IN A recent decision by the South Australian Industrial Relations Commission, a shop owner has been found to have constructively dismissed an employee by reducing his working hours following failed attempts to force that employee to purchase his business.
The respondent was the owner of a shoe repair business and argued that the applicant was not his employee as he only engaged him on the understanding that he would trial the business with a view to making an offer to purchase the business.
The applicant argued he was an employee with an expectation of ongoing employment. He stated his dismissal followed his refusal to accept reduced working hours and denied ever having expressed an interest in buying the business and refuted allegations made by the owner about his poor performance and conduct.
The Industrial Relations Commission held that there was an existing employer-employee relationship and that the reduction in the employee’s hours by the employer materially altered the contract of employment.
The employer’s decision to reduce the employee’s hours was done unilaterally without consultation or discussion with the employee and amounted to a constructive dismissal at the instigation of the employer.
The commission said the attempt to force a commercial decision out of the employee to purchase the business was a "capricious and prejudicial exercise of the employer’s authority".
The employer was ordered to pay the employee $2,500 compensation.
Carla Paratore, solicitor - 9288 6940
Michael Jensen, associate - 9288 6944