Can an employer’s actions indirectly end a worker’s employment?

In a recent FWC case, the Commission considered whether an employer’s words and actions could constitute two applicants’ unfair dismissals. The respondent operated a health food store in Sydney. Prior to their dismissals, the first applicant had worked as a store assistant for 20 months, and the second applicant had worked as a joint manager for ten years.

In late July 2020, the respondent’s husband, co-director of the store, fell gravely ill in hospital. The respondent attributed the deterioration of her husband’s health to stress caused by store employees, particularly the first applicant. When the respondent grew increasingly anxious about her husband’s health, she advised the staff that the store would close from 6pm on 31 July.

After a short reflection period, the respondent tried to organise to meet with the second applicant, but this attempt was unsuccessful. The respondent made no further contact with either of the two applicants.

Upon noticing the store had reopened a few days later, the two applicants filed an unfair dismissal application under the Fair Work Act 2009 s 394. The respondent submitted that the store had temporarily closed until her husband was released from hospital and that neither applicant was dismissed. The respondent maintained that, had they answered their phones, the applicants would have been invited back to work upon the store’s reopening.

The Commission considered whether the respondent’s words and actions on 31 July could properly represent her terminating the applicants’ employment.

The Commission found that, on 31 July, the applicant was in a state of high anxiety given her husband’s deteriorating health and that “the level of anxiety that she was experiencing caused her to make a series of unfortunate and perhaps irrational decisions.”

The Commission further found that the respondent’s conduct would have caused employees and customers to believe that the store had shut permanently.

Ultimately, the Commission was satisfied that the respondent’s conduct on 31 July constituted both applicants’ dismissals and noted that the respondent made no further attempts to restore these severed employment relationships. Moreover, finding there was no valid reason for the applicants’ dismissals related to their capacity or conduct, the Commission held the dismissals to be unfair. The Commission ordered compensation of $19,697.20 to the first applicant and $31,280.00 to the second. 

Key Takeaways:

• An employer’s words and actions may indirectly constitute a dismissal, which can subsequently be deemed unfair under the Fair Work Act 2009 s 394