Demoted, replaced and accused in six days, a farm manager quit

What happened

Isabelle Cowley started at the Lancefield farm of Van Eyk Horses, a horse business in Victoria, on 12 February 2018. She began as a team rider and was quickly promoted to farm manager, on $50,000 a year.

On Friday 31 January 2020 an email from the accounts department arrived with a "revised" contract and a request to sign it by the following Monday. There was no warning and no explanation. The new contract limited her to 37.5 hours a week, changed her title from Farm Manager to Rider, and had her report to two staff members instead of the owner.

On the evening of 1 February Ms Cowley emailed to say she would not sign and asked for a meeting to discuss the changes. That night the business advertised for a "Horse Farm Manager" at Lancefield. Ms Cowley found out only when a co-worker stumbled on it.

The six days that ended the job

From 3 February head office took over deciding who did what and when, and Ms Cowley had to record her own tasks and those of her team in detail, even when lunch breaks were taken. The Commission later said this had "the appearance of preparing a handover of duties".

On 2 February a groom had complained that she was not paid for weekend feeds. The person running payroll assumed Ms Cowley had kept money meant for those feeds. On 4 February Ms Cowley was accused of misconduct and misappropriation, and the weekend feeds arrangement, worth about 15% of her annual earnings, was ended. She was told to return a horse she understood was a gift, and the business interviewed her replacement.

On 5 February the owner and another manager came to the farm and held a meeting in the shed, where Ms Cowley was criticised in front of a co-worker for a list of alleged failures. She took two days' stress leave, her doctor advised her not to return, and on 7 February she resigned with two weeks' notice. She wrote that her treatment left her "no option". Her resignation was accepted 17 minutes later.

Was she dismissed?

Unfair dismissal protection under the Fair Work Act 2009 (Cth) only helps someone who has been dismissed. Under s 386, that covers being sacked, and also resigning because the employer's conduct forced you to. This is often called a forced resignation or constructive dismissal. The question is whether the employer's conduct left the worker with no real choice but to resign.

The business said Ms Cowley was not dismissed, and accused her of resigning out of spite to pressure it over the horse. Commissioner McKinnon did not accept that. She found that in under a week the business had contemplated demoting Ms Cowley, advertised her job without telling her, interviewed a replacement, removed her authority to manage, tried to make her part-time, denied her a fair hearing on serious accusations, and berated her in front of a co-worker. That course of conduct "left Ms Cowley with no effective choice but to resign".

Why it was unfair

With six employees, plus six in associated entities, the business had fewer than 15, so the Small Business Fair Dismissal Code applied. A dismissal that follows the Code is treated as fair. Where the dismissal is not for serious misconduct, the Code requires the employer to tell the worker why their job is at risk, warn them, and give them a chance to respond and fix the problem. None of that happened, so the Code did not help the business.

The Commissioner then asked whether the dismissal was harsh, unjust or unreasonable, weighing the factors in s 387. She found no valid reason for it. Refusing the new hours was not a valid reason, because changing a full-time job to part-time "required agreement between the parties". On the weekend feeds, Ms Cowley "was not dishonest"; the underpayment came from payroll misreading the groom's contract. Several other complaints were not proven, and she had never been warned her job was at risk.

The business's small size and lack of human resources expertise counted in its favour, but not enough. The dismissal was unjust and unreasonable, and so unfair.

How much was awarded

Reinstatement, getting the job back, is the primary remedy. It might have suited, as Ms Cowley was out of work and similar jobs nearby were few, but the pandemic and a badly damaged relationship ruled it out.

In a second decision on 24 September 2020 she estimated Ms Cowley would have stayed about two more months, because the dispute over the horse or the pandemic was likely to end the job soon anyway. That was worth $8,333.33. She deducted $2,600 Ms Cowley had earned in part-time work and ordered Van Eyk Horses to pay $5,733.33 gross.

What this means for you

Resigning does not always mean giving up your rights. If your employer demotes you, cuts your hours or advertises your job without your agreement, and treats you so that you have no real choice but to leave, that may be a dismissal in law. Keep the emails and messages, note what happened and when, and consider getting advice before you resign.

A successful claim can still bring a modest payment, because compensation follows what you would probably have earned had the job gone on. For employers, the case shows that a contract change needs agreement and that serious allegations must be put fairly before anything is decided. An unfair dismissal application must be lodged within 21 days of the dismissal taking effect.