FWC Prefers Employment Relationships Not Contracts

The decision of Mrs Sonia Argentier v City Perfume Retail Pty Ltd [2023] FWC 1819 is an important reminder that a dismissal under the Fair Work Act 2009 (Cth) (‘FW Act’) is determined by whether there has been a termination of an employment relationship and not an employment contract.

On-Boarding Process

On or about 4 April 2023, the Applicant applied for a position with the Respondent as a Fragrance Brand Ambassador. She attended an on-line interview on 6 April 2023 and later that day received a written communication from the Senior Financial Accountant and HR Manager (‘manager’) advising that she was successful. The written communication referred to onboarding information including instructions for the download of the Respondent’s App called ‘Deputy’ and requested that the documents be completed by 12 April 2023 for a start date of 18 April 2023.

On 6 April 2023, the Applicant received messages from the manager via Deputy stating that she was invited to receive shifts through Deputy and requested that she complete onboarding forms including bank details, tax information and superannuation. Later that day the Applicant accepted the invitation via Deputy, activated her Deputy account and received an employment contract via Deputy. About a week or so later the Applicant attended a brief in-person meeting with the Respondent’s brand partner.

On 11 April 2023, the Respondent sent the Applicant a message via Deputy notifying her about a training session on 19 April 2023. By 12 April 2023, the Applicant had completed the Respondent’s mobile phone policy, uniform policy, new employee form, TFN declaration and super choice form as well as signed and returned her employment contract. On 12 April 2023, the manager sent a message to the Applicant advising that her onboarding was complete and that she would be rostered next week via Deputy. On 13 April 2023, a Director of the Respondent signed the employment contract.

The employment contract stated that the agreement was made on 6 April 2023, an employment relationship had been established, the contract and employment would commence on 18 April 2023 and that the employment would be on a casual basis. The Applicant was rostered to commence her first shift on 20 April 2023 however, this did not eventuate.

Off-Boarding Process

On 17 April 2023, the Applicant asked the manager whether the training session on 19 April 2023 would be paid to which he replied no due to it being professional development. This resulted in the Applicant advising on 18 April 2023 that she would not be attending due to it being unpaid. Later that day the manager advised that she would be given a gift and asked that she confirm her attendance. The Applicant again refused due to it being unpaid.

At 12.52pm on 18 April 2023, the manager sent a message to the Applicant advising that the Brand Ambassador role had been withdrawn and the training session had been cancelled. At 3pm that day the Applicant responded that she had been fired and just wanted to be paid for attending the training. Later that day, the Applicant was advised via Deputy that her rostered shifts for 20, 21 and 22 April 2023 had been removed.

The Applicant lodged a general protections application whereby a primary issue for determination was whether the Applicant had been dismissed in accordance with section 386(1) of the FW Act. Essentially, the question was whether the employee’s employment with the employer had been terminated at the employer’s initiative?

Employment Relationship

The Fair Work Commission (‘FWC’) referred to the Full Bench FWC decision of Khayam v Navitas English Pty Ltd [2017] FWCFB 5162 which concluded that a termination of employment at the initiative of the employer for the purpose of section 386(1) of the FW Act is conducted by reference to termination of the employment relationship and not by reference to termination of the employment contract operative immediately before cessation of the employment. Therefore, the question of whether there was a dismissal depends on the status of the employment relationship between the Applicant and the Respondent and not the status of any employment contract.

The FWC determined that despite the absence of work performed and payment of wages there were other factors that indicated the existence of an employment relationship.

Firstly, the employment contract set out the employment conditions and made express reference to an ‘employment relationship’ with the agreement being made on 6 April 2023. Further, by 18 April 2023 those terms including the establishment of an employment relationship had come into effect with no contractual pre-conditions or unresolved issues between the parties that prevented an employment relationship from coming into existence.

Secondly, the Applicant had completed the application and onboarding process as well as being added to the Respondent’s Deputy App. This provided the Applicant with a number of employment-related communications prior to 18 April 2023 including instructions to attend the mandatory training session on 19 April 2023 and shift arrangements. Essentially, by 18 April 2023 the Applicant was part of the Respondent’s workforce. Any service-based payments would have commenced accrual by 18 April 2023.

Thirdly, the employment contract contained a term restricting the employee’s capacity to work for another without the employer’s consent. This restriction came into effect when the employment contract was entered into on 6 April 2023. The FWC also noted that this reflects an employee’s common law duty of fidelity whereby an employee would generally not be allowed to work for another employer while employed by the first employer.

Fourthly, the exchange between the Applicant and the manager prior to commencement of her first shift about attendance at the training session on 19 April 2023 supports the view that there was an employment relationship in existence. This training session was mandatory.

Fifthly, the manager acknowledged in evidence that the Respondent could have allocated shifts on and from 18 April 2023. The FWC noted that had the events on 18 April 2023 not taken place, then the allocated shifts from 20 to 22 April 2023 would have likely been worked by the Applicant.

Based on the above reasoning, the FWC concluded that an employment relationship existed on 18 April 2023 despite the Applicant not yet commencing her first shift.

Termination at the Employer’s Initiative

The FWC was of the view that the Respondent terminated the Applicant’s employment by the message that was sent at 12.52pm on 18 April 2023 and therefore constituted a written notice of termination with immediate effect. The FWC rejected the Respondent’s argument that there was no written evidence that the Applicant had been terminated and the Applicant’s reply message at 3pm that same day constituted a resignation.

Objections Dismissed

The FWC dismissed the Respondent’s objections and concluded that the Applicant had been dismissed within the 21 day application time period. This matter has been relisted for a conciliation conference.

This decision highlights that it is the termination of the employment relationship and not the employment contract that is important when determining whether there was a dismissal by an employer. While the wording of the employment contract in this case had some bearing on the outcome, the approach taken by the FWC indicates that the employment relationship may commence prior to the employee commencing their first shift.

If you would like to know more about what constitutes an employment relationship, please contact us at hello@mapien.com.au and a Mapien Workplace Strategist will be in touch within 24 hours.