not be overlooked, followed by the words: "I'd like to give you the opportunity to resign"[20] conveyed the termination of his employment.

• [46] I do not agree with the Applicant's characterisation of that exchange as a termination of employment. The act of the Respondent in offering the Applicant an opportunity to resign, which the Applicant did not accept, in my view did not result directly or consequentially in the termination of the employment. The words used by Mr McNally offered a choice to the Applicant to resign or face 'further action'. The further action was not specified but in the context of a text message that referred to Mr McNally personally liking the Applicant and having confidence in his abilities 'with the right training', the text message does not imply a threat of action that could result in the Applicant believing he had no choice but to resign or that his employment was otherwise terminated. The Applicant has not asserted that he was forced to resign.

• [47] The words used by Mr McNally in the text message do not, in my view, expressly or impliedly say 'if you do not resign then your employment will be terminated'. They offer the Applicant a choice to resign or face further action, which in the context of the text message referring to "a serious breach of company policy" strongly suggests that the further action would likely be a disciplinary process. The concluding words of the text message "Let me know how you would like to proceed" add weight to my conclusion that the text message of Mr McNally did not purport to terminate Mr Pilkington's employment.

• [48] Based on the words in his statement, it appears that Mr Pilkington incorrectly interpreted the offer to resign as "nothing more than a termination of employment".[21] However, the words that followed in the Applicant's statement give further insight into this matter. The Applicant noted that after the offer to resign he felt unwelcome to return to work. Considering this context, and on the evidence of Mr McNally that the Applicant never responded to any further attempts at contact by the Respondent, it is likely that the Applicant decided not to return to work and abandoned his employment.

• [49] The view I have reached that the Respondent did not terminate the Applicant's employment is supported by the Respondent's evidence of its conduct after the text message was sent by Mr McNally on 13 December 2024 that it:

(a) expected Mr Pilkington to return to work on the next working day;

(b) had to fill his shift at short notice when he did not attend for work;

(c) contacted him a number of times by text message and voicemail to ask him to come to work to discuss the issues that had arisen;

(d) paid the Applicant for a day of sick leave on Friday, 13 December 2024;

(e) paid the Applicant annual leave until his entitlement was exhausted; and

(f) never issued the Applicant with any written confirmation of a termination of employment.

• [50] The action of the Respondent in inviting the Applicant to resign his employment was not the principal, contributing factor that led to the termination of employment. It did not bring the employment to an end because the Applicant did not resign and has not claimed he did and was forced to do so.

• [51] The employment came to an end when the Applicant chose not to respond to the Respondent's efforts to contact him, elected not to attend for work again after he notified the Respondent that he was taking sick leave on 13 December 2024 and when his leave entitlements were subsequently exhausted.

• [52] I find that there was no dismissal at the initiative of the Respondent. The Respondent's jurisdictional objection is upheld.

• [53] As there was no dismissal, the Commission does not have jurisdiction to deal with the Applicant's application. The application was dismissed at the conclusion of the hearing.

K McNally and M Thorp on behalf of The Trustee for RB45 Trust, the Respondent.

[3] Audio recording of the hearing at 25:11.

[11] Text message annexures to the Respondent's statements.

[13] Audio recording of the hearing at 1:18:27.

[15] Text message annexures to the Respondent's statements.

[17] [2014] FWCFB 1070 ('Mihajlovic').

[18] [1995] IRCA 625; (1995) 62 IR 200.

[20] Statement of the Applicant and Text message annexures to the Respondent's statements.

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