Employees have an implied duty to obey their employer’s reasonable and lawful directions. Whilst employers cannot direct an employee to engage in conduct which is unlawful, the reasonableness of an employer’s direction will depend on the individual circumstances.
In Parkes v Fat Prophets Pty Ltd [2017] FWC 6121, the Fair Work Commission (FWC) held that an employer’s “unreasonable ultimatum” to an employee that he relocate to Sydney or lose his job was a lawful but not reasonable direction.
The employee had relocated to Byron Bay from Sydney in or about August 2016 after his wife secured employment in Byron Bay. At the time, the employee and the employer agreed to an arrangement where the employee could work remotely from his new home in Byron Bay.
Unfortunately for the employer, no formal written arrangement was entered into between the parties about the terms of the work from home arrangement.
The employer contended that the arrangement was only temporary until its Gold Coast office opened in early 2017, after which the employee would work from this office.
In March 2017, the employer undertook a review of its business structure and abandoned its plans to open an office on the Gold Coast. It determined that the employee’s work from home arrangement would not continue.
On 30 March 2017, the employer held a meeting by telephone with the employee to discuss the arrangements. The contents and nature of this discussion were disputed by both parties.
The employer maintained that the employee was advised during the meeting that the working from home arrangement could not continue and that he was to return to Sydney. The employer claimed that the employee did not want to discuss returning and that he had insisted he was not returning to Sydney and resigned from his employment.
The employee denied the employer issued him with a direction to return to Sydney. He alleged that he was advised that his employment had been terminated and relied on a text message exchange and a termination letter, which had been sent the following day indicating that his employment had been terminated. The employee argued that he was not given an opportunity to respond to any issues about the work from home arrangement.
The FWC determined that the work from home arrangement was a temporary and not permanent arrangement. The FWC was also satisfied that the employee was dismissed from his employment, noting that the employer’s letter of termination referred to issuing the employee with notice and stating that the termination of employment was effective 31 March 2017.
Having found that the employee’s employment had been terminated, the FWC held that there was not a valid reason for the termination. The FWC held that while the direction to relocate from Byron Bay to Sydney was a lawful direction, it was not a reasonable direction; it was manifestly unreasonable as the employee was given little or no notice to relocate to Sydney.
Accordingly, the FWC determined that as the employee was dismissed without notice or warning, any reason for dismissal was invalid and ultimately the termination of his employment was “harsh, unjust and unreasonable”.
The FWC ordered the employer to pay $8,350.38 in compensation to the employee.
Lessons for employers
This decision highlights to employers what will be considered a “reasonable and lawful” direction to employees. In this matter, the FWC held that the employer should have allowed the employee a reasonable period in which to consider and advise whether or not he was willing to relocate, and then agree to a reasonable period of time for the employee to physically relocate, together with payment of relocation expenses.
The decision is also a reminder to employers about recording individual working arrangements in writing. The FWC commented:
Given what has transpired, the absence of a document, recording the discussion at the time – let alone a written agreement or exchange of letters – is regrettable. Relying on recollection or indirect language in conversations, about such a significant matter, is to be very much discouraged as poor industrial relations practice.
This will be particularly relevant if the arrangement is intended to be for a temporary or trial period.
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