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Worker receives $13,000 in compensation for unjust dismissal after her shifts were cut by 75% - SmartCompany

By Alan J. McDonald


An employee at a Sydney RSL will receive more than $13000 in compensation after she was found to have been constructively dismissed from her role. Senior Associate Trent Hancock says constructive dismissals can occur when an employee has resigned but “has been forced to do so because of conduct, or a course of conduct engaged by the employer”.

Worker receives $13,000 in compensation for unjust dismissal after her shifts were cut by 75% – SmartCompany

An employee at a Sydney RSL club will be paid more than $13,000 in compensation after the Fair Work Commission found she was constructively dismissed from her role when her employer cut her rostered shifts  by 75%.

The Commision heard the female worker, who undertook cash-handling duties for approximately 30 hours each week at City of Sydney RSL, was warned twice in late 2016 and early 2017 in relation to discrepancies in the till amounts.

In the first warning, the till was found to be out by $188.75, which the worker put down to a failure to properly record a patron’s gaming pay-out. The second time, the till was out $100, but the worker was unable to explain the missing funds.

The Commission heard that after the matter was referred to the RSL’s HR department, the business decided the worker should undergo further training in how to adequately handle cash.

In the meantime, the worker’s roster was reduced to just one shift a week, because she was unable to work “change box” shifts in the interim.

In a meeting with the RSL’s HR manager, the worker claims she said she would go home after learning about her roster changes. The business disputed this, however, and instead claimed the worker said she would resign — a claim that which the worker rejected.

“The applicant steadfastly rejected that she ever used the word “resign”, and further, she asserted that there was no suggestion of retraining for money handling procedures mentioned during the meeting,” the Commission said in its case decision.

In further email correspondence between the worker and the HR manager, the manager told the worker the RSL had accepted her “verbal resignation” given during the initial meeting, however, the worker responded by stating: “I want to make it extremely clear that at no point in time did I put forward a verbal resignation”.

Additionally, she said, “by not providing me with the usual regular shifts I have received from day one you have effectively terminated my employment”.

Despite the RSL disputing it had effectively forced the employee to resign by cutting her rostered shifts, presiding Fair Work Commissioner Ian Cambridge found the questions surrounding the employee’s use of the word “resign” were irrelevant.

Instead, he said the outcome of the case hinged on whether the worker could “reject the changed employment conditions” discussed in the initial meeting.

“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. Consequently, it was the actions of the employer which brought the employment to an end,” Cambridge said in the decision.

“Unfortunately, the employer failed to appreciate that its decision to remove the applicant from all rostered engagements involving work in the “change box” involved such significant change to the employment as to amount to dismissal from employment.”

As a result, the Commissioner found the worker was dismissed “without valid reason involving established misconduct or capacity inadequacy”, and that the dismissal was “implemented by way of an unreasonable and unjust process”.

The worker was awarded compensation for 16 weeks lost remuneration, totalling $13,566, after it was found she was constructively dismissed.

Other courses of action may have been more appropriate, say experts

Employment lawyer Peter Vitale explains that if a business is concerned about an employee’s cash handling procedures, as was the case in this matter, there are a number of other appropriate courses of action that could be taken.

“It seems to me the appropriate course of action, assuming no dishonesty was involved, would be to retain the employee and provide her instruction in proper procedures, and give her an opportunity to improve her performance,” he says.

“Or to put another worker on to make sure she’s not solely responsible for balancing the float.”

Vitale also notes the onus is on employers to clarify “exactly” what employees mean when discussing potential resignations and says there may be circumstances where employees should be given a “reasonable opportunity” to retract potential statements of resignation.

Speaking to SmartCompany, senior associate at law firm McDonald Murholme, Trent Hancock, says employers should be aware resignations can be considered a dismissal “in some situations” under the Fair Work Act.

Constructive dismissals, for example, can occur when an employee has resigned but “has been forced to do so because of conduct, or a course of conduct, engaged in by the employer”.

Additionally, Hancock says employers “are generally not entitled to unilaterally reduce hours of work or demote an employee as a form of disciplinary action”.

“Employers should not communicate any decision on disciplinary action, whether interim or final, until a full investigation has taken place and procedural fairness has been afforded to the employee,” he says.

SmartCompany contacted City of Sydney RSL and was directed to Clubs NSW, the body that represents Sydney RSL. Clubs NSW intends to appeal the case but declined to provide further comment.

Reference: ‘Worker receives $13,000 in compensation for unjust dismissal after her shifts were cut by 75%’, SmartCompany, 31st August 2017.