Article by Kyle Scott, Director and Brittany Virgili, Associate
In a cautionary tale for employers dealing with long-term absent employees, a Full Bench of the Fair Work Commission (FWC) has upheld a finding that an employer’s lack of communication with an injured worker amounted to a forced resignation, thereby opening the door for the worker to pursue her claims against the employer.
Background to the decision
This decision is the latest development in a long running series of claims brought by an employee against Sydney Water, following an unfortunate 2016 incident where the employee’s image was used in a WHS promotional poster (commissioned by a third party marketing agency) featuring the words, “Feel great… lubricate!” that was widely distributed around the workplace.
Understandably, the distribution of the poster caused significant distress to the employee and led to her making a complaint and requesting the prompt removal of the posters. The employee then left the workplace and began receiving workers compensation payments for a psychological injury.
Between the date of the incident in 2016 and her ultimate resignation in December 2020:
The employee received workers compensation benefits for 12 months, and then received paid sick leave for a further seven months;
For the last three years of her employment, the employee was on unpaid leave;
During that time, the employee pursued a range of claims against Sydney Water in relation to the WHS poster, including complaints to the Australian Human Rights Commission and the NSW Anti-Discrimination Board alleging sexual harassment and sex discrimination; and
Those legal proceedings played out over four years and involved various appeals and an eventual decision in the employee’s favour where she was awarded $200,000 in compensation, to be paid equally by Sydney Water and the marketing agency which developed the poster.
The employee then resigned from her employment in December 2020 and pursued a general protections claim (involving dismissal), arguing that she had been subjected to adverse action after complaining about the poster. Sydney Water objected to the general protections claim on the basis that the employee had not been dismissed.
First instance decision: Forced resignation
The issue for determination by the Commission was whether or not the employee had been “dismissed” within the meaning of section 386(1)(b) of the FW Act (which encompasses forced resignations).
The legal test for forced resignation is to assess whether the employer had engaged in conduct with the intention of bringing the employment to an end, or whether termination of the employment was the probable result of the employer’s conduct, so the the employee had no effective or real choice but to resign.
After considering the facts, DP Beaumont concluded that the employee had been forced to resign. Several incidents were critical in reaching the conclusion:
- The first incident was the distribution of the offensive poster in 2016;
- The second incident was the failure by Sydney Water to investigate the complaint and to communicate the outcomes to the employee (although it was noted the workers compensation insurers had investigated the issue in the context of assessing the workers compensation claim);
- The third incident was the failure of Sydney Water to promptly apologise to the employee and to confirm the number of posters that had been destroyed; and
- The fourth incident was the “evident void of communication” between the parties from October 2017 until the employee’s resignation in December 2020.
In reaching that conclusion, DP Beaumont stated:
“There is no denying that Sydney Water was placed in a difficult circumstance of managing an employee who was not fit for work for a period, who was not fit to return to its workplace, and who had opted to litigate. However, ultimately it fell upon Sydney Water to manage the situation and there was no suggestion from Sydney Water that [the employee] had abandoned her employment or otherwise repudiated her employment contract. While the conduct it engaged in was at times appropriate and acceptable in managing [the employee] for a period in 2016/17, it does not negate the conclusion that [the employee’s] resignation was the probable result of its conduct, her having no effective or real choice but to resign in the face of Sydney Water’s prolonged silence from 2018. On an objective analysis of the evidence, the conduct of Sydney Water displayed an intent to bring the employment relationship to an end or would have had that probable result.”
The appeal proceedings
Sydney Water appealed the decision of DP Beaumont and argued (among other things) that:
- There was no ‘causal connection’ between the events of 2016/17 and the employee’s resignation in December 2020; and
- The Commission’s finding in relation to the employer’s failure to communicate with the employee between 2018-2020 failed to take into account a range of factors.
In relation to the second point, although there was an absence of direct communication with the employee throughout 2018-2020, Sydney Water argued that DP Beaumont failed to place sufficient weight on the facts that:
- Sydney Water had appointed a third party injury management provider to liaise with the employee and manage her rehabilitation;
- The employee had directed various managers not to make contact with her (and raised issues with other managers who had contacted her);
- The employee had refused further assistance throughout 2016 and 2017 in relation to any return to work; and
- The parties were involved in litigation between 2016-2020 (and presumably communicating regularly through their lawyers).
While the arguments advanced by Sydney Water were quite persuasive (in our opinion), ultimately the Full Bench found that DP Beaumont had taken each of the above issues into account and that her conclusions as to the reasons leading to the employee’s resignation were open to her on the evidence.
In particular, the Full Bench agreed with DP Beaumont’s conclusion that the lack of contact was “unacceptable and inappropriate”. The appeal was therefore dismissed, and the employee will be free to pursue her general protections claim through the Courts.
The appeal decision highlights the limitations of appeal proceedings and the fact that appealable error must be identified rather than merely challenging the merits of the original decision.
Lessons for employers
Managing ill or injured employees can often be a very challenging exercise, particularly where the employee expresses a desire not to be contacted by the business or does not participate in a return to work plan. However, as this recent decision makes clear, employers must ensure they maintain contact with long-term absent employees, even in the more challenging matters, to avoid any “prolonged silence” that might give rise to a forced resignation argument.
If this raises questions for your business, please get in touch at firstname.lastname@example.org for a confidential discussion.
ABLA runs training on a range of topics including managing ill and injured workers. Visit ablawyers.com.au/training for information on our upcoming courses.