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Forced resignation larger cost to business than cash box discrepancy

Submitted on Wednesday, 16th August 2017

A casual employee has been awarded 16 weeks remuneration, after the Fair Work Commission found reducing her shifts by 75% amounted to a constructive dismissal.

The employee was hired by an RSL for an “average of approximately 30 hours per week” for approximately 18 months. The employee undertook, a variety of general hospitality duties including regular cash handling in what was described as the “change box”. The employee had been provided with a previous warning concerning cash handling discrepancies. Approximately 4 months later the employee reported a second cash discrepancy of $100. The employee was informed she was not required for her next shift and instead directed to a disciplinary meeting with the human resources manager.

During the meeting the employee failed to provide the manager with any reason for the cash discrepancy. The employee did offer to pay the $100. The offer was rejected. The manger advised the employee she would need to undertake training before being rostered for any “change box” shifts. The employee indicated the reduction in shifts was unfair. There was conflicting evidence in relation to whether the applicant verbally resigned during the meeting. Following the meeting the employee requested a termination notice.

The employee lodged an Unfair Dismissal claim in the Fair Work Commission (Commission).  The claim progressed to hearing. The issues to be determined by the Commission included, (1) whether the employee had been dismissed and (2) if so, was the dismissal harsh, unjust or unreasonable.

The RSL argue the employee had not been dismissed. The RSL maintained the intention of the meeting was to advise of a temporary removal of cash handling duties and the requirement of additional training. When determining whether or not the employee had been dismissed, Commissioner Cambridge noted, “the [employee] rejected the changes to employment that were imposed by [the manager] during the meeting…The basis for the [employee’s] rejection of the changed employment circumstances was neatly summarised by the hand written notes that were made by [the manager] at the time, and which included; “[the employee] resigned stating that she would not have enough shifts.””

The Commissioner calculated the change would amount to a reduction of at least 75% of the employee’s remuneration. The Commissioner stated, “On any reasonably and objective contemplation, an indefinite reduction in remuneration of at least 75% would represent a repudiation of the employment which the [employee] could properly reject.” In light of this it was unsurprising the Commissioner concluded, “[t]he conduct of the employer was the true initiator of the termination of employment as the changes imposed a reduction in remuneration of at least 75%, and such significant change … was plainly incompatible with the continuation of the employment”.  The Commissioner confirmed the “resignation given by the [employee] was a direct reaction to the actions of the employer”.

The Commissioner also concluded, “the dismissal which involved circumstances of a second, but unexplained cash handling discrepancy, did not provide valid reason for dismissal….the dismissal was without valid reason” and “was implemented by way of an unreasonable and unjust process”.

The employee’s claim was successful.  The employee was awarded 16 weeks’ remuneration amounting to $13,566.

If you would like to further develop your understanding and skills of the Fair Work Commission processes our Responding to Fair Work Commission Claims and  Advocacy and Representation skills in the Fair Work Commission will assist you to gain a more thorough understanding of the processes and develop your advocacy skills.. Our experienced consultants will share some of their secrets and experience to help you understand the process, from initial response to appeals process. Lean more about the types of claims the Fair Work Commission deals with and how to put your best foot forward to defend your business.

Fair Work Commission Decision (U2017/4635)

Written by Phillipa Preston

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