Agreed resignation was a termination, FWA rules
24 January 2012
A high-level manager was effectively forced to resign, despite negotiating the terms of his ‘resignation’ package with his employer, FWA has found.
[Full text of this case: Turton v FMC Australasia Pty Ltd [2011] FWA 8903 (22 December 2011)]
A business development manager (BDM) with FMC Australasia Pty Ltd was attending a national sales meeting in Brisbane in July 2011.
However, before it commenced, he was called away for a meeting with the company’s managing director and finance director where he was given a copy of a letter from a major customer who had made a number of ‘negative’ comments about him.
He was then informed that ‘we can no longer have you as part of FMC’ — there had been certain performance and customer relationship issues discussed and a performance management process was undertaken during most of 2011.
The managing director, finance manager told the BDM that it was not a redundancy they were offering but a dismissal or, alternatively, a resignation so that they could both ‘save face’.
The BDM agreed and signed a letter stating that he was resigning and would receive one month’s pay, coaching and use of his company vehicle for a period of time.
Flights booked, laptop taken
The BDM applied for unfair dismissal, he submitted that FMC had already decided to terminate the employment relationship at the commencement of the meeting and that the only choice he had was to ‘resign or be sacked’.
Following the meeting, the BDM realised flights back to Adelaide had already been booked for him and that his laptop had been removed from the national sales meeting room.
FMC argued that although it had intended the employment relationship to conclude, they had however agreed to a mutual termination where the BDM resigned as part of an agreed arrangement.
This, it was contended, meant there was no dismissal and the resignation was an ‘act of free choice’ and should therefore be dismissed.
Only choice to resign
Commissioner Peter Hampton found there was ‘little doubt’ the BDM ultimately negotiated and agreed the terms upon which he was to leave the business.
‘However, his only choice was in reality to resign or be dismissed,’ Hampton said.
‘The cessation of the employment relationship was objectively the inevitable result of the employer’s decision to end the applicant’s (BDM) employment and to advise him of that fact.’
‘The fact that it was agreed to handle the dismissal in the form of a resignation and to provide additional benefits in that regard are all relevant to the assessment as to whether the dismissal was unfair.’
Hampton also noted that there was ‘no suggestion’ the agreement between the parties represented any form of release from legal proceedings.
The Commissioner ruled the BDM was dismissed under the Fair Work Act 2009. A conciliation meeting was ordered.
Turton v FMC Australasia Pty Ltd [2011] FWA 8903 (22 December 2011)
[Full text of this case: Turton v FMC Australasia Pty Ltd [2011] FWA 8903 (22 December 2011)]
A business development manager (BDM) with FMC Australasia Pty Ltd was attending a national sales meeting in Brisbane in July 2011.
However, before it commenced, he was called away for a meeting with the company’s managing director and finance director where he was given a copy of a letter from a major customer who had made a number of ‘negative’ comments about him.
He was then informed that ‘we can no longer have you as part of FMC’ — there had been certain performance and customer relationship issues discussed and a performance management process was undertaken during most of 2011.
The managing director, finance manager told the BDM that it was not a redundancy they were offering but a dismissal or, alternatively, a resignation so that they could both ‘save face’.
The BDM agreed and signed a letter stating that he was resigning and would receive one month’s pay, coaching and use of his company vehicle for a period of time.
Flights booked, laptop taken
The BDM applied for unfair dismissal, he submitted that FMC had already decided to terminate the employment relationship at the commencement of the meeting and that the only choice he had was to ‘resign or be sacked’.
Following the meeting, the BDM realised flights back to Adelaide had already been booked for him and that his laptop had been removed from the national sales meeting room.
FMC argued that although it had intended the employment relationship to conclude, they had however agreed to a mutual termination where the BDM resigned as part of an agreed arrangement.
This, it was contended, meant there was no dismissal and the resignation was an ‘act of free choice’ and should therefore be dismissed.
Only choice to resign
Commissioner Peter Hampton found there was ‘little doubt’ the BDM ultimately negotiated and agreed the terms upon which he was to leave the business.
‘However, his only choice was in reality to resign or be dismissed,’ Hampton said.
‘The cessation of the employment relationship was objectively the inevitable result of the employer’s decision to end the applicant’s (BDM) employment and to advise him of that fact.’
‘The fact that it was agreed to handle the dismissal in the form of a resignation and to provide additional benefits in that regard are all relevant to the assessment as to whether the dismissal was unfair.’
Hampton also noted that there was ‘no suggestion’ the agreement between the parties represented any form of release from legal proceedings.
The Commissioner ruled the BDM was dismissed under the Fair Work Act 2009. A conciliation meeting was ordered.
Turton v FMC Australasia Pty Ltd [2011] FWA 8903 (22 December 2011)
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