Clint Dupre v Excell Protective Group Pty Ltd [2024] FWC 2313 (2 September 2024)

Facts

• An employee refused to sign a new employment contract with a related entity unless amendments were made to address his concerns about the broader restraint clauses, the commission structure and the confidentiality agreement.
• Despite this, when the employee received a subsequent email on 6 March 2024 with a new employment contract, the changes he raised were not made. The covering email also conveyed a sense of urgency about signing the contract and a decision being made about the employee’s role if he didn’t agree to the new contract.
• On 8 March 2024, the employer sent a text message to the employee stating “there was a deadline for contract resolution which was not met[.] The best you can do is to sign it and get it witnessed and leave it on my desk and hope the boss will be lenient. Benny may now lawfully reject it as you have not resolved in accordance with reasonable directions.”
• 3 days after the employers deadline to sign the contract, the employee emailed them asking for clarification regarding the concerns that hadn’t been addressed.
• The following day, he received a letter inviting him to formal performance review despite never having a formal performance review prior to this.
• On 3 April 2024, the employee attended an office meeting where the employer advised the employees present that if they didn’t sign the contracts, he would consider that to be a resignation.
• The employee contacted Jobwatch (a community legal centre offering free legal advice) the following day regarding his rights to not sign the contract.
• On 11 April 2024, the employee attended a further meeting where he was presented with the employment contract again without any of his requested changes. The employee claimed that the employer demanded he sign it without the changes and when he rejected this, he was asked to return his access fob and “finish up”. He recalls saying several times during the meeting that he was not resigning.
• The employers account of this meeting significantly differed. The employer said they told the employee the changes could be made and proposed a meeting in a few days to discuss. The employer rejected the claim that they asked the employee to return his work items and leave. They also said that the employee’s claim that he was not resigning and came “out of the blue”.

Decision

• The FWC weighed in favour of accepting the employees account of events whenever it differed from the employers account due to the unreliability of the employer’s statements.
• In relation to the critical meeting of 11 April 2024, the FWC found that:
  • There was a background of pressure being applied to the employee to sign the contract before the meeting, including:
    • The sense of urgency to sign the new employment contract in the 6 March email that accompanied the contract;
    • The 8 March text which the employer conceded used language that implied that disciplinary action would be taken;
    • The 12 March invitation to a performance review which immediately followed the employee’s email raising concerns that his amendments hadn’t been addressed;
    • The 3 April meeting with other employees that hadn’t signed the new contract, in which the employer said that not signing the new contract would be considered a resignation;
  • the employee stated he was not resigning several times and the employer could not provide an explanation on what other reason there could be for this other than a response to pressure being applied;
  • When the employee didn’t agree to sign the new contract without his requested amendments, the employer told him to “finish up…today” effectively dismissing the employee;
  • Despite the employer claiming that the employee had the option to remain on his current contract, this option was never presented to him nor was their post-meeting conduct consistent with this.
• The FWC also pointed out that the employers post-meeting conduct indicated that the employer had dismissed the employee rather than the employee resigning, in particular because:
  • There was no attempt to contact the employee after the meeting until almost a week later (which the FWC said was “telling” given the employer claimed to be “shocked” by the apparent resignation);
  • The employer failed to try to confirm the resignation until 17 April 2024;
  • When the employee denied the resignation in reply to the 17 April email, the employer failed to respond to the employee seeking to clarify any misunderstanding;
  • The employer claimed that they expected the employee back at work on 17 April 2024 for the meeting they proposed, however there was no meeting invitation sent or time set up for the meeting;
  • Despite the employer claiming they were receptive to make the changes to the contract, they never provided the employee with an amended contract following the meeting and no steps had been taken to do so.
• The combination of the mounting pressure from the employer between January – April 2024 and the post-11 April meeting conduct of the employer, the FWC determined that the employer had dismissed the employee for failing to agree to the new employment contract.
• The FWC also rejected the employer’s claim that the employee resigned given the pressure, post-meeting conduct and lack of motive for the employee to resign pointed to the employer dismissing the employee.

Lessons for employers

1. Employers need to be flexible when asking an employee to sign a new contract and cannot terminate employees for not agreeing to a new contract.
2. The language around negotiating a contract should be carefully considered and employers should be careful not to imply that failure to agree to a new contract will result in termination.
3. While there was no need to consider a constructive dismissal in this case since the FWC concluded there was no resignation, the FWC alluded that the pressure being placed on the employee to sign the new contract could have amounted to a constructive dismissal if the employee had resigned.