Farm Manager Forced to Resign Wins Unfair Dismissal Claim

Case background

A manager had been employed for two years at a horse farm. She began as a Team rider but was quickly promoted to the position of Farm Manager with a gross annual salary of $50,000.

On January 31, 2020, the Farm Manager received an email requesting her to sign a new contract. This new contract reduced and limited her work to only 37.5 hours per week, making her a part-time employee. Her position and title was changed from Manager to Rider.

Lastly, the new contract changed her reporting line—she used to report directly to the owner of the business but under the new contract, she was to report to the Chief Marketing Officer, about 2 positions lower from the owner of the business. Two other employees were sent new contracts for them to sign.

Employee’s refusal to sign new contracts

The Manager and the Groom refused to sign the new contracts. The employer explained that the new contracts contained typographical errors but the employees felt that their contract of employment was essentially changed.

Employee’s job advertised

On 1 February 2020, the employer advertised the newly opened position of Farm Manager with the same duties as the Manager who had been demoted to Rider in her new contract. The new Farm Manager position advertised was at the same farm where the Manager worked.

On 2 February 2020, the Groom complained to management that she had been underpaid. She had been assigned to do one weekend feeding per month but she had not been paid for feeding the horses for that one weekend. The weekend feedings of the horses were not part of the regular tasks and duties of the Manager or the Groom. The employer gave the Manager an extra $10,000 to cover the payment of all weekend feedings.

Duties further reduced

On 3 February 2020 the Manager’s duties were further reduced. Also, she was required to document her daily tasks, specifically noting down the times that each task was done. They were to develop weekly task lists for the head office to determine who was to do which task.

Thus, the Manager’s former duty of assigning tasks to other employees had been removed.

Accusations against employee of pocketing $10,000

On 4 February 2020, the Manager received her weekly payslip and her hours worked had been changed and her pay was reduced. When she complained, the employer accused her of misconduct and misappropriation. The employer accused the Manager of pocketing the $10,000 set aside for the weekend feedings and of not paying the Groom on the 1 weekend she worked. The pay for the weekend feeding was terminated altogether. This caused a 15% reduction in the Manager’s pay.

The Manager had understood the $10,000 to be her pay for feeding the horses on weekends. She had thought that the Groom was required to do one weekend feeding under her own contract. The Manager was not informed that she was supposed to pay the Groom as well from the $10,000. The Groom also thought that the weekend feedings were extra work not covered by her usual hours and that it was the employer who will pay her and not the Manager. In the past, when the Manager had asked another employee to feed the horses on the weekends that she was not available, she paid those employees from her own pay.

Instead of acknowledging that a misunderstanding about pay occurred, the employer accused the Manager of pocketing the funds. Later that day, the Manager explained her side and apologised for the misunderstanding and hoped that they can all move past the incident and that she will continue to perform her duties under her original work agreement. Unknown to the Manager, her replacement as Manager was already interviewed by the employer on that same day.

Further Accusations of Wrongdoing against employee

On 5 February 2020, the employer arrived at the farm and berated the Manager at a meeting with the Groom and the Chief Marketing Officer. She was accused of neglect of her duties for failing to complete the preparation of the horses to join the National Young Horse Championships. The employer repeated her request for the Manager to return a ‘sore’ horse that had been given to the Manager. The Manager had been taking care of the horse which was no longer of any value to the business. Since December 2019, when the horse was given to the Manager, the Manager had emailed the employer seeking confirmation of the gift to her. The Manager refused to return the horse claiming that it was hers.

Employee Forced to resign

On 7 February 2020, the Manager emailed her notice of resignation as did the Groom and another employee. In her resignation email, the Manager stated that she felt that the manner she had been treated since 31 January 2020 left her with no other option but to resign and give them two weeks’ notice. Her resignation was accepted 17 minutes after the resignation was sent. At that same time, the applicant who was interviewed for the position of Manager 3 days before was hired.

Three days after the Manager resigned, the newly hired manager came to work. Instead of working out her notice, the Manager took a stress leave as she felt sick and unable to continue working under the circumstances.

Unfair Dismissal Findings – Forced Resignation

The Fair Work Commission found that since the business had only 6 employees, it was covered by the Small Business Fair Dismissal Code. Even under this law, the employee was required to be given a warning that she had engaged in misconduct and was at risk of being dismissed. She was not warned or given any reasonable opportunity to respond or to correct any problems.

The Manger’s refusal to abide by the new contract was reasonable as it essentially changed her employment. This change required an agreement between the employer and the manager. The employer’s intent to demote and dismiss the Manager from her position as manager was made more obvious by their advertisement of the position as vacant and by their interviewing a replacement for the Manager all the time that they were seeking to change her employment terms. This amounted to a contractive dismissal of the employee.

In short, not only was there no valid reason for the Manager’s dismissal, there was also significant failures in observing proper procedure in dismissing the Manager. All this made the dismissal unfair.

Further considering that there is a pandemic and that there are few jobs of manager available in her area, the FWC was going to order her reinstatement but found that the relationship between the Manager and the employer was already strained. The amount of compensation for the unfair dismissal was to be determined upon submissions.

Isabelle Cowley v The Trustee for the Hawthorn Furphy Farms Trust T/A Van Eyk Horses [2020] FWC 3968 (30 July 2020

Read More