FWC warns employers planning structural changes in recent case
The Fair Work Commission (FWC) recently dealt with a jurisdictional objection in a general protections dismissal dispute, where a worker claimed she was forced to resign from her position.
The worker argued that her employer's conduct left her with no real choice but to resign. She pointed to a company restructure that would have transferred her employment to a different entity without properly addressing her longstanding workplace concerns.
The employer denied this characterization, arguing the worker had voluntarily resigned and therefore wasn't eligible to make an application under the Fair Work Act's general protections provisions. They raised a jurisdictional objection claiming she wasn't "dismissed" within the meaning of the law.
The worker was employed by On Call Staffing Solutions Pty Ltd (On Call), which was part of a corporate group that included Lumia Care Services Pty Ltd (Lumia). The companies operated in the home care and community services sector.
In October 2024, the chief people officer of both companies (CPO) sent an email announcing plans to move all employees under Lumia Care Services. The message stated: "Lumia Care is moving closer to implementing a unified rostering system across all home care and community-based businesses under Lumia Care... With this upcoming change, we are a step closer to issuing new employment contracts for all field staff under one employer being 'Lumia Care Services Pty Ltd'."
On Call provided staff with an FAQ sheet addressing common questions about the transition. It assured employees their tenure, roles, and salaries would remain unchanged. Employees would have two weeks to review and sign the new contract and were encouraged to discuss concerns with management.
The worker, however, had unresolved concerns she wanted addressed before signing any new contract.
In early December 2024, the worker emailed the CEO, the CPO, and another manager raising six unresolved employment matters that included pay classification, back pay, unpaid training, pay slip discrepancies, disciplinary records, and acknowledgement for new clients she had brought to the company.
The worker expressed concern that signing the new contract might prevent her from resolving these longstanding issues. She requested a response by 4 December but didn't receive one within her timeframe.
Meanwhile, On Call was implementing a new rostering system called The Lookout Way (TLW). On 11 December, the CPO directed the worker to start using the new app by the next day, warning she would stop receiving work if she didn't comply.
The CPO also stated he hadn't responded to her concerns because he had provided a "reasonable direction for [the worker] not to bombard the Group CEO's email with the myriad of queries" she had raised.
On 12 December 2024, the worker received an automated email showing Lumia had processed her pay, despite never having formally agreed to transfer her employment. The next morning, she resigned effective immediately, citing the failure to address her concerns.
The key legal question was whether she had been "dismissed" under section 386 of the Fair Work Act, which includes situations where an employee resigns but "was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer."
The FWC cited case law on constructive dismissal, including Kylie Bruce v Fingal Glen Pty Ltd, which explains: "In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that [the worker] had no effective or real choice but to resign."
The Commissioner determined the worker remained employed by On Call until her resignation: "Prior to [the worker's] resignation email on 13 December 2024, no action had been taken to end [the worker's] employment with On Call. [The worker] had not resigned and had not been dismissed by On Call... It was not possible for On Call and Lumia to unilaterally decide that [the worker's] employment had transferred from On Call to Lumia on around 12 December 2024."
The FWC found a critical flaw in the company's approach. "Although I consider On Call and Lumia provided detailed and helpful information to employees about its decision to move all employees to Lumia, there was an important element that was not addressed. That was the answer to [the worker's] question about what would happen if she did not agree to the new contract with Lumia."
The decision explained: "The group's decision to move all employees to Lumia meant that [the worker] did not have the option to continue working for On Call. [The worker's] choices were agreeing to commence employment with Lumia or having no work. [The worker] chose the latter option and decided to resign from her employment with On Call."
The Commissioner determined the proper approach would have been to handle the situation as a redundancy: "The answer to [the worker's] question should have been that her employment with On Call would cease on the ground of redundancy. [The worker's] employment with On Call was no longer required because the group decided that all employees would be engaged by Lumia."
The decision emphasised that even in a transfer of business situation, proper legal steps must be followed: "As is clear from the definition of a 'transfer of business' in s.311 of the Fair Work Act, the employment with the old employer must still legally end and employment with the new employer must legally commence. That had not happened when [the worker] received an email... which stated she was now being paid by Lumia."
The Commissioner concluded: "I find that [the worker] was forced to resign from her employment with On Call on 13 December 2024 and that she was 'dismissed' in accordance with the definition in s.386(1)(b) of the Fair Work Act."
The jurisdictional objection was dismissed, allowing the general protections dispute to proceed to a conference.
