Commission settles CFO’s ‘unclear resignation date’ in dismissal claim

'She resigned when she emailed a resignation letter to her team,' says company

Commission settles CFO’s ‘unclear resignation date’ in dismissal claim

The Fair Work Commission (FWC) recently dealt with a dismissal application from an employee who said her case should be accommodated because her termination date was unclear. The employer claimed that she was dismissed when she resigned from work after she emailed her team members, but the employee said it happened much later than that.

The law requires that an application be made within 21 days after the dismissal took effect. However, when there is confusion about the true period, the FWC must step in and clarify the true starting point.

The employer is a resources company focused on discovering and developing copper and gold deposits.

In May 2022, the employee signed an employment contract as its Chief Financial Officer (CFO).

While the CFO resided in  Sydney,  she would sometimes fly to Brisbane, where the employer had its office, for the week before returning home, although she worked in both locations.

According to records, a key role in the CFO’s work had been an “important capital raising,” also described as a “cash box” raising by the company’s executive team.

The said capital raising failed or was described as “perceived by the employer’s Board as being likely to fail.” Consequently, it was discontinued by the Board “before reputational damage would accrue” to the business.

The company reportedly “attributed some significant responsibility for the unsuccessful capital raising” to the CFO.

Later, the Chief Executive Officer (CEO) and the CFO had a conversation about the matter, and the following discussion happened, as the latter recalled:

CEO: “I am sorry, but you will have to leave the company. I offered the Board my resignation after the failed cash box raising but they do not want me to resign. It is best that you to resign.”

CFO: “You know as well as I do that the only reason the capital raising failed is the Board did not follow the advice of  management  and  the external advisors.”

CEO: “I know, but they want you to resign. I think it is your best interests is to resign.”

CFO: “This is most unfair. I am being made a scapegoat for the failed capital raising and my criticisms of the Board. I will need some time to take advice before I decide whether to resign.”

CEO: “The Board and the shareholders want you to go. It is much easier if you will agree to resign. I understand you will need some time to take advice.”

CFO: “Yes. I will let you know about the resignation. I am going back to my hotel to clear my head and will come in tomorrow.”

CEO: “As there is no need for you to come back to the office, you can leave your computer here.”

Afterward, the CFO emailed her team, saying there would be a leadership change. She put “Resignation” on the title of her message.

She also returned her office pass and computer and collected her possessions. She left for Sydney, although her original plan was to stay in Brisbane for the week.

In another story, an HR manager claimed forced resignation after the employer removed recruitment duties in her role.

When did the dismissal occur?

The employer argued that the CFO when she sent her email to her team. Meanwhile, the CFO argued that she “did not resign by any conversation or conduct” and said she only “foreshadowed her intention to resign” for her team.

To clarify the matter, the FWC had to examine the content of the email, and the CFO wrote:

“With a heavy heart I advise that I will be resigning and leaving today,” the email said.

The commission commented on the nature of the message since the CFO argued that it merely “stated an intention to resign.”

“So far as that statement conveys future events, it was to two events occurring that day – her ‘resigning’ and ‘leaving.’ She did both. Objectively, it is difficult to see how such an email, from someone as senior as the CFO, to her team would be construed otherwise, not just in relation to the immediate recipients but to anyone else in the company to whom it might have been forwarded,” the FWC said.

The actual resignation date

The commission said the CFO’s employment relationship was terminated on the day she emailed her resignation letter to her team, which was also when she collected her belongings at the office.

“She was a very highly-paid executive, working in a publicly listing mining and exploration company. The company was in the process of attempting a capital raising. That capital raising was assessed, at least by the board, as likely to fail. Rather than failure, the board cancelled the proposed capital raising. Rightly or wrongly, the board blamed the CFO. In somewhat stark terms, she was given a choice to jump ship or be pushed,” the FWC’s decision said.

“The board’s decision was communicated… and she was plainly displeased, [because in her view, she was] being made a scapegoat.”

“But as might be expected by someone of her seniority, she was under little illusion that she was being asked to leave. When she sends the email titled “Resignation” to her team, and she gives her pass and computer, collects her possessions, and leaves for Sydney. She was otherwise originally planning to remain in Brisbane for the week… Her employment relationship was terminated by those events,” the FWC said.

HRD previously reported about a case where the commission refused an employee’s extension claim since it was filed after a 12-month delay, calling it “extreme.”

Should an extension be allowed?

After determining the actual resignation date, the commission found that her dismissal application was delayed by a month.

“The delay in the present case is significant – around 30 days. The reasons for delay are in part ignorance about the timing for making her claim due to the perceived effect of the Letter of Resignation,” the FWC said.

“While I acknowledge that it might be confusing for persons to appreciate the difference between the termination of an employment contract and the termination of the employment relationship, that it is not of itself exceptional,” the commission added.

Thus, the FWC ultimately dismissed her application for failure to file within the required period under labour laws.

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