Can employees be ‘dismissed’ without being fired?

Fair Work finds change to employment contract constituted dismissal

Can employees be ‘dismissed’ without being fired?

In a recent decision, the Fair Work Commission highlighted the reality that a workplace dismissal may occur even where an employer did not sever the employment relationship and where an employee continues to perform the same roles and duties.

The applicant worked as an electrician at the respondent’s solar farm in regional South Australia. As a condition of his employment, the applicant was afforded a company car for “limited personal use”, which he used to make an 80km round trip to and from work each day.

One morning in February, as the applicant was driving to work along a “pitch black” country road, a kangaroo appeared and struck the right side of his vehicle, deploying its airbag. The applicant, stranded in an area with no mobile phone coverage and satisfied that the car could continue to be driven, completed his commute and reported the incident upon arriving to work.

The respondent commenced an investigation into the “kangaroo incident” and concluded that the applicant’s decision to continue driving the “unroadworthy” car was “reckless, dangerous and… illegal”. It issued the applicant with a warning and rescinded his personal use of the car.

The applicant asserted that his use of the company car was a term of his employment and that, by withdrawing this term, the respondent repudiated the employment contract, constituting a “dismissal”. The applicant further submitted that, while he continues to work for the respondent, he now does so under a separate arrangement with 15% less value. The respondent rejected these submissions.

The Commission found that the applicant had a contractual right to the “limited personal use of a company car” and that the applicant agreed to the employment relationship based on this representation.  It also found that the post-repudiation relationship was “a fundamentally different relationship from the relationship the parties previously enjoyed” and one of about 16% less value to the applicant.

With this, the Commission was satisfied that the respondent had unfairly “terminated” the applicant’s employment, despite the fact that the applicant’s role and employment status remained unchanged. The Commission ordered that the respondent reinstate the applicant to his former position.

Key Takeaways:

  • An unfair dismissal may take place in circumstances where an employee continues to be employed
  • Altering an employee’s fundamental employment conditions may give rise to their dismissal

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