He walked out without explaining. His employer treated it as quitting

What happened

Mr A worked in the workshop of a small business from 1 June 2015. The owner, Mr H, said the plan had been for Mr A to take over at least some of the business one day. But in the six to eight weeks before 14 July 2016, the owner saw a poor work attitude, poor performance and consistent lateness. He never warned Mr A about any of it.

On 14 July 2016, on the owner's account, Mr A came to his office door and said: "Don't try to stop me … I am leaving … it's finished … I am going". He walked away and later left the workplace with some of his belongings. Mr A's account was different. He said he had a panic attack, linked to mental health conditions including depression and anxiety, and told the owner he needed to see his doctor.

The owner took advice from an employer association and the Fair Work Ombudsman. On 18 July 2016 he emailed Mr A: "The legal advise we have been given that you terminated your employment ... when you walked out the door." The next morning Mr A replied that he had not resigned.

The claim

Mr A lodged an unfair dismissal application under s 394 of the Fair Work Act 2009 (Cth) on 8 August 2016 and asked for six months' pay. Both sides represented themselves before Senior Deputy President O'Callaghan, who agreed not to name the parties.

The business said Mr A had quit, so there was no dismissal at all. That mattered because, under s 385, the Commission can find a dismissal unfair only if the person was in fact dismissed, the dismissal was harsh, unjust or unreasonable, it was not consistent with the Small Business Fair Dismissal Code, and it was not a genuine redundancy.

Resignation or dismissal?

Section 386(1)(a) says a person is dismissed if their employment is terminated on the employer's initiative. The Senior Deputy President applied the long-standing approach from Mohazab v Dick Smith Electronics and O'Meara v Stanley Works: the question is decided objectively, by looking at what actually happened, not at what either side privately thought.

He preferred the owner's version of the conversation at the office door. Even so, he found that Mr A had not announced a resignation: "the evidence shows that Mr A was leaving the workplace." There was no evidence that the belongings Mr A took were different from what he normally carried to his car. The employer had a legitimate cause for doubt, but doubt is not proof.

What had actually ended the job was the employer's own decision, made between 14 and 18 July, to treat the employment as over, and its email confirming it. That was a termination on the employer's initiative. It took effect on 18 July 2016, when it was communicated, so the application was within the 21-day time limit.

Was the dismissal unfair?

The business was a small business (fewer than 15 employees). Under the Code, a small business can dismiss without notice where it reasonably believes the conduct is serious enough, and otherwise must warn the employee and give them a chance to improve. Mr A's exit fitted neither path, and the Commission could not find the Code had been followed.

It then turned to the factors in s 387. There was no valid reason related to Mr A's capacity or conduct: the owner's concerns about performance did not establish one, and nor did Mr A's behaviour on 14 July. The email told Mr A the reason, and he probably had a brief conversation with the business on 18 July before it was sent, which gave him some chance to respond. No warnings had been given, but the Senior Deputy President did not count that towards unfairness. On the employer's side, it was a small business with no human resources expertise, and he noted that advice from an employer association or the Ombudsman is only as good as the questions put to them.

He concluded the dismissal was harsh, unjust and unreasonable, "unreasonable in that it was based on inference rather than being confirmed by facts". He also said that had Mr A explained himself more fully, or been willing to talk to the business afterwards, the case could have ended differently.

How much was awarded

Reinstatement was not appropriate because the relationship could not be repaired. Compensation under s 392 starts from what the worker would probably have earned had the dismissal not happened. Mr A had been certified unfit for work from 14 July to 31 December 2016, so even if he had stayed employed he would probably have received only his personal leave, about two weeks' pay. The Commission ordered two weeks' pay, less tax, plus superannuation.

What this means for you

If you are an employee, walking out is not automatically a resignation, but it is a risky way to leave. If you are unwell, say so plainly, tell your employer you are going to the doctor, and stay in touch. Mr A won, but only a small sum.

If you run a business, do not assume an employee has quit because they left in a hurry. Contact them in writing, ask whether they intend to come back, and wait for a clear answer. Deciding for them can turn a possible resignation into a dismissal. A worker who believes they were dismissed has 21 days from the dismissal to lodge a claim with the Fair Work Commission.