Australia: Resigning from your employment - can you withdraw your resignation? - Latest developments

Last Updated: 15 August 2018
Article by Richard Ottley

In recent times there has been a string of decisions from the Fair Work Commission directed to whether and in what circumstances, an employee can assert that a resignation given in the heat of the moment which is withdrawn, may not be relied upon by their employer.

To those following the titanic struggle between BUPA Aged Care Australia Pty Limited and its former employee Shahin Tavassoli, it may not come as a complete surprise that there has been a further decision from the Full Bench of the Fair Work Commission. This was handed down on 9 May 2018.

The fact that there have now been 4 decisions from the Fair Work Commission (2 from the Full Bench and 2 from individual Commissioners) without a final resolution, may seem like a lawyer's picnic. However the litigation has resulted in a detailed examination of the provisions of the Fair Work Act which are engaged in this area of the law.

In tracing developments, it is convenient to incorporate a large extract from my article "Australia: Resignation from employment - can you withdraw it" (Mondaq 2 April 2018).

DECISION OF COMMISSIONER RIORDAN

The employee, Ms Tavassoli, was employed by BUPA's Mosman Aged Care Facility as a nurse. She was a refugee from Iran with limited English language skills. She claimed to have been dismissed from her employment notwithstanding that she resigned from her employment on 16 November 2016 by the provision of a written notice of resignation on that date.

On 16 November Ms Tavassoli was not rostered to work but attended a training session at the workplace in the afternoon. At approximately 2.00 pm, a Mr Brice from the employer went to the training room and asked Ms Tavassoli to step aside. He walked her out of the building and then informed her that quite serious allegations had been made against her and he was awaiting documentation to come through before he could discuss it with her.

Mr Brice suggested Ms Tavassoli get a coffee and await further instruction. In any event, some two hours passed before she was summoned to the meeting. During that period Ms Tavassoli sat outside the facility with no idea why she had been escorted off the premises. She actually had no money on her, so had nowhere to go.

Whilst sitting outside on the footpath and deeply upset, Ms Tavassoli came to the conclusion that the allegations against her involved a six pack of beer that had been offered to her by a resident. Ms Tavassoli testified to the Commission that she did not want to be accused of being a thief or terminated for stealing, due to her cultural background. As a result, she asked for help from a colleague to draft her resignation letter.

When Ms Tavassoli re-entered the facility, she handed Mr Brice her resignation letter which contained the provision of 4 weeks' notice. Mr Brice did not accept the resignation at that time. Another employee then read out letters from BUPA containing allegations of misconduct (which had nothing to do with a six pack of beer) and advised her of her paid suspension and the upcoming investigation of the allegations. The allegations themselves concerned issues around Ms Tavassoli's attitude to residents and resident care.

Mr Brice did not provide Ms Tavassoli with a copy of the correspondence which was read out at the meeting. Ms Tavassoli did not fully understand the correspondence, however she did not want to participate in the investigation and pressed her resignation.

Mr Brice told Ms Tavassoli that unless the date of resignation was changed so it had immediate effect she would still be required to participate in the investigation. In response to this, Ms Tavassoli then scribbled out the reference to 4 weeks' notice and handed her letter of resignation back to Mr Brice.

On 17 November 2016 Mr Brice sent Ms Tavassoli a letter confirming acceptance of her resignation. On 18 November at 9:00 am Ms Tavassoli attended the facility and tried to rescind her resignation but this request was refused. She then filed a claim for unfair dismissal.

The matter came before Commissioner Riordan in July 2017. The main argument advanced on behalf of Ms Tavassoli was that she had resigned from her employment but was forced to do so because of the conduct of the respondent employer (and therefore had in effect been dismissed by her employer within the meaning of s. 386 (1) (b) of the Fair Work Act (Act)).
The respondent asserted that it had not conducted itself in a manner which had forced Ms Tavassoli to resign. Further that once a resignation is given, an employer is entitled to accept that resignation.

Commissioner Riordan having criticised the conduct of the respondent and how it impacted on Ms Tavassoli's state of mind which had "traversed into the realm of confusion and self-condemnation in an attempt to justify the actions of a long term employer", concluded that Ms Tavassoli had been constructively dismissed. He further found that Mr Brice should have accepted Ms Tavassoli's attempt to rescind her resignation.

He considered that the period of time for someone in her state of mind, having regard to her poor English skills and emotional state, was such that her decision to seek to rescind her resignation occurred within a reasonable period. He concluded that the respondent had acted in an unreasonable manner and that the dismissal was harsh and unjust and ordered reinstatement.

DECISION 1 OF FULL BENCH OF FAIR WORK COMMISSION

BUPA applied for permission to appeal Commissioner Riordan's decision. The Full Bench granted permission to appeal on certain of the applicant's grounds. Having reviewed the authorities, it then proceeded to provide guidance as to how the relevant sections in the Act: s. 386 (1) (a) and 386 (1) (b) should be interpreted in the context of a resignation by an employee.
S. 386 (1) (a) of the Act states that a person has been "dismissed" if their employment has been terminated "on the employer's initiative". Even if the employee resigns this may be a dismissal on the employer's initiative if it happens in the "heat of the moment". In the Full Bench's words:-

"47 (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."

The Full Bench then considered s. 386 (1) (b) of the Act which states that a person has been dismissed if the person has resigned from his/her employment but was forced to do so because of conduct or a course of conduct engaged in by his/her employer. In this context, it considered that whether or not an employee will be found to have been dismissed will depend upon the employer's conduct, and whether or not it engaged in conduct with the intention of bringing the employment to an end or knowing that it was the probable result of its conduct. In the Full Bench's words:-

"47 (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 probably 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 element."

The Full Commission then considered the appeal in the context of the above tests. It concluded that Ms Tavassoli could not succeed in relation to the test under s. 386 (1) (b) as it was not satisfied that her former employer had so conducted itself as to cause her to resign in the first place. The fact that Mr Brice had told her that she would have to resign immediately in order to avoid an investigation, may have influenced her decision to alter the notice period. However Mr Brice's action was not the cause of Ms Tavassoli's prior decision to resign in the first place. The Commission reiterated that the fact that an employer raises allegations of misconduct against an employee and gives notice of an investigation is not without more, forcing the employee to resign.

BUPA submitted that Ms Tavassoli had advanced her case on the basis she was dismissed within the meaning of s. 386 (1) (b) and such a case could not succeed either before the Commission or now.

The Commission was satisfied that Commissioner Riordan's decision was appealable because he had applied the "special circumstances" test (being a test applicable to a case advanced under s. 386 (1) (a)), to the case Ms Tavassoli had advanced, which was a case for constructive termination under s. 386 (1) (b). Notwithstanding this, his decision did "expose at least the possibility that the Commission's jurisdiction might have been successfully invoked under s. 386 (1) (a)".

In the circumstances the Full Bench granted permission to appeal but referred the question of whether or not Ms Tavassoli had been dismissed within the meaning of s. 386 (1) (a) to Commissioner Cambridge to decide. The reason for not deciding this question themselves was that the Full Bench considered that procedural fairness demanded that BUPA be given the opportunity of mounting an evidentiary case which addressed a different argument being the argument under s. 386 (1) (a).
In summary, the Full Bench considered that Ms Tavassoli had a claim with sufficient merit to be argued but which had not been adequately argued at first instance.

DECISION OF COMMISSIONER CAMBRIDGE

Commissioner Cambridge was essentially tasked to determine whether or not Ms Tavassoli had been dismissed at the initiative of her employer. This involved an examination of Ms Tavassoli's state of mind and consideration of whether her resignation had been submitted in the "heat of the moment".

BUPA asserted that the circumstances surrounding the resignation did not amount to "special circumstances". That is to say the resignation was a conscious and deliberate act and the conduct was unambiguous. Ms Tavassoli's level of English skills and other cultural or ethnicity factors did not establish any special circumstances. In essence, the conduct of Ms Tavassoli was an active conscious decision demonstrated by her persistence to resign when she resubmitted a resignation letter after its initial rejection.

Commissioner Cambridge had this to say about a heat of the moment resignation:
"41 One such circumstance is that of a "heat of the moment" resignation whereby because of special circumstances and/or a combination of other factors, it was unreasonable for the employer to assume that the resignation was genuinely intended. In these circumstances, if an employer accepts the resignation forthwith, and acts upon it, it may be held to have been a legally ineffective resignation and the actions of accepting the resignation establish that the employment was terminated on the employee's [sic] initiative, and in satisfaction of the terms of s. 386 (1) (a) of the Act."

Commissioner Cambridge was of the view that Mr Brice had significantly misjudged the mental state of the applicant and failed to recognise that she was acting irrationally or as a result of a disturbed mind. The amended resignation was not given freely, deliberately or as a result of any reasoned deliberation. The level of confusion was reflected by Ms Tavassoli writing the wrong day of the week on the resignation letter.

When all of the circumstances of the 16 November meeting were carefully examined it was in Commissioner Cambridge's view, clear that Ms Tavassoli was expressing irrational behaviour at the time. Her level of emotional distress was simply not recognised. In those circumstances the resignation should not have been accepted, particularly having regard to the applicant's lack of English skills and certain ethnic and cultural factors which played a part.

In those circumstances Commissioner Cambridge concluded special circumstances existed such that the resignation of the applicant was legally ineffective. Therefore the employment of the applicant was terminated on the employer's initiative and in satisfaction of the meaning of "dismissed" under s. 386 (1) (a) of the Act. Commissioner Cambridge then returned the file to the Full Bench to decide what orders should be made.

DECISION 2 OF FULL BENCH OF FAIR WORK COMMISSION

This Full Bench decision which was a two to one decision, concerned an appeal by BUPA against Commissioner Cambridge's finding that Ms Tavassoli had been dismissed on the employer's initiative within the meaning of "dismissed" provided by Section 386(1)(a) of the Act.

In his minority decision, Deputy President Colman challenged some of the findings made by Commissioner Cambridge concerning Ms Tavassoli's state of mind. In the first place, it was not apparent to Colman DP that Ms Tavassoli's resignation was not given freely. In particular there was no contention that she had been forced to resign.

Secondly he noted that there was no suggestion that Ms Tavassoli was acting "irrationally in any clinical sense" (and therefore had no capacity to form an intention to resign). If however Ms Tavassoli was acting irrationally in a non-clinical sense it was not clear to him how relevant this was to the question of whether she actually intended to resign. In his words:

"At least arguably, it would appear to relate to a different question, namely whether she was acting sensibly or in her own best interests. Similarly, whether her resignation was a result of any 'reasoned deliberation' appears to go to the question of whether Ms Tavassoli made a good decision, rather than whether she intended to resign. But there is no statutory 'cooling off period'."

Thirdly, Colman DP noted that whether a resignation was rational or reasoned is within the province of an individual's personal circumstances and preferences. Such assessment is highly subjective. A decision to resign rather than face an investigation may or may not be a good or sensible decision. Certainly an employer is not in a position to evaluate this matter. An objective analysis of the situation is required.

Colman DP concluded that Commissioner Cambridge had not included any specific finding that Ms Tavassoli did not intend to resign when considered objectively, nor was her counsel able to identify during the hearing where any such finding was made.

Whilst a fair reading of the decision as a whole might reflect such a finding, there was at least an arguable case that Commissioner Cambridge had not made any such finding and instead had relied on subjective considerations for concluding that Ms Tavassoli's resignation was legally ineffective. The Commissioner considered this constituted an appealable error and granted permission to appeal.

The majority of the Full Bench (Catanzariti VP and Bissett C) refused the application for permission to appeal Commissioner Cambridge's decision. They were not satisfied that there was any arguable case of error in relation to any aspect of the decision.

The Full Bench considered that Commissioner Cambridge had followed the earlier Full Bench's approach by taking into account whether in the circumstances of the case, the resignation was provided 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 be reasonably understood to be conveying a real intention to resign".

The Full Bench noted that Commissioner Cambridge had concluded that:
"(52) The resignation of the [Respondent] should not have been accepted in these circumstances. Particularly when one has regard for the [Respondent's] lack of English language skills and certain ethnic and cultural factors, I am compelled to conclude that special circumstances existed such that the resignation of the [Respondent] was legally ineffective (emphasis added by the Full Commission)."

In essence, the majority of the Full Bench considered that Commissioner Cambridge had in effect made an objective assessment of whether or not the Respondent had been conveying a real intention to resign in accordance with the relevant criteria and had not fallen into appealable error.

CONCLUSION

The most recent decision of the Full Bench has resulted in the matter returning to a Full Bench until its further order.
The question for the employer in resignations given in the heat of the moment is to consider whether the employee's emotional state or confusion is such that they cannot reasonably be understood to be conveying a real intention to resign. If in doubt employers need to clarify the situation with the employee at a reasonable interval after the purported resignation (such as the next day).

The dissenting judgment of Colman DP is interesting with its focus on whether there was capacity to resign and on the notion that a decision might lack any reasoned deliberation, but nevertheless still constitute a resignation made with the appropriate intention to resign.

However it is clear from the Full Bench decision, that separate from any issue regarding the quality of the decision to resign, the key test is whether a real intention to resign can be discerned given the context in which resignation took place and the apparent state of mind of the employee.

For further information please contact:

Richard Ottley, Partner
Phone: +61 2 9233 5544
Email: RBO@SWAAB.COM.AU

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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