Reduction of regular and systematic casual’s hours rendered an act of constructive dismissal

In the recent Fair Work Commission decision Balgowan v City of Sydney RSL & Community Club Ltd there was a further reminder of just how important it is to ensure disciplinary processes are thorough and any decision-making is made only after careful, objective analysis.

The History

The applicant in the matter, Ms Balgowan, was employed as a Customer Service Attendant. She worked as a casual but under a regular and systematic pattern of engagement. The role involved a raft of hospitality duties including food, drink and gaming services. On average, Ms Balgowan worked approximately 30 hours per week which included night shifts working with cash handling responsibilities in an area of the business called the ‘change box’.

The Matter

In December 2016, the Ms Balgowan was given a warning over a discrepancy in the float at the end of a change box shift. In early April 2017, she once again came to the end of her shift in the change box and there was a cash discrepancy which was reported to the relevant manager. When Ms Balgowan could not offer any explanation for the shortfall, the matter was referred to the Human Resources Manager.

Ms Balgowan was asked to attend a meeting with the HR Manager. Only the two of them in attendance and what was discussed between the two was the subject of two very different accounts.

What was not in dispute was that:

  • Ms Balgowan could not offer any explanation as to the missing money.
  • The HR Manager made the determination to remove the Applicant from her rostered change box shifts.
  • This resulted in Ms Balgowan having an insufficient number of engagements and stating that she would go home due to the unfair treatment.

What was discussed next was the subject of debate:

  • The Human Resources Manager stated she explained that the employee would undertake re-training before being allowed to work any further change box shifts.
  • The HR Manager believed the employee had verbally resigned and accepted the resignation.
  • Ms Balgowan stressed that she never used the word ‘resign’ and also stated that there was no mention of being re-trained in change box procedures.

Interestingly, the HR Manager conducted a brief exit interview and asked the employee to return her uniforms. Later in the same evening, the HR Manager emailed the employee stating that the employer has accepted the verbal resignation and that she would be paid in lieu of her notice. The employee replied saying that at no stage did she resign and that by reducing her shifts the employer has effectively terminated the employment relationship. Ms Balgowan sent a further email almost a week later titled ‘involuntary resignation’ which again repeated her position and also mentioned that she believed that due to the employer’s actions she was left with no choice but to resign.

The Finding

Despite employer arguments to the contrary, the Commissioner found that “On any reasonable and objective contemplation, an indefinite reduction in remuneration of at least 75% would represent a repudiation of the employment which the applicant could properly reject”. The employer had argued that there was no action taken that was intended or had the probable result of bringing the employment relationship to an end. The Commissioner also determined that “whether or not the word “resign” was actually uttered by the applicant is not a question that has necessarily required determination”. The fact that Ms Balgowan rejected the proposed changes and the nature of the uncontested facts lead the Commissioner to state that “it was the actions of the employer which brought the employment to end…the applicant was entitled to reject an alteration to the employment of such significance, and to treat the actions of the employer as a repudiation of the employment. Therefore the applicant was constructively dismissed”.

Ms Balgowan was awarded $13,566 in compensation, although the decision is now the subject of an appeal brought by the business.


KEY POINTS TO CONSIDER

  • For all that may or may not have been said between the former employee and the HR Manager, the root cause of the issue(s) faced by the employer stem from a lack of implementing basic fundamentals during the disciplinary process.
  • Basic processes such as note-taking, the allowing of support persons (for both the employee and the HR Manager) and taking time to consider all the appropriate responses or options clearly did not happen in this matter.
  • Why make mention of support for the HR Manager? In this matter, the HR Manager decided to handle the matter by herself and without any support from colleagues which has been a contributory factor in the final determination. Often HR staff feel the need to have an answer for all questions and be able to handle all situations. This is risky for a number of reasons, but particularly the lack of diversity in thought process and decision-making can be harmful if due consideration to all potential outcomes has not been given.
  • The actions that a business takes as a result of a disciplinary process need to be carefully thought through, in this case, the unintended consequence was the employer repudiating the employment relationship.