14 June 2018

Employers: loss of trust goes both ways

The Fair Work Commission (FWC) has held that reinstatement can be an untenable proposition when an employee has lost trust in his or her employer (rather than the more common reverse scenario).

Key impacts

  • The decision of Priest v Albury Blue Logistics [2018] FWC 1810 shows that the FWC is prepared to refuse to order reinstatement where an employee has lost trust and confidence in his employer (rather than the other way around).
  • The reasoning also demonstrates that an employer unilaterally taking away even intermittent roles given to an employee (in addition to what was contemplated in their initial employment) can amount to dismissal.

Facts

The applicant (Mr Priest) was originally employed by Albury Blue Logistics (Albury) in a warehouse/forklift driver role. Approximately 1.5 years into his employment, he was assigned the position of “Metro Supervisor” which involved additional managerial duties and responsibilities, as well as an additional $80 per week above his base salary.

Though Mr Priest’s additional supervisory duties were intermittent, he continued to perform them for over 4 years. He was then told by Albury that he would no longer receive the additional payment and that he was no longer required to perform the additional supervisory duties. Following this, Mr Priest was absent for an extended period due to illness after which he filed an unfair dismissal claim.

Outcome

Commissioner Wilson dealt first with the issue of whether Mr Priest had been dismissed at the employer’s initiative. There was sufficient evidence before the FWC that the extra payments and the Mr Priest’s readiness to perform the additional supervisory duties extended throughout the relevant period (and that they were not merely small “one-off” duties).

The arrangement was therefore an “ongoing, permanent part” of Mr Priest’s employment and, as such the unilateral decision by Albury to discontinue those duties permitted Mr Priest to consider that his employment was terminated at his employer’s initiative.

The Commissioner then turned to the issue of whether Mr Priest’s dismissal was harsh, unjust or unreasonable. The following factors were relevant to his ultimate finding that the dismissal was unfair:

  • criticisms about Mr Priest’s performance were not discussed with him;
  • Mr Priest was not notified of the issues prior to his dismissal;
  • Mr Priest was not given the opportunity to respond to any of the issues raised, or correct any of the behaviour identified; and
  • the removal of the additional $80 per week was more than the removal of an “allowance” but rather a “significant reduction in remuneration” (being 9% of his original base salary).

Given that Mr Priest had formed the view that Albury could not be trusted to act in his interests in the future – to such an extent that he did not want reinstatement – the Commissioner found that reinstatement would be an inappropriate remedy in the circumstances.

The Commission found that, despite the fact that reinstatement would be in Mr Priest’s economic interests, there was no longer a sufficient base level of trust and confidence that was capable of being restored, and attempts to restore the employment relationship would therefore be unproductive and fruitless. An award of compensation equating to roughly 6 weeks’ pay was made.

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