Employer argues he's not an 'Australian-based employee,' says Fair Work doesn't apply
The Fair Work Commission (FWC) recently dealt with a case involving a software engineer working remotely from Indonesia for an Australian online art marketplace.
The dispute centered around whether the worker was considered an "Australian-based employee" under the Fair Work Act, and if his departure from the company constituted a dismissal or resignation.
The worker argued that despite never having worked in Australia, he should be considered an Australian-based employee due to the nature of his engagement. He also contended that his departure from the company was not a voluntary resignation, but rather a dismissal.
The worker claimed that he was forced to resign due to unreasonable performance concerns and that the employer's actions, including withdrawing his access to company systems, effectively terminated his employment.
"Australian-based employee" status
The employer, an Australian-owned company selling artwork globally, initially challenged whether the FWC had jurisdiction over the case. They argued that the worker, a senior software engineer based in Indonesia, was not an "Australian-based employee" as defined in the Fair Work Act.
The employer said that the worker fell under an exception for employees "engaged outside of Australia and the external Territories to perform duties outside Australia and the external Territories."
The worker had been recruited in May 2023 and worked remotely from Indonesia for the entirety of his employment. He had never travelled to Australia for work purposes. The employment contract was negotiated and prepared by the employer in Australia, then sent electronically to the worker in Indonesia for signing.
The Commission found that while the worker performed his duties in Indonesia, he was not "engaged outside Australia" in the legal sense.
The Commissioner noted:
"Leaving aside that both [the employer] and [the worker] contemplated that his duties be wholly performed outside of Australia (the first limb), it is not in dispute that [the employer], from its Australian base, prepared the contract and sent it to [the worker] at his overseas base. This was, in contractual terms, an offer. Nor is it in dispute that [the worker], from his overseas base, signed the contract and sent it back to [the employer]. This was, in contractual terms, an acceptance."
Resignation or dismissal?
The main dispute lay in determining whether the worker was dismissed or resigned voluntarily. The sequence of events on May 30 and 31, 2024, played a crucial role in this assessment.
On May 30, during a one-on-one discussion, the employer raised performance concerns with the worker. The chief product officer had expressed concerns about errors in the worker's use of the product coding system. The worker responded to these concerns by stating, "I do not need this job. I quit. So let's discuss my peaceful exit on the terms of my contract."
The following day, May 31, further communication occurred between the parties. The worker's direct supervisor suggested finishing "our story in May," to which the worker responded affirmatively. Later that day, the supervisor reminded the worker that he had quit, and the worker responded with a thumbs-up emoji.
The Commissioner found:
"I am well satisfied that the conduct of and communication between the parties on 30 and then 31 May amounted to a mutual agreement that the resignation would take effect at close of business on 31 May."
Withdrawing system access
The employer withdrew the worker's access to their online systems on the afternoon of May 31. The worker argued that this action constituted a dismissal. However, the Commission disagreed, viewing it as a consequence of the mutual agreement to end employment that day, rather than the cause of termination.
The Commissioner explained:
"Given this, and whilst [the employer] could have waited until the following day to withdraw online permissions, their withdrawal on the afternoon of 31 May 2024 was not conduct terminating the employment relationship. By then, there was already a sufficiently clear mutual agreement that the employment relationship would end that day."
The worker also claimed that he was forced to resign due to the employer's conduct. He argued that the performance concerns raised were unreasonable and that the employer failed to negotiate a peaceful exit in line with his contract. However, the Commission found no evidence to support this assertion.
The performance concerns were raised in a one-on-one discussion, which the Commission deemed fair and orderly. The employer's co-founder and CEO testified that while he shared the performance concerns, he did not expect the worker's employment to end so abruptly because recruiting software engineers was not easy.
The Commissioner stated:
"As unexpected and uncomfortable as it was for [the worker] to hear the criticism, and irrespective of whether it was fair or warranted, there is no basis upon which to objectively conclude that the resignation was forced. There was nothing unorthodox about the steps taken by [the employer] to raise its concerns in the proper management of its operations."
Ultimately, the Commission concluded that the worker was not dismissed within the meaning of the Fair Work Act. The employment relationship ended by mutual agreement following the worker's resignation.
The Commissioner summarised: "I do not find that the employment relationship ended by forced resignation."
"As [the worker] was not dismissed within the meaning of the FW Act, his general protections application to deal with a dismissal dispute is beyond jurisdiction."
"I have found that [the worker] was an Australian-based employee within the meaning of the FW Act. [The employer's] jurisdictional objection on that ground is dismissed."
These findings emphasise the importance of clear communication during employment separations and the need for employers to consider the implications of their actions, even when an employee has expressed an intention to resign.
