s.365 - Application to deal with contraventions involving dismissal

Application to deal with contraventions involving dismissal

• [1] On 13 November 2024, Ms Christine Harris (the Applicant/Ms Harris) lodged an application (the Application) in the Fair Work Commission (the Commission) pursuant to s.365 of the Fair Work Act 2009 (Cth) (the Act), against the Institute of Internal Auditors-Australia (the First Respondent/IIA) and Ms Susan Ironside (the Second Respondent).

• [2] The Applicant commenced employment with the First Respondent on 2 June 2022. The Applicant claimed to have been dismissed by the Respondent by way of a forced resignation on 25 October 2024.

• [3] In the hearing of the matter the Applicant represented herself. The Respondents were represented by Mr McDonald, Solicitor. The Respondent raised the jurisdictional objection to the Application, being that the Applicant was not dismissed.

• [4] On 12 December 2024, directions were issued to program the manner in which the Application was to proceed to hearing (the Directions). In response to the Directions:

(a) On 22 December 2024, the Applicant filed a Statement and a list of Documents;

(b) On 9 January 2025, the Respondent filed an Outline of Submissions and a Statement from Ms Trish Hyde; and

(c) On 17 January 2025, the Applicant filed materials in Reply.

• [5] The Hearing of the Application occurred on 24 January 2025.

• [6] The Applicant was employed by the First Respondent as a Public Affairs Manager starting on 2 June 2022. Initially, she worked three days a week, which increased to four days a week at the beginning of 2023, and then to full-time from 1 January 2024.

• [7] In November 2023, Ms Trish Hyde became the CEO of IIA. Ms Harris immediately perceived that Ms Hyde was seeking to reduce her hours of work and change her duties.

• [8] Ms Harris stated that "Things came to a head" in a meeting between her and Ms Hyde on 31 January 2024. Ms Hyde does not dispute the recollection of Ms Harris. In that meeting, Ms Hyde told Ms Harris that she was changing the way Ms Harris worked. Ms Harris said the changes would significantly affect her role, and her work output would be severely diminished. Ms Harris also said that she believed such a change would need to be approved by the Board of IIA. At this point in the meeting, Ms Hyde said words to the effect: "This meeting stops now. We will reconvene tomorrow with Lynette, and you are welcome to bring a support person". Ms Hyde advised Ms Harris to stop working on her other projects because the way they worked together needed to take priority, and that other projects "... need to be put on hold until this is sorted out".

• [9] Ms Harris was thereafter extremely anxious about the upcoming meeting. Later that evening, Ms Harris emailed Ms Hyde and requested an adjournment to the meeting. Ms Hyde said Ms Harris would require a medical certificate stating she was fit for work before she could return to the office.

• [10] The Applicant's doctor was not available on 1 February 2024, so she saw another doctor, who gave her a general medical certificate to cover the period until she could get in to see her own doctor, which was 15 February 2024.

• [11] On 11 March 2024, Ms Harris attended an interview with Allied Universal Compliance and Investigations as part of her claim for worker's compensation. In that interview, Ms Harris explained her concerns about her job and her grievances against Ms Hyde.

• [12] As she felt her return-to-work ambitions were being blocked by Ms Hyde, in August 2024, the Applicant's legal representatives sent a letter to the board of IIA requesting an investigation into the behaviour of Ms Hyde. An internal review of her complaints against Ms Hyde was subsequently conducted and concluded that all the complaints were "unsubstantiated".

• [13] Ms Harris did not return to work, and she was on worker's compensation since mid-February 2024.

• [14] On 3 October 2024, Ms Harris met with Ms Hyde and a mediator from Altius Group to discuss her return-to-work plan. In that mediation, a Mediation Agreement (the Agreement) in the following terms was reached:

1. The mediation is a confidential process that both parties have agreed to, and the content of the mediation agreement will be shared with:
   • Christine Toll (Party A), Manager Advocacy - Institute of Internal Auditor.
   • Trish Hyde (Party B), Chief Executive Officer - Institute of Internal Auditor.
   • Charlotte O'Neill (Mental Health Consultant - Gallagher Bassett Services Workers Compensation

Support persons agreed that all communications happening in the room are confidential and cannot be used outside the mediation.

• Both parties agreed that the organisation has requested mediation as a preventive action and duty of care.
• Both parties agreed that mediation is an opportunity to build a sense of what the issues are, learn the problems, explore possible options for resolution, and make informed decisions about whether or not resolving at that time or moving on is the best outcome for that matter.

• Understand how the company can provide support for an effective return-to-work plan.
• Discuss the current situation
• Discuss your role
• Discuss the impact on mental health.
• Discuss work dynamics
• Discuss stress management
• Discuss effective communication
• Discuss the return-to-work plan
• Discuss the next step.

4. Both parties agreed to discuss how the company can provide support for an effective return to-work plan.

5. Trish (Party B) agreed that the organisation and herself as a CEO want Christine (Party A) back at work.

6. Trish (Party B) agreed that the job description of Christine (Party A) will stay the same when she returns to work.

7. Christine (Party A) agreed that she wants to return to work when she is fit to work.

8. Both parties agreed to discuss the current situation.

9. Both parties agreed to discuss and explore alternative opportunities.

10. Both parties agreed that they would discuss further the details of a return to work in seven days as they needed to source external information.

11. Christine (Party A) requested to explore potential financial support from Trish (Party B) in case she was willing to explore new work opportunities.

12. Both parties agreed that if a resignation of employment was handed over before 1 November 2024, the organisation agreed to compensate party A with a 4-week notice + 6 weeks redundancy+ leave accumulated and with the role evaluated at 1 FTE.

• [15] The Agreement was signed by both Ms Harris and Ms Hyde on 3 October 2024.

• [16] On 11 October 2024, Ms Hyde sought, and received from Ms Harris, updated certificates of capacity. Included in that email chain was an email that addressed the compensatory component of the Agreement, in the following terms:

That is odd. I spoke with my lawyer and also got an estimate of fees incurred to date. Her recommendation was that an additional four weeks ex gratia would be fair - and would help me cover some of the costs. Although obviously the extra payment would not be 'officially' for that purpose.

She also requested that we have the opportunity to review the paperwork, which of course you would expect.

Thanks Trish. Hoping we can resolve this and move forward.

• [17] From around 14 October 2024, the Applicant was certified to return to part time duties. She obtained work in a hotel.

• [18] On 16 October 2024, Ms Harris sent an email to Ms Hyde as follows:

Please find attached the statement we both signed at the mediation. My characterisation of the discussion refers to Point 12. After seeking the legal advice I advised I would in the session - I asked for an extra four weeks payment to your suggested compensation package to help cover my legal fees. I have now had to incur further costs, given your response last week - not to mention the considerable additional stress your denial of our agreement has caused me.

Notwithstanding, if you can agree to the additional four weeks compensation on top of what is in the document (4 weeks + 6 weeks redundancy at 1 FTE plus leave accumulated - which you stated was around $10k ), I will immediately tend my resignation and we can both move on.

• [19] On 17 October 2024, Ms Hyde sent Ms Harris an email, as follows:

The Company is fully committed to discharging its obligations, which arise from workers compensation legislation and Clause 10 of the Agreement, in respect to assisting in the facilitation of a return to work.

As such we are in the process of preparing a return to work plan, which will be provided to the insurer and yourself for feedback.

• [20] On 17 October 2024, Ms Harris wrote to Ms Hyde as follows:

Trish - clause 10 stated you would have this to me in seven days from the mediation. We are well beyond that.

As I stated in the mediation, returning to work with you is not an option as I do not believe you can provide a safe work environment for me. This is the recommendation also from my doctor and the independent medical assessor.

• [21] Ms. Harris resigned on 25 October 2024, with the covering email stating "Please find attached signed letter for your records. Please advise when the payment will be remitted to my account", and the annexed letter stating:

Please accept my resignation from the position of Manager - Advocacy, effective immediately.

Please remit the payment agreed in our mediation session of 26 September to bank account:

• [22] On 29 October 2024, Ms Hyde responded to the resignation as follows:

Thank you for your email dated 25 October 2024. I have been travelling for work.

The Company confirms it accepts your resignation.

Payment will be made in line with the terms set out in the attached Deed of Release upon your execution and return.

Our records show that you still have an access card for the office. Please make arrangements for it and any other items relating to IIA to be returned.

We hope that this supports your recovery and return to work aspirations. If you have any questions please let me know.

• [23] The Deed of Release (the Deed) provided (variously):

C. The Employee and the Company have agreed in relation to various matters concerning the Employee's employment as a result. The agreement, which resolves all matters concerning Employment and the Resignation, is set out in this Deed.

1 DEFINITIONS In this Deed, except to the extent the context otherwise requires:

Claim includes any complaint, dispute, action, suit, cause of action, arbitration, debt due, cost, claim, demand, cost and demand in respect of damages, and any other benefit, verdict and judgment whatsoever both at law or in equity or arising under the provisions of any statute, award, or determination whether or not known at the date of this Deed except for any statute, award, or determination relating to worker's compensation;

2.1 The Employee has resigned from her employment as of 25 October 2024.

2.2 Within fourteen (14) days of having received a copy of this Deed and return of all Company Property in the Employee's possession, the Company will make payment, less appropriate taxation, for a sum equivalent to:

(c) Annual Leave accumulated up until 25 October 2024.

3.1 The Employee forever releases, discharges and indemnifies the Company, its officers, employees and agents from all present and future Claims (legal, equitable or statutory) arising from employment which the Employee may have against any of them, including those relating to Entitlements.

3.2 The Employee agrees that the release and discharge in clause 3.1 may be pleaded as a bar to any proceedings commenced by the Employee (or on his behalf) against the Company and any subsidiary, Related Body Corporate or entity and their officers, employees and agents.

3.3 The Company releases and forever discharges and releases the Employee from any liability past, present or future from all claims, suits, demands, actions or proceedings arising out of or connected with the Employee's employment with the Company, including but not limited to the cessation of the employment.

3.4 For clarity, the Employee acknowledges that the release in clause 3.3 above does not encompass future claims, suits, demands, actions or proceedings arising from a breach by the Employee in respect to obligations set out in this Deed and, in particular, clauses relating to confidentiality and / or non-disparagement.

5.1 The Employee and the Company agree to keep confidential:

(a) all matters, negotiations or discussions whatsoever relating to the reason or reasons for this Deed; and

(b) the terms of this Deed, other than as may be necessary to disclose to a party's legal or accounting adviser and as may be required to be disclosed by law.

5.2 The Employee agrees not to use or disclose Confidential Information following their Employment.

6.1 The Employee covenants that they will not at any time disclose any information or make or publish any statement or do any other thing which may tend materially to harm or prejudice the Company's reputation or good name or the reputation or good name of its employees, and Company officers. This includes, but is not limited to, making disparaging or defamatory comments / statements, making false comments / statements, irrespective as to the medium / mode in which the comment / statement is disseminated.

6.2 The Company covenants that it will use reasonable endeavours to ensure that its employees do not at any time disclose any information or make or publish any statement or do any other thing which may tend materially to harm or prejudice the Employee's reputation.

• [24] On 30 October 2024, Ms Harris replied to the above email as follows:

Could you kindly provide the breakdown for me of the dollar figure of what will be paid and the tax rate you will apply? If you bundle the payment into an early settlement/redundancy it will be far more tax effective for me. And hence, will help cover my expenses in relation to this matter and mean I can accept the proposed terms of settlement.

My advice is that this can be done at your discretion, so it would be very much appreciated if you can.

I am adjusting the 14 day payment terms also. My understanding is that payment needs to be made within seven days under Fairwork regulations.

Thank you. I am posting the access card now and will send you the receipt.

• [25] Ms Harris refused to sign the Deed. On 6 November 2024, Ms Hyde wrote to Ms Harris as follows:

I confirm receipt of your message and acknowledge that you 'will not be signing the Deed of Release'.

At all times, the offer of financial support and assistance to assist in your return to the workforce, was contingent upon the execution of a Deed of Release. As such, the offer of support is withdrawn_._

Your Final Payment of accrued entitlements will be made this week as part of the scheduled pay run.

This is not how we envisaged this matter would have concluded, but you have made the decision to not return to work with IIA-Australia and subsequently, you have rejected our written offer containing financial support to assist you return to work elsewhere.

On behalf of IIA-Australia, we wish you all the best in your recovery.

• [26] The Applicant submits that she was subjected to unlawful treatment in the workplace causing significant health issues and forcing the Applicant to take leave and, subsequently, make an application for worker's compensation.

• [27] The Applicant submits her complaints to the Respondent were not properly investigated, and the Respondent made no effort or attempt to work with her on a return-to-work plan.

• [28] At the behest of the workers compensation insurer, a mediation was held between the Applicant and Ms Hyde. Ms Hyde, on behalf of the First Respondent, agreed to pay the Applicant a sum of money if the Applicant resigned before 1 November 2024. Ms Hyde subsequently refused to provide details of how the settlement sum would be calculated and the net amount that would be paid to the Applicant.

• [29] In the absence of details regarding the calculation of the payment or a return to work

plan, the Applicant submitted she had no choice but to resign on 25 October 2024 due to the conduct of the Respondent.

• [30] After the Applicant's resignation, the Respondent sent the Applicant the Deed to be signed by the Applicant before payment of the sum would be paid. The Applicant refused to sign the Deed without the information of the payment calculation. The Deed was not signed, and the settlement sum was not paid to the Applicant by the Respondent.

• [31] The Respondents submitted that the Applicant voluntarily resigned and was not dismissed. They argue that the Agreement provided two clear pathways, and the Applicant chose to resign. They also contend that the Applicant sought additional compensation beyond the Agreement, which was not granted.

• [32] The key issue is whether the employer's conduct forced the Applicant to resign, thereby constituting a dismissal under section 386(1)(b) of the Act. The test to be applied is whether the employer engaged in conduct with the intention of bringing the employment to an end or whether the termination of employment was the probable result of the employer's conduct, leaving the employee with no effective or real choice but to resign.

• [33] If the Applicant had not resigned, the First Respondent remained committed to supporting her return to work when she was certified fit to do so. This was reiterated to the Applicant prior to her resignation.

• [34] The jurisdictional issue that arises in this matter is whether the Applicant was dismissed.

• [35] Section 12 of the Act defines the word "dismissed" by reference to s 386 of the Act. Sub-section (1) of s.386 relevantly provides:

(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.

• [36] In Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli (Tavassoli),[1] the Full Bench of the Commission conducted a detailed analysis of authorities relating to whether particular resignations constituted dismissal pursuant to various legislative schemes. After that analysis, the Full Bench provided the following distillation:

[47] Having regard to the above authorities and the bifurcation in the definition of

"dismissal" established in s.386(1) of the FW Act, we consider that the position under the FW Act may be summarised as follows:

(1) There may be a dismissal within the first limb of the definition in s.386(1)(a)

where, although the employee has given an ostensible communication of a

resignation, the resignation is not legally effective because it was expressed in

the "heat of the moment" or when the employee was in a state of emotional

stress or mental confusion such that the employee could not reasonably be

understood to be conveying a real intention to resign. Although "jostling" by

the employer may contribute to the resignation being legally ineffective,

employer conduct is not a necessary element. In this situation if the employer

simply treats the ostensible resignation as terminating the employment rather

than clarifying or confirming with the employee after a reasonable time that the

employee genuinely intended to resign, this may be characterised as a

termination of the employment at the initiative of the employer.

(2) A resignation that is "forced" by conduct or a course of conduct on the part of

the employer will be a dismissal within the second limb of the definition in

s.386(1)(b). 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 probable result of the employer's

conduct such that the employee had no effective or real choice but to resign.

Unlike the situation in (1), the requisite employer conduct is the essential

[48] It is necessary for an applicant for an unfair dismissal remedy whose employment has terminated because the employer has acted on a communication of resignation on the part of the employee to articulate whether they contend they were dismissed in the first or the second scenario above (although it may be possible for both scenarios to arise in a particular factual situation). Where the applicant is self-represented or inadequately represented, it may be necessary for the member of the Commission hearing the matter to clarify with the applicant the precise basis upon which it is contended that the applicant was dismissed. If this is not done, it may lead to the wrong test being applied to the matter.

[Emphasis, including double emphasis on "or", added]

• [37] The Applicant confirmed in the Hearing that she relied upon the second limb of the definition in s.386(1)(b).

• [38] The Agreement is a significant factor in this matter. At clause 3 of the Agreement the two options for resolution, being "whether or not resolving at that time or moving on is the best outcome for that matter". Those two options were:

(a) A return to work, details of which return to work would be discussed in seven days as they needed to source external information (Clauses 4 and 11); or

(b) Exploring new work opportunities by resigning employment in consideration for agreed sums of notice and redundancy, and payment of entitlements (Clauses 9, 11 and 12).

• [39] Notwithstanding that the specification of seven days for discussion of a return to work in the Agreement dated 3 October 2024, the First Respondent did present a return to work plan prior to the resignation on 25 October 2024. That failure was particularly pronounced where the Applicant had written to Ms Hyde on 17 October 2024, stating:

Trish - clause 10 stated you would have this to me in seven days from the mediation. We are well beyond that.

As I stated in the mediation, returning to work with you is not an option as I do not believe you can provide a safe work environment for me. This is the recommendation also from my doctor and the independent medical assessor.

• [40] While not the subject of detailed submission, and not a matter for ultimate determination, I note that I have serious doubts as to the Respondent's apparent positions that:

(a) It could require the execution of the Deed as part of the Agreement; or

(b) That it could on 6 November 2024, withdraw what it described as "the offer of financial support and assistance to assist in your return to the workforce", otherwise the settlement sum in the Deed due to the non-execution of the Deed.

• [41] In Masters v Cameron,[2] the High Court summarised three of the circumstances in which a binding settlement may be reached:

"Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution."

• [42] In this matter, it would appear that the Agreement falls within the first or second categories outlined in Masters v Cameron. The Deed was not mentioned in the Agreement as part of the agreed terms, and in fact was only first mentioned 4 days after the resignation. The Deed also materially affects the Applicant's rights to pursue actions against the First Respondent, and issues of confidentiality and non-disparagement. On the material before me, I do not consider the execution of the Deed was a term of the Agreement, and further consider the First Respondent's conduct requiring execution of the Deed, and subsequently withdrawing from payment of settlement monies, as nothing short of duplicitous.

• [43] Whether the execution of the Deed was part of the Agreement does not, however, affect the determination of whether employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of the employer's conduct such that the employee had no effective or real choice but to resign.

• [44] I find that the First Respondent engaged in conduct with the intention of bringing the employment to an end. In particular:

(a) In circumstances where the Applicant had been absent on workers compensation since mid-February 2024, the First Respondent agreed to an avenue of the Applicant exploring new work opportunities by resigning employment in consideration for agreed sums of notice and redundancy, and payment of entitlements;

(b) Not providing details for a return to work, either within seven days as outlined in the Agreement, or in the 22 days between the Agreement and the resignation of the Applicant; and

(c) Failing to advise the Applicant on 17 October 2024, that were she to fail to return to work, as she foreshadowed, that the additional requirement of executing the Deed would be required in order to receive notice and redundancy payments.

• [45] In those circumstances, Clause 12 of the Agreement was conduct with the intention of bringing the employment to an end as it intended to entice the Applicant to resign. In the absence of efforts to obtain a return to work as had been promised in the Agreement by the First Respondent, and having been absent from work for over 8 months, it is unremarkable that the Applicant resigned due to that conduct.

• [46] While for a brief period after 16 October 2024, the Applicant sought additional compensation to that provided for in the Deed, she reverted to the terms of the Agreement, and her resignation was in accordance with the terms of the Agreement.

• [47] Based on the evidence, I find that the employer's conduct, specifically the enticement of the Agreement, failure to fulfill the Agreement and the withdrawal of the compensation offer, resulted in or confirmed Ms. Harris's resignation. Therefore, Ms. Harris was effectively dismissed within the meaning of section 386(1)(b) of the Fair Work Act 2009.

• [48] The jurisdictional objection raised by the Respondents is dismissed. The matter will proceed to a conference to deal with the Application.

Mr T McDonald, Solicitor on behalf of the Respondent.

[1] [2017] FWCFB 3941.

[2] [1954] HCA 72; (1954) 91 CLR 353.

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